Closing Bell - Closing Bell Overtime: Apple Earnings Extravaganza, Plus Qualcomm and AWS CEOs 5/2/24

Episode Date: May 2, 2024

Apple announced the largest corporate buyback in history and investors sent the stock higher in Overtime. We have you covered from every angle. Plus, Qualcomm CEO Cristiano Amon on his company's strong quarter and AWS CEO Adam Selipsky on what's driving growth. 

Stocks getting a boost as investors digest the Fed with more big earnings and a jobs report still on the way. That is the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort. Morgan Brannan is off today, and we're just minutes away from the earnings report that all of Wall Street will be watching. Apple takes center stage in 30 minutes after a rough start to the year for the stock. We're going to bring you the numbers live from Cupertino and get instant shareholder and analyst reaction. Also ahead, an exclusive interview with Amazon Web Services CEO Adam Solipski following strong AWS results in this week's Amazon earnings. His read on the cloud and AI spending is ahead.

Now, as we await earnings, let's get the market and a solid day under our belts for the major averages. It was led by the Nasdaq and the Russell 2000. Joining us are head of citizens, JMP Securities, Mark Lehman, and CNBC Senior Markets Commentator, Mike Santoli. Guys, I guess we're buckling up. Mark, interesting end to the trading day. The major indices faded a bit, but it was led by some of the smaller, riskier stuff, it seemed like, when we've got one of the biggest of the big names reporting after the bell. It was a good day. It was green.

We stayed higher. We're going into a big earnings report, obviously, kind of the end of, I guess, the FANG stocks, although we don't call them that anymore. But it's good to see. And the bounce is real. And we're going to learn a lot from Apple. Obviously, diminished expectations for that stock. But I think all eyeballs are on that because it's such a big bellwether. Mike, it's been an interesting earnings season for the larger tech names in the sense that we had strength from big cloud players like Microsoft, like Amazon just a couple of days ago.

But then the spending made the picture mixed for meta. Now we're getting Apple, which really there have been some concerning headlines about China, you know, referencing that company. And I'm not sure whether we're going to see this big name. Actually, I don't know what it's going to do. What do you see? No, it's not clear. And, you know, earnings estimates for Apple have been remarkably stable. That's kind of the rule. People just assume they can make the numbers revenues on due to be, you know, flat three fiscal years in a row. And yet they buy back stock and they manage to cost.

So I do think expectations are relatively in check for Apple, but it's unclear if it's going to give you that extra reason to get aggressive, either in the stock or the group. And very uneven reactions to generally pretty good earnings just across the board this season with outsized moves, close to 4% average move for stocks. So it does show you that the market's a little bit twitchy about whether we can extrapolate this year's better earnings, this quarter's better earnings estimates into the future.

Well, let's see if we get twitchy in overtime today. Amgen results are out. The stock's slightly lower initially. Angelica Peebles has the numbers. Angelica. Hey, John. Amgen beating on the top and bottom lines. Adjusted EPS coming in at $3.96 a share versus the $3.87 estimate. And revenue also beating at $7.45 billion versus $7.44

billion that was estimated. And looking at the sales, it was a little bit of a mixed quarter. On the cancer drug side, those results were pretty good with drugs like Lumicrast coming ahead. Also, some general medicines such as Repatha for high cholesterol coming in ahead. On the other hand, inflammation drugs like Otesla falling short of expectations. But now Amgen saying that they're lifting the low end of their full year sales guidance. They now expect between 32.5 billion to 33.8 billion. The street's looking for 32.95 billion. They're also raising their full year adjusted EPS guidance to between nineteen dollars and twenty dollars and twenty cents a share versus the nineteen point four eight estimate.

And one other nugget from this release is that they have completed the phase one trial of an experimental obesity pill. So we'll be looking for more on that. And the stock is now unchanged. Back to you, John. Yeah, just about flat, Angelica. Thanks, Mark. Lifting the low end of guidance and pointing to a stronger full year is good, I guess. I mean, given that there's been questions about the sustainability of demand in this economy. Well, all eyes are on OZic and its brethren for the healthcare stocks.

We obviously saw Lilly yesterday talk about that. It's kind of a have and have not market, a lot like the stock market these days. So if you're in tech and you're NVIDIA, you're one thing. If you're Intel, you're another. And if you're Lilly, you're one thing. And if you're Bristol Myers, you're another. And I think that is a sign that we are still buying the best stocks and willing to trade up for those. And the ones that really haven't participated are also kind of continuing to get a nod and say, we'll see the next quarter. So the market's healthy enough. I mean, one thing we haven't

talked about yet is the IPO market. Those stocks are working better than the stock market. And you'd expect more of those to come. And that hasn't happened yet. So that'll be a theme, I think, during the back half of the year. But like you said, kind of a have it, have it market. You got it, John. Yeah, we got Coinbase earnings out and that stock is bouncing around a bit, mostly lower. Kate Rooney has the numbers. Kate. Hey, John. Yes, it was a beat for Coinbase, at least on revenue driven by what looks like pretty strong trading volume in the quarter. It's held by crypto prices hitting an all time high.. Revenue clocked in at $1.64 billion. That was better than the street expectations, which were around $1.3 billion.

Adjusted EPS, John, we're not going to compare this number. It's $4.40. Again, not comparing that EPS number. It does include this $650 million mark-to-market gain on crypto assets held for investment. That relates to an accounting update. It's new in the quarter, so not going to compare that. But if you do look at EBITDA, this topped a billion dollars, trouncing the street estimate, which was 633 million, so showing strong profitability there. Coinbase also points out in the release that Q1 EBITDA was more than the total from all of 2023.

A lot of this driven by that trading volume. Margins also look a bit better than expected. So margins of around 60 percent. Street was looking for 47 percent margins. Transaction revenue was above a billion dollars. That was stronger than expected. Consumer transactions really made up the bulk of that. Nine hundred and thirty five million institutional and much smaller slice at eighty five million. Still calculating the take rate, which is something analysts watch closely.

Coinbase does expect transactions to grow, which do expenses rather transaction expenses to grow, which tend to track volumes. And then sales and marketing expenses are also going to rise slightly this year. The stock, though, as you said, John, bouncing around down more than 4 percent after I was here. Back over to you. All right. And Kate, Coinbase does not give traditional guidance, right? So I imagine that there's a lot riding on management commentary here on overtime and then on the call. Yeah, they do. They don't give traditional guidance. They give sort of this tiered approach. But we do expect an update for April trading.

And kind of that tends to give you a directional sense of where things are going. Prices have come down, which tends to indicate that, you know, retail trading is going to be less strong. And, you know, in bull markets, they tend to see a lot of volume. So we'll see if there's any update on the current quarter, current months. And that should give a bit more directional guidance. But again, as you said, they don't give what the street typically would think of as traditional guidance. But a lot to talk to with Alicia Haas coming up with you guys. Indeed. Thank you. As you mentioned, the chief financial officer, Alicia Haas, is going to break down those results here on Overtime before she dials into the call with analysts. Now, Expedia and Booking Holdings earnings are out, and Seema Modi has those numbers. Seema.

John, let's start with Booking Holdings, which beat on earnings $20.39 adjusted on EPS, revenue coming in at $4.42 billion. So a company that's clearly benefiting from the rebound that we are seeing in outbound travel. So the United States to Europe and Asia, strength in Asia specifically, with the second quarter, excuse me, room nights booked up 9%, gross travel bookings up about 10% year over year. So that was higher than what the street was expecting. You can see shares of booking are higher in overtime. But let's pivot the conversation to Expedia because a slightly different story there. It beat estimates on revenue, $2.89 billion. Earnings not comparable. But the story here is one of weakness when it comes to Vrbo. That is their home rental business that competes directly with Airbnb and booking.

The company is saying that given the Vrbo drag and the rate of acceleration in B2C, thus far we are lowering our full-year guidance to a range of mid- to high-single-digit top-line growth. We know Vrbo has been challenged by a lack of marketing spend in both booking and Airbnb, at the same time ramping up their spend and their budget on marketing around the home rental category. So that perhaps is why we're seeing the company referencing the weakness they're seeing they're more on the earnings call when it starts at 4 30 p.m. Eastern back to you guys all right Sima thank you Mike Santoli which stands out to you here between booking and Expedia as the more important read I

mean it sounds like the outbound travel probably speaks to a higher-end consumer here and that desire to get out and about again, as Seema said. And maybe since Vrbo is a second- or third-tier player, that doesn't count as much. What do you think? Yeah, I mean, booking has vastly greater scale. I mean, just the size of the business. It's been the dominant player in the OTA area for a while. And it really is one of those examples that proves how hard it is to be a pure value investor in tech or in e-commerce,

because Expedia has perpetually been the cheaper one, the one you can make the turnaround case for. But Booking has been the market share leader and the one that has been managing to grow faster and justify a higher valuation. So I'm not sure either one gives you just a pure macro read on how consumers are feeling about things. But clearly, there was plenty of demand to go around for Priceline in the last quarter in the way of international travel. Mark, between the airlines and booking, what does that tell you about travel? And if anything, the high-end consumer? I think it tells you you want to own the best. And I think Mike just said it. Uber, Lyft is a good comparison for me. I mean,

the better-run company and what they've done across their platform. And it shows you the consumer's still alive, maybe not quite as strong. And obviously, Kramer did a piece with Starbucks yesterday showing that you have to constantly manage your consumer internal and external factors. And obviously, we saw a much better number out of booking and the best continue to get better. All right. Mark, Mike, thank you both. Still ahead, much more after hours action, including the big name investors have been waiting for. Apple coming up in just a few minutes.

Plus, Amazon extending its post-earnings pop today. We're going to hear from Amazon Web Services CEO Adam Salipsky after AWS saw sales jump 17% for the quarter. Overtime's back in two. Welcome back to Overtime. I spoke exclusively today with AWS CEO Adam Salipsky. After Amazon earnings came in with cloud growth arguably the star of the show, I asked about what drove that beat.

It's driven by a lot of customers getting back to migrating those workloads, getting out of their data centers. And then, of course, also AI vectoring in on top of that. We, at this point, have a multi-billion dollar annualized AI business growing very quickly. And that's really being built on the capabilities and the rapid innovation we're delivering to customers in all those areas. Spend some more time there on bedrock, if you will, and on how the process that customers go through and choosing from the menu of, okay, here are all the sort of models that I can use,

maybe what I need for not only my industry, but a specific piece of my business that I want to start experimenting with or even migrating to AI models on. It's exactly as nuanced as what you just said. And that's why there won't be one model to rule them all. And being able to evaluate and try and figure out, hey, which model do I want to use for this very specific piece of drug research or for this educational application. And so just last week, one of the several new capabilities we released in Amazon Bedrock is the ability to do model evaluation. And so you can choose your criteria. Do you care most about accuracy or about speed

or about cost and many other characteristics? And you can basically upload sample data and then you can easily review results. And this is going to be really big in terms of helping customers actually understand and select which model to use. And then in addition, we also released the ability to bring your own custom models to AWS, to Amazon Bedrock. And so a lot of people are taking open source models, be they Mistral-type models, Meta models from Meta, and basically

tweaking them, customizing them, making them their own. Now you can bring those to Amazon Bedrock and inherit all of the security and all of the characteristics, all of the ability to complete multi-step tasks and to practice responsible and safe AI and to have those guardrails that people really want inside of Bedrock. I also asked him, in a space where multiple AI models are emerging that customers want to use, what's going to make one cloud provider a better AI platform than another? I think there are a few things, John, which are disproportionately important and that we're really focused on, one of which are disproportionately important and that we're really focused on. One of which is ease of use.

We're really focused on ensuring that AWS and that Bedrock and Queer collectively are the easiest place to get started and to get moving quickly with generative AI. I think second is a choice that we talked about a little bit. And given that you are going to need to use multiple models having them all instantly and easily available and having them really look and feel the same to you irrespective of which model you're using is going to be really important um third i think security is a big differentiator you know not some people think oh all the clouds are the same i'm here to tell you it is not the case that AWS has a stronger track record to both security and operational excellence than a lot of competitors,

some of which have really been in the news lately with perceived concerns around security. And that's a big deal in both privacy and security when it comes to AI is front and center, top of mind for our customers. And it's something that we put enormous energy into ensuring we are truly best in class in security. And it's something that we put enormous energy into ensuring we are truly best in class in security. And then finally, availability, just making sure that we've got enough capacity to service our customers' demands. And we're expanding really rapidly,

both in the U.S. as well as worldwide, to ensure we can be where customers need us to be. Yes, that was a little Microsoft shade there, if you didn't catch it. Finally, investment in infrastructure. I asked how he's planning the billions of dollars of spend to meet cloud and AI demand while trying not to overspend. I think our approach is to try and be really, really close to customers and also understand Amazon's internal needs and to make sure that we've got multiple options for expanding that capacity really, really quickly. So for example, if you look at supply chain, we've got both GPUs as well as the AWS design chips. It's really important to our customers that there is that supply chain diversity and that there are multiple avenues to bring new capacity to market. So I think the fact that we've invested for many years in building these multiple supply chains enable us to react perhaps more quickly than a lot of other folks in the market.

Competition continues with the likes of Microsoft Build, that developer conference coming up, and more. Adam Solipski. While now Block earnings are out, Kate Rooney has those numbers. Kate. Hey, John. Yes, it was a beat across the board for Block in the first quarter, driven by cost efficiency and growth, both in the Cash App and Square seller side of the business, also raising its outlook for the full year on gross profit and adjusted

operating income. In Q1, though, adjusted EPS coming in at 85 cents. That was a beat by 13 cents. Revenue coming in stronger than expected, 5.96 billion. That was a beat. Cash app gross profit grew 25% year over year. 57 monthly active users there. That was up 6% or so year over year. Within that, Bitcoin revenue came in at 2.7 billion. That was, again, stronger than expected. And then the seller business, which is still called Square, grew 19% year over year. I caught up with CFO Amrita Hujia, who pointed to growth on what she called both sides of the counter in payments and, quote, increasing profitability through

discipline across a range of expenses. That was reflected really in EBITDA, which nearly doubled year over year, adjusted EBITDA coming in at seven hundred and five million. That was better than expected. She noted improvements on operating income as well and then keeping head count and check, pulling back on things like corporate overhead and travel. And then on consumer health, it's been a big topic here on CNBC. She says we've seen, quote, continued resilience of spend, both in the discretionary and non-discretionary sides, pointed out growth for food and beverages and restaurants.

And then on the lending side with buy now, pay later, that was up about 25 percent with afterpay. They are seeing strong adoption, said it's growing quickly, but that risk loss levels are, quote, healthy from a delinquency perspective. And then on the guidance says that they're confident that they're going to be able to grow with higher margins. And you can see Street likes what they're seeing. Stock up more than 10 percent after hours, John. Yeah. All right. Kate, thanks. Now, Cloudflare earnings are out as well. Christina Partsenevelis has the right. Okay. Thanks. Now, Cloudflare earnings are out as well. Christina Partsenevelis has the numbers. Christina. Yeah, this is a cloud connectivity software firm, and you're seeing a beat on the top and bottom line for Q1. So 16 cents on revenues of 379. So

definitely stronger there, but it's the full year guidance that is falling short despite this beat that we're already seeing in the Q1. So the full year guidance is coming in at 1.648 million to a range of 1.652 million. Very specific on those numbers because even the top of that range is still lower than street estimates. I'd like to point out, though, that they did say they saw a record number of net new customers year over year spending, you know, 100,000, 500,000 a million in that Q1. So that contributed to the beat. but you can see shares down over 12 right now all right christina thank you uh coinbase just out with results at the top of the hour it's pulling back now about almost four well three percent despite a revenue beat up next the company's chief financial officer is gonna break down the numbers before she joins the earnings

call with analysts and the wait's almost over for Apple earnings with iPhone sales and AI strategy in sharp focus. We're going to bring you those numbers as soon as we have them. Overtime will be right back. Welcome back to Overtime. Coinbase shares are lower by about 4% after reporting Q1 revenue, beating estimates. Joining us now in an exclusive interview, ahead of the earnings call, Coinbase CEO Alicia Haas. Alicia, thanks for coming on Overtime. I think probably a lot of investors are trying to sort through the noise of a very strong Bitcoin quarter. And, you know, things like consumer transaction revenue just about doubling quarter over quarter. What are the health metrics in the business that you're most focused on?

Well, thanks for having me today. So Q1 was a very strong quarter for Coinbase. And we saw growth across the board driven by the strong market conditions. But we also saw the product investments that we've made over the last two years really pay off. So we gained market share across spot and derivatives trading. We saw all-time highs on our prime platform, which is our institutional platform. We accelerated adoption and scalability of base or layer two blockchain, which is designed to bring people on chain and into the next generation of crypto applications. And really, we just continue to make strides at building a stronger, more durable, diversified revenue streams.

What's the long-term impact of these Bitcoin ETFs now going to be on your business? If I'm more of a traditional investor, I can now access this through my brokerage account rather than going through the likes of a Coinbase. So what does that mean for you? Well, ETFs really unlocked a flywheel of engagement across the Coinbase Prime platform. We've said that ETFs would be a benefit to Coinbase and the ecosystem, and that really played out in Q1. What we saw is just net inflows across the board. So yes, we saw $11 billion of inflows into ETFs,

but we also saw an increase in consumer trading on our platform, an increase in institutional trading. And as I said, on the institutional side, this flywheel, we saw people engaging in financing. We saw people engaging in trading. We saw people engaging in custody. And as a result, we had 40% of our institutional clients engaged in three or more products on the Prime platform in Q1. So really, it was a lift across the board and benefited the entire ecosystem. Your institutional transaction revenue was up 133 percent quarter over quarter, stronger, a lot smaller, yet stronger than consumer transaction revenue. Do you expect that to continue? You know, we definitely have seen

an increase in institutions coming into crypto. I think it's important to remember in the last bull market in 2021, this was just when institutions started to adopt crypto. And they've continued to be steadily growing their exposure to this asset class over time. So over the long run, yes, I expect to see more institutions come into this space. But as we look quarter to quarter, I think it ebbs and flows. And I think we could see different trends impacting consumers and institutions. And so we don't look at just one quarter of impact to say this is a durable trend. But over the last few years, we've definitely seen increasing institutional adoption, and we'd expect that to increase. If you're looking at big

picture headline impacts to customer activity, what are you seeing from both geopolitical turmoil on one side and then just the fluctuation in yields on the bond side? So broadly, what we see is customers focus on crypto trends and they are not as focused on broader macro or geopolitical. That can impact our market makers, that can impact institutions, but on the retail side, it tends to be much more, do I like this asset class? What's happening in crypto? What are the trends happening in this market as opposed to the broader markets? All right, Alicia, that gives us a great picture ahead of the earnings call. Alicia Haas, the Chief Financial Officer,

thanks for joining us on Overtime. Thank you. Okay, well, let's take a look at Apple ahead of those numbers crossing. Let's see. We got about two or three minutes before we expect that to happen. So let's bring in our panel, Angelo Zeno from CFRA and Amit Dharianani from Evercore ISI. Amit, after Qualcomm's results last night showed strength in premium China, it makes me wonder if there's extra pressure on what Apple is going to report. Yeah, I mean, listen, I think beyond what's going to happen on the broader iPhone market, what's happening in China is probably going to be the biggest focus. And certainly with what Qualcomm has just reported, the question may just be what's happening in the market share dynamics in China for Apple.

That I think will be the biggest topic, especially those numbers are not going to live up to the expectations folks have. And Angelo, I know there's a lot of talk around what's Apple going to do in AI. And if we know the patterns in Apple, which, come on, we do, they're going to have some announcements at WWDC. But it's not going to be the type of product stuff that knocks people's socks off.

It's going to be things like developer tools and enhancements within their existing apps that make them a little bit more useful, right? So should investors kind of cool their jets on the AI expectations or is Apple going to change its habit and perhaps say more than usual? No, I think we'll have to wait and see on all that. But I think this is going to be a really great year for Apple looking forward now. I mean, you got, you know, of course, a big event coming next week in terms of that iPad event. Rumors out there that they potentially have an M4 announcement at that point. Maybe, maybe not. We do expect to see an M4 at some point this year, but you'll see an upgrade in terms of iPads this year. We think if there is an M4 this year, you potentially see an upgrade on the Mac side of things. And then, of course,

you've got on-device AI with the iPhone 16 cycle this fall. So this has the potential kind of makeup here looking, if we can kind of get through this quarter and the guidance here for the June quarter, I think as we look into the second half of the calendar year, there's a nice setup here in terms of a refresh cycle across kind of all their different hardware devices. And that's really what gets us excited here as far as the Apple story is concerned. Yeah, and we do have that iPad event, as you mentioned, coming out in just a bit. And it makes one wonder whether we get additional news that paints a picture for AI ahead of that. We got the numbers. Hold on.

Steve Kovach has them. Apple earnings are out. Steve? Hey there, John. Yeah, and it's a beat on the top and bottom line for Apple, plus the largest buyback in corporate history. Let me go over the numbers first. EPS is a beat here at $1.53. Street was looking for $1.50. Revenue, a slight beat, $90.75 billion versus the $90.01 billion expected. And as for that buyback, $110 billion. Like I said, that's the largest ever announced. That's according to Birani Associates. And then a

dividend is increasing to $0.25 a share. And just a couple little segment revenues here. Let's go over iPhone. A slight miss of expectations at $45.96 billion. That's down better than 10% year over year. And then services, a slight beat here, 23.9 billion. That's up nearly 14%. And then as for China, that's a big question going into here. Sales in greater China, down 8%. We see shares reacting here about up 3% or so after hours, Sean. All right, Steve, come back to you when you have more. Amit, down 8 percent, but beat across the board, it sounds like. Is that good enough?

I think, listen, down 8 is much better than what they did last quarter, right? It was down 12, 13. So I'll tell you, this number is actually, at first glance, much better than expected. And China almost tells you perhaps the negativity on China may have been overdone over here. So the buyback helps. One thing I want to go back to this AI dynamic. I think it's crucial to understand Apple can afford to be behind on AI versus their peers because AI is not an existential threat to them, as it might be for some other companies who are way more vocal and ambitious with how they're investing in it. Plus, Angelo, Apple's peers are going to be paying them to get their AI out there, right?

Yeah, I mean, you would think so. I mean, and I think the comment was just made great in terms of the CapEx landscape out there. You kind of look at some of the capital intensity numbers out there for some of the other Mag7 names, whether it be a Meta out there, which is close to 25 percent or, you know, some of these cloud players in the mid-teens or so. It's really interesting when you look at Apple's capital intensity ratio, you know, closer to about three to four percent. So they don't need to kind of spend aggressively in terms of kind of get this AI story right.

And that's kind of part of the thesis as far as Apple is concerned and the trajectory here of their free cash flow generation long-term. And speaking of just kind of the free cash flow, I think that $110 billion really kind of, I'm really excited about that. I think that's kind of a table pounder as far as what Apple is throwing out there

and kind of their conviction level long-term about their business prospects. Yeah, more than a little bit of money. All right. If you watch Apple results on overtime, and of course you do, you know, Steve Kovac tends to have some conversation with Tim Cook about this. Let's get back to him now. What do you got, Steve? Yeah, sure, John. So I did catch up with Tim Cook on these results and he broke with tradition a little bit and gave some guidance. He said to expect for the June quarter revenue to be up in the low and single digit percentage points. So that is one thing. We're going to get more color on the

guidance on the call. But they did get Tim Cook did give us some guidance there. And then as for some other things I talked to him about, I did press him a little bit on China. As we know, there have been some issues there, low demand and so forth. Here's what he told me about what's going on China. This is back off a trip. He was there several weeks ago opening a store in Shanghai. He told me, quote, I feel great that in an extraordinary competitive environment that regrew iPhone sales in mainland China last quarter, that may come as a surprise to some people. And so I feel good about China. I think more about long-term than I do the next week or so. And then of course, another big question going into this

earnings report, John, was artificial intelligence and where Apple kind of plays into that whole narrative that its peers are talking about. And we focus a little bit on hardware because this was also the quarter they announced that M3 MacBook Air, which they're marketing as an AI PC. He told me, quote, we've been shipping a neural engine since 2020. And so we had we've been working on AI from a silicon point of view for years before that to be able to ship it in 2020. And so I think we have a huge opportunity here. And as people start using AI more, there's a big opportunity here, end quote. And of course, we're expecting more details on that. Tim Cook also teasing to me more to come on artificial intelligence, presumably at WWDC, but he wouldn't say much more than that. And then I also asked Mr. Cook about the DOJ antitrust case and how that kind of plays in. It's coming at this interesting

moment for Apple as it is on the cusp of this AI revolution. Here's what he told me about the antitrust case, quote, I think the case is misguided and we're going to fight it. It's my job to make sure it doesn't become a distraction. And so if you look at it, what they're trying to do is essentially use the law to define how we design and that shouldn't be like that, end quote. So obviously, we know from Microsoft 20 years ago, there's that kind of narrative out there from Bill Gates and others that it distracted them and made them fall behind. Tim Cook telling me that's not going to be the case at Apple, John. All right, Steve Kovac. And as you've been talking and giving that commentary from Tim Cook about June revenue being up, we've also seen the stock move up in overtime now about 4% higher. It was about 3% higher before.

Amit Dharianani, your reaction to what Tim Cook said about June revenue and doubling down on what he said before about Apple's preparation based on its vertical integration for the AI era? Yeah, John, the low single-digit uptick in growth in June quarter is way better than I think what BuySide was expecting, right? The fear was they're going to guide for modest declines in June. Things get worse, not get better the way they're guiding. So that's notable. Also, the fact that it's talking about iPhone unit growth in China is notable. Despite that 8% down, it sounds like mainland China, they did grow you to the basket uh... you know i think the same and even the side of the side of the call to be

in money better and into the trial and things are going to back out this should set this company a very well into the back of the year where they have a whole bunch of catalysts in favor angelo is there a narrative shift here perhaps if uh... units in china are doing that at this time of year? I mean, we know Apple's not going to say so, but we know new iPhones are coming at the end of the year. So if they're even doing okay in units at this stage, that might set

them up nicely now. I mean, we think so. I mean, you kind of think about going into the second half of the year as far as iPhones specifically are concerned. And I would agree in terms of kind of our expectations going into the June quarter, we did expect to see, expect a guide down. The commentary on China, much more bullish and positive than we anticipated. But going into the second half of the year, as we think about China specifically, we do think kind of Apple lacked two core features across their ecosystem on the premium side of the market, that being an AI-enabled type of device and second, foldable devices.

Those are two areas where a lot of these kind of emerging kind of China-based providers are really starting to kind of differentiate themselves out there with what Apple is doing. But the fact that Apple is going to roll out an on-device kind of AI device out there with some of the, you know, with what Apple is doing. But the fact that Apple is going to roll out, you know, an on-device kind of AI, you know, device out there here in the second half of the year, I think the setup is really good for Apple. And then, you know, of course, as we kind of go into calendar 2025, given what they just reported in terms of China here this last quarter and in the December quarter, there is kind of an easier kind of bar for them to meet as we start that iPhone 16 cycle in China. Steve Kovac, I want to go back to you for a moment because you're there in Cupertino.

You talk to Tim Cook there in person and you know this company. And despite how big it's gotten, part of its DNA is this underdog sense of everybody doubts us everybody's against this and it seems in the stock market like that's emerged again what's your sense of tim cook's comfort level with uh with the doubts being out there about apple and what it can do next i'll quote what he told me and he said i I'm literally on the edge of my seat, John. This is when he was talking about these AI announcements that they're planning soon. So maybe we'll get a little more color that on the call,

but it sounds like they're really teasing whatever it is they're working on the artificial intelligence side, that this is going to be something big. So this is, in my view, going to be probably the most important developers conference that they've ever did. Forget about the Vision Pro last year. That was great and interesting. But this is the cusp of the new AI revolution. And we're finally going to find out where Apple's part plays. Tim Cook, I was just sitting next to him just minutes ago. He seemed

excited about it. So that is what they're talking about now. And that is going to be, you know, the story in the back half of the year, I think. I mean, is it about software now? That's the next step. Yeah, that's exactly it. So I talked to him about hardware, and he did talk, like I just read off to you, he talked about the chip work that they've been doing. We already know the success they've had there. But yeah, the next step is software. What does that look like on the iOS 18 layer that they're going to announce at WWDC on the software, the user-facing stuff? For many years, as I've done these interviews with Tim Cook, he's told me about the AI that's happening behind the scenes. You know, every time you take a photo on Vision Pro, the way it maps the room around you and things like that,

they're used to talking about AI in that way. But as far as a consumer-facing way, this is going to be a new thing for Apple to start showing off. All right, Steve Kovach, thank you. I'll let you prep for that call. Amit Dharianani, Apple's authorized a big buyback at a time where its stock, I mean, it's relatively cheaper than some of the other big names. What's the implication there for earnings per share? Let's see, do we have, do you have an audio issue? Okay. Hold on. I can't hear you. I'm sorry. So

I'm going to swing that over. Huh? Do we have them now? I was just saying one of the positives Apple has right now from a cap allocation basis is they don't have to invest in CapEx as aggressively as others do in AI. They can afford to do that back to their shareholders in terms of returning money. If they do it, the kids are doing it right now, I think what that really means is 300 to 400, maybe 300 to 500 basis points of incremental EPS growth over the next four years that can come from buyback. So it's a nice little kicker to enable double-digit low-teens EPS growth in this model on a multi-year basis. All right. Amit, Angelo, I'll let you get ready for that call as well as we await more detail.

Apple up 4% right now in overtime on those results ahead of that. And we've got much more on Apple still ahead, including shareholder reaction to the company's earnings beat and massive buyback authorization. And cue that QR code because it leads in perfectly to the latest installment of my On the Other Hand newsletter. This week's debate is AI key to boosting Apple stock this year. You can scan that QR code on your screen now to join the conversation by signing up for the newsletter. And Overtime will be right back. Welcome back. Shares of Apple are up 6% now in overtime after reporting a beat on the top and bottom line in earnings just a moment ago. Trading at these levels in the regular session would have just about erased the losses for the

year. Let's bring in Tim Lesko of Mariner Wealth Advisors, which owns more than 10 million shares of Apple stock. What's your feeling about these results? And Tim Cook saying up single digits in June. Yeah, I think the results were a heck of a lot better than most people on the street expected. You know, as long term shareholders, we don't react so much to quarterly results. But this was really a quarter that was setting up for disappointment, and certainly we saw something that was a lot more pleasant. And I also think it's a great time to talk capital allocation, how shareholders will be patient as the product cycle improves to get paid while we wait. So how much do you care about this

buyback, then? It won't hurt earnings per share, that's for sure. Right, certainly. You've had a company now for better over a year, really hasn't had the kind of earnings growth or the kind of revenue growth that's become expected in it. So it's nice to shareholders when you know you've got a billion users install base that you generate tons and tons of recurring cash that during periods of time when you don't have the hottest product that you generate tons and tons of recurring cash that while during periods of time when you don't have the hottest product that you're at least giving something back to shareholders

apple's in a unique position where it's not investing in ai necessarily so that it can sell services to other companies other companies are going to end up paying apple for your placement of their ai services in apple's browser on on Apple's phones. And then Apple's going to build these capabilities, we would expect, into its software and expect that to perhaps drive an upgrade cycle. So as a long-term investor, how are you looking to judge the value of Apple's investments in AI? Well, I think you hit a couple of really salient points, John, in that right now Apple is being sued across the globe for some of the privacy issues that it feels are very important to its customers. So how it works with existing AI, how it builds its own AI, and whether or not that's within a walled garden is going to become very important to the future of Apple and the future of these lawsuits. So we always like to see Apple wait for the technologies to mature so that they can get paid for the technology.

A lot of people are talking about AI. A lot of people are betting on a significant future in it. You always want to be the one collecting the paychecks. Do you think that Apple's share is in danger of being eaten somewhere, or are you heartened by what you heard about China? I think we're heartened by what we heard about China. You know, certainly China is a is there's two pieces to it. Right. China went through an economic slowdown as well as a switch to other products and some political machinations of our relationship with China as a country. So continued, you know, call it relative strength in China to what expectations were are all good for us. All right, Tim, let's go. Thank

you. Speaking of China, Qualcomm finishing near the top of the Nasdaq 100 today, important strength in that market. Up next, what the company CEO had to say about his company's earnings and the PC chip launch that's coming pretty soon and a programming note. On Saturday, be sure to watch Becky Quick and Mike Santoli from Berkshire Hathaway's annual shareholding meeting in Omaha. That's going to begin at 930 a.m. Eastern, live on CNBC and streaming on CNBC.com. We'll be right back. Amgen's stock getting quite a pop here, up more than 10% in overtime after reporting results at the top of the hour. Let's bring back Angelica Peebles with more. That's a bigger pop than we had last time we saw you, Angelica. Yeah, John, things have really turned around here,

and that's because Amgen on its conference call telling investors that they are preparing to move their obesity injection into phase three trials. They're saying that they're planning a broad phase three program, including obesity, also diabetes and some other indications as well. And that's, of course, what investors want to hear. They did have some bad news, which is that they are not going to advance their experimental pill, but that was much earlier in development. And still, investors clearly happy to hear that they're moving forward on obesity. That's obesity. It's the name of the game. Angelica, thank you. And Qualcomm, it ended the day up on nearly 10 percent after a beat and raise quarter driven, pun intended, by the automotive business and premium phones in China. Those are two areas where investors were concerned rivals were showing

weakness. I spoke to CEO Cristiano Amon about autos last night after the earnings call. That digital transformation of the car, that's what we do. That's a Snapdragon digital chassis, which is applied to combustion engine or ev and the story of qualcomm is a different story than the market the story of qualcomm is the car transitioned to be a new type of car with a lot of digital technologies and snapdragon became the the preferred platform of the industry that's why we had $30 billion of a pipeline back in late 2022. Now it's 45. It added $15 billion, which is a demonstration of continue to gain share

and a significant amount. Off the 45 total, one-third of that is actually ADAS in autonomy, which is just not digital cockpit. And the growing revenues of the 35% when the industry, some of our peers are flat or down, is just showing as new cars get launched, you started to see the benefit of Qualcomm automotive business. And that's an exciting part of the Qualcomm diversification strategy. Next up, Qualcomm is looking to expand revenues in its IoT unit by rolling out laptop

chips that Amon says are going to rival Apple's M-series chips in their combination of speed and power efficiency. If Qualcomm pulls that off, and this is just me talking, it could be a disruptor of PC CPU chip revenues for Intel and AMD. One of the things we did in the quarter, we actually launched a new product, the X+, which basically allowed us to go after a broader addressable market, not only premium laptops, which are the performance leadership of the industry, but also any laptop above $600. So that actually we can bring that benefit OEI to a broader range. The way I think about that financially, you know, there's a great event for Microsoft

coming with Build and the PC launches to others month of May. You're going to see the products hitting the shelf all the way to back to school calendar. It's going to be a fiscal 25 event, but in fiscal 25, it should start to be material in our IoT segment. We plan to provide an update at the next earnings call of PC Traction. More to come for sure. Now, up next, all of the overtime earnings movers that you need to know about. And there are a lot. And a look at what could move the market tomorrow. And don't forget, you can catch us on the go by following the Closing Belt Overtime Podcast on your favorite podcast app. We'll be right back.

Welcome back. Look at Apple stock. You can see it higher in overtime by just about 7%. Strong quarter beating on EPS and revenue, announcing the largest ever buyback for a company at $110 billion and upping its debit end to 25 cents a share. CEO Tim Cook also telling our own Steve Kovac that he expects low single-digit growth during the June quarter. And you heard from analysts here on overtime that some were expecting flat to down. And we've got some other overtime movers for you. Fortinet under some serious pressure right now.

You can see it down about 8.5% in overtime. The company topping street estimates on the top and bottom lines, but investors keying in on billings guidance, which came in light. Meantime, Bill holdings moving higher. That software firm reporting earnings and revenue that beat versus FaxSat. Estimates, you can see it up 3.5%. Revenue guidance also ahead of expectations, although the earnings forecast was light. We're going to get more on that tomorrow when founder and CEO Rene LaCerte joins us in an exclusive interview right here on Overtime. That name is important also because of

SMB spending, something Mike Santoli has pointed out for us, that that's an important piece of this economy and it has been lagging. Let's get you set for tomorrow. Busiest week of earnings season coming to a close. We're going to have another clue on the consumer when Hershey posts its first quarter numbers. Also reporting logistics firm XPO and CBOE, a commercial real estate in focus with CBRE as well. And of course, it's Jobs Friday. Economists expecting an additional 240,000 jobs created in April, slightly less than March's 303. Employment rate expected to hold steady. We'll see. That does it for us. Fast Money starts now.