Earnings from Meta, Amazon, Google, and Intel were better than expected, sparking hope that the post-pandemic hangover is fading, but sales growth still lags
Meghan Bobrowsky / Wall Street Journal :
Context & Ripple Effects
Six months after earnings from Amazon, Microsoft, Meta, Alphabet, and Intel signaled boom times were over, the same cohort is posting results that top expectations again. The swing matters because the 2022 quarter was driven down by inflation, weak demand, and rising rates — so a beat here reads as the first evidence the hangover is lifting.
The caveat in this report is that sales growth still lags, meaning the improvement is coming off a depressed base rather than from renewed expansion. The subsequent ad market turnaround, with Meta ad sales up 24% and Amazon's up 27%, shows where that revenue recovery eventually landed.
First-order effects
- Meta, Amazon, Google, and Intel get immediate investor relief after the demand-driven miss cycle of late 2022, with expectations reset upward for the rest of the year.
- Because the beats outpace sales growth, each company's cost-cutting programs — not new demand — are doing the work, keeping pressure on hiring and discretionary spend.
Second-order effects
- Advertisers reading the same signals shift budget back toward performance platforms first, which is why Meta's and Google's ad lines lead the recovery when it confirms in later quarters.
- Rivals that missed the quarter face a harder comparison: they now have to show both margin discipline and returning demand against a cohort that has banked its cost cuts early.
Third-order effects
- If profitability consistently recovers ahead of revenue across these four, the industry's cycle structure inverts — margins become leading indicators and topline growth a lagging one.
- The pattern also sets up the next capital-allocation fight: once costs are cut and cash returns, boards pivot to new spending narratives, which later splits investors sharply between rewarding Microsoft's and Alphabet's AI capex while punishing Meta's.
The trend: Big Tech's post-pandemic recovery runs cost-cuts-first and revenue-second, with the advertising line — led by Meta and Google — as the confirming signal of real demand returning.