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Wednesday, Dec. 21, 2022
Editor’s note: The Yahoo Finance Tech Newsletter will be taking off next week for the holidays. We’ll be back on Jan. 4.
The best-ish and worst tech stocks of the year
To say the tech industry’s biggest players had a rough 2022 on Wall Street would be an understatement.
The litany of problems: difficult year-over-year comparisons to 2021’s pandemic-era highs, rising interest rates, the highest inflation numbers in decades, and supply chain bottlenecks caused by COVID lockdowns in China. All combined to whack Big Tech’s stock prices.
The bleeding hasn’t stopped as the year comes to a close. Poor digital ad sales, recession fears, and a slowdown in consumer spending on products like PCs hammered social media firms, chip makers, and even managed to eat into cloud growth.
All of that is to say, 2022 has been a year of bad and worse for tech stocks. To that end, we’ve put together a basket of some of the biggest tech companies to compare how their shares have performed year-to-date as of midday on Dec. 20.
But we can’t exactly call these the best performing big-name tech stocks of 2022.
After all, year-to-date, shares of these companies were down more than the S&P 500’s -19.82%. So instead, we’re calling these the best-ish and worst performing tech stocks of 2022.
‘Best’ performers
Apple (-25.49% YTD)
A stock that’s seen its price drop more than 25% year-to-date would likely be among the worst performers any other year, but 2022 wasn’t like most years. So here we are, with Apple (AAPL) sitting at the top.
The company kicked off the year with its best Q1 revenue to-date—$123.9 billion—and continued that trend through the fourth quarter. But Apple also suffered as foreign exchange rates cut 3% from its overall revenue numbers in Q3. Then there were the reports that the company needed to trim manufacturing orders for the iPhone 14 Plus amid lower than expected sales. There was hope, however, that that meant more consumers were turning toward Apple’s pricier iPhone 14 Pro line, which would raise Apple’s average iPhone selling price.
Unfortunately, COVID lockdowns in China and worker protests at Foxconn’s largest iPhone plant hampered Apple’s ability to get its Pro smartphones into consumers’ hands in a timely manner, extending wait times by weeks.
That said, Apple’s standing as a stalwart in the tech industry space—and continued demand for its products and services—helped ensure that its stock ended 2022 in a better position than many of its peers.
Microsoft (-27.34% YTD)
Microsoft (MSFT) started off 2022 with a strong showing from its all-important Intelligent Cloud business, which includes its Azure platform. And while the division continued to grow throughout the year, it began to slow compared to the highs it saw in 2021.
In its October quarter, Microsoft reported growth in its Intelligent Cloud business slowed to 20% year-over-year, far lower than the 31% growth the segment saw in the same quarter last year. Azure growth, in particular, fell to 35% in Q1 versus 50% in the same quarter last year.
The company also had to deal with falling digital ad sales as well as a steep drop in PC sales from their pandemic-driven highs. Microsoft pointed to a number of macro headwinds that cut into its bottom line over the year including the war in Ukraine, foreign exchange rates, and COVID lockdowns in China.
Like Apple, though, Microsoft’s stock still managed to outpace shares of its competitors (listed below) in 2022.
Qualcomm (-37.44% YTD)
Companies like Intel (INTC) and Nvidia (NVDA) got hammered as consumers and businesses cut back on PC purchases just as the chip shortage eased. The result? Firms ended up with elevated inventory levels with nowhere to sell their silicon. Despite that, Qualcomm (QCOM), which primarily develops chips for smartphones, beat out its fellow chip stocks in 2022.
To be sure, the company needed to revise its quarterly expectations downward during the year, and continued to warn of a drop in handset sales. Still, Qualcomm’s decision to supply chips to other sectors including the automotive and server markets could serve as a means for the company to pull itself away from its dependence on smartphone sales.
Perhaps one of the biggest surprises out of Qualcomm in 2022 was the announcement that it will provide the bulk of 5G chips for Apple’s iPhones in 2023. Apple was originally expected to start cutting out Qualcomm for its own chips, but that didn’t quite workout the way the company planned due to technical problems building the chips, as Bloomberg reported.
Worst performers
AMD (-53.31%)
If Apple takes the top spot of best-ish performers despite its share price falling more than 25%, you know the worst performing stocks had to have a terrible year. And with AMD (AMD) dropping 53.31% year-to-date, you’d be correct.
The chip maker suffered many of the same problems its peers faced in 2022, including a steep slowdown in PC sales compared to during the pandemic when everyone was in the market for a new computer. Like Qualcomm, AMD had to revise its fiscal year revenue downward to account for the drop in PC sales in 2022.
Tesla (-60.62% YTD)
Tesla (TSLA) has had quite the year. While it started off 2022 strong, it faced an uphill battle from foreign currency rates and increases in the prices of raw materials. It didn’t help that the electric automaker also had to deal with COVID shutdowns in China, impacting its ability to produce vehicles in the market.
But you can’t talk about Tesla’s performance in 2022 without also discussing CEO Elon Musk’s Twitter takeover. The move, which saw Musk seeking to buy the company, then trying to back out after Twitter agreed—and finally purchasing the social network ahead of a potential lawsuit over his attempt to abandon the deal—has been one long headache.
The mercurial CEO fired staff, made controversial moderation decisions, and, recently, suspended the accounts of journalists who reported on the suspension of an account that posted information about Musk’s private jet. All the while questions swirl about whether Musk is able to keep running Tesla, while simultaneously dealing with Twitter, SpaceX, and his various other ventures. Tesla investors are also worried that Musk is using the EV maker to keep Twitter afloat, hurting Tesla’s share price.
Meta (-64.41%)
Things seemingly couldn’t get worse for Meta (META) this year. The company’s stock price fell a staggering 64.41% year-to-date on a host of poor reports. First off, Meta was struck by the decline in digital ad sales throughout the year. That’s compounded by the impact of Apple’s iOS privacy changes, which have been cutting into Meta’s overall sales since it was introduced in 2021.
The company has also been criticized for how much it’s spending on its quest to become a metaverse-first company. After dropping $10 billion on the effort in 2021, Meta is going to spend even more by the end of this year.
There’s still no sign that the move is paying off either.
Meanwhile, Facebook is becoming less popular with younger users, as TikTok continues to snap up teens and, increasingly, older users. According to an August study by the Pew Research Center, just 32% of the polls 1,316 responding teens say they use Meta’s Facebook app.
All of this culminated in Meta laying off some 11,000 employees in November.
If one company needs to dramatically turn things around in 2023, it’s easily Mark Zuckerberg’s Meta.
By Daniel Howley, tech editor at Yahoo Finance. Follow him @DanielHowley
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