Tallying Up Big Tech

companies. We're in a volatile period for the stock market, and Alphabet, Amazon.com, Apple, Meta Platforms, and Microsoft haven't been immune to that of late. Their combined weight of more than 25% of the S&P 500 has helped move the index dozens of points all on their own.

Surprises and missed expectations aside, the five Silicon Valley giants remain astoundingly profitable. They raked in $99 billion in net income in the last three months of 2021, on $422 billion in combined revenue.

Alphabet is the best-performing Big Tech stock over the past year, rising 39%. That compares with gains of 30% for Apple and 25% for Microsoft. After today's drop, Meta stock is down almost 11% from 12 months ago. And Amazon was off about 16% through today's close.

Here are the key points from each company's fourth-quarter report this week and last:

Alphabet
What was reported: $20.6 billion in net income, or $30.69 in earnings per share (up 38%), on $75.3 billion in revenue (up 32%)
What was expected: $27.68 in earnings per share and $72.3 billion in revenue
The good: EPS and sales solidly beat expectations, as search and YouTube advertising, and cloud computing outperformed. The company announced plans for a 20-for-1 stock split.
The bad: Nothing really. The scaling of new advertising products in 2022 will require stepped-up investment, but should pay off over time.
The stock reaction: Alphabet stock jumped 7.5% on Wednesday.

Amazon
What was reported: $14.3 billion in net income, or $27.75 in earnings per share (up 97%), on $137.4 billion in revenue (up 9%)
What was expected: $3.61 in earnings per share and $137.6 billion in revenue
The good: Quarterly earnings trounced expectations. Prime membership surpassed 200 million, and the price will increase by $20, to $139 a year.
The bad: Tough comparisons to 2020's holiday shopping season meant no growth for Amazon e-commerce last quarter.
The stock reaction: Amazon stock jumped 17% in after-hours trading Thursday.

Apple
What was reported: $34.6 billion in net income, or $2.10 in earnings per share (up 25%), on $123.9 billion in revenue (up 11%)
What was expected: $1.90 in earnings per share on $119.0 billion in revenue
The good: Despite supply chain issues and the chip shortage, iPhone sales rose 9% year over year and beat expectations. Services revenue jumped 24%, to $19.5 billion.
The bad: iPad sales fell 14% from a year ago due to supply-chain issues.
The stock reaction: Apple stock rose 7% last Friday.

Facebook
What was reported: $10.3 billion in net income, or $3.67 in earnings per share (down 5%), on $33.7 billion in revenue (up 20%)
What was expected: $3.84 in earnings per share on $33.4 billion in revenue
The good: The company is investing in the metaverse via its Reality Labs segment, which reported an operating loss of $3.3 billion.
The bad: Guidance for the first quarter missed Wall Street estimates. Management made discouraging comments about the impact of Apple software changes for ad tracking and competition from TikTok.
The stock reaction: Facebook stock tumbled 26.4% on Thursday.

Microsoft
What was reported: $18.8 billion in net income, or $2.48 in earnings per share (up 22%), on $51.7 billion in revenue (up 20%)
What was expected: $2.32 in earnings per share on $50.7 billion in revenue
The good: Windows OEM revenue—from PC makers—surged 25% on strong enterprise PC demand. Guidance for the current quarter was solid.
The bad: The company’s enterprise software segments only matched Wall Street estimates. Azure revenue growth slowed.
The stock reaction: Microsoft stock added 2.9% last Wednesday.