πŸ“ˆ A Big Tech Earnings Week

Microsoft, Google, Meta, and more..

TOP STORY
πŸ“ˆΒ Big Tech Reports Q2 Earnings, Beats Across the Board

This week, three tech giants β€” Google, Meta, andΒ Microsoft, reported their Q2 2023 earnings, each demonstrating strong performances despite mixed reactions from the markets. This comes after last week’s exciting earnings from other tech companies, Tesla and Netflix.

πŸ”ŽΒ Alphabet ($GOOG)

Google’s parent company, Alphabet, delivered an impressive Q2 2023 earnings report, exceeding analyst expectations in both revenue and earnings-per-share. The company reached a record amount of free cash flow in the quarter and traded up ~9% this week.

  • Revenue: $74.60 billion (vs. $72.76 billion expected) βœ…

  • Earnings: $1.44 per share (vs. $1.34 per share expected) βœ…

πŸ“ˆΒ Alphabet ($GOOG) stock is up 2.5% this week and up 48% this year.

☁️ Google Cloud: For the second consecutive quarter, Google Cloud posted profits. The Cloud segment registered revenues of $8 billion (27% YoY increase) and operating income totaling $395 million, a significant improvement from the $590 million loss reported in the same quarter last year.

πŸ“ŠΒ Advertising Revenues: Ad revenue exceeded expectations with $58.1 billion (vs. $57.5 billion expected) in the quarter. YouTube ad revenues also beat estimates at $7.66 billion compared to forecasts of $7.41 billion.

πŸš—Β Other Bets: Alphabet's β€œOther Bets” segment, which includes ventures like Waymo, grew revenue by 48%, and reported an operating loss of $813 million for the quarter β€” significantly less than the $1.34 billion loss in the same period last year.

πŸ”ŽΒ Microsoft ($MSFT)

Microsoft's Q4 2023 earnings report came with mixed results, meeting some expectations while falling short in others. Shares dipped by 4% in extended trading after the company issued quarterly revenue guidance that failed to meet analyst expectations.

  • Revenue: $56.19 billion (vs. $55.49 billion) βœ…

  • Earnings: $2.69 per share (vs. $2.55 per share) βœ…

πŸ“ˆΒ Microsoft ($MSFT) stock is down 2% this week and up 41% this year.

☁️ Microsoft's Intelligent Cloud segment, which includes Azure, reported a revenue of $23.99 billion, representing a 15% increase. Azure revenue grew by 26% during the quarter, outperforming expectations.

πŸ€– AI and OpenAI Growth: Microsoft's Azure OpenAI Service now boasts over 11,000 customers, up from just 4,500 in May. Microsoft anticipates growth from AI services to have a larger impact on revenue in the second half of the 2024 fiscal year.

πŸ“Š Personal Computing: The β€œMore Personal Computing” segment, which includes Windows, devices, gaming, and search advertising, reported revenue of $13.91 billion, a 4% year-on-year decline.

πŸ“±Β Meta ($META)

Meta delivered better-than-expected Q2 2023 results and an optimistic outlook for the third quarter, reflecting a significant rebound in the digital advertising market. The company saw an 11% increase in revenue from a year earlier, the first time for double-digit growth since the end of 2021.

  • Revenue: $31.03 billion (vs. $32 billion) βœ…

  • Earnings: $2.98 per share (vs. $2.89 per share) βœ…

πŸ“ˆΒ Meta ($META) stock is up 10% this week and up 160% this year.

πŸ‘₯ User Engagement: Meta reported daily active users (DAUs) at 2.06 billion and monthly active users (MAUs) at 3.03 billion, both surpassing expectations. The average revenue per user (ARPU) was $10.63, also above the forecasted $10.22.

πŸ“ŠΒ Future Outlook: For Q3 2023, Meta projects revenue between $32 billion and $34.5 billion, suggesting growth of at least 15% from a year earlier. The company also revised its capital expenditures for 2023 to between $27 billion and $30 billion, down from a prior estimate of $30 billion to $33 billion.

πŸ’» Reality Labs: The Reality Labs unit, tasked with developing the metaverse, posted $276 million in sales during the second quarter but reported a loss of $3.7 billion. The company expects this trend to "increase meaningfully year-over-year" due to ongoing product development efforts in augmented reality/virtual reality and investments to further scale the ecosystem.

OTHER EARNINGS

  • βœ…βœ…πŸ“ˆΒ McDonalds ($MCD): Beat on revenue, beat on earnings-per-share, shares are up ~11% this week.

  • βœ…βœ…πŸ“ˆΒ Intel ($INTC): Beat on revenue, beat on earnings-per-share, shares are up ~9% this week.

  • βœ…βœ…πŸ“ˆΒ Procter & Gamble ($PG): Beat on revenue, beat on earnings-per-share, shares are up ~2% this week.

  • βœ…βœ…πŸ“ˆΒ Roku ($ROKU): Beat on revenue, beat on earnings-per-share, shares are up ~20% this week.

  • βœ…βœ…πŸ“‰Β Coca-Cola ($KO): Beat on revenue, beat on earnings-per-share, shares are down ~1% this week.

  • βœ…βœ…πŸ“‰Β Snapchat ($SNAP): Beat on revenue, beat on earnings-per-share, shares are down ~17% this week.

  • βœ…βœ…πŸ“‰Β Visa ($V): Beat on revenue, beat on earnings-per-share, shares are down ~2% this week.

  • βœ…βœ…πŸ“‰Β Mastercard ($MA): Beat on revenue, beat on earnings-per-share, shares are down ~1.5% this week.

  • βœ…βœ…πŸ“‰Β Crocs ($CROX): Beat on revenue, beat on earnings-per-share, shares are down ~13% this week.

  • βœ…βŒπŸ“‰Β Chipotle ($CMG): Beat on revenue, missed on earnings-per-share, shares are down ~1.5% this week.

  • βŒβŒπŸ“ˆΒ Canadian National Railway ($CNR): Missed on revenue, missed on earnings-per-share, shares are up ~2% this week.

  • βŒβŒπŸ“‰Β Spotify ($SPOT): Missed on revenue, missed on earnings-per-share, shares are down ~12% this week.

  • βŒβŒπŸ“‰Β ExxonMobil ($XOM): Missed on revenue, missed on earnings-per-share, shares are down ~0.5% this week.

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ENTERTAINMENT
🍿 AMC Skyrockets on Court Ruling

Bloomberg

AMC Entertainment's stock surged 33% on Monday following a strong weekend box office and a court ruling that halted the conversion of AMC's preferred equity shares (APE) into regular AMC shares.

  • 🎟️ Box Office Success: The opening weekend for "Barbie" and "Oppenheimer" attracted over 7.8 million moviegoers to AMC-operated theaters, marking the theater chain's busiest day in four years. On Saturday, AMC posted its highest single-day attendance since July 2019, while food and beverage revenue achieved its second-highest daily total ever.

  • βš–οΈ Stock Conversion Halted: Last Friday, a Delaware court ruling that denied AMC's move to convert APE units into regular AMC shares, a conversion initially approved by shareholders in March, pending the court ruling. This type of stock conversion would increase the total number of common shares, potentially diluting the value of each individual share.

CEO Adam Aron addressed the situation in an open letter to investors, emphasizing the necessity for the company to raise equity capital. He warned of increased risks of AMC running out of cash or failing to refinance its debt satisfactorily by 2024 or 2025, particularly due to added uncertainties caused by ongoing writers and actors strikes potentially delaying movie releases for those years.

πŸ“‰ $AMC stock is down nearly 70% in the past year.

ARTIFICIAL INTELLIGENCE
πŸ€–Β Disney and Netflix Hiring For AI Roles Sparks Fears Among Writers

As the Writers Guild and Screen Actors Guild strikes continue over the use of AI in entertainment, industry giants Disney and Netflix are actively seeking AI specialists. Disney is currently hiring for several AI roles, while Netflix is offering a salary of up to $900,000 for the position of an AI product manager. This trend is not unique to these companies, with Amazon, Apple, and Sony also recruiting AI talent within their media sectors.

This rush for AI expertise has escalated tensions in the industry, stemming mainly from a proposal put forth by Hollywood studios. This proposal suggests that actors could be scanned, paid for a single day's work, and their digital replicas subsequently used indefinitely, which has sparked fears among actors and writers about their potential replacement by AI.

Β FROM THE BLOSSOM APP

πŸŽ™ Top Discussions This Week

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