Amazon, Apple, and Meta earnings preview: What to expect

Thu, Feb 1, 2024, 7:16 AM

DAN HOWLEY: Yeah, for Amazon it's going to be AWS. This has basically been their you know, big moneymaker for some time now. They're diving in head first when it comes to AI. They've been-- made investments in Anthropic, that $4 billion that they made in the fall. They've also been putting out their own chips. They're on their, I believe second generation of chips for AWS and AI training and inferencing.

And you know, we're hoping to learn more about where that kind of AI work is happening. Is it in inferencing, is it in training? How many people are signing up for AI usage? What kind of usage are they seeing? How much is that costing Amazon to build out? So those are some of the questions that we're going to want to see answered.

After that comes Meta.

BRAD SMITH: Yeah.

DAN HOWLEY: And Meta's big deal here is going to be obviously ad sales, right? We saw Google suffer there with their report. That's why we saw them down, I think it was as much as 6% yesterday when I was watching it. Their overall ad sales were off expectations. And so that's what we're expecting to get or what we want to get out of Meta is exactly what the ad sales are.

And then oh yeah, maybe a little something on Reality Labs, if they're still just hemorrhaging money. I tell you what, I can do something with a couple of billion dollars, just throw it my way and it's better than burning it.

And then Apple, we want to know obviously, the big question iPhone sales. It's been a big, big deal. A lot of analysts have been questioning what that's going to look like for them with the iPhone 15. China is the question that's on everybody's mind, how are China sales? What do those look like? What does that mean for Apple moving forward? And hopefully, we get something from Tim Cook as far as the early pickup pre-orders for something like the Vision Pro.

BRAD SMITH: You know, it was anticipated as you're laying expertly out all of the expectations going into and the top metrics to watch, it was expected that Amazon is going to be the bellwether of the rest of this earnings season here. What is the tone that you expect them to strike even on the call after the results drop to signal what the strength of the business is right now, both in their business-to-business side and the business-to-consumer side, which perhaps even gives us a little bit more of an economic read as well?

DAN HOWLEY: Well, I guess for the business, for the consumer side, you know, I think one of the bigger deals was the addition of ads--

BRAD SMITH: Yeah.

DAN HOWLEY: In Prime Video, right? So that's obviously going to be something that they're going to discuss. I think the addition of-- I mean, it's been bad so far-- but generative AI to the consumer reviews. I mean, woof, I've seen them so far, it just basically takes the consumer reviews and then gives you like a little snapshot. Not great, maybe they'll give us something on that, maybe they'll update it, I don't know.

But overall, I think it's going to come down to the business-to-business and what that says for Amazon, what kind of uptake are they seeing? How is cloud growth going, right? I mean, their growth wasn't as impressive as Microsoft's has been just because of the-- I mean, it's just large numbers, right? They had hit a certain point, it was like you can't grow as fast. That's why Google is you know, growing so fast, they're not nearly as big. And you know, we're talking about AI, and it's important to point out that AI is part of the cloud, right?

BRAD SMITH: Yeah.

DAN HOWLEY: You can't get AI without the cloud. And so when companies are inferencing this, which is using AI, they're still accessing cloud capabilities, and that's still good for the likes of Amazon, Microsoft, and Google. So you know, as more people want to lean into AI, it just adds more revenue to the cloud side. And I think that's something that we're going to want to watch out for.

SEANA SMITH: And certainly, well, we've seen many of these stocks really priced to perfection, especially Amazon, especially Meta in some cases here heading into these earnings. So any sort of disappointment could really put-- weigh on the stock here, at least in the coming days. All right, Dan. Thanks.

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Amazon, Apple, and Meta earnings preview: What to expect

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