Big Tech falters on dreary earnings and forecasts for Q4— Meta has worst week ever, Amazon tumbles 13%
Facebook CEO Mark Zuckerberg
Marlene Awaad | Bloomberg | Getty Images
Other than Apple, it was a brutal earnings week for Big Tech.
Alphabet, Amazon, Meta and Microsoft combined lost over $350 billion in market cap after offering concerning commentary for the third quarter and the remainder of the year. Between slowing revenue growth — or declines in Meta’s case — and efforts to control costs, the tech giants have found themselves in an unfamiliar position after unbridled growth in the past decade.
Third-quarter results this week came against the backdrop of soaring inflation, rising interest rates and a looming recession. Apple bucked the trend after beating expectations for revenue and profit. The stock on Friday had its best day in over two years.
On the opposite end of the spectrum was Meta, which has seen its stock price collapse in 2022. Facebook’s parent came up short on earnings, recorded its lowest average revenue per user in two years and said sales in the fourth quarter will likely decline for a third straight period.
“There are a lot of things going on right now in the business and in the world, and so it’s hard to have a simple ‘We’re going to do this one thing, and that’s going to solve all the issues,'” Meta CEO Mark Zuckerberg said on the company’s earnings call on Wednesday.
Meta’s stock had its worst week since the company’s IPO in 2012, plunging 24% over the past five days. Microsoft fell 2.6% for the week, due to a 7.7% decline on Wednesday after the company gave weak guidance for the year-end period and missed estimates for cloud revenue.
Things were also bleak at Amazon, which dropped 13%. A gloomy fourth-quarter forecast along with a dramatic slowdown in its cloud-computing unit were largely to blame for the sell-off.
While Amazon Web Services saw expansion slow to 27.5% from 33% in the prior period, Google’s cloud group, which is significantly smaller, sped up to almost 38% growth from around 36%. Google plans to keep spending in cloud even as it intends to rein in headcount overall growth in the next few quarters.
“We are excited about the opportunity, given that businesses and governments are still in the early days of public cloud adoption, and we continue to invest accordingly,” Ruth Porat, Alphabet CFO, said on a conference call with analysts on Tuesday. “We remain focused on the longer-term path to profitability.”
However, results from the rest of Google parent Alphabet were less impressive. The company’s core advertising business grew just slightly, and YouTube’s ad revenue dropped from the prior year. The reverse was true for Amazon, which is playing catchup to Google and Facebook in digital advertising. In Amazon’s ad business, revenue growth accelerated to 30% from 21%, topping analysts’ estimates.
“Advertisers are looking for effective advertising, and our advertising is at the point where consumers are ready to spend,” said Brian Olsavsky, the company’s finance chief. “We have a lot of advantages that we feel that will help both consumers and also our partners like sellers and advertisers.”
Analyst Aaron Kessler at Raymond James lowered his price target on Amazon stock to $130 from $164 after the results. But he maintained his equivalent of a buy rating on the stock and said the company’s “robust advertising growth” has the potential to help Amazon fatten up its margin.
As investors continue to rotate away from tech, they’re finding money-making opportunities in other parts of the market that had previously lagged behind software and internet names. The Dow Jones Industrial Average rose 3% this week, the fourth weekly gain in a row for the index. Prior to 2021, the Dow had underperformed the Nasdaq for five straight years.
WATCH: Wall Street set to open in the red as investors digest disappointing tech earnings
Sundar Pichai, chief executive officer of Alphabet Inc., during the Bloomberg Tech conference in San Francisco, California, US, on Wednesday, June 4, 2025.
David Paul Morris | Bloomberg | Getty Images
With the AI talent wars heating up between companies like OpenAI, Meta and Anthropic, one way Google has been competing is by aggressively rehiring former employees.
Some 20% of software engineers working on artificial intelligence that Google hired in 2025 were so-called boomerang employees, an increase from prior years, CNBC has learned. A Google spokesperson confirmed the statistic remains accurate as of December, and said the company saw a jump in the number of AI researchers coming from major competitors compared to 2024.
“We’re energized by our momentum, compute, and talent — engineers want to work here to keep building groundbreaking products,” the spokesperson said in a statement.
John Casey, Google’s head of compensation, recently told employees in a meeting about the rehiring. Casey said AI-focused software engineers are drawn to Google’s deep pockets and hefty computational infrastructure that’s needed to perform advanced AI work, according to audio reviewed by CNBC.
Google has a large pool of ex-employees to mine, particularly after its largest ever round of layoffs in early 2023, when parent company Alphabet cut 12,000 jobs, reducing headcount by 6%. That followed a market downturn driven by soaring inflation and rising interest rates. Google has since continued with rolling layoffs and buyouts.
Across the industry, employee boomerangs are up, according to data published earlier this year by ADP Research, with the sector it classifies as information showing the starkest numbers.
Google has been racing to catch up in generative AI after a slow start that followed OpenAI’s release of ChatGPT in late 2022. After fumbling a number of product rollouts, the company has bounced back this year, thanks to hefty investments in AI infrastructure and the success of its Gemini app. Google announced its latest model, Gemini 3, last month.
Alphabet’s stock price is up more than 60% this year, outperforming all of its megacap peers.
As a historical hotbed of engineering and innovation, Google has long been a place where competitors have turned to try and poach talent. That’s still the case.
Earlier this year, Microsoft hired around two dozen employees from Google’s DeepMind AI research lab, CNBC reported in July. OpenAI, meanwhile, has opened its wallets wide, along with Meta. OpenAI CEO Sam Altman told employees in June that Meta had been offering $100 million signing bonuses, and that he was aggressively trying to retain staffers.
Late last year, Google brought back a major figure in AI: Noam Shazeer.
Shazeer and Daniel De Freitas left Google in 2021 to start AI platform Character.AI, reportedly departing after Google rebuffed their attempts to try and get the company to push its internal chatbot forward.
Along with other members of the Character.AI research team, Shazeer and De Freitas rejoined DeepMind in August 2024 under a licensing deal for the startup’s technology.
Over the last year, Google has taken more risks, shipping products more quickly, even if they aren’t viewed as completely ready. Google has also made a companywide effort to remove bureaucracy, enacting widespread employee buyouts and eliminating more than one-third of its managers overseeing small teams, CNBC reported in August.
Google co-founder Sergey Brin, who came out of retirement in 2023, has at times personally reached out to prospective candidates to recruit them, according to people familiar with the matter who asked not to be named because they weren’t authorized to speak to the media. Meta CEO Mark Zuckerberg has also reportedly reached out to researchers on behalf of his company.
WATCH: OpenAI’s Sam Altman says Google is still a huge threat
Dado Ruvic | Reuters
Palo Alto Networks will migrate key internal workloads to Google Cloud as part of a new multibillion-dollar agreement, the companies announced on Friday.
The companies said the deal is an expansion of their existing strategic partnership and will deepen their engineering collaboration.
Palo Alto Networks is now using Google’s Gemini artificial intelligence models to power its copilots, and it is also using Google Cloud’s Vertex AI platform, according to a release.
“Every board is asking how to harness AI’s power without exposing the business to new threats,” BJ Jenkins, president of Palo Alto Networks, said in a statement. “This partnership answers that question.”
Palo Alto Networks, which offers a range of cybersecurity products, already has more than 75 joint integrations with Google Cloud and has completed $2 billion in sales through the Google Cloud Marketplace.
As part of the new phase of the partnership, Palo Alto Networks customers will be able to protect live AI workloads and data on Google Cloud, maintain security policies, accelerate Google Cloud adoption and simplify and unify their security solutions, the companies said.
Shares of Palo Alto Networks were up 1% on Friday. Google shares were mostly flat.
“This latest expansion of our partnership will ensure that our joint customers have access to the right solutions to secure their most critical AI infrastructure and develop new AI agents with security built in from the start,” Google Cloud President Matt Renner said in a statement.
WATCH: Google unveils ‘Gemini 3 Flash’ AI model focused on speed and cost
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