Big Tech Is Getting Clobbered on Wall Street. It’s a Good Time for Them.

ByMabel R. Acton

May 21, 2022 #3rd Wave Of Technology, #Active Mind Technology Steve Suda, #Adia Technology Limited, #Anxiety Caused By Technology, #Aum Technology Job Openings, #Best Books On Licensing Technology, #Best Us Companies Drivetrain Technology, #Boulder Creek Ca Technology Companies, #Bounce Box Technology, #Bridgerland Applied Technology College Cafeteria, #Cisco Technology News, #Comcast Comcast Technology Internship Program, #Complete Automated Technology, #Defence Technology News, #Definition Information Technology System, #Digital Technology, #Digital Technology Pdf, #Director, #Dxc Technology Malaysia Sdn Bhd, #Emerging Technology In Healthcare 2019, #Energy Efficient Home Technology, #Environmental Technology 2019, #Esl Information Technology Vocabulary, #Farming Technology Replacing People, #I.T. Information Technology, #Information Technology Residency Programs, #Issue With Holographic Counterfeiting Technology, #La Crosse Technology 9625 Manual, #La Crosse Technology C89201 Manual, #Lane Dedection Technology, #Long Quotes About Technology, #Micron Technology San Francisco, #Modern Steel Mill Technology, #Nc Lateral Entry Technology, #New Technology Replaces Wifi, #Russian Technology City, #Shenzhen Nearbyexpress Technology Development, #Stackoverflow Resume With Technology Interests, #State Agency For Technology, #Teacher Comfort With Technology Survey, #Technology Companies In Southwest Florida, #Technology Credit Union Address, #Technology In Mercedes Glc, #Technology Material Grant For College, #Technology Meibomian Lid, #Technology Production And Cost, #Treehouse Education Technology, #Western Technology Center Sayre Ok, #What Is Jet Intellagence Technology, #Why Women In Technology, #Will Technology Take Away Libraries

Tim Cook, Apple’s chief executive, has a longstanding philosophy that Apple should continue to invest for the future amid a downturn. It more than doubled its staff during the Great Recession and nearly tripled its sales. Lately, it has increased bonuses to some hardware engineers by as much as $200,000, according to Bloomberg.

John Chambers, who steered Cisco Systems through multiple downturns as its former chief executive, said the companies’ strong businesses and deep pockets could afford them the chance to take risks that would be impractical for smaller competitors. During the 2008 downturn, he said Cisco allowed distressed automakers to pay for technology services with credit at a time when competitors demanded cash. The company risked having to write down $1 billion in inventory, but emerged from the recession as the dominant provider to a healthy auto industry, he said.

“Companies break away during downturns,” Mr. Chambers said.

Excelling will require disregarding the broader market’s gloom, said David Yoffie, a professor at Harvard Business School. He said previous downturns had shown that even the strongest businesses were susceptible to profit pressures and prone to pulling back. “Firms get pessimistic like everyone else,” he said.

The first test for the biggest companies in tech will be contagion from their peers. Amazon’s shares in the electric vehicle maker Rivian Automotive have plunged more than 65 percent, a $7.6 billion paper loss. Apple’s services sales are likely to be crimped by a slowdown in advertising by app developers, which rely on venture-capital funding to finance their marketing, analysts say. And start-ups are scrutinizing their spending on cloud services, which will likely slow growth for Microsoft Azure and Google Cloud, analysts and cloud executives said.

“People are trying to figure out how to spend smartly,” said Sam Ramji, the chief strategy officer at DataStax, a data management company.

Regulatory challenges on the horizon could darken the big tech companies’ prospects, as well. Europe’s Digital Markets Act, which is expected to become law soon, is designed to increase the openness of tech platforms. Among other things, it could scuttle the estimated $19 billion that Apple collects from Alphabet to make Google the default search engine on iPhones, a change that Bernstein estimates could erase as much as 3 percent of Apple’s pretax profit.

But the companies are expected to challenge the law in court, potentially tying up the legislation for years. The probability it gets bogged down leaves analysts sticking to their consensus: “Big Tech is going to be more powerful. And what’s being done about it? Nothing,” Mr. Kramer of Arete Research said.

Jason Karaian contributed reporting.