Is this another sign that the postpandemic travel boom is running out of gas im melissa lee, this is fast money, were live at the nasdaq ma marketsite we start off with a huge slate of earnings. Apple and amazon headlining the afterhours action. Full Team Coverage on all these names. We start off with steve kovach and apples big quarter. Steve . Yeah, melissa, it is, like you said, the Third Quarter in a row of falling sales, with revenue still beating estimates, but down 1 year on year so, revenues coming in at 81. 8 billion, street was looking for 81 p . 69 billion and the eps was a bigger beat, 1. 26 versus 1. 19 expected. Iphone, slight miss, coming in at 39. 67 billion. Just a couple hundred mill short of expectations there. But the story today is going to be services. Hitting a new record of 8 year on year. Growth accelerating there, booking 21. 21 billion in revenue there. And gross margin, i want to point out the expansion there, also beating expectations, 44. 5 gross margin, and its up from 43 a year ago quarter, so, services really helping out there. And i got to speak to tim cook about these results about an hour or so ago, and talking about what really drove those services results were seeing here and basically, reversing some of the trends weve seen. Heres what we told me advertising has definitely accelerated from before, and the app store has axel rated from before a reverse of the trend weve seen in the last couple quarter else and i picked his brain a little bit about a. I. And how that technology will play in at apple. Heres what he told me, quote, weve been doing research on a. I. And Machine Learning, including generative a. I. For years, adding later that, quote, and were going to continue investing and innovating and rolling these things into products that enrich peoples lives, end quote also telling me, you know, products like the vision pro, just wouldnt be able to exist without the a. I. And Machine Learning technology that apple has developed. And then i also had to ask him about the fitch downgrade, of course, we heard from a couple other executives, like jamie dimon, Warren Buffett breushing off concerns, and tim cook saying its not something hes deeply concerned about melissa . Steve, thank you. Steve kovach lets trade this you know, it is important to keep in mind, apple in the afterhours session is about 10 away from a record high. So, we are very so close right to that high. But we have the call. Wait for the call. They can say a lot of other things i think that it was a very good quarter, a lot to like. Tiny miss in iphone. Services great, as steve said. And obviously the margin there is, i dont know, triple, or, whatever, very much adds to the growth margin average. And Greater China was actually, i think, a little bit stronger, i think. It was. It was up 6. 7 and consensus, nearly 2 billion greater than what consensus was sorry to right so put all that together, though, and at this price, you had to have a very good quarter, so, is it good enough . I dont know its okay, themarket is tellin you, well, we dont know what yet to make of it. It wasnt a giant beat, but you know, lets see what they have to say, and lets see how they, you know, i dont know that theyll give great Forward Guidance that we can really count on, but i want to hear the tone i want to hear how they feel about it my point about the record high, you would think that maybe apple would see a bigger selloff, given given that it was already it wasnt a perfect quarter oh, okay. And we are so close still to record highs i think thats a fair point the fact now that services are 25 of overall revenue is great. Thats the highest number i think weve seen it would be greater if it was doing it on revenues that were increasing, but revenues which is fine, im not going to i dont want to equivocate here, but in terms of valuation, its an expensive stock, given the metrics that were seeing. Again, singledigit eps growth, singledigit earnings growth, again, some a stock thats probably trading close to 30 times next years numbers. So, the question is, is it in the stock now . I thought that was the case awhile ago, and here we are. I think a logical place for the stock to trade down to, to sort of amplify what youre saying, is sort of that prior alltime high of, like, 176 or 177 or so. Which isnt crazy. And in the context of what weve seen historically with apple, its not out of the realm of possibility. Yeah. Courtney yeah, i think realistically, and weve all echoed this, apple is pretty expensive. These valuations, realistically, multiples have to come down or earnings have to come up stock probably isnt moving a lot right now, they get a lot of their business from slowing markets. Pc demand and phone demand has been coming down we saw that with qualcomm. They were having some negative news there, i think people were expecting that with apple. But seeing how much their services is making up for that, i think thats really what people are liking to see here, and were going to have to see how much that and china is the big story for them the fact they had beats there, i think is why people are not as negative on the right now. Interesting, i mean, weve had a lot of time to digest that taiwan semi guide, and what we saw out of qualcomm. They missed on iphone, it wasnt a great quarter, but they know in september, theyre going to introduce the iphone 15, so, its the sort of things theyre not going to hit the sell button on that miss i agree on china if you are trying to figure out what the bug a boos would be, that would clearly be one of them im sure the dollar weakness has been helpful to them we know how much sales they get outside the u. S. , but im kind of with guy on this one, i just dont know why you would buy this stick at 32 times here, given the sort of growth rates we have. Obviously, that increasing and gene is going to talk about this, ive heard him talk about this, hes been totally right on this if they can continue to grow this iosinstalled base and the Services Become to be a part of the greater part of the revenue, like, thats the story, from here on out. And anything else they introduce, a new product that takes off the way airpods did, its just gragravy. And the advertising stuff, i hope jgene talks about that, because thats been a really good lever for amazon. Their Retail Business is not particularly great, but look at the companies that were not relying on advertising, netflix is another one, its a good business, if you have the eyeballs and the credit card of the people there and, so, to me, its fine. I have a small position in apple, carter showed us a chart its finally a perfect 45 degree angle, okay . A perfect 45 it just broke it the other day. I dont think this is a good enough quarter to keep the stock moving to highs. Karen, what do you want to hear from them in terms of the tone or specific areas, i mean, i would like to hear a little bit more about china right especially when theres concerns about sinnives and promotional activities in china to get the sales up. I want to hear that and how much how are they are they how much of the product is being manufactured else where, is that the plan it has to be expensive in the shortterm to do and then the a. I. Is how much theyre going to spend on it and how they think they can generate revenue. Not quite as clear to me, but they will find a way, i think. Earlier this week, terry, the founder of foxcon, said if war broke out between china and taiwan, it would be catastrophic for u. S. Stocks. Foxcon is a huge supplier of apple. What are your thoughts on that that would be my question. See what i did there i actually sounded like im halfway intelligent. That would be my question. And its legit if you go back to listen what he said, he is clearly concerned. Kyle bass talks about it all the time theres been this escalation the United States just gave 345 million worth of military aid to taiwan this isnt Getting Better, its getting worse. Were not talking about it, and i dont hope this to happen, but clearly something is going on. The hope is, they transition to india before this sort of yeah, it takes time or, if it happens, it happens. But that is a risk clearly been a risk. And its funny you bring up india, because that is one of their big markets right now, where they are starting to get more into, and thats something that could be is a larger longterm catalyst for them, they can get more into the iphone space in india, which is a much younger population and a very growing population right now. That could be a catalyst for them, too. I think its early, but it will be interesting apple stock down 1. 4 ahead of the call. Lets meantime get to the other big tech earnings report, amazon popping in the afterhours on a top and bolt tom line beat the tech company saying growth will axel rate in the current quarter. Deidrdre bosa has more stabilization in aws, that is sending shares soaring just got off the phone with the cfo who said they are seeing stabilization at the current 12 growth rate in aws, and that is down from more than 30 a few quarters ago, and at lower margins, but perhaps some relief or hosopt himism that will it n further. A also, underpinning the gains in the afterhours is guidance prime day, remember, it falls in the current quarter, q3, and the company is expecting 138 billion to 140 billion in sales. Thats better than expected. Operating income between 5. 5 billion and 8 8. 5 billion they were delivering net losses just last year the company will point to regionalization of the main driver of that they expect to double their Logistic Networks over the pandemic they make it more efficient, more profitable, leading to faster delivery times. The cfo is pleased with the progress, but he sees more opportunity to drive more cost efficiency back over to you, mel. Dbo, thank you you said that carter made a bold call yesterday yeah. He was selling apple and buying amazon hes good, that guy. The best. Pantheon, party non both of them. Were talking about the quarter, this and that, and he refers them to the fundamentals, he doesnt care about that this is one, he said consolidating. Know that sentiment wasnt particularly great relative to some of the other cloud players, after we saw what google cloud and microsoft have been able to do thats part of the story seeing stabilization, telling a story about how their customers are going to be using these tools, and more compute, that sort of thing i totally get it im not chasing it here. I dont think you have to chase any of these stocks here you had all the time in the world, if you wanted to buy amazon over the last six months or so and i dont think theres this much a. I. Pixie dust in there. You know, these guys have been investing billions of dollars in Machine Learning for over a decade, i mean, theyre going to be just fine as it relates to a. I. Over the next ten years what we learned about amazon, they can turn the dial when they want to. 5. 7 operating margins were crazy, compared to street was at 3. 6, and year over year, its up 2. 7 the market likes that. But if our crack staff in ec, engelwood cliffs, can go back to august of last year, you will notice that this 140 levelish is where he stowe stopped at lat year if you listened to carter . A loej call place to take money off the table. They could benefit off a. I. , but they also have to spend. They do, right, so i think, though, the street will have a lot of patience for the spend, if they can start to show they dont have to show how big, if they can start to show, and maybe this is starting to show a little bit, right . Remember, there was that interview with andy jassy where they were saying, you seem late toll the party he said, you know what were in inning two, very early, so im going to give them the benefit of the doubt its not cheap im long, im staying long even i dont love going against carter, but its just funny to me, the 53 billion part of the business is, you know, a nice little part of the story, it was better, but not so relevant, which is kind of amazing to how extraordinary it is you are with carter long amazon long amazon court, what did you make of the quarter . Yeah, this is very impressive, after microsoft warned of a slowdown in the computing business its very impressive i agree with dan, i wouldnt be chasing these things i think this is fantastic, trading up for very good reason, because it is beating expectations, but it is very expensive. The good news is, it is a very high portion of the s p 500, so, when apple and amazon do well, you are going to see the overall markets do well. I wouldnt be chasing it here. For more, lets bring in fast money gene munster from Deepwater Asset Management gene, we have so much to deal with tonight lets go with amazon here. Is it worth this 8 pop . It is and ultimately, dbo framed it in perfectly that aws stability commentary was powerful that led investors to look for accelerating aws growth in the back half of the year. And then separately, what we saw in the profitability, that shift to earnings, i think thats an important, powerful segment that has not been part of amazons story. If we look back over the last severn years, the average margin on their Retail Business is 2. 6 if they can add some efficiency to that, this can be a 5 business this is a segment that the retail opportunities, i think thats a big piece, a big opportunity, relative to where amazon is today. I would say this, mel, is that amazon had a better quarter than apple. Pretty clear to me apple is in line but if you look at apple versus amazon, and which of those two companies to own for the next five years, i would take apple over amazon in a heartbeat a would you rather by gene hes allowed to do that . He just did why . Amazon is lump yerp ier . Apple sort of been steady eddy you said the perfect worlds there lumpy is not good for Investor Confidence steady is. And apple hit it right at the top. Dan mentioned, i was going to Say Something about this, you read my mind, is that the key takeaway from apples quarter isnt the results, its the active install base grew they said that in the headline they know how important this is. That means that the business, the fly wheel is working and that means that the business has continued to be steady and that is opportunity for a multiple expansion i know that sounds hard to believe. But the second piece, and your panel has been orbiting this topic, but im going to put a finer point on it, melissa, the india opportunity. China, in 2010, was a 3 billion business in 2016, it was a 59 billion business it grew basically 55 billion over six years now, 19 of total sales. India, today, is about a 12 billion business its 3 of revenue if it gets to the same size as china over the next six, seven years, that alone, india alone, can add 3 annual Revenue Growth to apples story for the next seven years. This company doesnt need to grow at 15 for investors to be happy. If they can nail between 5 and 7 , i think the stock continues to move higher and they can do a lot of that on the backbone of india. Gene, its karen, thank you for being on tonight so, you said apple multiple actually could be higher, even though that maybe sounds kind of surprising where should the multiple be pretty high . Its high ill let kind of the broader investors put that together. I would just say this theres no other company that has the stability that apple has and the optionality around revenue gro growth i put this in proctor gamble, cocacola, clorox, those kind of steadystaples. We havent even talked about vision pro dont get me started, ive used the device, i think this is something thats going to be added in, its going to be a few years from now, not to mention, if they do something in automotive and those other consumer staple companies, they arent even close to that conversation, so im looking at this over the next three to five years, and thinking about where the conversations going to go, and i think when you put thatwarranr multiple gene, lets talk about amazon you think about aws, accounting for 70 of their, you know, of basically their operating profit, okay and we know we saw the retail side, guy mentioned the operating margin better on the retail what excites you more about the story . The operating margins better on the retail front or a stabilization in the aws, and they see a really nice growth trajectory, as theres a lot of excitement in and around demand for their compute as it relates to a. I. , or are they both really good im mrm exciore excited abou retail i understand thats a light year away from what most investors are talking about today. Retail, 75 of their business. I talked about the margin profite over the last five years, 2. 5 . If they can sustain 5 plus with some of these efficiencies theyre starting to drive in their distribution, you can kind of circle back to the Retail Business being the exciting part of the story and i buried the headline. Retail units grew 9 year over year it was 8 year over year in the previous quarter and thats with all the proper comps, with prime day, and those prime day all hits in the september quarter. So, ultimately, i think the Retail Business is is the crown jewel of amazon, and hasnt had the flash that aws has, but ultimately, thats whats going to drive shares higher in the longterm. Im still positive on amazon, i would take apple ahead of amazon, though gene, thank you catch up with you a little bit later on in the show after you jump on the calls. Gene munster would you agree with gene . Yeah, that time frame yeah. Absolutely. Shorter time frame . Our show is a shorter time frame. And what we mentioned, that prior high in apple, i think, was 178ish from december of 2021 i dont think its unreasonable to think the stock can go back there. We have seen selloffs larger than in terms of magnitude the quarter is fine. Its a great all those things are great. Its about trading the stock in the here and now, and i think it goes to 176 before it goes back to whatever that prior high was, 198 or so . All right, coming up, theres still a lot more earnings action coming your way. 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