Apple's stock takes a $70 billion hit after earnings calls despite strong earnings, Meta and Amazon surge

Meta and Amazon witnessed a substantial surge in their stock market values, collectively adding $280 billion, while Apple’s value dipped by $70 billion following the release of their respective quarterly results.

Meta Platforms, the parent company of Facebook, saw its stock soar over 14 per cent, reaching a record high of $451 after reporting impressive quarterly results. The surge propelled its market capitalization by $148 billion to an impressive $1.16 trillion.

Meta announced its first-ever dividend, marking a strategic move for a company often associated with mature, slow-growth entities. The surge was fueled by a robust 25 per cent increase in revenue, reaching $40.1 billion for the December quarter, primarily driven by strong advertising and device sales.

Amazon experienced an 8 per cent jump in its stock value after surpassing revenue expectations for the December quarter. The surge in online spending during the crucial holiday shopping season contributed to the positive results, elevating the e-commerce and cloud-computing giant’s market capitalisation to $1.78 trillion.

In contrast, Apple’s quarterly results exceeded analysts’ expectations, but a 3.3 per cent dip in its stock value occurred as sales in China fell short of estimates. Tough competition in the Chinese market has raised concerns on Wall Street. Despite Apple’s solid performance, it faces challenges in maintaining its position against its tech competitors.

Investor enthusiasm for generative AI, a technology creating artificial intelligence models and content, has been a driving force behind the stock market rallies of major US tech companies. Microsoft recently surpassed Apple as the world’s most valuable company, with Wall Street investors perceiving Apple as trailing in the AI race.

On an investor call, Apple CEO Tim Cook acknowledged the importance of generative AI and hinted at exciting developments to be revealed later in the year. However, analysts project that Microsoft’s lead over Apple in stock market value will likely widen over the next five years due to Microsoft’s early advantage in AI.

Meta’s post-results report revealed a projected increase in capital expenditures for 2024, ranging between $30 billion and $37 billion, a $2 billion uptick from the previous plan. The additional investment is earmarked for server infrastructure, some of which will support AI initiatives.

The positive market response to Meta’s results was staggering, with the surge in market capitalization exceeding five times the entire value of smaller social media competitor Snap Inc, which stands at $26 billion. The impact of generative AI on the tech industry remains a key theme, influencing market dynamics and shaping the competition among major players.