In a dramatic night on Wall Street, Meta Platforms and Amazon.com stole the spotlight by collectively adding an astounding $280 billion in stock market value after reporting robust quarterly results. Meanwhile, Apple experienced a setback, witnessing a $70 billion reduction in its market capitalization.
Meta’s stock soared over 14% to reach a record high of $451 after-hours, propelling its market cap to $1.16 trillion. This surge was fueled by Meta’s announcement of its first-ever dividend, a move typically associated with mature companies experiencing slow growth. Despite this, Meta delivered a remarkable 25% increase in revenue to $40.1 billion for the December quarter, driven by strong advertising and device sales.
Amazon followed suit, with its stock jumping 8% after exceeding revenue expectations for the December quarter, attributed to robust online spending during the crucial holiday shopping season. This propelled Amazon’s market capitalization to a staggering $1.78 trillion.
In contrast, Apple faced headwinds as its quarterly results, while surpassing analysts’ expectations, fell short in the Chinese market. As a result, Apple’s stock dipped 3.3%, leading to a $70 billion contraction in its market value. The competitive landscape in China has been a growing concern for Apple in recent months.
Investor optimism around generative AI has been a driving force behind the rallies of major U.S. tech companies. Microsoft, having surpassed Apple as the world’s most valuable company in January, is perceived as leading in the artificial intelligence race. Apple’s CEO, Tim Cook, hinted at exciting developments in generative AI to be unveiled later this year, acknowledging the importance of staying competitive in this technological frontier.
Analysts unanimously agree that Microsoft’s lead over Apple in stock market value is likely to expand over the next five years due to Microsoft’s early advantage in AI. Analyst Gil Luria from D.A. Davidson noted that for Apple to accelerate growth, it would require either significant contributions from new products like the Vision Pro or a generative AI-driven cycle to emerge through the iPhone 16.
Apple is set to begin U.S. sales of its Vision Pro mixed-reality headset on Friday, a move anticipated to influence its market performance. Meanwhile, Meta revealed that its 2024 capital expenditures would range between $30 billion and $37 billion, signaling continued investments in servers, some dedicated to AI applications.
In the extended trading session, chipmakers Nvidia and Advanced Micro Devices experienced gains of nearly 2%, while server maker Super Micro Computer added 2%. The surge in Meta’s market capitalization during extended trade was more than five times the entire value of smaller social media rival Snap Inc., reflecting the magnitude of Meta’s impact on the market landscape. The tech industry’s performance in the coming weeks will be closely watched as these key players navigate the dynamic and competitive terrain.