Fast Money Blog- 2/2/24

This was an incredibly busy week on Wall Street, with earnings releases from several major companies, the first Federal Reserve meeting of 2024, and the release of January’s jobs report.  

On Tuesday, January 30th, Advanced Micro Devices, Inc. (AMD)Microsoft Corporation (MSFT), and Alphabet, Inc. (GOOG) all reported their earnings.

AMD announced top-line revenue for Q4 2023 of $6.2 billion, up 10% year-over-year.

Quarterly results were as follows:

Data Center segment revenue was $2.3 billion, up 38% year-over-year.

Client segment (which includes PC chips) revenue was $1.5 billion, up 62% year-over-year. 

However, it was their revenue for the full year 2023 that really caught attention.  AMD reported 2023 revenue of $22.7 billion, down 4% from 2022. 

Because of this 4% drop in annual revenue, it’s time to break up with AMD as they no longer fit our Wealthy Investor criteria. I’ll be discussing this in a future email. 

MSFT released it’s Q2 2024 earnings with revenue of $62 billion, up 18% year-over-year. 

Highlights

Microsoft’s Intelligent cloud segment had quarterly revenue of $25.9 billion, up 20% year-over-year. This segment includes server products and cloud services such as Azure, whose revenue grew 30% year-over-year for the quarter.

The Productivity and Business Processes segment, which includes Dynamics, LinkedIn and the Office suite of products, brought in $19.25 billion, an increase of 13% year-over-year.     Microsoft 365 Consumer subscribers grew to 78.4 million.

The company also reported revenue of $16.9 billion, an increase of 19% year-over-year, in their More Personal Computing segment. Windows revenue for the quarter increased 9% year-over-year.  

Once again, Microsoft makes a great long-term investment and short- term trade!

Google reported Q4 2023 earnings with top-line revenue of $86.3 billion, up 13% year-over-year. This marked its fastest quarter for revenue growth since early 2022, and highest quarterly revenue and profits in its 26-year history.

Here’s how the company’s quarterly revenue broke down:

Google’s cloud revenue grew 26% year-over-year, taking in $9.1 billion in the quarter. In the last three months of the year, Google’s cloud unit brought in an operating profit of $864 million, following a year-ago loss of $186 million.

In the fourth quarter, the company’s advertising revenue rose 11% year-over-year to $65.5 billion. 

All of this makes Google a good date!

On Thursday, February 1st both Amazon.com (AMZN), and Apple, Inc. (AAPL) released their earning reports. 

Amazon’s Q4 2023 earnings surpassed Wall Street expectations with top-line revenue of $170 billion, an increase of 14%.

The company generated $10.6 billion in net income, during the quarter—up from $278 million in the year-ago period. The growth was primarily driven by sponsored product ads, with streaming TV advertising on live events and Amazon Freevee programming. The company recently expanded ads to run on Prime Video, or pay an additional $2.99 per month for the ad-free streaming experience.

Highlights

Amazon saw advertising sales grow 27% year-over-year for a total of $14.6 billion in the Q4 2023.

Viewership for the second season of "Thursday Night Football" on Prime Video increased by 24% year-over-year.

Amazon Web Services, its cloud revenue segment that drives much of its operating profit, grew 13% to $24.2 billion. 

The company also announced the launch of an AI-powered shopping assistant named “Rufus".

Amazon is just outstanding as a long-term hold or active trade!

Apple, Inc. (AAPL) released its Q1 2024 earnings with quarterly revenue of $119.6 billion, up 2% year-over-year. 

Apple’s net income from the quarter grew nearly 13% year-over-year to $33.9 billion.

Segment Breakdown

The iPhone, Apple’s biggest moneymaker, brought in revenue of $69.7 billion, an increase of 6%.

Once again, the bright spot for Apple was in their Services segment which took in $23.1 billion, up 11% year-over-year. This segment includes Apple TV, Apple Music, Apple Fitness, Apple Cloud and the Apple App Store, just to name a few. 

Mac sales grew less than 1% during the quarter to $7.7 billion. However, this is a significant recovery for the product line, which in Q4 2023 fell nearly 34% year-over-year. 

On a negative note, sales in China dropped nearly 13% in the quarter amid heightened competition from domestic smartphone makers. This was Apple’s weakest December quarter in the Asian nation since early 2020.

The iPad was also a weak seller and saw its revenue decline 25% to $7.02 billion.

Finally, the company’s wearables business, which includes AirPods headphones and the Apple Watch had a rough quarter, declining 11% on a year-over-year basis to $11.95 billion in revenue. 

Although Apple’s revenue continues to rise overall, it is no longer a Wall Street darling.

In other news:

On Tuesday, January 30th, Walmart, Inc. (WMT) announced that it will conduct a 3-for-1 stock split after the market closes on Feb. 23.

On Wednesday, January 31st, Federal officials held interest rates at their highest level in two decades and hinted that cuts may not come until after their next meeting on March 20th.  

On Friday, February 2nd, January’s Jobs Report showed that the U.S. labor market added 353,000 jobs in January, signaling that economic growth remains vigorous. 

So far, top-line revenue for all Wealthy Investor stocks have been impressive!

I expect to see more high volatility over the next 12 weeks. 



Tyrone Jackson

The Wealthy Investor

 
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