Closing Bell - Closing Bell Overtime: Tech Giants Apple & Amazon Report Earnings 8/1/24

Episode Date: August 1, 2024

Amazon shares fell over 5% in Overtime after missing estimates on revenue and issuing disappointing guidance while Apple bounced between positive and negative on a mixed quarter. We have you covered from every angle on what you need to know from both earnings reports. Intel fell over 15% after a weak quarter. DoorDash CFO Ravi Inukonda talks the latest quarter as the stock rose sharply. Other earnings include Booking Holdings, Block, Roku, Coinbase and Snap. 

Well, that's the end of regulation. Dynatrace bringing in the closing bell at the New York Stock Exchange Special Olympics. New York doing the honors at the Nasdaq. Stocks getting slammed on this first day of August. The Nasdaq and small caps falling the most. Treasury yields tumbling to multi-month lows, too. All as fears of an economic slowdown rise. That's the scorecard on Wall Street. But the action is just getting started, and boy is it. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. Yeah, companies with trillions of dollars in market cap are about to give investors a look inside the health of their businesses. Apple and Amazon headline a huge hour of earnings, which also includes Intel, Block, Snap, DoorDash, and many more.

Let's bring in our panel as we do await those results. Stephanie Link of Hightower Advisors and a CNBC contributor. She owns Amazon and recently trimmed her Apple position. And Victoria Green of G Squared Private Wealth, also a CNBC contributor, who also owns both Apple and Amazon. It's great to kick off this hour with you. We are on watch for those Amazon results. In the meantime, though, Stephanie, I'll start with you.

We finished, we started the month in the red here, but off the lows of the session, the S&P still finishing down. It looks like maybe 1.3 percent. Slowing economy with the latest data we got this morning. How much now hinges on Apple, on Amazon as the latest of the Mag 7 to deliver and perhaps deliver? Oh, and there we go. Hold on. Intel earnings are out and you're going to want to hear this. Intel reporting a miss on the top and the bottom for Q2, guiding to a larger miss on the top and bottom for Q3. Now, Intel is suspending the dividend beginning in Q4 to preserve liquidity. And Intel says it is laying off more than 15 percent of employees with the majority of layoffs by the end of this year. Intel Q2 revenue comes in at $12.8 billion versus expectations of $12.92.

Non-GAAP earnings per share, $0.02 per share, well short of $0.10 expected. On the Q3 guide, $13 billion at the midpoint of a $12.5 to $13.5 billion range in Q3. That's versus consensus of $14.43, so a massive miss there. Intel got into a loss of $0.03 a share versus expectations of a $0.31 profit. The cause of the miss in Q2, not the PC business, it is data center and networking. They're not yet clear what the outlook is for the guide, but I will be speaking with Intel CEO Pat Gelsinger in a first on CNBC interview. After the analyst call tonight,

lots of talk about that stock was already at 52-week lows after today's rough trading session where it closed down by 5.5%. And right now, it is down 10.5% to start over time. Wow. What a way to start this hour. Stephanie, I'm going to get your response to that. We do have Amazon results. They're going through. Okay. Here we go. Kate Rooney, she's got them for us. Morgan, so it's looking like a mixed quarter here for Amazon. It was a beat on EPS, a slight miss on revenue. I'll get you that EPS number. $1.26. That was better than expected. Revenue of $147.9 billion. That looks slightly light here. And then, guys, it looks as well like the Q3 revenue is a little bit light at the midpoint of the range. $154 billion to $158.5 billion. Street

was looking for $158. And then same with operating income. If you look at the guidance there at the midpoint, it's lower than the street expected. I want to get you that AWS number. This is key. It was a beat. 19 percent growth in the AWS sales segment. Better than expected. Street was looking for 17.6 percent in terms of growth. A couple other segments here. North America up 9 percent year over year to 90 billion and then international up 7 percent. Stock down more than 6 percent here. You can see on the weaker guidance most likely, though, down more than 6 percent after hours. Guys, back over to you. OK, Kate Rooney, thank you. We'll come back to you as you get more in that report. This third time's a charm. Your reaction to Amazon here. We got AWS numbers better than expected, but obviously top line miss, slight miss here.

Soft guidance. What does that tell us about, I guess, the broader picture? Well, clearly it's a disappointment on the revenue side, but the AWS is really the most important piece to this story. And 19% beat the whispers of 18%. That's pretty good. And we had a good indication that cloud would be strong from Alphabet's 29% growth, right, and Microsoft's 30% growth. So that's the good thing. The bad thing is this was a prime day quarter, right, and it was record numbers. So I think that's why expectations for revenues were going to be better than expected.

Operating income, never really like to see that kind of come in disappointing as well. So have to see where the North America margins settled out, because that's what's telling me that the operating income number could be a little bit disappointing. All right. Victoria, I want to get your thoughts on this, because we just got two big reports from two companies, part of the tech landscape, with Amazon in particular, a lot of expectations going into this print. Yeah, I think it was disappointing. It'll be interesting to see exactly where that revenue weakness came in. Is it that consumers are starting to slow down a little bit?

Is it the competition from Taimou and Sheen and other e-commerce? Like, I'll be very interested in the commentary there. I am, you know, I'm a little less concerned. I think Prime Day actually was in July, so I think that'll be Q3 lift there on e-commerce. But I look at it and I want to know more about the ad space because me, that is the biggest catalyst. AWS, absolutely key to growth, very high margin business for them.

Happy their growth trajectory is still expanding. But ads to me is where the future growth with this company is. I see that $100 billion business for them by 2027. Wonderful partnerships they're putting together with the NBA, pushing more and more to Amazon Prime Video, charging that $2.99 to avoid that ad fee. And so I look at those as great new revenue sources. Maybe they're a little bit slow, but I want to know

what that trajectory is. But obviously, any type of work on one of the Mag7s, it typically gets punished pretty hard. And then Intel, for me, just bottom's not in yet. They were super hopeful that second half and 2025 ramp up. I think Foundry's still a loss for them. For me, Intel is just, it needs to right the ship, and I'm not sure just the cost cuts are going to do it. They've got to find a more competitive ship. Yeah, Stephanie, on Intel, got to get to that. I mean, Foundry is the least of the issues right now.

You expect that takes a while to spin up, but there were real hopes for the second half. Maybe client PCs hold out. But we've heard from the hyperscalers that they're spending on infrastructure, but clearly they're not spending on Intel. No, Intel has been losing market share for years. I mean, I almost want to say come back to me in 2027, you know, because there's going to be so much change at this company. I mean, I'm encouraged. Sorry to hear that they're laying off people, but I am encouraged, at least on the cost side of things, that they're trying to get their ship in or their house in order. But the market share is really disappointing.

I had expected enterprise to be weak, but I expected PCs actually to be a little bit stronger because we have been getting little green shoots, right? From some like Seagate, for example. They were talking about some green shoots on the PC side. So this is definitely disappointing. This is a value trap in every way, and it's just going to take time to see any kind of recovery. Quite disappointing. Okay, meantime, DoorDash results are out.

Let's get to those because it's a little bit complicated. And the stock looks like it's up about 14.5%, 15% here in overtime. DoorDash reporting a Q2 beat on the top line and a beat on the profitability metrics that the company guides to. This is important. I spoke to the CFO earlier this afternoon. The company doesn't guide to earnings per share. So that number is going to look like it missed consensus because a couple of one-time items. The guide here is a beat as well.

So DoorDash reporting Q2 revenue of $2.63 billion versus 2.54 expected. Loss per share is 58 cents, while analysts were expecting a 9-cent loss. But again, that's a gap and due to one-time items, including including a write down on office space and a set aside for legal costs. Now, from operations, contribution profit came in above expectations at eight hundred twenty five million dollars versus seven eighty two expected. Adjusted EBITDA also came in way above expectations at four hundred thirty million versus three ninety two expected. Now, marketplace gross order value beat for Q2 at $19.7 billion versus $19.3 expected. The GOV guide for Q3 is a beat as well, $19.6 billion versus $19.5 expected. And we're going to hear from DoorDash CFO Ravi Inukonda in just a bit right here on

Overtime before he speaks to analysts. And Stephanie, I'll go to you first on this one. I thought the consumer was supposed to be weak, but apparently they're still ordering on the phone. They're eating for sure. GOV beat and then the guide beat. That's a nice beat because I think that 19.6 GOV for 3Q. I mean, expectations were for 19.1 on the low end, 19.5 on the high end. So it's a nice number right there. EBITDA, anytime a company beats on EBITDA,

you got to cheer for it, right? I mean, profitability, it's all about that. So I want to hear about what their EBITDA guidance is for the third quarter, because that'll be also very important. But so far, it looks great. Stock's only up 8% year to date before this move. So I think it certainly can have legs if we get confidence in the guide. All right. Victoria, I want to get your thoughts on this, especially because it does seem like we're getting much more of a bifurcation where consumer spending is concerned. It's not just from low-end consumers and high-end consumers, but it's really very brand specific on the retail side, on the restaurant side, and now clearly with DoorDash, even how customers are engaging with these products.

Yeah, and I think it's interesting. It just means your product actually has to stand up and you have to provide value to your customers. I mean, I'm not going to lie. I think I'm part of the reason DoorDash beat. I mean, I had lunch brought in every day this week because I just got busy. And so I look at it and their user interface is great but most importantly they're holding off uber each they're expanding their margin share they're doing that without having to expand too much capital so they're even a number staying strong because

that hookup between uber and instacart looked like a big challenge to them but they are they're expanding into grocery they're expanding into you know retail shopping for you though they'll go to CVS and pick you up some ibuprofen. And so I look at this and say, I think they're continuing to expand how people are looking at DoorDash. Their infrastructure and their app is top notch in the way that they're retaining clients

and getting repeat clients and getting them to use DashPass. Plus the tie up with Chase offering free DashPass continues to drive even more customers. I love DoorDash's strategy. For me, I think it's a competitive landscape and they're going to have to continue to innovate and provide value to their customers. I love DoorDash's strategy. For me, I think it's a competitive landscape and they're going to have to continue to innovate and provide value to their customers. But obviously, we're being pretty lazy and we love to eat our food at home and our PJs watching Netflix the

way God intended. Or CNBC. And real quick, 505 million on the adjusted EBITDA for Q3 versus 452.1 expected. Better than expected, too. Okay, well, we've got more earnings. Snap, those results are out. Julia Boorstin has the numbers. Julia. Hey, Morgan. Snap's earnings per share of 2 cents.

That's right in line with expectations, while revenues of $1.24 billion essentially in line with analysts' expectations. The company's third quarter revenue outlook of $1.3 billion to $1.8 billion is pretty much in line with a $1.6 billion analyst consensus. But we see shares trading lower, and here is what is weighing on the stock. The company guided to adjusted earnings of $70 million to $100 million for the third quarter. That's lower than the $110 million street account estimate.

So it really seems like that's what's pushing shares lower. Global daily active users were a million more than anticipated, 432 million. And the company announced monthly active users, 850 million. That's a big jump from the 800 million most recently announced back in February. But we see, guys, shares down 23% now. And after hours trading, the company is saying that brand ad revenue declined 1%, but the direct response business grew 16%. So more weakness in brand advertising there, guys.

John? I'll take it. Julia, thank you. Shares down 20% now for Snap. Snap's always a big mover when they report earnings. But you take this, you take Pinterest, you compare that against Meta, which was so much stronger than everybody expected. Well, that's why I think it's down a lot i mean obviously the guide is terrible and very disappointing but also very surprising are they being conservative are they losing share what's

going on we don't know but i think the expectations were that it was going to be better than this especially after yesterday with meta yeah meantime booking holdings earnings are out kate rogers has those numbers kate. Hey there, John. This is a beat on the top and bottom lines. For booking holdings, EPS, $41.90 adjusted, better than the $38.37 analysts were looking for. Revenues also beefed for Q2, $5.86 billion versus the $5.77 billion that analysts were looking for here. And the company's CEO, Glenn Fogle, saying our business continued to perform well with room nights, revenue and operating income exceeding our prior expectations. Room nights also booked increased seven percent from the prior year quarter. The stock is unchanged, but it seems the experience spending in this economy continues.

Back over to you. All right, Victoria, your take on this? I mean, travel have been strong. People want to go out and have experiences, and booking seems to be reflecting that. Yeah, and I think it's great that, again, they're continuing to hold off other competitors, either at Airbnb or VBRO or direct booking with Hilton and Marriott. They're putting themselves well-established. They have good partnerships, and for me it is. I think travel and food, quite frankly, well, being picky about our food food but travel and food has been two areas that we continue to spend on and we are prioritizing spending on and people continue to see the value from booking whether it's the easy interface whether it's the lower prices and they continue obviously you have more rooms booked you

know you beat on almost all three of the most major matrices we would look at that company so you gotta like what they have to say i'm a a little, you know, interested on what the guidance is. You know, how much of this was just a really hot summer travel season? Are they getting a pickup from the Paris Olympics? Are they getting hit a little bit with the war in the Middle East and maybe some travel restrictions there? So I think guidance and outlook is key and maybe a little bit of a reason why we haven't seen too much of a move. Let's see what this company plans to do for us going forward in the third and fourth quarter. Yeah, down a bit, maybe a percent and a half after hours. Victoria, Stephanie, thank you.

We're going to see you a little bit later in the show. We haven't even gotten to Apple yet. We got a lot more reaction to Amazon's earnings next, of course, as that stock pulls back after results. More ahead on Intel, too, as that pulls back a lot. And we're counting down to one of the biggest moments of earnings season. John just talked about it. Apple, those results, they're just minutes away.

We got the countdown clock right there for you. We have an all-star panel ready to break those down over time. Back in two. Welcome back. Coinbase earnings are out. Kate Rooney has those numbers for us. Kate. Back in two. Welcome back. Coinbase earnings are out. Kate Rooney has those numbers for us. Kate. Hey, Morgan.

So it was a beat, at least on revenue, when you look at Coinbase. Revenue coming in at $1.45 billion, better than expected. EPS, we're not going to compare this number, but it was $0.14. That was on $36 million of net income. There's a footnote here that talks about an impairment charge to a pre-tax crypto asset loss charge, mostly an unrealized loss, but it is on the balance sheet and it's being reflected in earnings. So the losses were about $250 million after taxes. So something to note as well.

Subscription services revenue hit an all-time high, $600 million. Coinbase now has about $7.8 billion in cash and cash equivalents on the balance sheet. They do not give guidance when it comes to EPS and revenue, but you can see shares slightly higher here after hours. Morgan and John, back to you. All right. Okay. Thank you. Now, Roku and Block earnings both out. Julia Borsten has numbers for both. Julia. Let's start with Roku. Earnings and revenues beating estimates. The company reporting a loss, an adjusted loss of 24 cents per share. That's a smaller loss than the 43 cent per share. Estimated revenues of 968 million ahead of the 938 million estimated and average revenue per user ahead of expectations. And the company's adjusted EBITDA

also above expectations. And another key number here for Roku streaming households, 83.6 million. That's ahead of the 82.95 million estimate. That means more people are using Roku than anticipated. You see shares are now up about five and a half percent. Shifting gears over to Block. Block's earnings of 93 cents per share, missing estimates of 84 cents per share, revenues of 6.16 billion, missing estimates of $6.28 billion. The company raising its outlook for full year gross profit, now forecasting 18% gross profit growth for the year, also raising its outlook for adjusted EBITDA, as well as raising its outlook for adjusted operating income. So just to reiterate there, an EPS beat revenue miss, but raising those the outlook there really pretty much across the board for the third quarter.

CEO Jack Dorsey flagging in his shareholder letter that Block's adjusted operating income margins expanded significantly year over year for both Square and the cash app. And Block is also giving a new expanded role to Nick Molnar. He is the CEO and co-founder of Afterpay, which is a company acquired back in 2022. They say he will lead a centralized sales function, which they expect to drive revenue and sales. Now we see shares are a block or up about 4%. Back over to you. All right, Julia, thank you. Interesting. Now let's get another check on Amazon. Those shares are down about 4% after reporting weaker than expected revenue for the second quarter. Joining us now is Scott Devitt from Wedbush. Scott, they did face a billion dollar currency headwind on the top line here. I don't know how much of that was factored in from the beginning. And AWS,

a little better than expected. So what do you think of this reaction? Good quarter, mediocre quarter? Yeah. Hi, John. I'd say mixed. So the headline you think of this reaction? Good quarter, mediocre quarter? Yeah. Hi, John. I'd say mixed. So the headline revenue number isn't really where investors focus because so much of that, you know, almost $110 billion of the $150 billion is just retail, and that's impacted by 1P and 3P mix that get booked differently. But where the focus tends to shift too quickly is operating income, where they did beat with a 9.9% margin versus consensus at 9.2%. As you mentioned, AWS at 19%, that's the fastest growth rate for AWS going back to when the business started to slow a couple of years ago. But the net is the advertising revenue. That came in at 19.5%.

Consensus was 22. So meta advertising grew faster. And that was a pretty good deceleration from the last quarter. So we'd like to learn more about that. I think to me, that's the one thing that stands out as the negative, but the AWS is quite good. Now, Scott, if that's the thing, if advertising revenue is the thing, has that become so important that if you believed in Amazon's story a few hours ago that you question it now, is this potentially a buying opportunity if the stock trades here tomorrow? Or no, this is an important growth area. It's an important growth area. I think you want to know, you know, have a better understanding of what caused the deceleration. You know, this is a 60 billion dollar kind of revenue line that investors anticipate is going to grow significantly over time.

So you want to be certain that they can keep an elevated growth rate for a long period of time. And personally, when you look at the entire report, I think a pullback is a buying opportunity. I think the strength in AWS overwhelms the advertising. But if I'm being transparent about it, the advertising is not a good number relative to expectations. So it sounds like probably a lot of questions about that on the call. So you got shares down 4%. I mean, up more than what, 20% year to date. Expectations were pretty high going into this report. Even if you look at the consensus numbers for revenue, for operating income,

they were at the higher end of Amazon's own guidance, higher into the range of Amazon's own guidance in terms of what Wall Street was expecting. So I guess just how high was the hurdle for the company to cross today to be able to see a positive reaction here in general? Well, in hindsight, it was high, right? But AWS performed. So expectations for AWS were rising going into the print and it exceeded expectations. The advertising number, if you go back to Alphabet,

YouTube's dealing with something a little different in terms of video advertising inventory growth. But the core search business outperformed XOIC patients by almost 200 basis points. And then Meta had a very strong quarter and a strong guide. So you would have expected going into this print on the ad line for Amazon, it would have been a good number and it wasn't. So that's where the expectations miss, you know, is really centered. Overall, operating profitability, very good. Revenue is what it is. You know, I call that in-line-ish because you just don't know that mix shift dynamic that's happening in retail and you want to focus more on the operating profit line more than anything. So it's a healthy number, but not perfect.

Okay. Very quickly here. How much is CapEx spending on AI going to matter? How much do you expect them to talk about it in this call? Quite a bit. So we were expecting 16. They did 17.6 billion. So just like everybody else, you know, we're all kind of catching up to the real numbers. And so that CapEx was higher than expected. And, you know, I think investors will, you know, will look for more information on that. We'd expect them to spend somewhere in the ballpark of $65 billion this year all in on CapEx across AI, AWS infrastructure and the retail business. OK, Scott, thanks for joining us. Shares of Amazon down about 4% right now. DraftKings results are out.

The stock is falling. It's well off its lows. The company missing on revenue is reporting $1.1 billion versus estimates of $1.11 billion. Bottom line was a big beat, though. Analysts had been looking for a loss of a penny per share. DraftKings reported earnings of 12 cents. The company also announcing a billion-dollar stock buyback and raising its fiscal 2024 revenue guidance. But you can see right there, those shares are still lower.

About 4%. Well, don't go anywhere. Apple's earnings are coming lower. About 4%. Well, don't go anywhere. Apple's earnings are coming up and all Wall Street is watching for the latest signals on iPhones, AI, China sales and more. We'll have those results when overtime returns. Got a lot of big moves on the screen right there. Well, welcome back to overtime. We are moments away from another earnings report. Apple back with us now. Stephanie Link, Hightower Chief Investment Strategist, Victoria Green, founding partner and CIO of G Squared Private Wealth. And Scott Kessler joins us as well. He is the global sector lead for TMT at Third Bridge.

Stephanie and Victoria are CNBC contributors. Stephanie, I'm going to start with you as we await these results here because you own Apple, but you did trim in the spring. Why? And what are you looking for in this report? So I was actually adding in the spring when the stock was around 160 to 170 and everybody hated it. And you were seeing downgrades and numbers were coming down and no one believed in the refresh cycle for the iPhone. And so I just kind of added to my position and I went really way overweight, 300 basis points overweight. Why that's important is because in the index, my benchmark, it is 6.5% weighting. So I have almost a 10% position. So I pulled back a little bit just given the nice run that we've had since that time period. It was up 31%. So it took some off, still market weight. So it's still a big position. I don't think this quarter is going to

be that telling. I think it's going to be pretty much in line. I think we have to hear what they have to say more on AI and the refresh for the iPhone and the iPhone 16. We have to hear about China. I do think China is important. Has it bottomed? It was down 8% last quarter. Is it down mid-single digits? And then maybe this being the last one, that's a good thing, too. So those are the two kind of things that I'm working on watching and as well services. I think services are going to be very good. Scott do you oh you want to go ahead I was going to say Scott do you agree? That sounds reasonable to me. I think a lot of people are talking about kind of a bottoming out when it comes to China but I'm not so sure that there are strong indications of that. Obviously we'll see what the company says but. My sense is that they've been clawing back market share

based on- discounting which probably is not a great sign. So I don't know that China is necessarily going to be extremely helpful for the company in addition. People are looking for Apple intelligence to be a catalyst. We'll see

about that I think some people would think that. I think some people would think that that's more of a 2025 positive for the company. Hold on. Apple earnings are out. Our Steve Kovach, how's the number, Steve? Yeah, John, and Apple is returning to sales growth again. Let me give you the top and bottom lines here. EPS was a beat at $1.40. Street was looking for $1.35. And revenue is a nice beat here, $85.78 billion. Street was looking for $84.53 billion. That's up 5% year on year. So this is another quarter of growth for Apple here. iPhone revenue was also a beat at $39.3 billion. Street wanted $38.8. And then services revenue, just a slight beat here, $24.21 billion versus $24.01 billion.

That's up 14%, by the way, year on year, just continuing that double-digit acceleration in services we've seen. And then Greater China, that's been a sore spot for several quarters in a row for Apple here. That's down 6.5% year on year to $14.73 billion. Those are the top numbers for you guys. I'll have more for you in a bit, but I'll let you take it from there. We see shares down 0.3%, 0.2% it looks like. Yeah, still a lot of overtime to go though, of course, and especially I think on that China commentary. It's going to be interesting to hear the call. Victoria, how much does this quarter matter on these things when so much of the move over the past couple of months has been about this refresh cycle, right?

And we don't know yet how excited people are to get new phones that are capable of handling Apple's AI, Apple intelligence. Isn't that a lot of what the stock is priced for? Sure, absolutely. But I look at this as this is like the hors d'oeuvres where everything's going to happen in the fall. They're either going to sell the 16 like Banshees or they're not. And I do think they actually are going to outsell it, mostly because listen to what AT&T and Verizon told us. They said people weren't upgrading their phones in Q2. Everybody is waiting to look at it. And yes, we do need them to come out with actually working AI and Apple intelligence

and not just like Surrey Plus because that won't impress anybody these days. But I do think that they can continue to be. And look at this. This is not about this quarter. This is going to be all about what is coming in the fall. All of these refresh they've done, the AirPods, the watch, the new iPhone 16, the iOS 18.1 that you can only run on the 15 Pro. And then the services continue to

climb, which I think is fantastic because that's recurring subscription revenue. And Apple is fantastic about once you start buying one product, it's like give a mouse a cookie, right? Then you buy another and then you buy another and then you're in your ecosystem. And then they have these recurring revenues. I pay $2.99 a month for something that just hits my credit card. And I will happily give that to Apple because they tell me I have to do that. But I think this is a good base quarter. Good beat. We have revenues outside of China.

We're still growing, even though the main event isn't here. We're still in the JV. The varsity event is coming in the fall. I like this. And I think the market's going to like it depending on what the commentary is like. Scott Kessel, what's the most important sign of health for Apple in a quarter like this and I think the market's going to like it depending on what the commentary is like. Scott Castle, what's the most important sign of health for Apple in a quarter like this? That's before we get the data from iPhone. Yeah, I don't know, John. I think the expectations were pretty muted here.

Obviously, what the company signals about production and demand going going into iPhone sixteen. That would tell a lot. What they're saying about kind of. Indicated interest in an excitement around Apple intelligence I think that's also important but kind of flattening out of the declines related to China I

think that's something that people can be watching closely as well. Okay we're going to get back to Steve Kovac with shares of Apple turning positive. He's got more on these results. Steve. Hey, Morgan. Yeah, I caught up with Apple CEO Tim Cook on these results a little bit. And of course, much of our conversation did center around artificial intelligence and where Apple plays

into that. Let me give you a few things. I talked to him about capital expenditures related to AI that has been such a huge thing that we've seen from his other peers in big tech. Here's what he told me about AI spending and CapEx. First on AI spending, quote, what we've done is redeployed a lot of people onto AI that were working on other things. So that basically saying managing costs, they're not spending as much, but also taking their talent, moving them over a lot of the Apple car project people. After that project was canceled, move over to AI, for example. And then on capital expenditures, he told me, quote, this quarter is an increase year over year in their amount we're spending for AI and Apple intelligence. So also increasing their CapEx as

they have to build out these AI capabilities, both on the server side and also the personnel side, things like that. And then I asked them specifically about the rollout of these artificial intelligence features. We know, for example, that they're going to start here in the United States in English only. But then the question becomes, when do we start seeing that roll out globally, particularly in China, which has some really tough AI regulations that need government approval before you can launch here. Here's what he told me about that quote. We're working on exactly what we will do there, meaning China. And there are definitely regulatory questions there that we have to respond to. And we're working constructively on those. And by the way, I also just asked him in

general, does he see Apple intelligence features kind of driving demand for iPhone sales? Has he seen any signals so far about that? Not yet. Basically, he told me we have to wait until this launches. And that's typically when you see people start to show their interest and the demand starts to show. So it's going to be until probably the end of next month that we start to see that going one way or the other, guys. OK, Steve, great context there. Thanks for bringing it to us. Steph, I'm going to go back to you on this.

China, regulatory questions we have to respond to regarding AI. An increase year on year in the quarter for spending on AI, but no other details associated with it. I mean, what do we make of this? Yeah, we'll probably get more information on the call, but not as much as we want. I don't think any company is giving that kind of detail because there's just so much unknown. Right. But I think any time you have an iPhone beat, a China beat, even though it was still down and a services beat, slight services beat, that's good. Right. That's good. That kind of just

buys them time so that we'll hear more on the conference call, but then next quarter becomes more important. The following year becomes that much more important. So very solid report. I should be up. All right. Well, Victoria, the bar was arguably high. They seem to have gotten over it at the same time. Valuation's not cheap. So what do you need to look for to know when to add here? Is it when the iPhone comes out? Is it when we start to get some shipment data on which models might be in stock or out of stock? I look at it, if there's any dip on this, I would buy the dip. I think that Apple has proven time and time again that they have the ability to continue to drive interest and drive sales on their phones. And they understand the stakes here. They understand the market share in China. They know what investors are looking for.

And they do genuinely want to produce a good product that people want to buy. So for me, if this slips 5% to 7%, I'd be buying this dip, absolutely. I don't think they're price of perfection. If you factor in, they're probably going to charge us $1,000 for this new phone. And the price point on that could definitely increase margins. Services margins are great, like 70%, I believe. And then if we have growth elsewhere, the one thing in China that I thought was a little bit interesting is that we've actually seen luxury goods that because the yen was so weak, we've seen Chinese buyers moving and buying things in Japan. And I know an iPhone isn't necessarily considered a luxury like Hermes,

but at the same point, I wonder if some of that revenue got picked up in Japan and other Asia, which we've seen that. They play the weekend, go buy a high ticket item overseas and come back with it. But I think this stock is a long-term buy. I look at some of these like generational holds. Apple has continued to add new products, add new services, add new features that add value to their customers. And so anytime we see a slip, I'm looking to add. Okay. Scott, the fact that the company is returned to top line growth of 5% in the quarter how much does that matter. I mean I think it matters from a headline

perspective but I think the call is really critical what they say about Apple intelligence. What they say about China what's to come. For Q four of their fiscal year and more importantly I would argue a Q four of the calendar year.

That's really what's going to matter in terms of how I think really what's going to matter in terms of how I think this stock is going to perform you know over the next couple of quarters. All right a lot to digest here thank you to our panel Stephanie Victoria and

Scott with shares of Apple up almost one percent right now. Well up next the top analyst on what he wants to hear from Apple and Intel executives when their conference calls begin in just a few minutes. And we'll hear from the chief financial officer of DoorDash before the call with Wall Street analysts.

That name is up 13 percent here in overtime. We'll be right back. Welcome back to Overtime. Apple just reporting a beat on earnings and revenue. Shares getting a bump after the report. And Intel posting a miss on both the top and bottom lines and suspending its dividend starting in the fourth quarter. Shares sinking there, down more than 17 percent in overtime. Joining us now is founder and CEO of More Insights and Strategy, Patrick Moorhead. Pat, Intel, this is another rough, rough quarter. What can they say that would make the believers feel better? Yeah, it was a very rough quarter. I got the chance to talk to Pat Gelsinger and get a little bit of color on this. But the way that I look at it is if you're a company and you come in, I mean, you want to blow it away on earnings and you want to blow it away on revenue

and give a good guide. And when one of those is off, what do you do? If you can hit your revenue and burn more costs getting there, that's the choice that you have to take. The other downstream implication to Intel customers would be if even if your profit margins, and I believe that Meteor Lake, their first AI processor was having the issue, is if you can't ship that to customers, you're impacting your customers' profitability. So I believe that the company took a shot on this. They burned the wafers, or it was a work in progress from a packaging

standpoint, and they took their shot here. The most concerning thing to me is the forecast, which is, I know we don't know everything that's going to happen in the back half. What we do know is data center is going to be off the rails, and you can't just ship an NVIDIA GPU or an AMD GPU without a CPU. So whose processors are they using? I would have thought Intel, who is the highest level of market share there on servers, would be the beneficiary of that. So it is concerning. Now, you asked me for the bright spot. It is that, from my understanding, from all the signals I'm getting, all the roadmaps are in place. And the number one thing is this 1.8 process that they have for their foundry. All good things

can happen to the company when this gets on track. And it appears to be on track and devices running. Well, Pat, tell me if I'm wrong here, but it sure seems like this is maybe an execution issue more than a strategy issue. Because if we wind back the clock three years, there are a lot of questions about does the world need this much chip capacity? Why is Pat Gelsinger talking about Foundry? AI seems to have answered that question. The world and the U.S. and Western allies need a lot of chip capacity. So, I mean, what is the other option here strategically that has Intel as a significant company other than the strategy they're pursuing right now. Yeah, so this was, you nailed

it, this was an execution issue. I do believe this is the only strategy. To be a company like Intel, you have to have strong design and a strong way to build it. And you can't just disconnect those when you feel like it. If you're in and you burn the bridges, you're in. Maybe in the future, you could split the foundry from the design company, but not now. It would be devastating for both parts of the business. And then when you look at the competitiveness, and we already saw that TSMC is raising prices on everybody. And by the way, we will see that in the future here in other companies who don't have their own in-house manufacturing. But getting to the having to have foundries in Western Europe and in the U.S., when it comes to leading edge, it's really Intel and Samsung Semi. That's it.

Those are your choices. You have global foundries if you want less than leading edge, but that's it. Yeah. Patrick, I want to go back to something you said before. You were talking about GPUs being shipped for data center build out, the fact that there's accompanying CPUs with that. Intel's the market leader. They should be the beneficiary. The fact that that was so soft is alarming. Does that mean that somebody else is taking market share? And if so, who? Or is that potentially a read through to maybe some unexpected slowing in the growth that we have seen recently in the NVIDIAs of the world? So I well, first of all, I think it's going to be smooth sailing for NVIDIA, at least for the next 12 months, based on the downstream FOMO of wanting generative AI in your software and services. And as we heard from Microsoft and Meta, they're going to the wall on CapEx, building these out.

So NVIDIA is going to be there. I believe it appears to me a potential share shift to companies like AMD and even ARM would be a beneficiary as well from their licensing, excuse me, their royalty business when you look at companies like AWS, Microsoft's Azure and Google cloud using arm-based processors, that's the only thing I can, I can piece together at this early juncture. All right. A lot more to learn Patrick Moorhead for more insights and strategy. Thank you. And speaking of a lot more to learn, don't miss my first on CNBC interview with Intel CEO, Pat Gelsinger't miss my first on CNBC interview with Intel CEO Pat Gelsinger. That'll be on CNBC tomorrow.

Up next, DoorDash's chief financial officer is going to break down the quarter with us in a first on CNBC interview before he dials into the call with analysts. And some more big earnings movers are coming in. Clorox, that's higher after a clean quarter. Beating on EPS, missing on revenues, raising its fiscal 2025 earnings forecast. Twilio also higher after beating on earnings and revenue with strong earnings guidance. And Atlassian sinking on soft revenue guidance down 11%. Stay with us. Welcome back to Overtime.

Shares of DoorDash are up 14% after reporting earnings earlier this hour. I spoke with DoorDash CFO Ravi Inakonda about the quarter. He said consumers are spending more and more often, including in grocery and convenience. We're seeing strength across the board in terms of number of times people order. Users are growing at double digit rate at our scale. The order frequency, which is number of times people order, which is similar to how much people spend on the platform, that is at an all time high. We're proud that more than 20% of our users today look to DoorDash to order groceries, convenience products, beauty products. That was up from 0% just a few years ago.

And we're doing this successfully across 30 countries. And what's exciting is we have become your local neighborhood superstore for millions of consumers across the board. Indukanda telling me it continued to be true that one in five DoorDash customers is now ordering groceries. And from his description, it sounds like DashPass might be having an Amazon Prime style impact of encouraging members to order more of everything. Still, the majority of the orders are from restaurants. But what you see is

when consumers order from multiple categories, their overall engagement on the platform goes up, meaning they order more on restaurants. They order more on grocery, which means they're coming back to us and spending more on the platform. Our goal has always been to build a business that extends beyond restaurants into everything in your neighborhood. I talked about the strength of grocery in the U.S. In fact, in some of the international markets, we are seeing even stronger response to grocery. And the good news is we are doing this while improving the gross profit of our international business. So when I look at the top line and look at the bottom line of the international business, both had a very strong quarter, as well as the last couple of years have been really strong for our international business.

Now, all of this flying in the face of results we've seen from several consumer-facing companies, including McDonald's and Starbucks. We are not seeing any weakness from consumer demand on the platform. Demand continues to be at an all-time high. When I look at the underlying metrics, the state of consumer on DoorDash is very strong. Order frequency is at an all-time high. Subscribers are an all-time high. And what's driving this is the underlying improvements in the product. Morgan, McDonald's and Starbucks, both at scales, lots of physical locations. I can't help but wonder, is the meaning of convenience changing such that part of that cohort that would normally go to the closest place is ordering on their phone instead?

I mean, you've got to think it is because it's fascinating and not for nothing. If you're not subscribing to a DoorDash, for example, the fees are crazy, which also I think probably explains why you're maybe not ordering your $5 McDonald's value meal on there either. All right. Really interesting. Up next, we have new headlines from Amazon's call with the media. All right. Really interesting. Up next, we have new headlines from Amazon's call with the media. That's after the break. Welcome back. Amazon's analyst call begins at 530 Eastern, but the company just wrapped up its call with the media. And Kate Rooney has the highlights for us. Kate. Hey, Morgan. So that was Brian Olsowski, the CFO on the media call just now. A couple of

headlines we want to bring you. First is on AWS. He said AWS now has a revenue run rate of more than $105 billion. That's up from what they said last quarter, which was $100 billion. He also talked about CapEx, a big theme of big tech earnings. Said it's going to be going up to support AWS and new capacity in terms of demand for AI. He said the first half of the year, those investments were $30.5 billion. Looking ahead to the rest of the year, he says we expect capital investments to be higher in the second half of the year. The majority of that spend is going to be for growth needed for that

AWS infrastructure. He says we continue to see strong demand in generative AI and that they have strong conviction on that CapEx number. He said it's a positive indicator when they do step up CapEx and does signify demand. When it comes to AI, he says that it's now a multibillion dollar business within AWS, says he's pretty pleased with the pickup. Also asked about ads and that deceleration. He says they're pretty pleased with it and says they're seeing increased demand. But back to you guys. That's the latest. All right.

OK, thank you. Well, all that and the earnings roll on tomorrow morning when oil giant ExxonMobil and Chevron also reports. And in overtime, we're going to get results from Meme Stock AMC Entertainment. Tomorrow also brings the July jobs report. Now, Intuit QuickBooks just released its latest small business index, which measures companies in the U.S. with fewer than 10 employees. Jobs in that category increased by 3,300 from June to July, thanks to hiring in construction. Plains and Midwest regions seeing the biggest employment boost. The far west and mid-east experiencing the largest job losses, Morgan. I think there's this expectation that you're going to see that deceleration in jobs. The question is, is bad news becoming bad news for the market?

That's really what played out here with all the averages lower. But, of course, counter that against Apple returning to top-line growth. Yeah. All right. That does it for us here at Overtime.