You can split hairs over profit margins and buybacks, but this earnings season proves that tech investors really only care about growth.
That’s exactly what the likes of Amazon.com (AMZN), Alphabet (GOOGL) and Facebook (FB) failed to deliver in the last week. (Click here for more on those.) And now Apple (AAPL), mighty Apple, is suffering a similar fate.
Sure, the bottom and top lines both surpassed estimates. And yes, CEO Tim Cook successfully raised iPhone prices and repurchased $23 billion of stock. That kind of tinkering can lift a food stock or chemical maker, but it means little to the kind of investors who buy tech stocks.
They prefer to look at sheer growth and forward guidance. And that’s where AAPL came up short. Its 46.89 million iPhones missed estimates by more than 500,000 units. The company’s new services revenue failed to impress, and guidance for the holiday quarter was downright poor.
As a result, AAPL’s down more than 7 percent — its worst drop since early 2014.
As previously reported on Market Insights, AAPL’s news is consistent with an unraveling of growth stories across broader technology space. You also have a slowing in chips and possibly electronic payments.
Do you know about the showdowns in tech? Stay tuned to Market Insights for special reports on how some of the biggest players in Silicon Valley plan to compete in each other’s core businesses.
Finally, all these weak results may have damaged the Nasdaq-100’s chart. Remember 7,000 was a key zone from earlier in the year. It tried to close above it yesterday but today is back below. Is old support becoming resistance?