📊 Big Tech Earnings Recap

1) Google Search Remains Strong 2) Microsoft Misses Revenue Forecast 3) Meta Projects More CapEx and more!  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

November 03, 2024   |   Read Online In partnership with Happy Sunday! Before we dive in, I wanted to say a huge thank you to all of you! We recently hit a major milestone—20,000 subscribers! I couldn't have done it without you. As I mentioned in last week's email, I have a good idea for where I'd like to take this newsletter, and this quick 30-second survey will help make that vision a reality. If you can spare the time, I promise it'll enhance your overall newsletter experience. Complete The Survey Some key data bites from this week that you should know: The U.S. added just 12,000 jobs in October, below the 100,000 estimate. Russia has fined Google $20 decillion for blocking Russian media outlets. Warren Buffett's cash pile increased to a record $325.2B. Apple will take a 20% stake in Satellite services provider GlobalStar for $400M. Weight-loss giant Eli Lilly missed Q3 EPS estimates by 20%. U.S. Q3 GDP grew at 2.8%, below the 3.1% estimate. China is considering over $1.4T in additional debt over the next few years. Intel lost $16.6B in Q3 and will cut 16,500 employees. Uber's Gross Bookings grew 16% YoY to $41B in Q3, below the $41.25B projected by analysts. Reddit posted a surprise Q3 profit of $29.9M against an expected loss of $8M. Elon Musk's xAI is looking to raise money at a $40B valuation. Delta is suing CrowdStrike for over $500M, CrowdStrike fires back with a countersuit. Chipotle's same-store sales increased 6% in Q3, missing the 6.3% analyst estimate. MicroStrategy is raising $42B to buy Bitcoin over the next three years. Dropbox is laying off 20% of its total workforce. In today's newsletter: 🔎 Google Search Remains Strong 🦾 AMD Meets Expectations ☁️ Microsoft Misses Revenue Forecast 📲 Meta Projects More CapEx 🍎 Apple Sees Low Digit Sales Growth Despite a surge in search competitors popping up, Alphabet continues to flex its strength. On Tuesday, Google's parent company reported Q3 FY24 earnings, beating expectations on both the top and bottom lines. Here are the key data points for the quarter: 🟢 Adj. EPS: $2.12 vs. $1.85 Est. 🟢 Revenue: $88.27B vs. $86.30B Est. 🟢 YouTube Ad Revenue: $8.92B vs. $8.89B Est. 🟢 Google Cloud Revenue: $11.35B vs. $10.88B Est. 🔴 TAC: $13.72B vs. $13.53B Alphabet saw revenue climb 15% YoY, adjusted EPS rise 37%, and operating margin expand by 4.5 points. The most eye-catching part of the report? Google Cloud revenue surged 35% to $11.4B, with operating income up 632%, thanks to its AI solutions. To add icing on the cake, YouTube's ad and subscription revenue crossed $50B over the past four quarters for the first time ever. AMD didn't get the same love as Alphabet. The company's Q3 earnings and guidance left investors underwhelmed. Here are the key data points for the quarter: ⚪️ Adj. EPS: $0.92 vs. $0.92 Est. 🟢 Revenue: $6.82B vs. $6.71B Est. Revenue rose 18%, operating income jumped 223%, and operating margin expanded by 7 points. Adjusted EPS climbed 31%. The data center segment, which includes AI chip sales, soared 122% to $3.5B. Client segment revenue also grew 29% YoY, while Gaming and Embedded segments declined 69% and 25%, respectively, due to lower semi-custom revenue and inventory normalization. One bright spot of the report? AMD raised its AI chip sales forecast for the year from $4.5B to $5B. So, why did shares drop 11% last week? Investors were disappointed that revenue for the current quarter is expected to align with analyst estimates of $7.54B. This, coupled with adjusted EPS for Q3 only coming in line with expectations sent shares downward. Like AMD, Microsoft shares also took a fall this week, declining 5%. With shares trading at roughly 36x earnings, expectations are high for the tech giant, and any signs of a slowdown can shake investor confidence. For the current quarter, Microsoft expects revenue to grow 10.6% to $68.6B at the midpoint, below analyst estimates of $69.83B. This is largely due to delays in data center infrastructure delivery from external suppliers. Despite this news, results for Q1 FY25 were solid. Here were the key data points for the quarter: 🟢 Adj. EPS: $3.30 vs. $3.10 Est. 🟢 Revenue: $65.59B vs. $64.51B Est. 🟢 Productivity & Business Processes Revenue: $28.32B vs. $27.9B Est. 🟢 Intelligent Cloud Revenue: $24.09B vs. $24.04B Est. 🟢 Azure Growth: 33% vs. 32.8% Est. 🟢 More Personal Computing Revenue: $13.18B vs. $12.56B Est. Revenue rose 16%, and net income grew 11%. All three of Microsoft's main segments achieved double-digit growth, with Intelligent Cloud leading at 20%. CEO Satya Nadella commented on the quarter, "AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process." 📣 A Message From CompareCredit 2 Cards Charging 0% Interest Until 2026 Paying down your credit card balance can be tough with the majority of your payment going to interest. Avoid interest charges for up to 18 months with these cards. Learn More Meta released its Q3 earnings on Wednesday, surpassing analyst expectations on both the top and bottom line. Here were the key data points for the quarter: 🟢 Adj. EPS: $6.03 vs. $5.25 Est. 🟢 Revenue: $40.59B vs. $40.29B 🔴 Daily Active People: $3.29B vs. $3.31B Est. A slight miss on daily active people weighed on shares, closing 3% lower this week. That said, with shares up a considerable 64% this year, the decline was relatively miniscule. Attention also turned to Meta's rising costs and capital expenditures, with total costs and expenses up 14% YoY to $23.24B, and capital expenditures reaching $9.20B. Meta raised its 2024 CapEx forecast to $38B-$40B, up from $37B-$40B, with more growth expected in 2025. Revenue for Q3 climbed 19%, and net income soared 35%. Meta's ad business remains strong, with ad impressions up 7% YoY and the average ad price rising 11%. The company generated a robust $15.52B in free cash flow in Q3, with cash and cash equivalents at $70.9B. For Q4, Meta projects revenue at $46.5B at the midpoint, slightly ahead of analyst estimates of $46.3B. Apple's Q4 FY24 earnings report highlighted solid iPhone sales but revealed softer performance across other product lines. Here were the key data points for the quarter: 🟢 Adj. EPS: $1.64 vs. $1.60 Est. 🟢 Revenue: $94.93B vs. $94.58B Est. 🟢 iPhone revenue: $46.22B vs. $45.47B Est. 🔴 Mac revenue: $7.74B vs. $7.82B Est. 🔴 iPad revenue: $6.95B vs. $7.09B Est. 🔴 Services revenue: $24.97B vs. $25.28B Est. Apple topped both revenue and EPS estimates, driven by a 6% increase in iPhone revenue. However, the company fell short on Mac, iPad, and Services estimates. Shares declined 5% over the past week for two reasons: Apple paid a $10.2B one-time income tax charge to settle a dispute with Ireland. The company projected "low to mid-single digit" sales growth for next quarter, below the 6.6% analysts expected. In related news, Warren Buffett reduced his Apple stake by 25% in Q3, following a 50% cut in Q2. 🎛️ Dow Swap. Nvidia is set to join the Dow Jones, replacing Intel - CNBC ✌️ Auditor Exit. EY has resigned as Super Micro's auditor following concerns around governance and transparency - BB 🚀 SearchGPT Launch. ChatGPT launched its AI-powered search engine - OAI 🔎 Meta Search. Meta is building its own AI-powered search engine within the Meta AI Chatbot - TV 🏧 Cashback Consequences. JPMorgan is suing customers who took advantage of the ATM "infinite money glitch" - CNBC 💾 Chip Partnership. OpenAI is building its first in-house AI chip in collaboration with Broadcom and TSMC - R 💼 AI Scout. LinkedIn launched its first AI agent to automate a recruiter's most repetitive tasks - LNKD Presented by our sponsor, EarningsHub Notable Companies Reporting Earnings This Week: Here's what I will be watching this week: Monday: Palantir $PLTR, Hims & Hers Health $HIMS Tuesday: Ferrari $RACE, SuperMicro $SMCI, Coupang $CPNG Wednesday: Celsius $CELH, Novo Nordisk $NVO, Qualcomm $QCOM, Arm $ARM, MercadoLibre $MELI, Duolingo $DUOL, FICO $FICO Thursday: Datadog $DDOG, Moderna $MRNA, Airbnb $ABNB, Rivian $RIVN, The Trade Desk $TTD, Block $SQ, CloudFlare $NET, Monster $MNST Friday: Paramount $PARA I use EarningsHub to track earnings, estimates, and receive AI summaries of investor calls. If you'd like an all-in-one earnings tool and see all other companies reporting, I definitely recommend you check it out! Access EarningsHub Here Major Trades Published 10/28 - 11/1. Trades may be those of family members. [Source: 2iQ] Buys No Major Activity 😮  Sells Mark Green (R) Company: NGL Energy Partners ($NGL) Amount Sold: $100K - $200K Major Trades Published 10/28 - 11/1 Buys Beyond Inc ($BYON) Insider: Marcus Lemonis (Executive Chairman of Board) # of Shares Purchased: 228,413 $ Amount: $1,499,990 SEC Forms: [1], [2] Crocs Inc ($CROX) Insider: John Replogle (Director) # of Shares Purchased: 2,240 $ Amount: $252,222 SEC Forms: [1] Sells Palantir ($PLTR) Insider: Alexander Karp (Director) # of Shares Sold: 3,951,452 $ Amount: $177,792,242 SEC Forms: [1] Amphenol Corporation ($APH) Insider: Richard Adam Norwitt (President & CEO) # of Shares Sold: 1,190,000 $ Amount: $82,204,731 SEC Forms: [1] How was today's newsletter? I value all of the feedback that I receive. Let me know how I did so I can continue to make this the best investing newsletter available! Share Feedback Submit A Request 🤝 Review of the Week Share Carbon Finance Enjoy my newsletter? 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