📉 Apple and Amazon's big results are in

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Today's big stories

Amazon and Apple reported very different quarterly results
Here's one simple rule that tech execs and investors use to spot a winner – Read Now
Oil giant Shell announced its second-highest quarterly profit ever

Bye Bye, Big Tech

What’s Going On Here?

Amazon’s quarterly results fell short of analysts’ expectations, while fellow Big Tech heavy-hitter Apple announced better-than-expected results late on Thursday.

What Does This Mean?

Amazon’s ecommerce business made 13% more sales overall last quarter than the same time last year, but investors were focused elsewhere. See Amazon’s cloud segment grew sales by a worse-than-expected 27% over the quarter, and that slowing growth’s a bad omen for the profit-making division that’s been funding Amazon’s other businesses. So after Amazon’s overall revenue and outlook for this quarter ended up way short of expectations, investors initially sent shares plummeting 19%.

Fellow tech giant Apple reported a worse-than-expected uptick in iPhone sales, but still managed to keep stealing Android users, which – along with strong Mac and wearable sales – helped its “active user base” hit a new all-time high. In theory, that meant the goliath could flog its profitable services to more turtleneck-idolizing superfans, but the segment still posted a measly 5% sales growth. Even better-than-expected revenue and profit couldn’t appease investors: they initially sent Apple’s shares down too.

Why Should I Care?

Zooming in: Money sings.
Apple upped prices of its music and television services this month for the first time ever, but it could be shooting itself in the foot. See, Apple’s becoming more reliant on those services now that folk are putting off expensive hardware upgrades, but this jolt makes them pricier than Spotify and Amazon’s equivalents. And with Apple TV+’s viewership hanging behind other major streaming platforms, turning off cash-strapped entertainment seekers could be a risky move.

Zooming out: This is bigger than tech.
Big Tech can’t blame this earnings season on the US economy: data out on Thursday showed the country’s economy grew at an annualized rate of 2.6% last quarter, after two quarters of shrinkage. But it’s not out of the woods yet: the main contributor to that growth was the volatile exports category, while consumer spending – the economy’s main growth driver – looks set to stay squashed under inflation’s heavy pressure.

You might also like: Where BlackRock sees the economy going.

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Analyst Take

How To Pick Tech Stocks Using The Rule Of 40

By Paul Allison, Analyst

It’s all well and good posting huge numbers in your early years as a high-growth tech company.

But it’s what happens as a company enters the inevitable aging process that matters.

That’s what popular blogger Brad Feld had in mind when he devised a simple performance measure that’s now widely used among investors and tech bosses alike.

It’s called the rule of 40.

That’s today’s Insight: how a simple calculation can help you pick tech winners.

Read or listen to the Insight here

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Come Out Of Your Shell

What’s Going On Here?

Shell, Europe’s biggest energy company, reported humongous quarterly profit on Thursday after coming over all demure only weeks ago.

What Does This Mean?

Shell put pride aside earlier this month to warn investors that its run of record-breaking quarterly profit was about to fizzle out, but turns out it could’ve been more sure of itself. Okay, Shell’s gas and renewables division made 38% less profit after supply issues took a toll, and its chemicals and oil trading business tanked by 62% on the back of less-than-desirable margins. But the hulking energy giant still wrangled an overall profit of $9.5 billion last quarter, double its total from this time last year and still its second-highest quarterly profit ever. That brings Shell’s total profit to a brawny $30.5 billion this year, making its $31 billion record from back in 2008 look easy to beat (tweet this).

Why Should I Care?

The bigger picture: Someone tell them about the recession.
Not to be shown up, France’s own goliath TotalEnergies announced record-breaking profit of its own on Thursday, and shareholders will be all too happy that oil companies are bucking the whole hurtling-toward-a-global-recession trend. Shell, for one, plans to buy back another $4 billion of shares over the next three months to bring the year’s total to $18.5 billion, and is set to beef dividends up by 15% too. Still, oil companies are hardly flying under the radar with these results, and that will only increase calls for governments to impose more windfall taxes and put a stop to those colossal figures.

Zooming out: The ECB won’t let it be.
Those hot-to-touch energy prices are only exacerbating Europe’s spiraling prices. The European Central Bank, then, is bringing out the even bigger guns: it hiked interest rates by 0.75 percentage points for a second-straight time on Thursday, doubling existing rates to take them to their highest in over a decade.

You might also like: Three reasons not to forsake Europe just yet.

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“If you rest, you rust.”

– Helen Hayes (an American actress)

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popular blogger Brad Feld other major streaming platforms Read NowOil giant Shell Fellow tech giant Apple free virtual summit ticket free virtual ticket smarter investment decisions active user base expensive hardware upgrades cashstrapped entertainment seekers volatile exports category inevitable aging process highgrowth tech company ultimate financial power simple performance measure biggest energy company different quarterly resultsHere Modern Investor Summit six free months three free months secondhighest quarterly profit humongous quarterly profit free Finimize Premium free Revolut Premium main growth driver one simple rule

📉 Apple and Amazon's big results are in

Today's big stories

Bye Bye, Big Tech

What’s Going On Here?

What Does This Mean?

Why Should I Care?

How To Pick Tech Stocks Using The Rule Of 40

Come Out Of Your Shell

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Your key to commercial real estate

🥳 Coming Up In The Next Week…

👀 And After That…

Key phrases

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👀 The first Big Tech results are in

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