Tech giants feel pain as cloud spending cuts suggest slowdown

In a further sign that large companies may be girding against an imminent recession, U.S. tech giants Amazon.com, Microsoft and Intel said this week that customers were taking an axe to cloud and datacenter spending.

Cloud services for years has been one of the largest and most dependable sources of growth for some of the biggest tech companies, including during the pandemic as people worked and studied from home.

Now investors are looking to see whether there is a glut in capacity that will lead to investment cuts as companies deal with rising costs amid soaring inflation, while interest rate increases have squeezed consumer demand. The strong dollar has been a particular headwind.