Stock Market Futures Dip Following Mostly Positive Trading Day
U.S. stock futures are losing momentum near the end of the current trading week. The tech-heavy Nasdaq in particular continues to face bouts of volatility as Big Tech posts a rather mixed bag of earnings this week. Nonetheless, it seems that analysts and investors alike are trying to make sense of all this now. Speaking on this is the chief investment officer over at Principal Global Asset Allocation, Todd Jablonski. He posits, “There’s a lot of rerating going on, whether it’s the rerating of equity valuations, the rerating of interest rate expectations, or the rerating of inflation expectations, against tightening happening at the Fed.”
Overall, Jablonski argues that “the threats of a slower economy, the threats of inflation, and the threats of higher energy prices out of the conflict in Ukraine [are] all sort of coming together to really stymie investor confidence and sentiment.” Regarding a slowing economy, yesterday’s surprise decline in U.S. GDP could be a key indicator of times to come. Regardless, investors have plenty of earnings news on tap in the stock market today as well. As of 4:01 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 0.07%, 0.36%, and 0.64% respectively.
Apple Posts Solid Beats In Latest Quarterly Financial Update; Announces $90 Billion Share Buyback Program
Front and center on the earnings front today would be Apple (NASDAQ: AAPL). This leading consumer tech firm saw green across the board in its latest financial release. For the quarter, Apple is looking at earnings of $1.52 on revenue of $97.28 billion. To put things into perspective, this handily beats Wall Street’s estimates of $1.43 and $93.89 billion. Moreover, Apple also topped consensus forecasts for sales across most of its core segments. In particular, the company’s services revenue is up by over 17% year-over-year, totaling $19.82 billion. Meanwhile, Apple’s iPhone revenue for the quarter is up 5.5% over that time, adding up to $50.57 billion. This is well above forecasts of $47.88 billion.
Overall, it seems like the demand for Apple’s tech services continues to hold strong despite growing macroeconomic pressures. This is apparent across the board even as investors were initially concerned about the potential slowdown in smartphone sales. Nevertheless, Apple has been and still is working to provide better long-term software services and subscriptions to combat this. However, CFO Luca Maestri warns about the possible pandemic-related constraints that could impact production in China. According to Maestri, sales could take a $4 billion to $8 billion hit from this as Covid lockdowns in China persist. As such, the company is not providing an outlook for the current quarter.
Even with all this in mind, Apple continues to double down on its investments. Namely, the company’s board of directors is authorizing a $90 billion share buyback program. This comes as no surprise seeing as Apple’s last share repurchase effort last year was $88.3 billion. Additionally, the company is also raising its quarterly dividend by about 4.5% to $0.23 per share. While it navigates short-term headwinds, AAPL stock could be attractive to value investors now.
Amazon Slides Following Massive Miss On Earnings; AWS Revenue Steadily Rising
Amazon (NASDAQ: AMZN) is another one of the Big Tech firms under the earnings microscope today. Although, the e-commerce and cloud computing titan appears to be feeling the heat after releasing less-than-ideal earnings figures. Diving in, investors are likely focusing on Amazon’s core financial figures for the quarter. The company saw an earnings per share of $7.38 on revenue of $116.44 billion, falling short of consensus numbers on Wall Street. For year-over-year revenue growth, this marks Amazon’s slowest growth rate since the dot-com bubble in 2001. Furthermore, the company’s advertising revenue of $7.88 billion for the quarter is below consensus expectations of $8.17 billion.
The current slowdown for Amazon comes amidst a bit of a rough patch for the company. In theory, as prices continue to rise across the board, advertisers and consumers alike could be looking to streamline their spending. According to CEO Andy Jassy, “The pandemic and subsequent war in Ukraine have brought unusual growth and challenges.” Not to mention, Amazon’s investments in Rivian (NASDAQ: RIVN) are down by a whopping $7.6 billion for the quarter. To better combat all this, Jassy highlights that Amazon is “squarely focused” on strengthening its fulfillment network. This would especially be the case as Amazon continues to recover its staffing and warehousing capacity back to regular levels.
On the positive side, Amazon’s cloud computing arm, Amazon Web Services (AWS) seems to be holding strong. In fact, AWS’s revenue growth would be one of the company’s key highlights for the quarter. Sales are up by a sizable 36.5% year-over-year, adding up to $18.44 billion, above Wall Street projections of $18.27 billion. With all this in mind, investors could see the current dip in AMZN stock as an opportunity.
Snap Unveils New Mini Photo-Taking Drone, Pixy
On the social media-tech front, Snap (NYSE: SNAP) is making bold plays. Notably, the company is launching a new piece of camera hardware, Pixy. In detail, Pixy is a mini drone that helps users take pictures and videos. To highlight, the drone does not require a controller or SD card to operate. Instead, Snap is integrating a seamless wireless connectivity system between Pixy and regular smartphones. Users simply need to push a button to activate the drone and have it flying and taking footage. Moreover, Pixy comes with four pre-configured flight paths, allowing for various shot compositions.
More importantly, Snap is currently pricing the mini-drone companion at $229.99. For starters, it will be available for sale in the U.S. and France. All in all, Pixy offers consumers a budget-friendly alternative to professional drones. This would, in theory, appeal to consumers looking to capture more casual content on their travels. Summing all this up is CEO Evan Spiegel. He says, “Today, we’re taking the power and magic of the Snap Camera — the spontaneity, the joy, and the freedom — to new heights. A new camera to match the limitless potential of your imagination.” After hearing of this, investors could be looking in on SNAP stock now.
DWAC Jumps After Donald Trump Initiates Second Post On Truth Social
In other social networking-related news, Donald Trump’s media firm is making headlines again. For those uninitiated, the Trump Media & Technology Group will be going public via a SPAC merger with Digital World Acquisition (NASDAQ: DWAC). Accordingly, news concerning Trump’s social platform, Truth Social has and continues to impact the movement of DWAC stock. In short, shares of the company are surging today following a recent post from Trump on the platform.
Going into the specifics, the former president posted on Truth Social yesterday afternoon, his second. In his post, he writes, “I’M BACK! #COVFEFE,” referring to one of his earlier infamous typos on his Twitter (NYSE: TWTR) account. Also, the Truth Social app now holds the No.1 spot for the most downloaded app on the Apple App Store. For one thing, this would mark an exciting time for social media stocks across the board. Between DWAC stock’s latest gains, the Twitter-Elon Musk drama, and Meta Platforms (NASDAQ: FB) latest earnings beat, this is apparent. The question now is whether DWAC stock can maintain its current momentum amidst all this.