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Market volatility hammers tech giants Apple, Microsoft, Google

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Yahoo Finance's Dan Howley joins the Live show to discuss the ongoing market volatility in the tech sector.

Video Transcript

- The market sell-off continues to batter that tech sector, and that is where we find tech editor, Dan Howley, who has been covering the space and looking at all the sell-offs in this sector. Dan.

DAN HOWLEY: That's. Right. Yeah, we're seeing a lot, obviously, of movement in both the big tech stocks, as well as the smaller tech stocks. When you're talking about something like an Apple, like an Amazon, like a Microsoft, those are all being battered, obviously-- Amazon as well. And there's different reasons for why these companies are taking individual hits, outside of just the broader sell-off. Now, Apple has the issue, obviously, with COVID lockdowns in China. That impacts, not only production, but also sales, because people just can't get out and buy things when they're locked down.

Alphabet-- they're going down because of the market, but also because they can't sell as many ads, or they're having more issues selling ads. That's as a result of-- well, they'll chalk it up to the China lockdowns as well, somehow. But the war in Ukraine, as well as rising interest rates or expected rising interest rates and rising inflation, then we have Microsoft. They're dealing with similar issues. Obviously, so many businesses went out and went towards the cloud, as a result of the lockdowns that we had seen. So there's not as many people that need to get on the cloud at this point.

And then Amazon, they just simply have too many employees now and too much space. They don't need as much after they saw that huge explosion, people needing to start purchasing things online. So in addition to the general market conditions, all of these companies have their own individual problems going on as well. Then we have the smaller stocks, Zoom, DocuSign, after huge pandemic darlings, obviously, those stocks saw their shares explode during the pandemic. But they have since fallen back to Earth, as people realized, that drinking and talking to your friends on Zoom every night sucks. So we've seen the shares start to fall back there. Obviously, over the year to date, really big losses for them, as well as tech in general. But for those particular ones, they're getting hammered.

- OK. And so, what was interesting about this too, especially in the cloud landscape that you were talking about a moment ago, it was really strong for a company in Oracle, and what we were hearing just days ago. What's different then, if we're looking at these companies and the cloud plays that they've brought on to their own operations, and tried to make sure that if you're a company like Google or Microsoft, that you do have that differentiating factor between those lines of businesses in gaming, and cloud, and advertising, versus an Oracle that's saying, hey, the demand for us is pretty strong?

DAN HOWLEY: Yeah, I mean, Microsoft is massive, right. They're the second largest cloud provider in the world, right. It's Amazon, Microsoft, and then everybody else, right. We'll, just sprinkle in a couple of Oracle's and Google's, and what have you. So I think, obviously, it's going to be a bigger problem for Microsoft, just because of the size of the market that they control at this point. They're also dealing with-- again, so many people have gone with them. That becomes the issue, as interest rates eventually-- we probably get the announcement later. We're going to start to see more companies start to pull back.

We've already seen some of that. Microsoft announcing that they were going to be doing some hiring freezes, by the way, and their Teams and office. Teams, Teams, capital T-- Team. And we're seeing the same thing across the board, with a lot of tech companies-- Amazon doing a little bit of hiring freeze. Apple-- there's reports that, some of the geniuses and their stores aren't being backfilled. Nothing, so far, about the actual campus, the white collar side of things for Apple. But the retail side of things, that's where we're hearing rumblings, but nothing official yet.

- Well, I need my Apple Watch fixed. I'm coming to you Dan Howley, I'm coming to you very soon.

DAN HOWLEY: I'll do it.

- I know you will. Dan Howley, thanks so much. We'll talk to you soon