This analysis was first published in SvD Näringsliv, in Swedish, on February 3rd, 2023. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Apple, Amazon, and Alphabet all reported the quarters everyone had been dreading. Not even the very biggest can stand against the macro environment.

Thursday started so well for stock traders.

The Nasdaq Composite surged and recorded its best start to a year since 1975. The S&P 500 was up and pushing toward its highest point in five months.

Was this the moment the tech market would turn upward again?

Because even though individual stocks showed strong gains, really only three names mattered on Thursday — Apple, Amazon, and Google’s parent company Alphabet. All three chose to report quarterly results on the same day, offering a collective picture of how the tech giants are faring.

The tone was set by Alphabet CEO Sundar Pichai, who opened his presentation to investors in grim terms:

“It’s clear that after a period of significant growth in digital spending during the pandemic, the macroeconomic environment has become more challenging.”

A translation without all the corporate polish would go something like: “it was fun while it lasted, but the party seems to be over.”

Revenue from Google’s search ads fell for only the second time since the company went public in 2004. YouTube revenue also fell, causing Alphabet to come in below market expectations. Alphabet’s share price, which had risen alongside the general optimism earlier in the day, immediately reversed course.

Apple’s numbers arrived shortly after, and they didn’t exactly lift the mood.

Apple posted a 5 percent decline in sales — its biggest drop since 2016. Production problems in China, the strong dollar, and the aforementioned “macroeconomic environment” were all cited as contributing factors by CEO Tim Cook. The company also missed analyst expectations on both revenue and profit. It was the first time in seven years Apple had done so.

“We had record revenue in markets like Canada, Indonesia, Mexico, Spain, Turkey, and Vietnam,” Tim Cook said at the start of his presentation on Apple’s results.

All credit to those markets, but the company has had to dig deep to find optimistic signals when countries like these are being cited in this kind of context.

Two countries were absent from the list — the US and China. Apple’s two most important markets by a wide margin. Successes in Vietnam or Spain cannot compensate for weakness there.

The third tech giant, Amazon, fared somewhat better than the others.

But that was partly because it had already absorbed the blow in the previous quarter, when it gave a weak forecast heading into the crucial holiday season — and the stock fell 20 percent. The latest quarterly figures were more or less in line with expectations, but one concern was that growth in the important cloud services unit AWS slowed sharply. That may signal growing cost-consciousness among businesses and fewer new investments.

The three companies are often seen as competitors — Amazon and Google both sell cloud services, for example — but they are also partners. Apple sells products on Amazon, Amazon buys enormous amounts of advertising from Google, and Google pays Apple billions to be the default search engine in Apple’s Safari browser. Even the tech giants aren’t big enough to be completely independent of each other.

Despite their different business models, they operate in the same markets and are affected by the same macro factors.

None of them — not even Apple, which has held up best on the stock market among the largest — can resist inflation, supply chain disruptions, pandemics, and a potentially approaching global recession. Thursday’s reports make clear that even the biggest players struggle to manage a volatile world.

When the giants stumble, the consequences reach far beyond their own balance sheets.

The largest tech companies have for many years acted as locomotives for both the tech sector and the stock market as a whole. These three stocks — Apple, Amazon, and Alphabet — together account for nearly 11 percent of the entire S&P 500 index. They weigh heavily in most people’s fund portfolios, whether or not they have actively bought the shares.

How they perform also affects tech companies around the world. There isn’t a CEO anywhere who isn’t watching these numbers and drawing conclusions about what they might mean for their own business.

Being a tech giant is a privileged position. For many years they have shown total dominance in their respective markets, with metrics that most other companies can only dream about.

But after a long stretch of seemingly endless gains, we are now seeing signs of weakness. For the first time in many years. You may be giants — but no one is bigger than the macro.