Shah raib Ali’s Post

Week 43 - 5 Things to Know in Investing This Week Point 3) Mega Tech Earnings Week: This past week has been significant for five of the "Magnificent 7" stocks. Google ($GOOG) kicked things off with strong revenue of $88.3 billion, surpassing expectations. On Wednesday, both Meta ($META) and Microsoft ($MSFT) beat earnings estimates; however, Meta's substantial increase in AI capital expenditures raised concerns among investors, while Microsoft faced challenges in meeting the demand for its AI products. On Thursday, Apple ($AAPL) and Amazon ($AMZN) also exceeded estimates. iPhone sales increased 6% year over year reversing prior declines, and Amazon's focus on efficiency and AI expansion was well-received by investors.

Week 43 - 5 Things to Know in Investing This Week Point 3) Mega Tech Earnings Week: This past week has been significant for five of the "Magnificent 7" stocks. Google ($GOOG) kicked things off with strong revenue of $88.3 billion, surpassing expectations. On Wednesday, both Meta ($META) and Microsoft ($MSFT) beat earnings estimates; however, Meta's substantial increase in AI capital expenditures raised concerns among investors, while Microsoft faced challenges in meeting the demand for its AI products. On Thursday, Apple ($AAPL) and Amazon ($AMZN) also exceeded estimates. iPhone sales increased 6% year over year reversing prior declines, and Amazon's focus on efficiency and AI expansion was well-received by investors.

I definitely see Facebook and Apple are on a collision course. As competitors they're competing for consumer eye balls. Facebook wants its users to consume news, connect with their friends & loved ones, and increasingly (with Oculus) spend more of their days inside of Facebook properties. They've built the meta layer on top of operating systems. Apple wants to own their users' time as well - news, music, iMessages, photos - all of these are creating network connections between users, leveraging their OS and an emerging meta layer. One obvious way they're on a collision path is VR/AR - the metaverse. While not for everyone, I can totally imagine a world where a decent chunk of the population is plugged in several hours a day into a headset. I can't see other companies than Apple and Meta that are vying for that place in our lives. Tim Cook built an incredible incremental innovation machine. He's not Steve Jobs. His methods are to build fine first products and use Apple's incredible reach to incrementally improve those products. Were AirPods groundbreaking? Not really. Are you wearing them? Probably. Meta's strength is in its ability to leverage network effects. Apple doesn't have that. I'm watching both :)

In 2023, major online and tech giants showcased diverse revenue streams. Meta (formerly Facebook) dominated with 98.4% of its revenue sourced from advertising, emphasizing its ad-driven business model. Apple's earnings were largely propelled by iPhone sales, contributing 48.5% to its revenue. Amazon thrived on online store sales, which accounted for 39.4% of its total earnings. Google (under Alphabet) relied heavily on advertising, generating 82% of its revenue through ad placements. These figures highlight the distinct strategies and market focuses of each company amidst the digital landscape. #Meta #Facebook #Apple #Amazon #Google #TechRevenue #SPRandCo

Yesterday, the European Union (EU) launched an investigation into big tech companies, including Apple, Alphabet, and META Technology Platforms, under the new Digital Markets Act (DMA). Here’s all you need to know about the investigation: 👉 The first two probes focus on Alphabet and Apple and relate to anti-steering rules. The DMA states tech companies are not allowed to block businesses from telling users about cheaper options for their products or about subscriptions outside app stores. 👉 In the third inquiry, the EU is investigating if Apple has complied with obligations to ensure users can easily uninstall apps on iOS and change default settings. 👉 The fourth probe targets Alphabet. The EU wants to find out if Google’s search results may lead to self-preferencing over similar rival offerings. 👉 The final investigation focuses on Meta and its pay-and-consent model. In 2023, Meta introduced an ad-free subscription model for Facebook and Instagram in Europe. The commission is investigating whether the subscription model without ads violates the DMA. Read more about it in today's newsletter. Link is in the comments 👇. #bigtech #apple #meta #alphabet #stocks

Apple, Amazon, Google, and Meta all reported their recent financials in the past few days, revealing that they spent a record $200+ billion this year kicking their AI investments into high gear. They’re trying to convince investors this is worth it. After its AI-related earnings disappointed Wall Street last quarter, Big Tech doubled down in the latest period. Amazon spent $22.6 billion on property and equipment like data centers and chips. That’s an 81% spike from the same time last year. Meta raised its low-end guidance for capex, which could reach $40 billion by the end of the year. It beat earnings estimates, even with AR glasses subsidiary Reality Labs costing $4.4 billion in operating losses. Apple is still betting on Apple Intelligence to boost sales. Most revenue came from the new iPhone 16, Apple Watch, and AirPods, but Apple services like TV+ and iCloud also grew massively to account for a quarter of the business. Google crushed earnings estimates and revealed that more than 25% of all new code it writes is generated by AI (and reviewed by engineers). All of the companies intend to maintain or boost their capex budgets next year.

Google and Amazon are both actively competing in the same arena. However, the recent spending patterns of Microsoft and Meta are particularly striking compared to their historical trends. Microsoft has already invested $53 billion in capital expenditures this calendar year, which represents about 28% of its revenue for that period far exceeding the 12% average it has maintained from 2014 to 2023. Similarly, Meta plans to spend between $38 billion and $40 billion on capital expenditures this year, amounting to approximately 24% of its projected annual revenue, up from a 10-year average of 19%. These developments underscore the dynamic strategies companies are adopting within the industry. https://lnkd.in/etjQ2-YN

In a recent segment on "Bloomberg Technology," Brad Erickson, an Internet research analyst at RBC Capital Markets, provided insights into what to expect from Meta and Amazon in the upcoming week. Erickson highlighted critical areas to monitor during the earnings calls of both companies. As the tech landscape continues to evolve, the performance metrics and strategic direction articulated by their respective CEOs will be pivotal for investors and industry watchers alike. With both Meta and Amazon facing unique challenges and opportunities, these earnings calls will likely shed light on their future trajectories and market positioning. #EarningsCalls #Meta #Amazon #TechAnalysis #RBCCapitalMarkets ---------------------- Learn more here: https://lnkd.in/e_53sM8G

Three #tech giants released Q1 earnings these week - #Google, #Microsoft & #Meta. Each company had one thing in common: significant increases in CapEx related to #AI. Google & Microsoft shares rose, while Meta shares declined significantly. What accounted for this? Google & Microsoft were able to absorb the CapEx related costs thanks to revenues stemming from their core business lines, while Meta's revenue outlook was questionable. Big tech is clearly in the midst of an #AI arms race. Two other major AI players - #Amazon & #Apple - release earnings next week. It will be interesting to see if they have also increased CapEx...and also whether or not revenues from their core business lines were sufficient to absorb the extra costs.

Didn't expect this, but very curious to see the shakeout. https://lnkd.in/gaKeYMPy Really hope that either: 1. Apple develops their own search engine, finally diversifying the search landscape. 2. A generative search disrupter emerges and gains enough market share. Unsure how "monetizable" it will be to advertisers, but that's part of the exciting future of possibilities. Will be interesting given search represents +50% of Alphabet's revenue.