In the next few days, the seven most influential tech giants in the world today will announce their December 2023 and January 2024 fiscal quarter results.
among othersMicrosoft (MSFTus）Google (googus）withSupermicro Corporation (AMD.)us）The results will be announced after market hours on January 30, 2024, and Apple (AAPLUS), Amazon (AMZNus) and meta (metaUS) will report results after market hours on February 1, 2024, while Nvidia (NVDAUS) will announce its results after market hours on February 21, 2024, as shown in the table below.
These seven companies carry the hope of the capital market, but also the most representative pioneers of science and technology, their performance is not only a reflection of their own fundamentals, but also the embodiment of the actual global economic situation, their outlook and investment orientation, will affect the development of the next global cutting-edge technology.
So, what are the highlights of their latest quarterly results?
Microsoft: AIGC development and PC market recovery
Microsoft will announce its results for the second quarter of fiscal 2024 ended December 2023 after the U.S. stock market on January 30, 2024, and the company's fiscal year deadline is June 30, so the fiscal quarter ending December is exactly the interim results season.
Microsoft's recent market capitalization topped $3 trillion and continues to set new records, overtaking Apple as the world's most valuable giant publicly traded company.
Microsoft's biggest attraction is its cloud platform, Azure. Expectations for Microsoft have shifted in the past when Azure beat expectations of 29% in the last quarter and profitability showed signs of improvement due to the segment's lower margins and revenue growth not consistently outperforming.
What's more, Microsoft's exclusive depth with the current generative AI unicorn OpenAI** also makes Microsoft's prospects look high. OpenAI released a series of updates to its AI tools in late 2023, lowered pricing, and announced a version of the ChatGPT bot that allows users to customize themselves, and developers can use OpenAI tools to create applications that can deploy software on Microsoft's Azure cloud infrastructure. In addition, Microsoft's Office and Windows 11's AI assistant features are both from OpenAI.
It will also be interesting to see if the global personal computer (PC) market will turn around in 2024. According to the latest data from Gartner, global PC shipments totaled 63.3 million units in the fourth quarter of 2023, up 0.0. year-on-year3%, which is the first rebound after eight consecutive quarters**, may mean that supply and demand have finally reached equilibrium. The rebound in PC shipments should be good news for Microsoft's products.
Microsoft reported quarterly earnings per share of 2At $32, Wall Street consensus expects quarterly earnings per share of 2US$76, a year-on-year increase of 1897%, compared to Microsoft's earnings per share for the quarter ended September 2023, which increased by 27. year-on-year23%。
Google: Advertising vs. Google Cloud
As in the past, Google (googUS) and Microsoft announced quarterly results on the same day.
Microsoft is the king of PC apps, while Google is the leader in mobile apps. Unlike Microsoft Windows, Google's mobile Android system is open source, and therefore, Google is not like Microsoft can get a stable and strong cash flow from the Windows series, Google mainly relies on search engines to make money, and the "gold owner" of search engines is the global advertiser in the final analysis, and therefore Google can better reflect the overall global economic performance, when the economic environment is good, advertisers are willing to invest in the purchase of keywords, ranking and ** rate, in order to promote revenue growth, on the contrary, when the economy contracts, Advertisers are also becoming cautious.
As the capital feast brought about by negative interest rates in 2021 is coming to an end, everyone expects the Federal Reserve to start a rate hike cycle in 2022, the economic outlook has become more subtle, and Google's advertising revenue has also been affected, as shown in the chart below, from the third quarter of 2021, Google's advertising revenue growth peaked and fell, and fell to the bottom in the fourth quarter of 2022, and began to recover slightly from 2023.
At the end of 2023, the Fed's attitude towards interest rate hikes has changed significantly, and the chances of turning to interest rate cuts in the second quarter of 2024 have increased significantly, but the impact of high interest rates on the market is still deepening, and whether Google's advertising business will be affected will be the focus of its latest quarterly results, which will not only affect the future performance of the search engine giant, but also reflect a barometer of the global economic outlook.
In addition to the advertising business, the market is most concerned about the performance of Google Cloud. Google Cloud's revenue growth in the last quarter was strong and its operating performance improved, but it was lower than market expectations, and the market has high expectations for Google Cloud to surpass Amazon and distance itself from Microsoft Cloud. Google Cloud's revenue growth slowed down in the last quarter (see chart below), and whether the latest quarter's revenue will improve will be an important point of interest.
In addition, just as Microsoft invested in OpenAI, Google is also working hard to invest in AI startups and not leave behind the opportunity for AIGC to flourish. The introduction of generative AI functions into search engines, AI robot Bard, and large-scale model Gemini will be the focus of this fiscal quarter's results.
AMD: AI chip progress
From the perspective of market capitalization, the American supermicro company (AMD) and Nvidia are still far away, but in Nvidia's AI chip H100 is in short supply, ** at a time when it is in short supply, AMD, which has also developed AIGC chips, can just grasp the market space vacated by Nvidia due to the shortage of production capacity, AMD released the AI product MI300.
AMD has previously revealedMass production of the Instinct MI300A and MI300X GPUs is progressing well in Q4, and noted at the fiscal 3rd quarter results conferenceIts AI progress has been better than expected, with data center GPU revenue expected to be around $400 million in Q4 and more than $2 billion by 2024The MI300 is expected to be the fastest product in AMD's history to reach billion-dollar sales in the shortest period of time
It is also worth noting that AMD launched the software open platform ROCM, which wants to use its own ecology to compete with NVIDIA's ecological barrier CUDA.
Therefore, AMD's latest quarterly earnings report attracted the most attention about the mass production progress of its AI chips, as well as the gap between it and Nvidia in technology.
Apple: iPhone sales and service performance
Only one month has passed in 2024, and most of the tech giants' stock price performance has risen this year, only Apple's performance has been poor, with a total of **006%, see table below. Recently, its crown with the highest market capitalization in the world was also taken away by Microsoft.
The market's concerns about Apple are mainly focused on several aspects: 1) the demand for the most ** iPhone may be lower than expected, and the competition may intensify, and the revenue growth of Apple's other products may also continue to slow; 2) Rising "antipathy" to the "Apple tax" among end users and regional markets, coupled with risks such as data and privacy or regulatory violations in the markets in which they operate, will raise concerns about whether the revenue and profitability of its service segment can be maintained.
In addition, in addition to its existing products and services, Apple does not seem to have the "explosive models" brought about by AI chips like Nvidia and AMD and AIGC immersive investment like Microsoft and Google, which can give the market some hope for its future.
Apple will announce its December 2023 quarter results after market hours on February 1, 2024, and the company's fiscal year deadline is the end of September, so the December 2023 quarter is its first fiscal quarter for fiscal 2024.
Amazon: AI, cloud, and e-commerce
As the most beautiful boy on the "cloud" side, Amazon's cloud business performance has been in the spotlight, but in recent quarters, the growth rate of Amazon Cloud has lagged slightly behind Google Cloud and Microsoft Cloud, for example, in the last quarter, Amazon Cloud business AWS revenue growth of 1227%, compared to Google Cloud's increase of 2247 percent, while Microsoft Azure revenue increased by 29 percent. Therefore, the market will pay attention to the growth of Amazon's cloud business in the latest quarter, and whether the gap with Google Cloud and Microsoft Cloud is narrowing.
On the other hand, AWS's profitability improved last fiscal quarter, with segment operating margin increasing by nearly 4 percentage points year-on-year, and the market will be watching to see if this trend can be sustained.
Amazon's e-commerce business is its main revenue**, and the market will also pay attention to the revenue growth performance and profitability of its e-commerce business under inflationary pressure.
In 2023, Amazon announced an investment of up to $4 billion in OpenAI's rival Anthropic to take the lead in the generative AI race. As part of the expanded partnership, Amazon will select AWS as its primary cloud provider and will build and deploy its foundation models for future generations on AWS Trainium and AWS Interentia silicon.
Therefore, the market will be watching the progress of Amazon's AI deployment.
Meta: AI and social platform traffic
Meta, Facebook's parent company, will also announce its December quarter results after market hours on February 1, 2024.
In the last quarter (i.e., the September 2023 quarter), Meta's quarterly revenue increased by 23% year-on-year, and its quarterly net profit increased by 164% year-on-year, driven by the growth drive from the advertising recovery and the efficiency gains caused by cost savings.
Investors weren't buying it, and Meta's stock price plummeted after it announced its quarterly results. The main reason is that the cost savings are a one-time boost, and it is uncertain whether the positive impact will be sustainable. In addition, Meta recently launched Reels and Threads to deal with the competition from TikTok and X (formerly Twitter), respectively, but the monetization progress is not very impressive. Coupled with the fact that Meta's investment in the metaverse continues and losses widen further, this will continue to put pressure on Meta's performance prospects.
Therefore, the highlights of Meta's performance in the latest fiscal quarter will be: 1) the growth rate of its new users, especially the traffic and monetization progress of new social platforms; 2) the loss of virtual reality labs; 3) AI input.
Nvidia: AI chips and competition
The AIGC frenzy has propelled Nvidia's stock price to soar in 2023. In 2024, NVIDIA's strength continues, and its stock price hits new highs. For the whole year of 2023, NVIDIA's stock price has accumulated **23924%, and in just one month in 2024, its stock price has risen by another 2614%, which is very strong.
NVIDIA, which drank the "head soup" alone in the AIGC heat wave, has already suffered a wave of dividends, and its AI chip H100 continues to be in short supply. Nvidia also announced the GH 200, the new product in the Hopper series, which is the first GPU to offer HBM3E (high-bandwidth storage), faster and larger memory, further accelerating generative AI and large models. It improves inference power by a factor of 2 compared to H100 GPUs running large language models such as Lambda2.
However, the nervousness and high price have also made its customers turn their attention to Nvidia's competitors. In late 2023, AMD announced the AMD Instinct MI300X accelerator for generative AI with large language model (LLM) training and inference performance. According to CNBC, Meta, OpenAI and Microsoft have said they will use AMD's latest AI chip, the Instinct Mi300X.
CPU giant Intel (INTC.)US) also revealed that it will launch Gaudi3, an AI chip for generative AI software, in 2024 to compete with Nvidia and AMD. According to Intel, the performance of Gaudi3 is better than that of Nvidia's H100, or it may quickly fill the current market gap where Nvidia's H100 is in short supply.
It is foreseeable that in the latest quarter and the next few fiscal quarters, Nvidia will be able to undertake the trend of AI chip H100 and achieve strong performance growth. However, the market may be more concerned about what Nvidia will do next in the face of competition from AMD and Intel, and whether its competitive advantage can be maintained.
Summary
The earnings season for giant tech companies has kicked off, and AIGC, economic growth (advertising performance), and giving back to shareholders will continue to be the focus of the market, but it cannot be ruled out that these leading tech companies will bring some new technological inspiration that will have an impact on the market in the future. In addition to the current quarter's results, the market will be more concerned about the outlook for these companies and their guidance for the next fiscal year.
Author: Mao Ting.