Meta, Amazon smash earnings expectations, as stock markets surge

Asian markets rally after US tech giants post stronger-than-expected financial results.

US tech giants this week released financial results for the fourth quarter [File: AP]By Erin HalePublished On 2 Feb 20242 Feb 2024

Asian markets have rallied after the release of stronger-than-expected earnings results by Meta and Amazon sent the tech giants’ share prices surging.

In Hong Kong, where stocks have slumped on weak economic indicators in mainland China, the Hang Seng Index on Friday rose around 2 percent in morning trading before paring their gains, while Japan’s benchmark Nikkei Index climbed 1 percent.

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India’s NSE NIFTY 50 Index rose more than 1.5 percent.

Meta, the parent company of Facebook, on Thursday reported revenue of $40.1bn and a profit of $14bn for the fourth quarter of last year – far surpassing analysts’ forecasts.

Meta’s stock price surged more than 14 percent to surpass $445 in after-hours trading.

Meta reached a major milestone on Thursday as it became the first in its generation of tech unicorns – a company whose valuation reaches $1bn prior to listing on the stock market – to announce it would pay shareholders a dividend, set at 50 cents per share.

“We had a good quarter as our community and business continue to grow,” Meta CEO Mark Zuckerberg said in a statement.

Amazon’s fourth-quarter results also came in ahead of expectations with sales of $170bn, sending shares up as much as 9 percent.

Amazon’s AWS cloud business also posted strong results for the last quarter, with revenue reaching $24.2bn.

“This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon,” Amazon CEO Andy Jassy said in a statement.

Meta and Amazon have both been engaged in aggressive cost-cutting, with the tech giants laying off about 48,000 employees between them since 2022.

The tech titans’ strong performance added $280bn to US markets on Thursday, with the S&P500, NASDAQ Composite Index, and Dow Jones Industrial Average all closing on a high note.

Meta and Amazon’s better-than-expected fourth-quarter showing is a bright spot in a bumpy start to 2024 amid growing scrutiny from US regulators over online safety concerns and alleged antitrust breaches.

Fellow tech giant Apple also beat expectations with its fourth-quarter results on Thursday, but its stock dipped 3.3 percent on the back of a 13 percent decline in iPhone sales in China, where local brands have toppled its once dominant market position.

Google’s parent company Alphabet on Tuesday announced fourth-quarter financial results that missed analysts’ forecasts, sending shares more than 6 percent lower.

Source: Al Jazeera and news agencies