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Wednesday, December 21, 2022
Editor’s note: The Yahoo Finance Tech newsletter is starting next week for the holidays. We will be back on January 4th.
The best and worst tech stocks of the year
To say the tech industry’s biggest players have had a tough 2022 on Wall Street is an understatement.
The range of challenges: Difficult year-over-year comparisons from 2021 to pandemic-era highs, rising interest rates, the highest inflation in decades and supply chain disruptions caused by China’s covid lockdowns. All combined to hit Big Tech’s stock prices.
As the year drew to a close, the bleeding did not stop. Weak digital ad sales, fears of a recession, and a slowdown in consumer spending on products like PCs have eaten away at social media firms, chipmakers, and even advances in the cloud.
All of this means that 2022 was a bad and bad year for tech stocks. To that end, we rounded up a basket of some of the biggest tech companies to compare how their stocks performed year-to-date when the market closed on December 20.
But we can’t exactly call these top-performing big-name tech stocks 2022.
More importantly, year-to-date, shares of these companies are down more than the S&P 500’s -19.82%. So instead, we call these the best-ish and worst tech stocks of 2022. Note: All prices are as of noon on December 21, 2022.
The ‘best’ actors
Apple (-25.49% YTD)
A stock that has seen its price drop more than 25 percent year-to-date can be one of the best performers of any given year, but 2022 was not like most years. So here we are, Apple (AAPL) sitting on top.
The company started the year with its best Q1 revenue of $123.9 billion and continued the trend through the fourth quarter. But Apple was hurt by foreign currency, which reduced 3 percent of its overall revenue numbers in Q3. Then came reports that the company had to trim production orders for the iPhone 14 Plus due to lower-than-expected sales. However, there was hope that many consumers were returning to Apple’s expensive iPhone 14 Pro line, which would push up Apple’s average iPhone selling price.
Unfortunately, the Covid-19 lockdowns and worker protests in China at Foxconn’s largest iPhone factory have hampered Apple’s ability to get Pro smartphones into consumers’ hands in time, extending wait times by weeks.
That said, Apple’s position as a stalwart in the technology industry — and continued demand for its products and services — helped ensure the stock ended 2022 better than many of its peers.
Microsoft (-27.34% YTD)
Microsoft ( MSFT ) launched 2022 with its most important Intelligent Cloud business, which includes the Azure platform. And while the dividend continued to grow throughout the year, it started to slow down compared to the highs it saw in 2021.
In the October quarter, Microsoft reported a 20% year-over-year decline in its Intelligent Cloud business, far below the 31% growth the segment posted in the same quarter last year. Azure growth specifically fell to 35% in Q1 and 50% in the same quarter last year.
The company had to contend with a steep decline in digital ad sales and PC sales led by the pandemic. Microsoft pointed to a number of macro headwinds that weighed on its bottom line during the year, including the war in Ukraine, foreign exchange rates and the COVID-19 lockdown in China.
Like Apple, however, Microsoft’s stock still manages to outpace its rivals’ shares in 2022 (listed below).
Qualcomm (-37.44% YTD)
Companies like Intel ( INTC ) and NVDA ( NVDA ) fell as consumers and businesses cut back. On PC purchases as the chip shortage eases. The result? Companies ended up with high inventory levels with nowhere to sell silicon. Even so, Qualcomm ( QCOM ), which primarily makes chips for smartphones, beat its peers in 2022 chip stocks.
To be sure, the company had to revise down its quarterly expectations for the year, and continued to warn of declining phone sales. Still, Qualcomm’s decision to offer its chips to other sectors, including the automotive and server markets, could serve as a way for the company to move away from its reliance on smartphone sales.
Perhaps one of Qualcomm’s biggest surprises of 2022 was the announcement that it will supply 5G chips to Apple’s iPhones in 2023. Apple was originally expected to start ripping off Qualcomm for its own chips, but that hasn’t been enough of a workout. Bloomberg reported that the company’s planned route was due to technical difficulties in building the chips.
Very bad performers
AMD (-53.31%)
If Apple’s stock price is down more than 25 percent and still tops the list of best performers, you know the worst-performing stocks are bound to have a terrible year. And with AMD ( AMD ) down 53.31% year-to-date, you’d be right.
The chipmaker faces many of the same challenges as its peers in 2022, including a sharp slowdown in PC sales compared to when everyone was in the market for a new computer during the pandemic. Like Qualcomm, AMD had to revise its fiscal year earnings downwards to account for a decline in PC sales in 2022.
Tesla (-60.62% YTD)
Tesla ( TSLA ) has gained all year. In the year While it started strong in 2022, it faced a war of rising foreign exchange rates and rising commodity prices. It didn’t help that the electric automaker had to deal with the COVID shutdown in China, which affected its ability to produce vehicles in the market.
But you can’t talk about Tesla’s performance in 2022 without discussing CEO Elon Musk’s takeover of Twitter. The move, which saw Musk seek to buy the company and then backtrack after Twitter agreed to buy the social network ahead of possible lawsuits over his attempt to renege on the deal — has become one long headache.
The mercurial CEO has laid off employees, made controversial arbitration decisions and recently suspended the accounts of journalists who reported the suspension of accounts that posted information about Musk’s private jet. All the while, questions swirled about whether Mook was able to run Tesla at the same time as Twitter, SpaceX and his other ventures. Tesla investors are also worried that Tesla’s stock price will suffer as Mook is using Twitter to keep the EV maker afloat.
Meta (-64.41%)
Things couldn’t get any worse for the meta this year. The company’s stock price fell a staggering 64.41% year-to-date on weak reports. First, Meta was hit by declining digital ad sales throughout the year. That’s compounded by the impact of Apple’s iOS privacy changes, which have reduced Meta’s overall sales since its introduction in 2021.
He also criticized how much the company is spending in its efforts to become the number one company in the metaverse. In the year After throwing in $10 billion in 2021 efforts, Meta will spend even more later this year.
Still, there is no sign that the move is viable.
Meanwhile, Facebook is losing popularity among younger users as TikTok continues to capture teenagers and increasingly older users. According to an August survey by the Pew Research Center, only 32 percent of 1,316 young respondents said they use the Meta Facebook app.
All this led to Meta laying off about 11,000 workers in November.
If one company wants to dramatically turn things around in 2023, it’s simply Mark Zuckerberg’s meta.
as if Daniel Hawley, technology editor at Yahoo Finance. Follow him. @Daniel Hawley
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