Apple Wins The Week Of MAMAA Earnings
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As the week closes, the major tech stocks have all reported… and lets just say, it wasn’t pretty.
To briefly recap, lets go over some of the results from this past week’s bloodbath:
First, Microsoft (MSFT) led things off, which for all intents and purposes, didn’t have that of an earnings report. The software company reported a beat on revenue when it reported $50 billion versus the analyst estimates of $49 billion. As for earnings per share (EPS), another beat, as reported came in at 2.35 as opposed to the estimates of 2.31. However, Wall Street and investors were not impressed with those numbers or the company’s guidance, which led to a near $20 drop in the stock overnight as the report was made publicly available.
Then came the parent company of search giant Google, Alphabet (GOOGL). The company’s third-quarter revenue and earnings missed expectations as advertising sales growth slowed. Google advertising revenue rose just 2.5% year over year to $54.5 billion, which was below expectations for $56.9 billion. This came much to the dismay of investors and the stock sold off nearly 8%.
However, Meta Platforms (META) made those declines look like mere bumps in the road as investors assessed the progress of the company’s large undertaking of creating their version of the metaverse. The company continued their 2022 free fall, plunging 19% in extended trading on Wednesday after Facebook’s parent issued a weak forecast for the fourth quarter and came up well short of Wall Street’s expectations, missing big on both earnings and revenue.
Meta has posted consecutive quarters of revenue declines and is expected to post its third straight drop in the fourth quarter. The company said revenue for the fourth quarter will be $30 billion to $32.5 billion. Analysts were expecting sales of $32.2 billion.
Amazon (AMZN) also had a disappointing report and subsequently saw a selloff as well. Share plummeting 13% in extended trading on Thursday after the company issued a disappointing fourth-quarter forecast and missed on revenue estimates.
Which leads us finally to Apple (AAPL). AAPL’s stock rose 7.5% on Friday, a day after it reported September quarter earnings that modestly beat expectations on revenue and profit and showed global demand for its premium hardware remains high. It was the best day for Apple shares since April 2020. Apple was the second-best performing stock in the Dow Jones Industrial Average behind Intel on Friday.
As you can see, AAPL was the shining star of the week, posting a monster day and closing Friday up 7%. Investors flocked to the stock as they determined that despite slower then expected iPhone sales, this was their safe haven tech asset. Perhaps they’re right.
AAPL has been the powerhouse of the tech sector for quite some time now and may have just solidified their reign. Picture this as you gear up for the weekend, waiting for Monday to plan your next move. About a year ago, Apple’s market cap was about 2.8 times the size of Meta. Today, Apple is worth about nine times Meta. If there was ever a time to add AAPL to your portfolio for the long term, it’s now.
Not only did AAPL beat earnings, but it proved, even in a bear market or recessionary environment… or whatever you call this market cycle we’re in, it is still one of the best tech investments out there… and quite possibly, one of the best companies ever created. Some food for thought. Have a great weekend and happy Halloween!
