Visitors take photos in front of the Meta sign at its headquarters in Menlo Park, California on December 29, 2022.

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Technology ( Tech ) companies are learning an old lesson from Wall Street: Maturity means shrinking.

Meta And Amazon Its shares rose on Friday following its fourth-quarter earnings report. While both top estimates, the story for investors is that they are showing their ability to do more with less. Fascinating equation For shareholders.

There is also the recognition that investors value cash, in many cases, above all else. The tech industry has long preferred to reinvest excess cash into growth, adding jobs and experimenting with the next big thing. But after a year of heavy layoffs and capital conservation, Meta announced Thursday that, for the first time, it Quarterly Dividend 50 cents per share, while also approving an additional $50 billion stock repurchase plan.

In an interview with CNBC’s “Squawk Box” on Friday, Neuberger Berman analyst Daniel Flex said, “The key fact with these companies is that they are able to reinvent themselves.” He said they “continue to invest for the future and continue to execute while simultaneously managing costs in this challenging environment.”

Neuberger Berman's Dan Flex breaks down Big Tech's earnings results.

Amazon is moving less aggressively to send cash to shareholders, but the topic is certainly being discussed. The company established a $10 billion buyback program in 2022 and has not announced anything since. On Thursday’s earnings call, Morgan Stanley analyst Brian Novick asked about plans to return additional capital.

“I’m really excited to ask that question,” Finance Chief Brian Olsowski responded. “No one has asked me in three years.”

“We discuss and discuss capital structure policies annually or more frequently,” Olsavsky added, but said the company had nothing to announce. “We are pleased to have improved liquidity at the end of 2023 and we are going to look to continue to build on that,” he said.

After years of seemingly unstoppable growth, the world’s biggest Internet companies are firmly entering a new era. They are still looking for the best technical talent, especially in fields like artificial intelligence, but headcount growth is measured. Increasing staff in some parts of the business will likely mean moving back elsewhere.

‘Playing to win’

For example, MetaCEO  Mark Zuckerberg “We’re playing to win here and I expect us to continue to invest aggressively in this area to build the most advanced clusters,” he told investors when it comes to AI.

Later on the call, Zuckerberg was asked about increasing headcount. said The new jobs will be “relatively small compared to what we’ve had historically,” he said, adding, “I want to keep things lean.”

Olsavsky said most teams at Amazon are “looking to hold the line on headcount, maybe go down because we can increase efficiency in the size of our business.”

The story takes place in Silicon Valley. It was January. Busiest month for tech job cuts Since March, according to the website With about 31,000 layoffs across 118 companies. Amazon and the alphabet They added to the 2,023 job cuts last month with more layoffs, as done. Microsoftwhich one Eliminated 1,900 characters. in its gaming unit shortly after Activision closed its acquisition of Blizzard.

SAN FRANCISCO, CALIFORNIA – JUNE 23: Xbox CEO Phil Spencer arrives in federal court on June 23, 2023 in San Francisco, California. Top executives from Microsoft and Activision/Blizzard will testify against the FTC during a five-day hearing to determine the fate of the two companies’ $68.7B merger. (Photo by Justin Sullivan/Getty Images)

Justin Sullivan | Getty Images News | Getty Images

Downsizing hit the cloud software market this week, where Octa. What was announced? About 400 job lossesor 7% of its staff, and Zoom Confirmed it to terminate Less than 2% of its workforce, which numbers around 150. Zoora announced the project. 8 percent job lossor about 125 positions based on the latest headcount data.

Evan Sohn, chairman of, called it a “very confusing job market.” Last year, tech companies were responding to dramatically changing market conditions — rising inflation, rising interest rates, risk aversion — after an extended bull market. Meta cut More than 20,000 jobs by 2023, Amazon laid off Over 27,000 people, and alphabetically Cutting Over 12,000 positions.

The economy is in a very different place today. Growth is back at a healthy clip, inflation appears under control and the Federal Reserve is signaling a rate cut this year. Unemployment. It held at 3.7 percent in January, down from 6.4 percent three years ago, when the economy was just recovering from the pandemic lockdown. and non-farm payrolls rose by 353,000 last month, the Labor Department’s Bureau of Labor Statistics reported Friday.

Tech stocks are at or near record levels, with Meta, Alphabet and Microsoft.

But the industry continues to decline.

“Companies are still cleaning up from ’23,” Sohn told CNBC’s “Worldwide Exchange” this week. “The skills needed to really handle the new world of 2024 may be different skills.”

Evan Sohn of says recent layoffs are fueled by changing skills and a push for AI.

Wall Street is rewarding tech companies for better discipline and cash allocation, but that raises the question of where they can turn for significant growth. except for Nvidia  which had one. Banner 2023 Due to increased demand for its AI chips, none of the other mega-cap tech companies are growing at their historical averages.

Even Meta’s better-than-expected 25% growth for the fourth quarter is a bit misleading, as comparable numbers from a year ago were depressed by a sluggish digital ad market and Apple’s iOS update, which made it harder to target ads. Finance chief Susan Lee reminded analysts Thursday that as 2024 progresses, the company will “go through periods of increasingly strong demand.”

By the end of this year, analysts are projecting that growth in the meta will return to the low-teens at best. Growth estimates for Amazon and Alphabet are even lower, a good indication that demand for capital allocation measures can only get higher.

Ben Barringer, a technology analyst at Quilter Cheviot, told CNBC that Meta’s decision to pay a dividend was a “symbolic moment” in that regard.

“Mark Zuckerberg is showing that he wants to bring shareholders on board and is highlighting that Meta is now a mature, big business,” Barringer said.

Watch: Meta’s Q4 report suggests that it is using Nvidia’s chips heavily.

Why did Rosenblatt raise the price target on Meta?

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