2. Tech earnings season’s 3 takeaways
Investors were hoping to come away from this week's earnings reports with a better sense of how tech companies were faring, but they ended up with some dollops of sobering news on a heap of continuing uncertainty.
The big picture: Tech may be the sector best poised to ride out the economic disruptions caused by COVID-19, but it won't be immune from the pain, and even some of its revenue gains will be dented by a higher cost of doing business.
Here are three key takeaways.
1. Ad dollars are disappearing fast. This was clear in Google's and Facebook's reports but made even clearer in Thursday's report from Twitter. CFO Ned Segal noted that its ads business so far in April is similar to the 27% decline it was seeing at the end of March.
2. The sour economy is going to take a toll, even on the giants. It's not just the ad-powered companies bracing for a hit. Both Microsoft and Apple did beat (already lowered) market expectations, but most of the first quarter preceded the full impact of the pandemic.
- Amazon, which would appear to be among the biggest beneficiaries of the abrupt shift to e-commerce, said Thursday that it expects to invest billions of dollars this quarter, potentially posting a loss, to better serve customers and protect employees.
3. No one really knows just how bad it is going to get. Apple declined to offer any specific earnings forecast for the coming quarter, while others offered plenty of caveats to the guidance they gave, cautioning that it's really hard to know what the second half of the year will bring.