Microsoft's $1B Amazon Deal

And, United's revenue per seat mile.

Today is Wednesday, October 18, 2023.

The Early Bird Index today is 54.84.

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Microsoft's $1B Amazon Deal

One of the biggest cloud computing rivals for Microsoft (Nasdaq: MSFT) might become a customer of the company’s cloud productivity tools, according to a report on Tuesday.

Details: Insider claims that Amazon (Nasdaq: AMAZN) is going to become a customer of the cloud tools on Microsoft 365. The report says that Amazon is committing more than $1 billion over five years to secure over one million Microsoft 365 license seats for corporate employees and frontline workers. Both Amazon and Microsoft have not commented on the report.

Powering the Story: Microsoft and Amazon are major tech rivals, especially in cloud computing. Microsoft sells the cloud service Azure and Amazon sells its own cloud computing platform called AWS (Amazon Web Services). With this report, the rivalry has turned into a giant client-supplier relationship.

Data: As of 2022, AWS had a 32% market share while Azure’s market share sat at 23%, according to Statista.

Stock Price: Microsoft’s stock ticked up about 0.58% in after-hours trading due to the news. For the year, Microsoft is up 38% thanks to its growing AI business. Meanwhile, Amazon is up 53% this year, but down 6% in the last 30 days.

Final Thoughts: Microsoft reports earnings on October 24. Two days later, Amazon reports earnings.

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Notable Earnings Today: Netflix (Nasdaq: NFLX), Tesla (Nasdaq: TSLA), Citizens Financial Group (NYSE: CFG), Equifax (NYSE: EFX), Kinder Morgan (NYSE: KMI), Northern Trust (Nasdaq: NTRS), SL Green Realty (NYSE: SLG), State Street (NYSE: STT), Travelers (NYSE: TRV), Winnebago (NYSE: WGO), ASML (Nasdaq: ASML), Procter & Gamble (NYSE: PG), Morgan Stanley (NYSE: MS), Lam Research (Nasdaq: LRCX), Abbott Labs (NYSE: ABT), Las Vegas Sands (NYSE: LVS), U.S. Bancorp (NYSE: USB), Alcoa (NYSE: AA), Elevance Health (NYSEL ELV), Discover Financial Services (NYSE: DFS), M&T Bank (NYSE: MTB), Columbia Banking System (Nasdaq: COLB), NASDAQ (Nasdaq: NDAQ), Zions Bancorp (Nasdaq: ZION), Ally Financial (NYSE: ALLY), Steel Dynamics (Nasdaq: STLD), First Horizon (NYSE: FHN), Crown Castle (NYSE: CCI).

Which company earnings today are you looking forward to the most?

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Notable IPOs Today: N/A.

Notable Equity Crowdfunding Campaigns Ending Today: N/A.

Notable Economic Events Today: Building Permits (8:30 a.m. ET), Housing Starts (8:30 a.m. ET), Crude Oil Inventories (10:30 a.m. ET), Fed Beige Book (2:00 p.m. ET).

United's Revenue Per Seat Mile

United Airlines (Nasdaq: UAL) dropped by 4.66% in after-hours trading on Tuesday after the airline posted mixed financial earnings results.

Financials: United reported earnings of $3.65 per share in the past quarter and revenue of $14.5 billion; both were better than expected.

Problems: Despite strong travel demand in the past quarter, the total revenue per available seat mile dropped by 2.8%. The earnings outlook for the current quarter also decreased.

Final Thoughts: United, up less than 8% this year, is facing challenges such as higher fuel costs and the new war in the Middle East.

Interactive Brokers’s Daily Average Revenue Trades

Interactive Brokers (Nasdaq: IBKR) fell by 4.38% in after-hours trading on Tuesday due to mixed financial results.

Financials: Interactive Brokers reported earnings of $1.55 per share in the past quarter and revenue of $1.14 billion; both were better than expected.

Details: The number of daily average revenue trades decreased by 1% in the quarter.

Final Thoughts: While Interactive Brokers is up 21% this year, there are concerns about the declining revenue.

Trends to Watch

Loads of Trouble: J.B. Hunt Earnings Tumble on Falling Freight Rates (Wall Street Journal)

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