Technology giants Meta and Amazon are embracing a more mature approach, focusing on optimizing operations and delivering value to shareholders.

Their recent fourth-quarter earnings reports have not only exceeded revenue expectations but have also underscored their ability to achieve more with less, a strategy that has captivated investors.

One significant change in strategy is the recognition that investors often prioritize cash above all else.

Traditionally, the tech industry has been inclined to reinvest surplus cash into ambitious growth initiatives, such as expanding their workforce and exploring innovative ventures.

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Meta profits

However, after a year marked by substantial layoffs and a commitment to capital preservation, Meta has announced its inaugural move towards quarterly dividends, starting at 50 cents per share, along with the authorization of a $50 billion stock repurchase program.

Daniel Flax, an analyst at Neuberger Berman, highlighted the significance of these companies’ adaptability.

He noted that they are not only continuing to invest in future prospects and offensive strategies but are also prudently managing expenses in the current challenging environment.

Cash to shareholders

While Amazon is not as aggressively returning cash to shareholders as Meta, the conversation around capital returns is gaining momentum.

In 2022, Amazon initiated a $10 billion buyback program, and during the recent earnings call, there were inquiries regarding additional capital return plans.

Tech industry giants have entered a new phase after years of unrestrained growth.

They are still actively seeking top technical talent, particularly in fields like artificial intelligence.

However, the pace of workforce expansion is now more measured, with some areas scaling back to enable growth in others.