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Monthly Market Update: January

After a brilliant 2023 for tech investors, big tech company earnings for the final quarter were much anticipated and didn't disappoint. January also saw further instability in the Middle East and slowing US inflation. Let’s take a deeper look!

Tech Earnings

Alphabet and Microsoft both beat Q4 2023 expectations yet their share prices both fell after they each on the 30th January.

Both companies successfully rode the AI wave of 2023 and dramatically cut costs. Microsoft is up 50% in the past 12 months and surpassed Apple on January 11th to become the world’s most valuable publicly traded company. 

  • Alphabet reported revenue of $86.31 billion, 13% higher than Q4 of 2022 and  its fastest since early 2022. Earnings per share of $1.64 also beat estimates by $0.05.

  • Microsoft's revenue grew 18% to $62.02 billion and its earnings per share of $2.93 was $0.15 above estimates.

Both companies also beat expectations within their cloud businesses, with Alphabet and Mircosotf’s cloud businesses growing 25% and 30% respectively.

Meta, Apple and Amazon released their results just two days later on the 1st February.

  • Meta shares jumped 14% after its earnings report and the announcement of its first ever dividend. Revenue was $40.1 billion vs $39.2 billion expected, a  25% increase over Q4 2022. Earnings per share was $5.33 vs $4.96 expected.

  • Apple’s revenue grew for the first time in a year to $119.58 billion vs analyst expectations of $117.91 billion. It also beat on earnings per share with $2.18 vs $2.10 expected.  Unfortunately sales in China fell 13% which led to the stock falling about 2% after its earnings were announced.

  • Amazon made $170 billion, up 14% and its earnings per share were $1.00, way ahead of the $0.80 analysts expected. It also gave strong guidance for the first quarter of 2024, expecting revenue of between $138 - $143.5 billion.

Meta sign

Meta was arguably the star of the show in the final quarter of 2023 with Dan Ives of Wedbush Securities calling the better than expected earning results “a turnaround for the ages.”

So it seems like all the big tech companies are doing great! But can their share prices rise much further in 2024 after the great year they had in 2023?

Middle East Tensions Rise

Antony Blinken, the United States Secretary of State, expressed serious concerns about escalating tensions in the Middle East at the end of January, describing the situation as the most critical since 1973. 

The statement came after an attack on a US army base on Sunday 28th in Jordan in which 3 US servicemen died and another 40 were injured. The Biden administration has said it will respond to the attack with a series of strikes on Iranian targets in Syria and Iraq according to CBS News.

A US official revealed that a mistake in identifying an enemy drone as a US drone led to the failure of the US military to intercept it on Sunday. This drone approached the base near the Jordan-Syria border. 

The incident marks the first American casualties since the Israel-Hamas conflict began on October 7 and has put pressure on Joe Biden to address these attacks on US personnel and interests effectively.

Oil extraction

The attack sent oil prices up with Brent Crude reaching about $81 per barrel, although this wasn’t actually as high as some had expected. The ongoing tension in the region though will have a huge impact on how oil performs in the rest of 2024.

US Inflation Dips

The Federal Reserve's primary measure of US inflation dropped below 3% for the first time since 2021, marking a week of positive developments for the country’s economy. The slowdown means there’s a higher chance of  interest rate reductions and will surely give Joe Biden's re-election campaign a boost.

The core personal consumption expenditures index, which excludes food and energy prices due to their volatility,  increased by 2.9% year on year in December, a decline from 3.2% in the previous month. The broader index, which includes food and energy prices, remained at 2.6%. 

US inflation data December 2024

The news followed unexpectedly high economic growth in the last quarter of 3.3%, concluding a year of exceptional performance for the US with a 3.1% growth rate, making it the fastest growing major economy in 2023.

Although the US economy appears to be heading in the right direction, many Americans feel that  it’s not where it should be. Bad news for the incumbent president as the election will take place in November this year. Despite America’s economic strength, the outcome of the election remains totally uncertain.

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James Ashoo

Senior Content Writer

James has been investing for over five years. His aim is to explain the hard stuff, easily! When he's not chewing your ear off about stocks and crypto, he'll most likely be telling bad jokes.

Harjas Singh

Harjas Singh

Chief Product Officer & Co-Founder

With a wealth of experience in fintech, Harjas is the man in the know when it comes to all things product. Investing features, chatting capabilities and thriving communities – he oversees all development on the Shares app!

Harry Harrison

Harry Harrison

Finance Writer

Harry is an experienced business writer, with a love for all things tech. In his free time, he enjoys reading, playing sport and winning at chess. He also loves posting inside the Shares app!