Amazon affected by the strengthening of dollar, emphasizes risks in technique to overseas dependence

The strengthening dollar presents challenges for the largest US tech companies that have become increasingly dependent on overseas revenue. With other currencies weakened, money earned elsewhere is less worthwhile when converted to dollars.

Amazon Should suffer less than its megacap peers, as the e-commerce giant generates a higher percentage of sales in the United States, but in its fourth quarter earnings report on Thursday, Amazon said exchange rates are blamed for the company’s weaker than expected forecast for the first quarter and the opportunity for its slowest revenue growth on the record.

Revenue in the current quarter will land between $ 151 billion and $ 155.5 billion, suggesting an annual growth of only 5% to 9%. Amazon’s slowest quarter of growth came in mid -2022, when revenue increased by 7.2%.

“This guide expects an unusually large, unfavorable effect of about $ 2.1 billion or 150 basic points from exchange rates,” Amazon said in the revenue release.

At its earnings call, Amazon said it saw $ 700 million “more of currency winds than we expected” in the fourth quarter. During the period, international revenue amounted to $ 43.4 billion, or 23% of total sales.

On Appleapprox. 58% of revenue came from abroad in the recent period. For Meta it was 55%, Alphabet reported approx. 52%, Microsoft just under 50% and Tesla just over 50% for as much as 2024.

The US dollar index – which measures Greenback against a basket of rivals – hit its highest level of more than two years last month, ahead of President Donald Trump’s inauguration. The dollar steadily climbed from the end of November to mid -January and has since fallen slightly.

The dollar may be particularly unstable in the coming weeks and months due to uncertainties about Trump’s customs policy and the threat of a trade war, especially China, along with a lack of clarity on US foreign policy, given comments Trump has made a potential to try to take over Greenland and Gaza.

Here is what other companies had to say about the topic of currency by issuing their financial results.

Microsoft CFO Amy Hood said that exchange rate did not have “not a significant influence on our results and was roughly in line with the expectation”, but for the current quarter it would reduce revenue growth by “more than 1 point.”

Susan Li, Meta’s Finance manager, said the company expects “a three-point headwind in Q1” After the exchange rate “approximately neutral for turnover in the 4th quarter, just with the dollar strength, especially against the euro.”

Alphabet CFO Anat Ashkenazi said investors can “expect a greater headwind to our revenue from the strengthening of the US dollar compared to key eluta in Q1 versus Q4 2024.”

Apple Finance Chief Kevan Palekh warned last week that “as the dollar strengthens significantly, we expect currency to be a headwind and will have a negative impact on a turnover of about 2.5 percentage points in the previous year.”

The increase of the dollar will lead investors to pay attention to job numbers on Friday. When the Bureau of Labor Statistics releases its counting of non-farm for January, it is expected to show a growth of 169,000, down from 256,000 in December, but almost in line with the last three months average. Unemployment is expected to remain at 4.1%, according to the Dow Jones consensus for the report.

Then the tech industry waits to see what Nvidia Must say about currency when the chipmaker reports earnings later in February. During the period ended in October, Nvidia generated approx. 58% of its revenue outside the US

– Cnbcs Deirdre Bosa contributed to this report

CLOCK: Why a stronger dollar could spell trouble for Big Tech