Amazon Earnings, Amazon in the Home
Prior to heading off for vacation, we went over my thoughts on the U.S. v. Google verdict (Part 1 and Part 2). The two updates covered quite a bit. On social media, there continues to be a surprising number of people claiming default distribution contracts are under attack. Considering how the judge explained such arrangements are legal, it’s clear many people didn’t bother to read the verdict.
Earlier in the month, we took a deep dive into Apple’s 3Q24 earnings. While anticipation always rises heading into September thanks to the iPhone and Apple Watch rumor mill, expectations regarding what Apple will unveil remain in check. The same can be said for Apple Intelligence. There is growing acknowledgment that the rollout will be measured and gradual.
At this point, we will circle back to reviewing CY2Q24 earnings from some of Apple’s competitors. We already went over earnings releases from:
It makes sense to begin with the remaining Big Tech companies and then work our way down into certain verticals (i.e. streaming video). Today’s update will focus on Amazon’s earnings. It’s been six months since we talked about Amazon earnings (we skipped Amazon’s 1Q24).
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Alphabet Earnings, Amazon Earnings
Monday’s update concluded with the following:
“Meta has reported more than $38B of operating losses on its AR/VR efforts. The company needs products like Quest 3 and Ray-Ban Meta to do well and generate revenue to reduce pressure on what are mounting losses.”
There is more to say about the mounting losses in Meta’s Reality Labs and why I think generating some revenue is important. We will focus on that topic today. Our Big Tech earnings reviews will continue tomorrow.
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Amazon Earnings, Amazon’s Growth Initiatives, Amazon Bets on Return to Office
Hello everyone.
Welcome to a new week.
To recap where things stand in what has been a whirlwind of a month, last week we concluded our Apple 2Q23 earnings review. There were four updates dedicated to earnings:
Apple 2Q23: By the Numbers, Apple Device Upgrading Slows, Apple's Emerging Markets Strength
Reading Between the Lines of Apple's 2Q23 Earnings Q&A With Analysts
Apple 2Q23 10-Q Takeaways, Apple's Share Buyback Update, More on Apple's Stingy Dividend Increases
Apple's Paid Subscriptions Growth Reaccelerates, The Case for Higher Apple Gross Margins
Starting with today’s update, we will pick up where we left off by examining CY1Q23 earnings from Apple’s peers and competitors. In addition, developer conference season has kicked off with Google I/O last week.
The update begins with Neil’s thoughts on Amazon’s earnings. The discussion then turns to Amazon CEO Andy Jassy’s 2022 shareholder letter. We conclude with Amazon’s renewed pitch for having its corporate employees spend more time in the office instead of work from home.
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Let’s jump into today’s update.
Amazon Earnings
The big theme from Amazon’s CY1Q23 earnings was optimization. The company continues to work through an overinvestment cycle in which management thought pandemic-driven demand would continue seemingly unabated. Instead, Amazon ended up front-running demand by ramping up capex and investment spending. Management claims to have made some progress in working through the overinvestment, including substantial reconfigurations of its U.S. fulfillment network. Wall Street remains concerned (and somewhat confused) with what normalized profit margins will look like for Amazon.
From a product perspective, the Amazon story continues to be found with
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Amazon 3Q22 Earnings, The Shift in Selling Amazon Prime, Microsoft 1Q23 Earnings (Daily Update)
In today’s update, we wrap up our earnings reviews for the four tech giants (and Meta) by circling back to cover Amazon’s and Microsoft's CY3Q22 earnings. To recap, these are the dates when we covered earnings from the others:
The five companies represent 21% of the S&P 500 index. The discussion includes Neil’s thoughts on the most interesting takeaways from the reports.
Amazon 3Q22 Earnings
Amazon reported 3Q22 results back on October 27th, one day prior to Apple’s earnings.
Overall, the quarter was more negative than what the company reported three months earlier.
Amazon has stood out among Big Tech for facing the most direct impact from macro issues.
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