In January 2024, the U.S. tech market suffered a cold snap, and a number of well-known technology companies reported earnings reports that fell short of expectations, triggering panic and sell-off in the market. The stock prices of tech giants such as Tesla, Intel, and Microsoft have all seen a sharp **, and their market value has evaporated hundreds of billions of dollars. Does this mean that the bull market in US tech stocks is over and the myth of America's forever rise is about to be rewritten?
Tesla, the leader in U.S. technology stocks, has achieved impressive results in 2023, delivering 1.8 million electric vehicles, a 38% year-on-year increase and a record high. Tesla's stock price also peaked in 2023, once exceeding $1,000 and its market capitalization exceeding $1 trillion, making it the world's most valuable car company.
However, on January 25, 2024, Tesla announced its financial results for the fourth quarter of 2023, which disappointed investors. According to the financial report, Tesla's total revenue in the fourth quarter was 251$6.7 billion, an increase of 3% year-on-year, below analysts' expectations; Net income attributable to ordinary shareholders was 79$2.8 billion, an increase of 115% year-on-year, but non-GAAP net income was 24US$8.6 billion, a year-on-year decrease of 39%. More worryingly, Tesla's gross profit margin increased from 231% dropped to 176%, far below market expectations, and even inferior to domestic BYD and Li Auto.
After Tesla's earnings report was announced, the market immediately punished it, and Tesla's stock price fell by 12 on the same day13% at 182$63, the total market capitalization evaporated 8011.1 billion US dollars (about 5743 yuan.)800 million yuan). From its 2023 high, Tesla's stock price has increased by nearly 82%, and its market value has shrunk by nearly $800 billion.
Tesla's poor performance is mainly affected by factors such as the chain crisis, chip shortages, and raw material costs, which have led to difficulties in production and sales. In addition, Tesla is also facing challenges from competitors, including traditional automakers and emerging car manufacturers, who are increasing their investment in the electric vehicle market, launching more products and services, and competing with Tesla for market share.
Looking ahead to 2024, Tesla said its sales growth will be significantly slower than in 2023 as it works on launching next-generation vehicles at its Gigafactory in Texas, which will affect sales of its existing products. Tesla has not yet given a specific sales target for 2024, after it had been setting an average annual sales growth rate of 50%. Tesla's CEO Elon Musk said at the earnings conference that the next generation of cars is expected to go into production in the second half of 2025, which will be a difficult project, but once successful, it will revolutionize the way cars are made. Musk also said that he would "sleep on the production line" to ensure the smooth running of the project. This is also Musk's usual style, he has spent the night in the factory many times for the production of Tesla's Model 3 and Model Y.
Like Tesla, Intel is also one of the representatives of U.S. technology stocks, as the world's largest chip manufacturer, Intel has also achieved good results in 2023, with annual revenue of $61.5 billion, an increase of 8% year-on-year; Net profit was $15.3 billion, up 13% year-over-year. However, on January 25, 2024, Intel announced its earnings report for the fourth quarter of 2023, and although its revenue and net profit for the quarter exceeded expectations, its outlook for the first quarter of 2024 was much lower than market expectations, causing concern among investors.
Intel said in its earnings report that in the first quarter of 2024, its expected revenue will be $12.7 billion, down 10% year-on-year; Earnings per share were 0$13, down 87% year-on-year. The market expectation is that Intel's first-quarter revenue will be $14.2 billion, and earnings per share will be 0.$34. After Intel's earnings report, the market punished it, and Intel's stock price fell nearly 10% to 54 in after-hours trading on the day01 US dollar, the total market capitalization evaporated nearly 20 billion US dollars in one day.
Intel's poor performance is mainly due to the impact of competitors, especially Nvidia and AMD, who have surpassed Intel in high-performance computing, artificial intelligence, cloud computing and other fields to seize market share. In addition, Intel is also facing a lag in chip manufacturing processes, with its 10nm and 7nm processes progressing slowly, while competitors have introduced 5nm and even 3nm processes to improve the performance and efficiency of chips. Although Intel has announced a $20 billion investment in two new chip factories to boost its manufacturing capacity, it will take time and money, and the market will not wait for Intel.
Looking ahead to 2024, Intel said it will continue to increase R&D and investment to enhance the competitiveness of its chips, while seeking more partners to expand the application scenarios of its chips. Intel's CEO Pat Kirsaig said at the earnings conference** that Intel is confident that it will achieve revenue growth in 2024 and return to the leadership position in the chip industry. He also said that Intel will launch its first 7nm chip in the second quarter of 2024, which will be a major milestone for Intel.
Unlike Tesla and Intel, Microsoft announced its financial results for the fourth quarter of 2023 on January 25, 2024, but the results exceeded market expectations. According to the financial report, Microsoft's total revenue in the fourth quarter was 513US$900 million, an increase of 16% year-on-year, higher than analysts' expectations; Net income attributable to ordinary shareholders was 182$500 million, an increase of 28% year-on-year, also higher than analysts' expectations. Microsoft has achieved growth in all business segments, with cloud computing, office software, and gaming businesses particularly outstanding.
However, after Microsoft's earnings report was announced, the market did not give it affirmation, but sold it off, and Microsoft's stock price fell by 635% at 247$18, the total market capitalization evaporated nearly $300 billion in a day. From its 2023 high, Microsoft's stock price has risen by nearly 40%, and its market value has shrunk by nearly $4 trillion.
Microsoft's share price** was largely driven by market sentiment, with investors dumping highly-valued tech stocks in favor of more conservative value stocks amid concerns about inflation and rising interest rates. In addition, Microsoft is also facing competitive and regulatory pressures, with it competing fiercely with Amazon and Google in the cloud computing space, Sony and Nintendo in the gaming space, Facebook and Twitter in the social ** space, and Google and Google in the search engine space. Microsoft has also been subject to antitrust investigations and penalties in the United States and the European Union for its monopoly position in software such as Windows and Office.
Looking ahead to 2024, Microsoft said it will continue to drive its digital transformation strategy to meet the needs of customers and partners, while strengthening its investment in innovation and security to maintain its leading position in the tech industry. Microsoft CEO Satya Nadella said at the earnings conference** that Microsoft is confident that it will achieve double-digit growth in revenue and profit in 2024 and create more value for shareholders. He also said that Microsoft will launch its next-generation operating system, Windows 11, in the first quarter of 2024, which will be a major innovation for Microsoft.
Amazon, another leader in U.S. technology stocks, has also achieved amazing results in 2023, with full-year revenue of 1$9 trillion, up 27% year-on-year; Net profit reached $21.4 billion, up 84% year-on-year. Amazon's stock price also hit an all-time high in 2023, once breaking through $4,000 and having a market capitalization of more than $16 trillion US dollars, becoming the world's most valuable e-commerce company.
However, on January 27, 2024, Amazon announced its earnings for the fourth quarter of 2023, which disappointed investors. According to the financial report, Amazon's total revenue in the fourth quarter was $152.9 billion, an increase of 15% year-on-year, lower than analysts' expectations; Net income attributable to common shareholders was $7.5 billion, down 8% year-over-year and below analysts' expectations. What's even more troubling is that Amazon's outlook for the first quarter of 2024 is also not optimistic, with its expected revenue of $98 billion to $106 billion, a year-on-year increase of 2% to 17%, which is lower than market expectations; Operating profit was $3.0 billion to $6.5 billion, down 47% to 76% year-on-year, well below market expectations.
After Amazon's earnings report, the market sold it off, and Amazon's stock price fell by 7 at the end of the day56% at 3692$11, the total market capitalization evaporated nearly $130 billion in one day. From the high point in 2023, Amazon's stock price has increased by nearly 8%, and its market value has shrunk by nearly 1$3 trillion.
Amazon's poor performance was mainly affected by the fading of online dividends during the epidemic and the threat of competitors. Due to the easing of the epidemic, consumers' offline shopping demand has recovered, Amazon's e-commerce business has slowed down, and its logistics costs have also risen. In addition, Amazon is also facing competition from e-commerce platforms such as Walmart, IKEA, and Shopify, as well as competition from technology companies such as Apple, Google, and Facebook, which are increasing their investment in cloud computing, artificial intelligence, advertising, and other fields to compete with Amazon for market share.
Looking ahead to 2024, Amazon said it will continue to strengthen its core e-commerce and cloud computing businesses, while expanding its presence in emerging areas such as healthcare, education, and entertainment. Amazon's CEO Jeff Bezos said at the earnings conference** that Amazon is confident that it will achieve revenue and profit growth in 2024 and create more value for shareholders. He also said that Amazon will complete its first manned space flight in the first quarter of 2024, which will be a major milestone for Amazon.
As another leader in U.S. technology stocks, Facebook has also achieved impressive results in 2023, with full-year revenue of 1$2 trillion, up 25% year-on-year; Net profit reached $33.7 billion, up 36% year-on-year. Facebook's stock price also hit an all-time high in 2023, once breaking through $500 and capping more than $14 trillion US dollars, becoming the world's most valuable social ** company.
However, on January 26, 2024, Facebook announced its earnings for the fourth quarter of 2023, which surprised investors. According to the financial report, Facebook's total revenue in the fourth quarter was $33.9 billion, an increase of 28% year-on-year, higher than analysts' expectations; Net income attributable to common shareholders was $11.7 billion, up 48% year-over-year and higher than analysts' expectations. Facebook has seen growth across all business segments, with advertising, metaverse, e-commerce and other businesses performing particularly well.
However, after Facebook's earnings report, the market did not praise it, but sold it off, and Facebook's stock price fell by 8 on the day23% at 459$67, the total market capitalization evaporated nearly $120 billion in one day. From the high point in 2023, Facebook's stock price has increased by nearly 8%, and its market value has shrunk by nearly 1$1 trillion.
Facebook's stock price** is mainly affected by regulation and litigation, and it has been severely criticized and investigated by the United States and the European Union and other regions in terms of privacy, security, content moderation, competition, etc. Most seriously, Facebook is also facing antitrust lawsuits from the U.S. Federal Commission (FTC) and 48 states, alleging that it has monopolized the social market by acquiring competitors such as Instagram and WhatsApp, harming consumers and innovators. If Facebook loses the case, it may be forced to split or ** these subsidiaries, which will be a huge blow to its business and market capitalization.
Looking ahead to 2024, Facebook said it will continue to strengthen its core social and advertising business, while accelerating its layout in areas such as the metaverse and e-commerce to seize future market opportunities. Facebook CEO Mark Zuckerberg said at the earnings conference** that Facebook is confident that it will achieve revenue and profit growth in 2024 and create more value for shareholders. He also said that Facebook will launch its new brand name, Meta, in the first quarter of 2024, which will be an important transformation for Facebook. List of high-quality authors