Amazon's Cloudy AWS Future

April 28, 2023

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Amazon's Cloudy AWS Future

Concerns about cloud growth hammered financial earnings for Amazon (Nasdaq: AMZN), causing shares to drop 2.09% in Thursday’s after-hours trading.

Financials: Amazon reported earnings of 31 cents per share in the past quarter and revenue of $127.4 billion; both were better than expected.

Details: Overall sales in North America grew by 11%. Looking at individual categories, revenue for subscription services jumped by 15% and advertising services surged by 21%.

But: There were questions about Amazon’s cloud business, AWS (Amazon Web Services). While AWS sales increased by 16%, there was concern about growth slowing down in the unit. CEO Andy Jassy said that companies are “spending more cautiously in this macro environment” when it comes to information technology.

Stock Price: After a rough 2022, shares of Amazon are up 27% so far in 2023.

Final Thoughts: Similar to other tech companies, Amazon has been laying off employees in an effort to become more efficient. While it is great that the company grew its revenue in the past quarter, there are questions surrounding AWS.

Notables

Notable Earnings Today: Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX), Cameco (NYSE: CCJ), Colgate-Palmolive (NYSE: CL), New York Community Bancorp (NYSE: NYCB), Charter Communications (Nasdaq: CHTR), W.P. Carey (NYSE: WPC), Chart Industries (NYSE: GTLS), Gentex (Nasdaq: GNTC), Saia (Nasdaq: SAIA), Aon (NYSE: AON), Ares Management (NYSE: ARES), Bloomin' Brands (Nasdaq: BLMN), LyondellBasell (NYSE: LYB), Newell Brand (Nasdaq: NWL), U.S. Silica (NYSE: SLCA), WisdomTree (NYSE: WT).

Notable IPOs Today: Interactive Strength Inc. Common Stock (Nasdaq: TRNR).

Notable Equity Crowdfunding Campaigns Ending Today: Trade Street Jam Co. (Wefunder), Agria (Netcapital).

Notable Economic Events Today: Core PCE Price Index (8:30 a.m. ET), PCE Price Index (8:30 a.m. ET), Personal Spending (8:30 a.m. ET), Employment Cost Index (8:30 a.m. ET), Chicago PMI (9:45 a.m. ET), Michigan Consumer Expectations / Sentiment (10:00 a.m. ET).

Intel’s Biggest Loss Still Wins Investors

Photo by Slejven Djurakovic / Unsplash

Intel (Nasdaq: INTC) posted its largest loss ever on Thursday, but the stock jumped 4.99% in after-hours trading.

Financials: Intel reported a loss of four cents per share in the past quarter and revenue of $11.78 billion; both were better than expected.

Outlook: Despite revenue dropping 36% in the past quarter, the company expects revenue to be in the range of $11.5 billion to 12.5 billion in the current quarter, which represents an improvement.

Quote: “We hit key execution milestones in our data center roadmap and demonstrated the health of the process technology underpinning it. While we remain cautious on the macroeconomic outlook, we are focused on what we can control.” - CEO Pat Gelsinger.

Final Thoughts: The slowdown in the PC market has been bad for Intel, which is down 36% in the last 12 months. The guidance suggests that better days are coming soon.

Pinterest’s Poor Outlook

Pinterest (NYSE: PINS) plummeted 13.46% in after-hours trading on Thursday despite posting good financial earnings results.

Financials: Pinterest reported earnings of eight cents per share in the past quarter and revenue of $603 million; both were better than expected.

Final Thoughts: The problem is that Pinterest’s revenue guidance for the current quarter disappointed investors. Pinterest's stock is up 19% this year.

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Trends to Watch

Delicious: Mondelez Lifts 2023 Revenue Guidance (MarketWatch)

Recession Coming: GDP Report Shows Economic Growth Slowed in First Quarter (The Wall Street Journal)

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