The dog days of August were a tough time for Wall Street’s tech optimists. Signs of a tech slowdown seemed to spread inexorably into many more corners of the tech world. Now, with the all-important fourth quarter looming — a period when IT spending is typically at its strongest — a nail-biting end to the year is in store.
As the summer began, there was still reason to hope that the effects of high inflation and economic uncertainty would be limited. PC sales had slumped as consumer confidence fell back. A slowdown has eaten into some corners of the digital advertising market, made worse by privacy changes at Apple that have hit companies that depend on collecting personal data from iPhone users. They include Snap, which responded last week by cutting 20 per cent of its staff.
As the month of August wore on, however, cracks started to appear far more widely in the demand picture. This has not been lost on the investors. A strong tech rebound on Wall Street ran out of steam halfway through the month, with companies in the IT world taking some of the biggest hits.