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This week in tech: Shares slide at Netflix, Tesla, Alphabet | Pro Recap

By Louis Juricic Read More...

By Louis Juricic

Investing.com — Here is your weekly Pro Recap on the past week’s biggest tech headlines you may have missed on InvestingPro: earnings out of Tesla and IBM; sour forecasts from Netflix and TSMC; and potential bad news for Alphabet.

Get this news in real time with InvestingPro.

Tesla’s big miss

Tesla (NASDAQ:TSLA) was sliding last week on CEO Elon Musk’s vow to continue cutting prices on the company’s electric vehicles, even though those price cuts led to a sizable earnings miss for Q1.

Musk said the price cuts are intended to heighten demand, even though they are hurting margins. More than a dozen Wall Street analysts lowered their price targets on Tesla, and at least two (Truist and Tudor Pickering) outright cut their ratings on the stock.

Shares tumbled 11.4% for the week to close at $65.08, and other automakers slid in sympathy as well.

Netflix trips on a delay

Netflix (NASDAQ:NFLX) took a fall, as well, on a disappointing forecast due to a delay in its attempt to resolve the widespread user habit of password sharing among Netflix accounts.

Still, analysts feel that the solution should ultimately yield long-term gains once it rolls out, despite the likelihood that some users may react by canceling their subscriptions.

Shares were off some 3% for the week on the news.

And InvestingPro subscribers got a heads-up first. Sign up for your 7-day free trial.

Google may lose its default-search-engine status

Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) also lost ground on Monday on a New York Times report that Samsung (KS:005930) may use for its default search engine Microsoft’s (NASDAQ:MSFT) AI-powered Bing. Currently, Samsung devices use Google as their default.

The stock lost as much as 4% Monday, although they recovered and closed fractionally higher for the week.

A ‘sigh of relief’ for IBM

On the positive side, IBM (NYSE:IBM) reported fourth-quarter earnings that beat analysts’ forecasts, driven by an uptick in margins amid demand in its software business and cost cuts.

“Investors blew a sigh of relief that IBM’s quarterly update was better than feared,” said Jesse Cohen, senior analyst at Investing.com.

BMO analysts cut the price target on IBM stock to $145 per share from the prior $155, and Morgan Stanley (NYSE:MS) analysts also slashed the price and remain cautious on rich valuation.

Shares spiked higher on the news, but ended the week down by 2% at $25.73.

Apple supplier warns of a demand hit

Chipmaker Taiwan Semiconductor Manufacturing (BVMF:TSMC34) (NYSE:TSM) flagged slowing demand in its fourth-quarter results in January, and said it would cut its capital spending in 2023 to between $32B and $36B from $36.3B in the prior year.

The firm, which also supplies chips to Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD), makes the most advanced semiconductor chips in the world, and is also Asia’s most valuable company.

ADRs of TSMC lost 2.7% for the week.

Yasin Ebrahim, Senad Karaahmetovic, and Ambar Warrick contributed to this report.

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