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🏠 Big Tech Earnings SZN

🏠 Big Tech Earnings SZN

Alphabet, Microsoft, and Snap check in

Stephen Flanders
October 25, 2023

Gm. The season of my city’s Phillies ended yesterday. Hearts were broken, tears were shed, and every store in center city rejoiced. If you’re a Phillies fan, how are you feeling? And if you’re a baseball fan in general, who do you think is taking the World Series, the Diamondbacks or the Rangers? Reply and let me know.

— Stephen Flanders

🏠 TECH

Big Tech Checks In

It’s that time of the year again: big tech earnings season.

First up are Microsoft, Snap, and Alphabet, and they all logged pretty strong quarters.

Microsoft

As the kids say these days, Microsoft went absolutely stupid last quarter:

Revenue of $56.5B vs $54.5B expected.
EPS of $2.99 vs $2.66 expected.
Cloud revenue of $24.3B vs $23.6B expected.
On and on it goes like that.

Clearly Wall Street is pleased with Microsoft’s earnings, investments into AI, and acquisition of Activision Blizzard, as shares jumped about 4%.

Snap

Everyone’s favorite picture-sending app with the really annoying AI chatbot also put in a good quarter:

EPS of 2 cents vs negative 4 cents expected.
Revenue of $1.19B vs $1.11B expected.
Global Daily Active Users of 406M vs 405.7M expected.
Five million subscribers for Snap+ compared to four million the prior quarter.

Although there was a lot to like, concerns over advertising dollars drying up following the latest Middle East development led to the stock staying relatively flat.

Alphabet

The fightin’ Sundar Pichai’s also recorded a good quarter…with one big exception:

EPS of $1.55 vs $1.45 expected.
Revenue of $76.69B vs $75.97B expected.
Advertising revenue of $59.96B, up from $54.48B last year.
Cloud revenue of $8.41B, missing the expected mark of $8.64B.

That cloud miss has got investors spooked, as cloud services are becoming increasingly important in our world of heavy AI workloads. Microsoft’s Azure and Amazon’s Web Services currently dominate this market, but Google has been making concerted efforts to catch up.

Obviously they still have a ways to go, and investors punished them with a drop in after-hours trading.

The Big Picture: The big tech comeback continues.

🤝 THE LATEST IN…

TECH

Nvidia and AMD are now making PC chips.
New Macs look to be coming next week.
Cruise’s robotaxis have been suspended in California.
Meta is getting sued for being addictive.

AI

Reddit is taking its API war to AI companies.
AI may be able to give our food a longer shelf life.
The godfathers of AI are once again advocating for caution.
AI might be the key to combating data center emissions.

SCIENCE

The man with the implanted pig heart is doing well.
You know about CRISPR, but have you heard of DANGER?
The first 1,000+ qubit quantum computer is here.
Dehydrated kings rejoice, there’s been a breakthrough in kidney stone treatment.