Big tech shocks but Atlassian tells the real story

Tech stocks might be surging, but Friday morning brought a reminder that tech revenue growth is slowing and profitability is under pressure, as consumers and advertisers reduce their spending under the weight of higher interest rates and weaker economic activity., with tech stocks leading markets higher – Facebook owner Meta Platforms surged a stunning 23 per cent, Amazon and Alphabet jumped 7 per cent, and Apple, the world’s largest company, rose 3.7 per cent.

But it was the December quarter result from Australian-born tech giant Atlassian – and the savage reaction to those numbers – that really shows what’s going on in the tech sector.Alphabet’s numbers came first. It missed top and bottom-line estimates, with advertising revenue well under what Wall Street expected.

“We’re working really hard to streamline our costs and trying to do so at the same time that we don’t give up on the long term strategic investments that we believe can meaningfully change broad customer experiences and change Amazon over the long term.” Its shares crashed 13 per cent in after hours trade – eclipsing the 7.1 per cent jump in the main session on Thursday night after it missed on both revenue and earnings expectations and delivered soft revenue guidance for the March quarter; with revenue of $US890 million to $910 million forecast, versus expectations of $US900 million.

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