Alphabet Earnings, Amazon Earnings

Monday’s update concluded with the following:

“Meta has reported more than $38B of operating losses on its AR/VR efforts. The company needs products like Quest 3 and Ray-Ban Meta to do well and generate revenue to reduce pressure on what are mounting losses.”

There is more to say about the mounting losses in Meta’s Reality Labs and why I think generating some revenue is important. We will focus on that topic today. Our Big Tech earnings reviews will continue tomorrow.

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Amazon Earnings, Amazon’s Growth Initiatives, Amazon Bets on Return to Office

Hello everyone.

Welcome to a new week.

To recap where things stand in what has been a whirlwind of a month, last week we concluded our Apple 2Q23 earnings review. There were four updates dedicated to earnings:

Starting with today’s update, we will pick up where we left off by examining CY1Q23 earnings from Apple’s peers and competitors. In addition, developer conference season has kicked off with Google I/O last week.

The update begins with Neil’s thoughts on Amazon’s earnings. The discussion then turns to Amazon CEO Andy Jassy’s 2022 shareholder letter. We conclude with Amazon’s renewed pitch for having its corporate employees spend more time in the office instead of work from home.

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Let’s jump into today’s update.

Amazon Earnings

The big theme from Amazon’s CY1Q23 earnings was optimization. The company continues to work through an overinvestment cycle in which management thought pandemic-driven demand would continue seemingly unabated. Instead, Amazon ended up front-running demand by ramping up capex and investment spending. Management claims to have made some progress in working through the overinvestment, including substantial reconfigurations of its U.S. fulfillment network. Wall Street remains concerned (and somewhat confused) with what normalized profit margins will look like for Amazon.

From a product perspective, the Amazon story continues to be found with

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Amazon 3Q22 Earnings, The Shift in Selling Amazon Prime, Microsoft 1Q23 Earnings (Daily Update)

In today’s update, we wrap up our earnings reviews for the four tech giants (and Meta) by circling back to cover Amazon’s and Microsoft's CY3Q22 earnings. To recap, these are the dates when we covered earnings from the others:

The five companies represent 21% of the S&P 500 index. The discussion includes Neil’s thoughts on the most interesting takeaways from the reports.

Amazon 3Q22 Earnings

Amazon reported 3Q22 results back on October 27th, one day prior to Apple’s earnings.

Overall, the quarter was more negative than what the company reported three months earlier.

Amazon has stood out among Big Tech for facing the most direct impact from macro issues.

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