It’s earnings season for tech companies, and if you’re feeling confused about the state of the industry, you can be forgiven. So far, the quarterly results posted by many of the biggest names in tech have been surprisingly…decent.
Google parent company Alphabet, Mark Zuckerberg’s Meta, and Microsoft all delivered revenue and profits in the first three months of the year that were better than analyst expectations.
But wait, isn’t the tech industry supposed to be in the dumps? Meta is laying off tens of thousands of workers. Ditto with Amazon, Alphabet, and so many others.
There’s no question that business has slowed down. Meta’s revenue increased a scant 3% year over year, a far cry from the 40%-plus rates it posted just a couple of years ago. But investors were expecting a revenue decline at Meta, which didn’t materialize.
One takeaway is that the advertising spending that many of the largest internet companies rely on, appears to be stronger than people thought. As one money manager told Bloomberg, the feared “earnings apocalypse” didn’t come to fruition.
The coming weeks will provide a broader reading of the tech market’s health with two key reporting companies: Apple and Nvidia, neither of which have ad-based revenue models.
The bar is low for Apple, which reports earnings on Thursday. Analysts expect that sales will come in 4.4% lower than the same time last year, with investors more focused on the company’s developer conference next month. That’s when the company is expected to unveil a new augmented reality headset, its first expansion in years into a new product category.
Nvidia, on the other hand, is at the center of the generative AI craze sweeping the tech industry. Its GPU chips are the vital engines that power some of the most mind-boggling AI feats, and demand for the chips is red hot (to wit, reports that Elon Musk recently purchased 10,000 GPU processors for an AI project, according to Business Insider) .
Of course, Nvidia’s stock is trading at its 52-week high. Nvidia is carrying all the hopes and hype of AI on its back. So while the internet companies benefited by simply exceeding investors’ lack of luster expectations, Nvidia may have to clear a much higher bar.
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Data Sheet’s daily news section was written and curated by Andrea Guzman.
Godfather of AI leaves Google. Geoffrey Hinton, who was a 2018 winner of a major computing award for a creation that laid the groundwork for today’s AI boom, resigned from Google after working there for more than a decade. Hinton, along with two of his students, created a network that taught himself to identify plants, animals, and other common objects after analyzing photos, a discovery that ultimately brought us Google Bard and ChatGPT. Now, he’s telling the New York Times about his worries over bad actors using AI for spreading misinformation. “I console myself with the normal excuse: If I hadn’t done it, someone else would have,” Hinton said. He later added in a tweet his belief that Google has acted responsibly on AI
Bluesky’s flying high. Social media app Bluesky saw the “biggest single-day jump in new users” late last week after a twofold increase in users compared to the day before it brought a boost for the Twitter competitor. The surge in demand was so strong that the service, which was launched on app stores in February took downtime for an upgrade. Interest in Bluesky may be the result of frustrated Twitter users, Fortune reports. Twitter has limited a number of recent outages and took blue check marks from verified accounts in favor of its paid subscription model. Bluesky is agreeing on that vulnerability with CEO Jay Graber bragging that Bluesky achieves what people have wanted in social platforms for years, including owning their data, transparent algorithms, and user control over moderation.
Sony braces for falling demand. Tokyo-based Sony forecast lower-than-expected profits for the current fiscal year, as it prepares for a slump in its PlayStation division. Supply chain challenges that have crimped production of its PlayStation 5 game consoles eased in January. But Sony faces an uphill battle selling software and subscriptions to monetize the consoles, Bloomberg reports. Game sales in the latest quarter were down compared to the same period a year earlier and Sony’s in-house game studios didn’t have major new releases this last quarter.
This Day in Tech History
BASIC takes off. On May 1, 1964, John G. Kemeny and Thomas E. Kurtz first successfully used a computer programming language called BASIC to run programs on Dartmouth College’s General Electric computer system. Its name stands for “Beginner’s All-Purpose Symbolic Instruction Code,” and it became a common way that people learned to program computers. time reports that when a new wave of PCs arrived in the late 70s from Apple, Commodore, and Radio Shack, one of the features that made them consumer PCs was that they had BASIC.
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