According to a report, Apple AAPL +0.38% anticipates cutting back on hiring and spending in the upcoming year, while International Business Machines (IBM) -6.57 percent’s stronger-than-anticipated results were overshadowed by the company’s downbeat outlook.
Apple’s stock increased by 0.4% to $147.67 in premarket trade on Tuesday after Bloomberg reported that Apple planned to limit employment and expenditure growth in 2023 in response to a predicted economic downturn. Apple has hinted that it plans to limit hiring in light of the rising likelihood of a recession, joining other tech giants like Meta Platforms (META), Alphabet (GOOGL), and Microsoft MSFT +0.01% (MSFT).
Despite a 9% gain in second-quarter revenue, IBM’s stock was under pressure due to investors’ concerns about the company’s short-term prospects. An earlier estimate of $10 billion to $10.5 billion in free cash flow has been cut to $10 billion.
In premarket trade on Tuesday, IBM shares fell 5% to a low of $131.24. The stock was up 3.3% for the year as of the close of trading on Tuesday.
IBM CEO Arvind Krishna said in an interview that the updated cash flow amount includes $200 million due to the suspension of operations in Russia, as well as cost inflation and foreign currency implications. The CEO said that IBM’s free cash flow expectation for the three years through 2024 has not altered.
They also feel IBM is “executing fairly admirably” in the face of macroeconomic and foreign exchange (FX) headwinds, and that the business will be judged on its ability to demonstrate free cash flow and profit margin improvement, particularly “if we end up in a recession scenario.” in-line rating and a $140 price target.
Tuesday’s premarket session saw modest gains for other IT companies. Amazon.com AMZN +0.53 percent (AMZN) was up 0.6 percent, Alphabet was up 0.8 percent, Microsoft was up 0.9 percent, and Oracle ORCL +1.14 percent (ORCL) was up 0.6 percent, all of which outperformed all other major technology companies.