- Apple earnings beat on top and bottom lines, but stock falls on bearish commentary.
- Amazon misses as Rivian stock fall hits its profits.
- AAPL stock down 3% premarket, AMZN stock down 9%.
The big earnings day this week was Wednesday with two tech titans looking to save the market. Instead, it looks like it was Facebook's parent company Meta (FB) that managed to do that as mediocre earnings were enough to trigger a relief rally that permeated across the tech sector on Thursday. Apple (AAPL) then posted strong earnings and everything looked bullish once again as the S&P 500 held the important support, at $415 in SPY, see chart below.
SPY chart, daily
So really it was a case of the good, the bad, and the ugly. I doubt anyone will get that reference but pat yourself on the back if you do. Actually don't pat yourself too hard because if you get that reference then you are clearly not as young as you once were! Scroll down for the obvious answer.
Apple (AAPL) stock news: The Good
Apple posted really strong earnings. Earnings per share came in at $1.52 versus the $1.43 estimate. Revenue hit $97.3 billion versus the $94 billion estimate. Apple said it was raising its dividend to 23 cents per share and increasing its share buyback program by a cool $90 billion as you do! Apple (AAPL) stock popped straight away. iPhone revenue surged on demand for the iPhone 13 and subscriber growth was also strong with 825 million subscribers up from 785 million last quarter and 660 million last year. Nice work but then it all went downhill on the conference call, as CEO Tim Cook and CFO Luca Maestri were both quite downbeat on the future:
"Supply constraints caused by COVID-related disruptions and industry-wide silicon shortages are impacting our ability to meet customer demand for our products. We expect these constraints to be in the range of $4 billion to $8 billion which is substantially larger than what we experienced during the March quarter. The COVID-related disruptions are also having some impact on customer demand in China."
It was likely this comment on the conference call from CFO Luca Maestri that saw Apple (AAPL) stock quickly slump 4% in the after-hours market. It has since not recovered.
Apple (AAPL) stock chart, daily
Amazon (AMZN) stock news: The Bad
If Apple was the Good, now let's get onto the Bad. Amazon posted earnings too after Thursday's close. Earnings per share (EPS) missed, coming in at $-7.56 versus the $8.07 estimate. Revenue was in line at $116.4 billion. Guidance also missed estimates. Revenue was the next quarter is guided at $118.5 billion when analysts had expected $125.2 billion. Amazon CEO Andy Jassy said that "with AWS growing 34% annually over the last two years, and 37% year-over-year in the first quarter, AWS has been integral in helping companies weather the pandemic and move more of their workloads into the cloud".
We had correctly forecast this strong performance from AWS due to the read-across from Microsoft's Azure cloud business earlier this week, but the decline in operating income and free cash flow was surprising. AMZN stock fell 8% in the after-hours market and has remained lower in Friday's premarket.
Amazon (AMZN) stock forecast: The Ugly?
Now onto the Ugly. Rivian stock has been under pressure this year as have most high-growth names. RIVN stock is down nearly 70% this year. With Amazon having a large stake in Rivian it was no surprise to see Amazon take a $7.6 billion loss on its Rivian (RIVN) stake. Truly ugly.
We posted before earnings that $2,700 was the must hold level. Well, it didn't hold after those earnings, naturally. $2,400 now is the next target and then more likely $2,000. Decent volume at both levels with volume gaps in between to speed the move.
AMZN stock chart, daily
"The Good, the Bad, and the Ugly" was a Clint Eastwood classic. Clint Eastwood, anyone, anyone. Ok, so I have to explain that one too. Really old, tough-guy movie star! Wow, that must mean I'm really old then! Keep that under wraps in case my editor finds out, he never reads down this far anyway!
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.