Sectors: Technology

Nvidia (NVDA US) delivered another stellar result, but expectations were so high in many parts of the market that the stock initially slipped ~8% in after-market trade. Revenue of $30.04bn was a little better than the $28.86bn average estimates, but as we covered yesterday morning, they have beaten by a lot more in recent periods. 

Apple Inc. is facing some headwinds moving forward, especially now that future sales are being questioned in China, which was previously one of its growth areas—imagine if Trump wins! Greater China, which includes mainland China, Hong Kong, and Taiwan, is Apple’s third largest region by revenue, representing 19% of Apple’s total sales during the 2023 fiscal year. Apple’s revenue in the region has declined year-over-year in six out of the seven most recent quarters, although it wasn’t as bad as many feared last quarter.

After it reported in July, MSFT’s stock slipped after the slowdown in its cloud space, as it lines up against Amazon and Google. At this stage, we believe MSFT is getting things right with a growing number of customers signing up for and actively using its generative AI-based Copilot software, according to Jared Spataro, Microsoft’s corporate VP of AI at work – “Last quarter, the number of Copilot for Microsoft 365 customers increased by more than 60%, which is great because we were already off to the races with that.”

We have covered GOOGL a few times this year, having added the tech giant to our Hitlist earlier in the month. GOOGL has just said it will soon allow users to create images of people using its Gemini artificial intelligence tool after pulling the AI image generation option in February, a sign they remain full steam ahead with AI. In July, GOOGL delivered largely better-than-expected earnings results that showed the search and cloud giant is finally on a better footing in the fast-growing AI space.

When the stock was trading below $US500 in early July, we wrote, “We can see META making fresh all-time highs in the coming months, but we wouldn’t be chasing such a move.” This stance hasn’t changed, and we won’t be chasing the stock above $US500. Y

Earlier this month, Amazon reported weaker-than-expected revenue for the second quarter and issued a disappointing forecast for the current period; the stock fell accordingly. Amazon’s cloud business exceeded analyst estimates, but its advertising unit came up short. The traditional earnings numbers looked good, but under the hood, it was a touch light

We believe Elon Musk has a huge fight on his hands with rival EVs becoming increasingly prevalent on the road, and although tariffs should help, we don’t like the potential risks moving forward.