📈 Tech Giants Report Strong Earnings

This week, Amazon, Meta, Microsoft, and Google released Q1 earnings. The companies surprised investors as they all exceeded analyst expectations in revenue and earnings-per-share.

With the exception of Amazon, the earnings resulted in significant jumps in stock prices, adding to an already impressive performance this year as the companies continue a strong recovery from 2022:

• Meta ($META): +93% YTD, +14% after earnings 📈

• Microsoft ($MSFT): +28% YTD, +12% after earnings 📈

• Amazon ($AMZN): +23% YTD, -4% after earnings 📉

• Google ($GOOG): +20% YTD, +4% after earnings 📈 

These four companies comprise roughly 14.5% of the S&P 500 index, making their performance very important to the broader market.

Eyes are now on Apple which announces earnings on Thursday after market close. Apple is the largest company in the S&P 500, making up 7% of the index. Uber, Starbucks, Marriott, Ford, and CVS are among other major companies reporting earnings this week.

📝 Earnings Roundup: Key Takeaways

🔎 Google ($GOOG)

• Strong performance despite online ad market challenges

• Cloud computing segment achieves profitability for the first time ($191M operating income)

• $70 billion share buyback authorized

• Revenue: $69.79 billion (+1.43% surprise)

• Earnings: $1.17 per share (+9.21% surprise)
  

📱 Meta ($META)

• Reality Labs division struggles, down ~51% YoY, losses to increase in 2023

• $40 billion share buyback announced

• Revenue: $69.79 billion (+3.6% surprise)

• Earnings: $2.20 per share (+8.3% surprise)

📦 Amazon ($AMZN)

• Very strong earnings surprise

• After-hours gains were lost due to hinted growth slowdown in AWS

• AWS' operating margin is the lowest it’s been since 2017

• Revenue: $124.60 billion (+2% surprise)

• Earnings: $0.31 per share (+42% surprise)

💻 Microsoft ($MSFT)

• Morgan Stanley increased its price target to $335 (current price $307)

• Continued focus on artificial intelligence

• Strong growth in Microsoft Cloud division (~55% of Q1 revenue)

• Revenue: $52.86 billion (+3.59% surprise)

• Earnings: $2.45 per share (+9.67% surprise)

😍 Blossom Pro Launches Tomorrow

The moment we’ve all been waiting for has finally come! The team has been working hard building Blossom Pro for many months and it’s finally ready.

Here’s what you need to know about Pro:

• ⭐️ Blossom Pro is entirely new functionality from the current app focused on deeper portfolio analytics/portfolio analysis. Everything that is free will stay free.

• 📊 Pro contains a ton of new ways to analyze your portfolio including Dividend Breakdowns, Performance Charts, Sector Analysis, and more. I’ll be posting a full video demo on Blossom tomorrow!

• 🗓️ You will be able to sign up for a 7-day free trial and then Pro is $8.99/month or $4.99/month if you subscribe for a year.

• 💖 As an early-stage start-up, Blossom currently spends a lot more money than we make! If you enjoy the app and community, this is a great way to show some love to the team while getting some awesome extra functionality at the same time.

❌ Microsoft's $69B Acquisition of Activision is Blocked

Shares of Activision ($ATVI) fell over 10% after Britain’s top competition regulator moved to block Microsoft’s acquisition of the company. The $69 billion deal, which was first announced on January 18, 2022, would have seen Activision stock, now trading at $77 per share, sold for $95 per share.

The U.K. Competition and Markets Authority’s (CMA) decision cited concerns over the potential negative impact on the rapidly growing cloud gaming market.

The ruling came as a shock as the regulator had already resolved its concerns over the consoles market, a sector which dwafts cloud gaming. With Microsoft holding a 60-70% market share in cloud gaming, the CMA feared that the Activision Blizzard deal could worsen the situation if their games were made exclusive to Microsoft's cloud gaming services.

Despite the huge blow, the deal isn’t necessarily dead. Microsoft has said it remains fully committed to the deal. Microsoft’s last course of action is to appeal to Britain’s Competition Appeal Tribunal (CAT) - but this independent body will only examine the CMA’s decision-making process, not the merits of the merger.

This process takes 9 months for straightforward cases, but the Microsoft / Activision merger is anything but straightforward. If Microsoft wins the appeal, the Tribunal will just return the case to the regulator for further review.

In any case, the markets have spoken and while hopes are not all lost, the deal seems quite unlikely at this point. Many in the Blossom community (i.e. @maxstocks, @bradleytalksmoney and others) have exited their positions.

📡 Rogers' Stellar Earnings and Strategic SpaceX Partnership

Rogers Communications ($RCI) has partnered with SpaceX and Lynk Global to enhance satellite-to-phone connectivity across Canada, focusing on improving coverage in remote regions.

This comes after a massive network outage by Rogers in July 2022, which left over 12 million mobile and internet customers without service, including difficulties in connecting to 911. The outage highlighted the need for more reliable communication infrastructure, especially in remote and rural areas.

This collaboration comes on the heels of Rogers' impressive earnings, with a 30% increase in profit in the most recent quarter. Rogers is up 9% this month.

The company intends to gradually provide voice and data services in areas without connections, such as national parks and rural highways, starting with satellite-based SMS text coverage. SpaceX founder and CEO Elon Musk has previously mentioned that Canada is a high priority for Starlink.

🎙 Top Discussions This Week

🗞️ What else you might’ve missed:

• Alimentation Couche-Tard announces plans to buy 112 gas stations and convenience stores in the U.S.

• Intel jumped 5% after setting a record quarterly loss.

• Netflix lost over 1 million users in Spain during Q1.

• Samsung’s Q1 profit plunged 95% year-over-year.

• Dropbox is cutting 16% of its workforce amid cloud slowdown.

• Snapchat sees a surge of 1-star reviews after introducing an AI chatbot.