😢 Three Big Tech titans, three big disappointments

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Today's big stories

Big Tech titans Apple, Amazon, and Alphabet all turned investors off with their results
Here’s how you can use artificial intelligence to size up a stock like the pros – Read Now
The Bank of England and the European Central Bank hiked interest rates again

Misery Loves Tech Companies

What’s Going On Here?

Big Tech birds of a feather sure do flock together: Apple, Amazon, and Alphabet all released lackluster results late on Thursday.

What Does This Mean?

Apple, for starters, reported that iPhone sales stumbled 8% from the same time last year, pinning the blame on the global slowdown and production issues in China. But there was one bright spot: Apple’s active devices hit 2 billion last quarter, validating the firm’s reach and helping its services segment outperform. Still, overall sales were down for the first time since 2019, and earnings missed estimates for the first time in nearly seven years. With that performance, Apple may have to join the Big Tech layoff club sooner rather than later.

Amazon didn’t fare much better: investors keep a keen eye on its highly profitable cloud business, so they were turned off when its revenue grew just 20% last quarter. Even a 7% jolt in its ecommerce business and impressive overall revenue couldn’t win them back, especially given Amazon’s rough outlook for this quarter. And not to be left out of the gang, Alphabet reported that its all-important ad business – which runs across platforms like Google and YouTube and makes up the bulk of the firm’s revenue – fell 4% last quarter due to a pullback in ad spending and increased competition from the likes of TikTok. Mix in a worse-than-expected jump in its cloud business, and you get disappointing overall revenue and profit. No happy endings here: investors initially sent the Big Tech trio's shares down after the news.

Why Should I Care?

Zooming in: Time to Prime.
Amazon Prime’s struggling to get new members in its home market, so it’s turning to new tactics to bring in the dough. It’s introducing fees for grocery orders under $150, and branching out into new areas too: the new “Buy with Prime” service lets other sites use its payment and delivery services for a fee. That won’t just bring in more revenue, it’ll also help fend off similar offerings from rival Shopify.

The bigger picture: Telephone bill.
European regulators are considering making tech giants pay for the internet traffic they generate, in a bid to help pay for the next generation of internet infrastructure. That would be a bummer for belt-tightening tech firms, but music to the ears of telecom companies like Telefonica and Deutsche Telekom.

You might also like: Five Big Tech themes for 2023.

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Analyst Take

How To Use ChatGPT To Analyze A Stock

Reda Farran, Analyst

With all the buzz about ChatGPT, it got me thinking: can you use the sophisticated artificial intelligence (AI) chatbot to analyze a stock?

To test it out, I asked it: “should I invest in Tesla?” And it gave me a very generic, basic answer.

But after a lot of experimentation, I realized that the trick is to ask it the right questions. And if you do, you get some fairly impressive responses.

So that’s today’s Insight: six smart ways that you can use ChaptGPT to analyze a stock.

Read or listen to the Insight here

A Hike Made For Two

What’s Going On Here?

The Bank of England (BoE) and European Central Bank (ECB) both hiked interest rates on Thursday.

What Does This Mean?

This week, the Federal Reserve ticked up its interest rate dial by a modest 0.25 percentage points, but the Bank of England and the European Central Bank had different plans: they surged ahead with more aggressive hikes of 0.5 percentage points, leaving the UK’s at 4% and the eurozone’s at 2.5% – their highest rates since the era of the financial crisis. Still, their plans for the future were poles apart: while the BoE said it would only increase rates again if there were signs inflation wasn’t budging, the ECB struck the most aggressive stance of all three central banks, insisting more aggressive hikes were needed and even promising another big one next month.

Why Should I Care?

For markets: Sliding sterling.
The BoE's comments suggest rates could stay put at 4%, never to hit the 4.5% peak markets were expecting. And since higher interest rates makes a country’s currency more attractive to international savers and investors, that news meant the British pound dropped against the euro when news broke. And that downward trend could well continue, with the ECB likely to outhike the BoE over the coming months.

The bigger picture: What goes up…
Thing is, interest rates in the UK and US may not stay at these levels all that long, with traders betting that the BoE and Fed will cut them back down later this year. After all, inflation should be well on its way down by then, and shoring up flagging economies might be a priority once more.

You might also like: Here’s what the Fed’s latest rate hike means for markets.

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💬 Quote of the day

“It is always a silly thing to give advice, but to give good advice is fatal.”

– Oscar Wilde (an Irish poet and playwright)

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💰 How To Build A Smart Portfolio: 1pm, February 14th
💸 Healthy Investing Habits For Uncertain Times: 6pm, February 14th
👩‍💻 Opportunities For Women In Blockchain 2023: 12.30pm, February 16th
🗞 The Relationship Between News And The Markets: 5pm, February 21st
✍️ What Are Investment DAOs And How Do They Work?: 6pm, February 22nd
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