Will tech giants survive 2022?

The first major social initiatives from Meta or Snap, spending cuts, sharp drop in demand for semiconductors… 2022 is a crisis for large parts of the industry after the paradoxically positive events of the year with the coronavirus epidemic. Covid.

GAFAM had turned covid to their advantage

The tech giants have fallen off their pedestal on the stock market and have a disastrous end to 2022. In 12 months, Apple, Meta (formerly Facebook), Twitter and the rest of Amazon lost hundreds of billions of dollars in market value.

This setback on Wall Street highlights doubts about their future growth. It must be said that after years of walking on water and changing the world with algorithms and platforms that make everyday life easier, they have suddenly become sensitive to the economic situation in the same way as other actors in the economy.more traditional.

Inflation, rising interest rates, the war in Ukraine dealt a blow to their years of hyper-growth.

However, Covid seemed to have sanctified the power of their models. In a matter of weeks, Gafams was able to deliver a technology that allows the world to work online and more generally to maintain a social life at a distance.

Phone apps even allowed governments to administer travel bans on people without too much hassle. But the rents generated by their innovations are starting to dry up.

Whether it is the cloud computing potential of Amazon and Microsoft, Facebook’s appetite for social networks, or even the efficiency of industrial organizations optimized for Apple, limits are beginning to appear.

As for the attempt to reinvent itself, characterized by the transformation of Facebook into Meta, it has not yet borne fruit.

Result: the technology no longer attracts investors.

Significant decline in stock market values

The stock market corrections were particularly strong for tech giants: Meta (parent company of Facebook, Instagram and WhatsApp) -65%, Amazon -49%, Alphabet (parent company of Google) -38%, Microsoft -27%, Apple -26% .

Analysts believe that with the exception of cryptocurrencies, the 2022 crisis does not represent the bursting of a bubble, but simply a violent correction after years of excess.

They therefore do not expect the industry to collapse as the fundamentals of the digital revolution remain strong, meaning the technology will continue to be a safe bet.

On the other hand, no one expects the industry to return to its disproportionate 2021 levels in 2023, even with a strong improvement in global geopolitical and economic conditions.

Meta: the symbol of a failed year for technology

After nearly two decades of relentless success, Mark Zuckerberg had 12 months of disappointments and bad news.

While the announcement of Meta’s new name and stated ambition to shift the company’s priorities to the Metaverse could have been interesting, they now face the harsh realities of the social media and online advertising markets.

It’s been more than a year since Facebook made a strategic shift by becoming Meta.

Mark Zuckerberg decided in October 2021 that his company would focus on creating a “metaverse”, a term borrowed from science fiction to make virtual reality (VR) the backbone of ambitious new markets.

The craze was immediate, and entire industries rushed into the Metaverse with the promise that virtual worlds would revolutionize the use of luxury, technology, advertising, and mass distribution.

A year later, the revolution has yet to come, and above all, Meta has not convinced.

Thus, the change in strategy became a failure: for every dollar invested in subsidiary Reality Labs (which manages Metaverse), the group lost 5 dollars.

As it remains heavily dependent on the online advertising market, which has been hit hard by economic conditions and competition from Titktok, its second-quarter revenue fell for the first time in its history.

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