How big is the impact of FAANG’s falling revenue?

At present, the global epidemic situation is still very serious. Under the influence of the new crown pneumonia epidemic and the decline in oil prices, risky assets such as stocks and high-yield debts have plummeted, and the liquidity of enterprises has first become tight. Under the influence of these major factors, the global stock market is also turbulent. Among them, the U.S. stock market set a historical record of market decline in March, and there was a “fuse day” for two consecutive days.

In order to save the market and save US stocks, the US government also adopted a series of measures. The White House and the Senate reached an agreement on a US $ 2 trillion economic stimulus package, which also greatly stimulated the US stock market. US stocks rose wildly on Wednesday, marking their first consecutive rise since February 5. In the short term, US stocks still stop falling, but there are still many uncertain factors affecting the subsequent trend.

Under the influence of this black swan, many global technology giants are facing an unprecedented severe test. Most of the market value and stock price evaporated in March. With the frequent red alert, how big is the epidemic’s impact on the revenue of global technology giants?

The epidemic continues to spread and the global economic contraction triggers a series of chain reactions

According to the latest data, the global epidemic situation is not very optimistic, and the number of newly diagnosed patients is still rising. According to real-time statistics released by Johns Hopkins University in the United States, as of 10:00 on March 26, Beijing time, a total of 470,000 cases have been diagnosed worldwide and 21,276 have died. Of these, 65,285 cases were diagnosed in the United States.

Under the influence of the epidemic, the economies of various countries have also been greatly affected. According to Xiaobai’s financial report, JPMorgan Chase said that due to the epidemic, the economy of almost all countries will contract in the period from February to April. Specifically, in the second quarter of this year, the European economy will experience an unprecedented plunge, the highest rate may reach 22%, the British economy will plunge 4.2%, the US economy will also plunge 14%, and the global economy will shrink sharply by 13.7%.

The epidemic is spreading rapidly around the world, and the impact on the economy is inevitable. Among the global stock markets, the market size of U.S. stocks is the largest and attracts the most attention. During this epidemic, US stocks experienced a sharp drop in March, and market sentiment is still not very optimistic. In the U.S. stock market, technology stocks account for 80%. The technology giants represented by FAANG and Microsoft have naturally been greatly affected and the stock prices have been implicated and dropped a lot.

At present, these representative technology giants arrange employees to work from home, to minimize the impact of new crown pneumonia on their business, but only as giants to deal with the epidemic. The risks are also greater, especially since their operations are spread across many regions of the world. Will the revenue in the next quarter face greater challenges?

Under the epidemic, global technology giants under pressure to surge, earnings performance will face huge growth pressure

ofQianhaitong’s strategy pointed out that among the 11-year long U.S. stocks in 2009, Chang Niu technology stocks were the big winners, and the top 10 companies in the U.S. stock market valued 7 technology companies. That’s why investors are especially fond of Microsoft and FAANG stocks. They are a barometer of US technology stocks. During this epidemic, both Microsoft and FAANG were affected, except that Netflix was one of the few companies that were less affected.

As the backbone of U.S. technology stocks, Microsoft and FAANG are not well prepared to deal with the epidemic. Employees are unprepared to work from home, the efficiency of office work is slow, the pressure on technology is increasing, and business is being affected. Great influence. At present, many investment institutions are worried about the financial performance of these technology giants in the first quarter of 2020, and the risk of revenue decline may not be fully included in the stock price.

It is undeniable that the outbreak has had a significant impact on the revenue of Microsoft and FAANG. Although their respective business developments have a focus, it is still difficult to be unaffected in the face of the outbreak. Business is affected to start discussions.

I. Facebook and Google: Advertisers cut marketing expenses

As the world-renowned social giants and search giants, Facebook and Google have big revenues from advertising business. In the fourth quarter, Facebook’s revenue reached $ 21,082 million, and revenue from advertising business was $ 20,736 million. In the fourth quarter, Google S achieved revenue of USD 46.075 billion, and the current total advertising revenue was USD 37.934 billion, accounting for about 82% of total revenue.

At the time of the crisis, the first thing companies cut was marketing spending, especially digital advertising that was easier to adjust than traditional media such as TV. This had the most obvious impact on Facebook and Google.

During the epidemic, Facebook faced a dilemma in which traffic surged while advertising revenue was damaged. The surge in traffic means that Facebook is facing increasing technical pressure, and that traffic cannot be translated into financial gains. “In countries where we are taking strong steps to slow the spread of the new crown pneumonia epidemic, we are seeing a decline in advertising,” said Alex Schultz and Jay Parik, Facebook ’s two vice presidents of infrastructure operations.

For Google, the search engine’s revenue growth also comes from many advertisers, of which travel advertising contributes about 10% to 15% of Google’s revenue. According to Yingwei’s financial report, Booking, the world’s largest OTA (online travel platform), has withdrawn its revenue guidance for the first quarter, and has recently stated that it will “slash” its marketing costs. Before that, Booking and Expedia spent hundreds of millions of dollars in marketing on Google each year. The two companies each accounted for about 3% of Google’s revenue.

Second, Netflix: Streaming media demand expands but cash flow pressure is high

Under the influence of the epidemic,