The Rundown - Earnings Round-up: Meta, Amazon, Apple

Episode Date: February 2, 2024

Stock market update for February 2, 2024. Meta Reports Fourth Quarter and Full Year 2023 Results; Initiates Quarterly Dividend (Meta) Mark Zuckerberg says Meta will 'keep things lean,' going big in AI with a lid on hiring (CNBC) Amazon reports better-than-expected results as revenue jumps 14% (CNBC) Amazon Profit Surges on Strong Holiday Shopping (WSJ) Apple Sees First Quarterly Revenue Increase in a Year (NYT) Mark Zuckerberg’s Wealth Surges by $27 Billion as Meta Rallies (Bloomberg) The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome to the rundown, your daily market update in under five minutes. My name is Zadadmani, and today is Friday, February 2nd. We have an action-packed episode today. It might be my favorite episode we've ever done, because we're talking jobs. We're recapping earnings from meta, Amazon, and Apple, one of which made my jaw hit the ground. There's just so much to discuss to this show that I'm pretty sure it's going to run over five minutes, but stick with us till the end because we're going to cover a lot of information. All right, let's just get into it.

Let's start the show off with a quick recap of how the markets did on Thursday. You know how I said that investors were feeling a bit bummed out after Jerome Powell's comments on Wednesday? Where he pretty much shut the door on a Fed rate cut in March? Well, we got over that pretty quickly because the markets bounced back big time on Thursday. The S&P, NASDAQ, and Dow all finished higher. In fact, the Dow finished at record highs for the eighth time this year. It was a great way to start the month.

And things are only getting better today. Thanks to some solid job data and monster big tech earnings, the Dow, S&P, and NASDAQ are all in the green at the time this recording, around 1 p.m. Eastern. Let's talk about the jobs report because that came out on Friday morning, and it definitely shocked some economists. According to the Department of Labor and Statistics, the U.S. economy added 353,000 jobs in January. That is way more than the 185,000 jobs that economists were predicting. I mean, that far exceeded the expectations.

And the unemployment rate is at 3.7%. So this is yet another data point that the economy is humming right along, And the job market seems to be pretty solid. So that was a great way to start a Friday morning, but we also had some big time earnings come out on Thursday night. So let's talk about them. We got earnings from three giant tech companies, Apple, Amazon, and META. And typically I would start with Apple, but I want to start with META

because, oh my God, they just crushed it across the board. Meta's earnings exceeded Wall Street estimates and then some. Let me give you some numbers here, okay? Meta reported revenues of $40.1 billion. That's up 25% from a year ago. They also reported profits of $14 billion. That's up 201% from a year ago. Their costs went down by 8% and their margins doubled to 41%.

In fact, the company feels like its financial health is so good right now that they're going to start paying dividend for the first time in the company's history. The dividend will be 50 cents a share paid every quarter. They also authorized $50 billion in stock buyback. Now, I do want to point out something, which I think is actually pretty funny. Meta's Reality Labs Division, which is in charge of the VR headsets and the Metaverse stuff, it's still losing a ton of money. The Reality Labs Division lost over $4.5 billion in Q4.

Investors don't seem to care anymore because of how solid the underlying business is right now at Meta. And that's why the stock is up more than 20% at the time of this recording, around 1 p.m. Eastern. You don't typically see companies this size see a huge jump in the stock price in a single day. Like Meta added over $200 billion to their market cap in just a single day. To give you some perspective, that's more than the entire value of Disney. Disney. Just absolutely crazy stuff. Amazon also reported solid earnings beating Wall Street estimates

across the board. Amazon's Q4 revenues came in at $170 billion. That's up 14% from a year ago. And get this, their profit in Q4 was $10.6 billion, which is the most profitable quarter they've had in two years. So Amazon revenues are going up and their profits are going way up. Some of that has to do with the fact that Amazon CEO Andy Jassy was on a cost-cutting mission all of last year. He shut down divisions that weren't profitable. They had a lot of layoffs, and these cost-cutting measures are having an impact on their business now. There was another number that caught my attention from Amazon's earnings, advertising revenue. Amazon made $14.7 billion from advertising. That is up 27% from a year ago. You know, I bet that's something that investors are going to keep an

eye on because Amazon is leaning more into ads with Amazon Prime Video showing ads starting earlier this week. So keep an eye on that number for future earnings report. But yeah, overall, great showing by Amazon, and the stock is up more than 7% at the time of this. recording around 1 p.m. Eastern. And finally, that leaves us with Apple. I was looking forward to Apple's earnings the most. And, you know, the earnings were pretty solid, but I guess not super exciting. Here's the good news. Apple did $119.5 billion in revenue in Q4, which was up 2% from a year ago. In fact, that is the first time that Apple has had revenue growth in over a year. So, that's good to see. Apple also did $33.9 billion in profit, which is up 13% from a year ago.

Also good to see. Both of those numbers are higher than what Wall Street was estimating. But despite beating Wall Street estimates, Apple's stock dropped more than 2% after earnings came out. And the stock is still in the red at the time of this recording around 1 p.m. Eastern. See, unfortunately for Apple, investors don't have anything to get excited about in their business. I mean, the Apple Vision Pro goes on sale today, but it's still way too early to see if it's going to become a huge business. As far as there other hardware units, iPhone sales are up, which is good. But sales of Mac, iPads, and Apple watches are either flat or down. Kind of concerning.

So I think the problem for Apple is that they just don't have anything to get investors hyped. Like there's no AI for Apple right now. Microsoft, Google, Meta, they've all been talking about their AI products and services. Apple doesn't really have that right now. Tim Cook did tease in the earnings call that Apple will be announcing some AI stuff later this year. So something to keep an eye on, but until it actually happens, I think investors are kind of like, eh, which is why the stock dipped. So that's your recap from all the big earnings from yesterday. Meta and Amazon, big time winners, adding over $200 plus billion in market cap to their companies.

Let's wrap up the show with a fun fact. So as I said earlier in the show, meta is going to start paying. dividends of 50 cents a share every quarter, which means that Mark Zuckerberg will now get paid $700 million in dividend payments because he owns about 350 million shares of meta, a nice $700 million a year. That's all pre-tax. But it should still be enough for him to install like a nice cage in his backyard for MMA training or whatever else he wants to do at this point. All right, guys, this episode has gone pretty long. What a week that was. I mean, we covered so much this week. Big tech earnings, jobs report, the Fed meeting. I had a...

blast doing the show this week. I hope the show helps you guys stay in the loop of everything that's happening, especially right now where there's so much happening every day. I hope everybody has a great weekend and I'll see you guys back here on Monday. This is Public Live, your real-time resource for news events and trends in the markets. All views presented in this show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell or hold that security. Public Live hosts are not financial advice. and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult.

Respective professionals. Learn more at public.com slash disclosures. In paid partnership with Zaid Admani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.