Episode summary
Amazon Reports Fifth Straight Quarter of Cloud Sales Growth & Apple Sales Slow Down | Bloomberg...
Bloomberg Businessweek Daily
· · 45 min · Hosts: Carol Massar, Tim Stenovec · Guests: Poonam Goyal, Anurag Rana, Ed Ludlow, Mark Gurman, Dani Burger, Charlie Morrison, Stuart Paul, Ira Jersey
Summary
Amazon’s latest results reassured investors that heavy AI spending is still translating into cloud growth. Analysts on the show said AWS revenue rose 37% to $42.2 billion, its fastest pace since late 2021, and that margins held up better than expected despite big data-center and chip investment. The discussion focused on why Amazon’s advantage may be less about consumer AI products and more about enterprise adoption, its long cloud history, and its growing use of in-house chips to reduce dependence on Nvidia.
Apple’s print was more mixed. Revenue and iPhone sales beat estimates, but services and China came in softer than expected, which helped push the stock lower after hours. One analyst said the iPhone and Mac numbers looked strong, but services were “a little soft,” while another argued Apple’s next big growth phase depends on AI devices, smart glasses, and eventually a more obvious successor to the iPhone.
Later, the show turned to Fed communication and the new chair’s sparse style. The analysts argued that strategic ambiguity may work poorly for a central bank because markets need a clearer reaction function, especially if inflation stays sticky and long rates move higher. The episode also briefly covered Jersey Mike’s IPO and its plan to use proceeds to pay down debt while expanding internationally.
Key takeaways
- Amazon’s AWS revenue jumped 37% to $42.2 billion, and the analysts said that beat eased fears that AI capex is not paying off.
- The analysts said Amazon’s own chips could save money by reducing purchases of Nvidia GPUs and help differentiate AWS from rivals.
- Apple beat on revenue and iPhone sales, but weaker services and China numbers were the main reasons the stock sold off after hours.
- The analysts said Apple’s next growth story is likely AI devices and smart glasses, not a near-term replacement for the iPhone.
- On the Fed, the analysts argued that vague communication can unsettle markets because investors need a clearer reaction function, not just a slogan about fighting inflation.
Notable quotes
“Revenue jumped 37% to 42.2 billion at Amazon Web Services, which generates about a fifth of the company's revenue and most of its operating profit”
“the biggest surprise for me was the margins. I would have expected margins to go down with all these investments. It actually went up”
“I don't really care that much about the AI net number. The number of the chips is the one that I find it more exciting”
“the company lacks a hit consumer AI product on par with OpenAI's ChachiPT and anthropics cla but has Inc. deals committing both AI labs to spend at least hundred billion dollars”
“the market's not going to like what Kevin Worsh is trying to do and not because it doesn't provide but mostly because it doesn't provide any information at all”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. — This is Bloomberg Business Week Daily. Reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenc on Bloomberg radio.
Shares of Amazon hire in the aftermarket. Let's get to it with our team, two members, killer members if you will, of our Bloomberg Intelligence team. We're talking about Punam Goyle.
She's Bloomberg Intelligence senior analyst for e-commerce and athleisure and Anna Rana, Bloomberg Intelligence senior technology analyst. Punam, let me kick it off with you in terms of uh Amazon. What's jumping out here for you?
Look, it looks like broad-based broad-based strength across the board. The retail numbers were particularly good and that was expected because we had the Prime Day shift moving in from 3Q to 2Q. So, overall, uh, really nice numbers here on the retail side.
Consumers came to Amazon to shop Prime Day sales and the shift to online just continues to appear more and more apparent as we move through a tough consumer spending cycle.
What's this third quarter net sales miss 197 to 202 billion? And the estimate was for $24 billion punum. — I think part of it is the prime day shift, right? When you think about such, — But analysts knew about that. So they should have
But we don't know how much, right? We don't know how much in dollar volume has moved into here. If you look at the beat that we saw, analysts were expecting revenues to be up. Um, but they came in even higher than that, right? 13.7% online revenues was the expectation and they came in at 15%.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- amazon web services growth
- ai cloud spending
- apple china demand
- blockchain?
- interest rates outlook
Companies and tickers mentioned
- AMZN
- AAPL
- JMKE
- Amazon.com
- Amazon Web Services
- Apple Inc.
- Jersey Mike's
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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