☀️ Happy Sunday

It’s Big Tech Earnings Week this week, and today we’ll be breaking down everything you need to know from the earnings reports of Amazon, Microsoft, Google, Meta, and more!

Let’s get into it,

Max, CEO of Blossom

TOP STORY
💰 Big Tech Reports Earnings: Amazon, Microsoft, Google, Meta + More

This week Microsoft, Amazon, Meta, and Google all reported earnings. Despite all beating revenue and earnings forecasts, the stock performance of the tech giants tell different stories:

• 📈 Amazon stock ended the week up 2.60%

• 📈 Microsoft stock ended the week up 1.32%

• 📉 Meta stock ended the week down 4.15%

• 📉 Alphabet stock ended the week down 9.56%

Let’s explore why…

Microsoft ($MSFT)

This week, Microsoft stock rose 1.32% after reporting Q3 earnings, surpassing Wall Street's forecasts in both earnings and revenue.

The shining star for Microsoft was its cloud computing segment, outpacing the growth rates of both Amazon's AWS and Google's Cloud Platform.

• ✅ Revenue: $56.52 billion (vs. $54.50 billion expected)

• ✅ Earnings: $2.99 per share (vs. $2.65 expected)

Key Takeaways:

• ☁️ Azure's Impressive Performance: Microsoft's Azure cloud revenue grew 29%, surpassing analysts' expectations. This comes after two years of slowing growth.
   
  For the rest of the 2024 fiscal year, Microsoft's CFO Amy Hood anticipates the Azure growth rate to stabilize around 26-27%.
   

• 🤖 Artificial Intelligence: Clients are rapidly adopting new generative AI tools in the cloud supported by Microsoft-backed startup OpenAI.
  
  The Azure OpenAI Service reported a jump to 18,000 customers from 11,000 just three months prior.

   

• 💻 PC Market: After declining for five quarters, the sale of Windows-operating system licenses to device manufacturers grew by 4%, reflecting a rebound across the whole PC market.
   

Alphabet ($GOOG)

This week Alphabet reported its Q3 results, with revenue hitting double-digit growth for the first time in over a year.

Despite strong numbers overall, the stock fell by a significant 9.56% due to the underperformance of Google Cloud. This is because Wall Street has been betting on Google leveraging its AI software to boost its share of the cloud market. As a result, expectations for Google Cloud were high, and the business failed to deliver.

It doesn’t help that Google reported results minutes after Microsoft, who had a blowout quarter.

• ✅ Revenue: $76.69 billion (vs. $75.87 billion expected)

• ✅ Earnings: $1.55 per share (vs. $1.45 expected)

• ✅ YouTube Advertising Revenue: $7.95 billion (vs. $7.81 billion expected)

• ❌ Google Cloud Revenue: $8.41 billion (vs. $8.64 billion expected)

Key Takeaways:

• ☁️ Google Cloud: Although Google Cloud missed its revenue target by over $20 million, it still grew 22% year-over-year.
  
  The company’s cloud segment registered a profit of $266 million, after a loss of $440 million in the same quarter a year ago.

   

• 📺 YouTube's Rising Influence: YouTube's TikTok rival, Shorts, had a significant uptick in daily views, now boasting 70 billion, up from 50 billion at the start of the year. YouTube ad revenue also beat expectations.

   

• 🚗 Other Bets Performance: The “Other Bets” segment, which includes Waymo and Verily, saw revenue jump to $297 million from $208 million the previous year but still reported a loss of $1.19 billion.

Amazon ($AMZN)

Amazon’s stock performed the best out of all big tech this week, rising 2.60% after beating earnings per share by over 60%.

• ✅ Revenue: $143.1 billion (vs. $141.4 billion expected)

• ✅ Earnings: $0.94 per share (vs. $0.58 per share expected)

Key Takeaways:

• 🚫 Cost-cutting: The impact of Amazon’s extensive cost-cutting, including laying off 27,000 employees and discontinuing unprofitable ventures, was seen this quarter in Amazon’s soaring operating margin of 7.8% — the highest since early 2021.
   
  Net income also more than tripled to $9.9 billion, up from $2.9 billion a year prior.
   

• 📦 Prime Day Impact: Amazon’s core e-commerce segment reported a 7% YoY growth, boosted by the "biggest ever" Prime Day sale in July.

   

• 📊 Digital Advertising Growth: Ad revenue surged 26% YoY, outshining Google and Meta’s ad growth rates.
   

• ☁️ AWS Dynamics: AWS witnessed slowing growth compared to Microsoft's Azure and Google Cloud.

Meta ($META)

This week, Meta delivered a stellar Q3 report that surpassed Wall Street expectations, including a 23% surge in revenue - its fastest growth rate since 2021.

• ✅ Revenue: $34.15 billion (vs. $33.56 billion expected)

• ✅ Earnings: $4.39 per share (vs. $3.63 expected)

• ✅ Daily active users: 2.09 billion (vs. 2.07 billion expected)

• ✅ Monthly active users: 3.05 billion (vs. 3.05 billion)

• ✅ Average revenue per user: $11.23 (vs. $11.05 expected)

Despite the great results, the stock ended the week down 4.15%, largely due to the CFO warning about weaker advertising demand in the fourth quarter.

Key Takeaways:

• 📊 Digital Ads Business: Meta's digital ads segment rebounded from a challenging 2022 when revenue declined for three consecutive quarters.
   

• 💰 Net Income: The company's net income skyrocketed, with a 164% YoY growth to $11.58 billion.
   

• 🆚 Competition: Meta's advertising growth stands out compared to competitors. Meta revenue grew 23% compared to Google's ad revenue growing 9.5% and Snap growing 5%.
   

• 🕶 Reality Labs Division: Despite launching products like the Quest 3 headset, Meta's Reality Labs faced a massive operating loss of $3.74 billion for the quarter.

SPONSORED BY HAMILTON ETFS
🤑 Now Trading: SMAX & QMAX | Higher Income from U.S. Equity Leaders & Large-Cap Tech

Hamilton ETFs is growing its suite of Yield Maximizer ETFs with the launch of the Hamilton U.S. Equity Yield Maximizer ETF (SMAX) and the Hamilton Technology Yield Maximizer ETF (QMAX), which began trading last week with initial target yields of 12% and 13% respectively*.

Designed with income investors in mind, SMAX and QMAX use a covered call strategy to generate cash premiums which it pays out to investors every month while providing exposure to U.S. Equity Leaders (SMAX) and Large-Cap Tech companies (QMAX).

Adriano from the Passive Income Investing channel had the opportunity to speak with Hamilton ETFs and discuss the recent launches in a new video:

• 📺 NEW High Yield Covered Call ETFs: QMAX (13%+ Yield) & SMAX (12%+ Yield) | HYLD Changes COMING?

ETF Highlights:

SMAX and QMAX write options on approximately 30% of their holdings, allowing the funds the maintain about 70% of their upside potential in a rising market. The ETFs boast:

• Higher monthly income

• Tax efficient distributions

• Modest long-term growth potential

• Reduced volatility from options strategy

Learn more about $SMAX here and $QMAX here.

*An estimate of the annualized yield an investor would receive if the monthly distribution remained unchanged for the next 12 months, stated as a percentage of the net asset value per unit on October 25, 2023.

MORE EARNINGS

Outside Big Tech, a lot of other giants reported earnings. Here are their results sorted from highest to lowest stock performance:

✅ ✅ 📈 Spotify ($SPOT): Beat on revenue and earnings-per-share, shares were up 9.26% this week.

✅ ✅ 📈 Chipotle ($CMG): Beat on revenue and earnings-per-share, shares were up 3.7% this week.

✅ ✅ 📈 Intel ($INTL): Beat on revenue and earnings-per-share, shares were up 2.63% this week.

✅ ✅ 📈 3M ($MMM): Beat on revenue and earnings-per-share, shares were up 1.81% this week.

✅ ✅ 📈 Coca Cola ($KO): Beat on revenue and earnings-per-share, shares were up 1.56% this week.

❌ ❌ Canadian National Railway ($CNR): Missed on revenue and earnings-per-share, shares were flat this week.

❌ ✅ 📉 Canadian Pacific ($CP): Missed on revenue, beat on earnings-per-share, shares were down 0.53% this week.

✅ ✅ 📉 Snap ($SNAP): Beat on revenue and earnings-per-share, shares were down 0.75% this week.

✅ ✅ 📉 Visa ($V): Beat on revenue and earnings-per-share, shares were down 0.9% this week.

✅ ✅ 📉 Mastercard ($MA): Beat on revenue and earnings-per-share, shares were down 4.79% this week.

✅ ✅ 📉 GM ($GM): Beat on revenue and earnings-per-share, shares were down 7.26% this week.

❌ ❌ 📉 Ford ($F): Missed on revenue and earnings-per-share, shares were down 13.77% this week.

CRYPTOCURRENCY
📈 Bitcoin Surges to $35,000 Amid ETF Anticipation, Up More than 100% in 2023

This week, Bitcoin surged past $35,000 (USD), a high not seen since May 2022. This surge in price was fueled by speculations of an imminent SEC approval for a spot Bitcoin exchange-traded fund (ETF).

This approval is eagerly anticipated because it would enable investors to gain direct exposure to Bitcoin through an exchange-listed product. As of now, the SEC has only greenlit ETFs that are linked to Bitcoin futures contracts.

Expectations for spot ETFs surged after the SEC decided not to contest a court ruling with the commission's previous rejection of Grayscale Investments' plea to turn its current Bitcoin trust into a spot Bitcoin ETF.

In essence, the SEC's exploration of Bitcoin ETFs may signify a potential shift towards a more accepting stance on cryptocurrency-related products in the mainstream financial ecosystem.

 FROM THE BLOSSOM COMMUNITY

🎙 Top Discussions This Week

🗞️ What else you might’ve missed:

• The National Bank of Canada ($NA) has reportedly reduced staff within its capital market segment.

• Chevron ($CVX) has agreed to acquire Hess Corp ($HES) for $53 billion in an all-stock deal.

• Okta ($OKTA), a cybersecurity firm, had a cybersecurity breach, wiping billions of dollars from its market cap.

• Bank of Nova Scotia ($BNS), along with Royal Bank of Canada ($RY) and Bank of Montreal ($BMO) are reducing 2-3% of its workforces.

• The U.S. core PCE price index rose by 0.3% in September, marking a fourth-month high.