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Tech giants Meta and Amazon drive tech rally; Apple suffers from China woes

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Tech titans Meta Platforms and Amazon ignited a surge in the market, with Meta’s stock soaring on the heels of robust revenue and strategic financial maneuvers, while Amazon’s shares surged following impressive earnings results. However, Apple Inc. experienced a downturn, driven by concerns over its performance in the Chinese market. 

In after-hours trading, Meta Platforms surged over 15% in stock price to $454.85, propelled by better-than-expected revenue, the initiation of a quarterly dividend at 50 cents per share starting March 26, and a massive $50 billion share buyback program.  

The parent company of Facebook and Instagram, Meta’s rebound from advertising challenges in late 2022 and 2023 added over $140 billion to its market capitalization, surpassing the $1 trillion mark. 

“Meta benefits from growing adoption of Reels across Instagram, core Facebook app and Messenger, and initiatives to improve security and transparency,” said equity analyst at ZACKS Research citing reason to buy. 

Simultaneously, Amazon.com witnessed a significant after-hours increase of over 7% to $170.60 following its strong fourth-quarter earnings report. Driven by innovative AI features in its cloud and ecommerce divisions, Amazon’s revenue exceeded expectations, with its cloud computing division AWS contributing a 13% rise to $24.2 billion in the December quarter. 

“Amazon’s high-margin businesses continue to allow Amazon to drive greater profitability while still continuing to invest (last mile delivery, fulfillment, Prime Now, Fresh, Prime digital content, Alexa/Echo, India, AWS, etc). Amazon Prime membership growth drives recurring revenue and positive mix shift,” noted Brian Nowak, Equity Analyst at Morgan Stanley. 

“Cloud adoption hitting an inflection point. Advertising serves as a key area for both further growth potential and profitability flow-through.” 

However, Apple Inc. faced a nearly 3% decline in after-hours trading to $181.40 despite beating analyst estimates for profit and revenue. The dip was primarily due to lower-than-expected sales in China, leading Apple to forecast a $6 billion revenue decrease compared to Wall Street estimates. Sales in China for the December quarter fell short of analyst projections, totaling $20.82 billion compared to the expected $23.53 billion.  

“The guidance for iPhone revenue in March-Q implies 10% YoY decline, vs. our estimates of total builds down 7% YoY at 50mn units for the quarter. The focus is now on upcoming user feedback from Vision Pro with key features, including spatial computing, gesturing sensing and eye tracking,” noted Sharon Shih, Equity Analyst at Morgan Stanley. 

“The AI application in upcoming iPhones will be worth monitoring for future iPhone upgrade demand.” 

Apple’s CFO Luca Maestri mentioned during a conference call that revenue in the current quarter would be at least $5 billion lower than the previous year’s, attributing it to COVID-related factory closures. 

Meanwhile, Qualcomm experienced a 5.0% decline amid concerns over Android sales in China. 

In Asia, markets were lifted by a late surge in U.S. tech stocks on Friday. Major U.S. stock indices also closed higher, with the S&P 500 climbing 1.25% to close at 4,906.19 points, the Nasdaq rising 1.30% to 15,361.64 points, and the Dow Jones Industrial Average increasing by 0.97% to 38,519.84 points.

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