April 15, 2024
Earnings eye: Apple, Amazon and Meta reports will decide the direction of the market

Tech titans Meta Platform and Amazon took the market by storm, with Meta’s stock rising on strong revenues and strategic financial maneuvers, while Amazon’s shares surged after impressive earnings results. However, due to concerns over its performance in the Chinese market, Apple Inc. experienced recession.

In after-hours trading, Meta Platform’s stock price rose more than 15% to $454.85, driven by better-than-expected revenue, the start of a quarterly dividend at 50 cents per share starting March 26, and a massive $50 billion share buyback program. Done. ,

Meta, the parent company of Facebook and Instagram, added more than $140 billion to its market capitalization in late 2022 and 2023, overcoming advertising challenges, surpassing the $1 trillion mark.

“Meta benefits from the growing adoption of Reels on Instagram, the core Facebook app and Messenger, and initiatives to improve security and transparency,” said an equity analyst at ZACKS Research giving the reason for the buy.

Additionally, Amazon.com saw a significant increase of more than 7% to $170.60 following its strong fourth-quarter earnings report. Driven by innovative AI features in its cloud and ecommerce divisions, Amazon’s revenue exceeded expectations, with its cloud computing division AWS contributing 13% growth to $24.2 billion in the December quarter.

“Amazon’s high-margin businesses allow Amazon to drive greater profitability while continuing to invest (last mile delivery, fulfillment, Prime Now, Fresh, Prime Digital Content, Alexa/Echo, India, AWS, etc.). Amazon Prime membership growth drives recurring revenue and positive mix changes, said Brian Novak, equity analyst at Morgan Stanley.

“Cloud adoption is reaching an inflection point. “Advertising serves as a key area for both further growth potential and profitability streams.”

However, despite beating analysts’ estimates for profit and revenue, Apple Inc. suffered a nearly 3% decline to $181.40 in after-hours trading. The decline was primarily due to lower-than-expected sales in China, which caused Apple to miss its revenue by $6 billion, compared to Wall Street estimates. Sales in China for the December quarter fell short of analyst estimates, totaling $20.82 billion, versus the expected $23.53 billion.

“Guidance for iPhone revenues in March-Q is down 10% year-on-year, while our estimate of total manufacturing at 50mn units for the quarter is down 7% year-on-year. Sharon Shih, an equity analyst at Morgan Stanley, said the focus is now on upcoming user feedback on Vision Pro with key features including spatial computing, gestural sensing and eye tracking.

“AI applications in upcoming iPhones will be worth monitoring for future iPhone upgrade demand.”

Apple CFO Luca Maestri noted during a conference call that revenue in the current quarter will be at least $5 billion lower than last year, due to COVID-related factory closures.

Meanwhile, Qualcomm experienced a 5.0% decline amid concerns over Android sales in China.

In Asia, markets were boosted by a late surge in US tech stocks on Friday. Major US stock indexes also closed with gains, with the S&P 500 up 1.25% at 4,906.19 points, the Nasdaq up 1.30% at 15,361.64 points and the Dow Jones Industrial Average up 0.97% at 38,519.84 points.

Source: www.cityam.com

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