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Big tech results and why you shouldn't care about the Fitch downgrade
Apple and Amazon reported this week plus the July numbers are in for the NASDAQ 100 and the S&P 500. Hint: they're looking good.
Here’s what I’d like to share this week:
Laying off 27,000 people since last August was one of the factors attributed to Amazon’s positive quarterly earnings announcement this week sending the stock up 5% this week, 52% year to date. Revenue increased 11% from the same period last year. CEO Andy Jassy said AWS's spending on AI represented a "significant" amount of the more than $50 billion in capital investments Amazon projected for 2023.
Apple’s third-quarter results: revenue declined by 1% and CFO Luca Maestri expects revenue “should get a bit better” in the fourth quarter. Tim Cook stated that “the smartphone industry is tough in the U.S. right now”. Apple stock is up 48% for the year. Commenting on Fitch’s downgrade of the US, Cook stated that “It’s not something I’m deeply concerned about.”
Here’s an interesting chart that looks at the big tech firms and their bloated headcount during the pandemic leading to mass layoffs thereafter.
The NASDAQ 100 gained 3.8% in July, its fifth consecutive month of gains, up 44% for the year. The S&P 500 is up 3.11% for July and 19.52% for the year. The chart below shows a comparison between the two over five years with the NASDAQ 100 being the clear leader. More importantly, it’s one of the many reasons why Pilane Capital is a large-cap tech-focused fund.
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