← CNBC's "Fast Money"
CNBC's "Fast Money"
Apple and Amazon Earnings… And What’s Next for Global Markets 7/30/26
00:44:24
The traders watching key after-the-bell earnings like Apple, Amazon, Strategy and Coinbase. CEO of Moor Insights & Strategy Patrick Moorhead gives his take on whether Apple can withstand memory inflation and if Amazon’s cloud revenue is enough to beat earnings expectations. Then, the Japanese Yen surging ahead of a key policy meeting, and if this means central bank rate hikes are imminent. Plus, Microsoft and Meta heading in opposite directions on the back of their earnings, with Microsoft seeing its best day in almost two decades. Fast Money Disclaimer
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- [00:00]
Karen Finerman
The board recommends approving regarding that seat on the committee.
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Julia Boorstin
We're promoting quarterly earnings.
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Vanguard Marketing
Every day, shareholders meet to discuss important matters about the companies you invest in. Now you can easily make your voice heard. Vanguard Investor Choice gives you a say in the companies you invest in. With just a few taps, you can set your proxy voting preference for your index funds. Visit vanguard.com investorchoice to learn more. Vanguard investors own shares of our index funds, which own shares of the companies they invest in. Available for Vanguard index funds that participate in Investor Choice. Vanguard Marketing Corporation Distributor how do you
- [00:31]
Dan Nathan
turn your strategy into action and action into impact?
- [00:35]
Karen Finerman
Bold leaders do it through transformative strategy
- [00:37]
Melissa Lee
and transactions, ones that work in practice,
- [00:41]
Mackenzie Sigalos
not just on paper.
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Melissa Lee
At EY Parthenon, we use an investor
- [00:45]
Mackenzie Sigalos
mindset to help you create value.
- [00:47]
Tim Seymour
How?
- [00:48]
Dan Nathan
By combining deep sector experience with AI
- [00:51]
Melissa Lee
powered technology so you can reimagine your business for tomorrow while building it today. Shape your future with EY Parthenon. Learn more today Live from the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Another big night of earnings. Amazon surging on big cloud growth while tariffs take a bite out of Apple. The details behind the moves and what to do with these stocks right now. Plus the yen rallying on speculation. The bank of Japan is taking steps to support the currency. What it could mean for global markets and rates here at home. And Microsoft's massive post earnings melt up. What Valero's earnings tell us about about tomorrow's big energy reports and a little indigestion for Jersey Mike shares. The sandwich shop dropping in their NYSE debut. Details on the sub our performance.
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Guy Adami
You didn't do that.
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Melissa Lee
I didn't but it's genius. I'm Melissa Lee coming to you live from CDO B at the nasdaq. On the desk tonight, Karen Feiderman, Dan Nathan, Gai Adami and Tim Seymour. We start off with the Apple earnings. The iPhone maker shares in the red in the after hours. The company beating revenue estimates but also saying the tariff refund had an impact on profit. The call starting at the top of the hour. It is the last one before CEOs Tim Cook hands over the reins to John Ternus. CNBC's MacKenzie Segalis got the numbers Mac
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Mackenzie Sigalos
Mel those Apple shares falling more than 4% now despite the company posting four straight quarters above $100 billion in revenue with iPhone sales jumping more than 20% for the third consecutive quarter as that iPhone 17 family continues to drive upgrades Mac also beating estimates while services missed though that business is is still running at more than $120 billion a year now here at Apple Park, CEO Tim Cook told me he would not rule out raising iPhone prices as Apple confronts what he called choking memory costs, adding that the immediate focus is working through iPhone supply constraints and that the company will have to look at alternatives. Now that could include memory from China. Cook telling me any additional source would help because supply is scarce and prices are too high. We saw gross margin, one of the best gauges of profitability, surpass 50% on a boost from tariff refunds, which Cook says Apple will reinvest in advanced manufacturing here in the U.S. mel?
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Melissa Lee
All right, Mac, thanks. Mackenzie Sagalos joining us out from Apple park there. What do you make of the quarter? Dan?
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Dan Nathan
Well, it's kind of interesting that they are basically going to reinvest those tariff rebates into, you know, some sort of process or something. We'll all benefit from that in the quarters to come. But yet if you think about this, they're raising prices for this coming fall on their phone. So again, interesting. I think that is a political statement for all intents and purposes because the administration do not want to give back any of these tariffs. Quarter is good. I mean, the China thing is interesting because that was one of the bright spots last quarter, the growth. I think it was like 28% year over year. So that obviously decelerated a little bit. I wonder at some point whether they're going to have a little nationalist fear fervor. You know, we talked about a lot of the components that go into data centers and there's a lot of competition there obviously also with the models. You know, the last thing I'll just say it's interesting that they keep talking about memory and they should. It's a big, big thing. You know, Apple used to be in the Capron seat to get all of the, you know what I all of the components that they needed and just shows how I think tech in general have just moved away from devices like iPhones and they're really all focused on datacenter and what goes into them. So again, I think it's interesting that you have Apple and iPhones taking a backseat to memory that goes into servers.
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Melissa Lee
Why do you think the stock is down?
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Guy Adami
Because of the setup. I mean, it had a huge run up in earnings. Karen talks about this. I'm sure Tim will bring it up. I mean it had a huge run into earnings was probably a little ahead of itself. The quarter is great. I mean operating margins 32.6% the street was at 30.6. Doesn't sound like a big deal. That's a pretty big deal. And all the metrics around it are very good. It's just the setup in earnings and I'll say this, services now almost 28% of overall revenue. That's really good. Which is one of the reasons they probably deserve a premium multiple. But the run up into earnings is why it's lower now.
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Melissa Lee
Premium multiple 38 right now it's pretty high.
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Karen Finerman
Right? I mean I agree exactly with you that yes, that set up, you know, when you look at some of the other setups going in, they were easier.
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Melissa Lee
Right.
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Karen Finerman
And this was a difficult one. The quarter was okay. I mean we saw, you know, a tiny little thing to pick at. You saw the services down which were below rather. And so that goes to the mix. We always talk about, you know, the margins on services so much higher and pricing pressures. But it was a good quarter. And Steve Cook deserves. Tim Cook, I always called him Tim Apple but Tim Cook deserves a tremendous just, I mean from, from shareholders. What an extraordinary job.
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Melissa Lee
He Tim, what do you want to know from the conference call?
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Tim Seymour
I want to get some sense of insight into what the margins could look like based upon what they are telling us what that quote was about, where memory prices are. I think we want to have some understanding of, of what the operating environment looks like for them in China. That 22.8% China number, I mean I thought it was really solid. I think North America 11.1% remember the things that rallied Apple into this number which made it for a tough setup are all the things that they delivered here and the gross margin actually was probably a little better than feared and doesn't mean that there won't be pressure on that going forward. In fact, I think that is really the story. I mean the story is can they hold above 48 over the next couple of quarters. But 20 plus percent iPhone sales growth is, is something that's part of the story here. And it's part of the story coupled with the fact that they haven't had to spend a ton of money and you know, it's the non capex story. So everything that rallied Apple into this print they gave you here as we know it's what kind of a market do you want to be an investor in Apple?
- [06:40]
Karen Finerman
Just one other notable thing. Mac. I mean that was a ridiculously strong quarter.
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Kate Rooney
Yes.
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Melissa Lee
But I wonder because they, they raised prices on Macs at the end of the quarter. So you wonder if There's a little bit of pull forward on that number
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Karen Finerman
maybe, but still the magnitude of that was really tremendous. I guess it is the, you know, the computer of AI users.
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Dan Nathan
You know, your point about the setup I think is really important. If you think about Microsoft, it was down nearly 30% from its highs, you know, into the print. Amazon was down 15%. So it wasn't hard on a decent quarter. They're very good. And a raise to have those stocks moving, I mean, you know, I know we're going to talk about Microsoft. That is an astounding move. And you know, one way or another into the print, you would not expect to see Apple if it was a beaten raise, even being up, you know, 10% after its rally. But the last thing here to 75, that's where the stock sold off to when they said that they were going to raise prices on iPhones. So to your point, maybe you see a bit of a pull forward even before they get a new phone out in the fall.
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Guy Adami
If you're looking for a level,312 was the prior all time high in May before it cascaded lower. And then if you look past resistance becomes support and we're probably pretty close to it now. That's your first level to 75. If the tape sort of unwinds, that's not out of the realm of possibility. But 3:12, your first stop.
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Melissa Lee
We'll keep you posted on what comes out of that Apple conference call. The Stock is down 4% right now. Let's get to Amazon, trade that. Shares jumping after revenues came in ahead of expectations. Sales seeing their best growth in 18 quarters. That conference call also just started. CNBC's Kate Rooney's got those numbers. Hey Kate.
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Kate Rooney
Hey, Melissa. So Amazon really was able to show momentum on air revenue and that is giving them a hall pass for some of the higher spending around. I mentioned US cloud revenue a clear beat in the quarter. 37% growth year over year. The number to top was 31% for estimates. CEO Andy Jassy saying AI business also topped 25 billion in annual revenue in terms of the run rate growing triple digits there, triple digit digit percentages year over year. Amazon's total revenue was up 20% on the year also beat estimates. We didn't compare the earnings number because they did report an investment gain of about $53 billion, at least on paper. That is primarily from their investment in Anthropic. CEO Andy Jassy says quote, NWC is booming. He also called out fastest growth there in 18 quarters, pointing to advertising as well said that had another strong quarter, 26% year over year growth. Ad revenue did top expectations and then its homegrown semiconductor business. This one surprised to the upside, 25 billion in annual revenue run rate as well. The chips business also growing triple digit percentages. North America revenue, that's E Commerce grew about 16% year over year partially thanks to prime day in the quarter and then capex. This has been the big tech story. Higher than expected in the corner in the quarter. We may get more details on that around the call. And then Q3 revenue guidance and operating income did come up a little bit light but still stock up as you mentioned mel, more than 6%. It was up as much as 9% after that.
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Melissa Lee
Yep. Kate. Thanks Kate Rooney. And again it all has to do with the setup because this is one of the laggards in the mag seven going in.
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Karen Finerman
Exactly. Definitely a decent setup for it, but a very good quarter. I mean those numbers way higher than the whisper number which is even a little higher than I think model in the street. But that was just an extraordinary quarter and it sounds like, you know, full steam ahead which is why the CAPEX then comes in. We'll see the full reaction to that. I want to hear more about it. Like, you know, I listened to the medical last night. It was very squishy on what the return would be. Right. Nowhere even remotely close to any kind of number. That's something where I guess we don't. Who knows when we'll ever see what that is. But this was I think really a great quarter. Some other little things and you know, advertising. Nice. That was a little bit of a beat. That's great. The other thing is guidance. I never care what Amazon guides, they're not particularly good at it. I don't think they really care either when they give guidance. So I give zero weight to that. The setup was the most important thing.
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Guy Adami
Capex trend continues to roll. I mean 68% year over year at Capex, I think they're up to what, $54 billion. But remember there was a time we used to do the show where the operating margins for Amazon were low single digits. I mean here they are coming in at 13.7%. I mean it was 11.4% this quarter last year and it was better than the street was looking for, which is a big function of, as Karen just said, good for them. It's a good quarter. But is it going to be that same type of situation we might see with Microsoft? The setup was really good for earnings. You saw what Microsoft did today. But is this going to be sort of like the last gas before the rollover? My instincts say that Amazon's got a little room to run here. I think the Microsoft move today might have exhausted itself.
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Dan Nathan
Yeah. Three years ago growth bottomed out at 12%.
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Tim Seymour
Right.
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Dan Nathan
So you think about that and they had more market share than they do right now. They're expected to have like I think about 30% market share. They're growing 37%. We know that Azure, you know, is probably 24 of the cloud and you know, that was growing, you know, at a pretty good clip. I think it was somewhere in the 30s. Is that right? Or 43%. Right. Year over year. So you know, you have a bit of a two horse race here now. It's not really running away from it. And you know, when you think about Microsoft and what they have on their cloud as far as models, I don't think it's nearly as interesting possibly as what GCP and Amazon have. So you know, the Microsoft thing might start to moderate to some degree and you might see GCP kind of picking up a little bit of steam there.
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Karen Finerman
Well, GCP, I don't think it's the only two horse race. I mean it's smaller.
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Dan Nathan
13%.
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Karen Finerman
I know it's smaller, but the growth there was really, really extraordinary. And the margins on AWS at 39, that is really extraordinary. So I mean you can lever that business and just get bigger and bigger. That's a really profitable thing to do. Obviously.
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Melissa Lee
Tim, if Amazon ratchets up its capex number, does it get a free pass at this point given the, the results of the rest of the businesses?
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Tim Seymour
I mean, within reason, no one's getting a free pass right now. But, but you know, we're getting, if we want to argue, you know, who's best positioned in cloud, let's talk about the fact that Amazon is so well positioned in like four businesses that have massive TAM growth. So it's not just cloud, it's advertising, it's hardware, chips and we're not even talking about retail. So yeah, the, the, the U.S. the rate of change on the change. In other words, this is a trend that's getting a lot better, not just a little better. And get you back to some of those growth rates of a couple of years ago. But I just think that this is a company that has more levers to pull than others at a time when compared again to Metta, where we understand there's new businesses and we understand there's new forms of revenue, but we don't really know a whole lot about them. These we really do know a whole lot about. By the way, the 26% for AD growth is. Meta was 28%. I mean, it's good news for everybody. Bottom line is these two. These two guys are growing massively in advertising and it seems like it's. I mean, Google's there too, but this is really impressive.
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Melissa Lee
We were talking to Mark Mahaney.
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Guy Adami
Mahanes.
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Melissa Lee
Mahanes. On Closing Bell Overtime, and he said, you know, there are all these. There's also these other two businesses, Project Leo and the logistics business. And those could be large businesses as well. On top of the Trainium and Gravitron
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Karen Finerman
business, which is enormous on its own.
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Melissa Lee
Right, Exactly. So it's staggering. Outside of. Of the things that they break out right now, the other items that could be.
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Guy Adami
Yeah, I mean, there was a time when we were concerned about valuation. I think that time has passed. I mean, you can actually make a pretty cogent argument for Amazon on valuation. The problem is, you know, it's a pretty. Gets a little sloppy in terms of stock performance. We see a lot of volatility in the name. I think overall though, this quarter suggests there's another leg higher. Can I ask you a question quickly, Melissa?
- [14:27]
Melissa Lee
Of course you can ask me.
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Guy Adami
You mentioned the term free pass and then Kate said hall pass. Is there a difference between a free pass and a hall pass?
- [14:35]
Melissa Lee
I think that the directional meaning is the same.
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Guy Adami
Okay.
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Melissa Lee
Really?
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Guy Adami
I'm just. I mean, I thought a hall pass was something. Yeah, I thought a hall passed. Entirely different.
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Tim Seymour
No comment.
- [14:43]
Melissa Lee
Depending on what you get in school.
- [14:44]
Dan Nathan
Let's go to school.
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Karen Finerman
Okay.
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Tim Seymour
That's another challenge.
- [14:51]
Melissa Lee
That's funny. Never has that. Let's break down Apple and Amazon's quarter and price and bring in more insights. Patrick Moorhead. Patrick, great to have you with us. Let's. Let's start off with Apple. What stood out to you in the quarter here?
- [15:04]
Patrick Moorhead
Yeah, so the first thing we all need to recognize is Apple's the safe bet when it comes to tech. The ability to get them off their rails would require something major. And I don't want to underplay the memory cost increases, but they seem to be raising prices to offset. There were some pluses, there were some minuses. I think the number one question I would have is how are they going to deal with memory? I heard the earlier conversation. The political firestorm about Apple using Chinese manufacturers to essentially lock in their 90% margins on memory and storage is going to be a tough one for them. You've had senators come out you've had House members come out. This is going to be a difficult thing to do and I think in the end it will, it will not go through.
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Melissa Lee
I understand the notion that Apple is, you know, a port in the storm but the things that could knock it off its rails, don't they get smaller and smaller as that valuation gets richer and richer?
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Patrick Moorhead
They do. I mean it's rich. And the reason they've had this the huge run up is people are who left the the AI trade p their some of their money into tickers like Apple. The other rotated back into enterprise software like Salesforce and Servicenow and companies like this. I do think at this valuation everything that Tim Cook says on the call will be will be scrutinized. And I think particularly on the services side, like why on earth would this have missed by 12%? Does this have something to do with the Gemini Siri economics coming up? Does it turn into a tailwind or some sort of a cost line?
- [17:02]
Guy Adami
So Patrick, let me ask this question. I mean the rising interest rate environment can't be good for Apple because it's still a consumer company at the end of the day and the GDP print today suggests at least for the quarter that, you know, maybe things aren't as robust. Is there a concern sort of on the economic front potentially for Apple?
- [17:19]
Patrick Moorhead
So what Apple has done to smooth that line a little bit is come out with their own leasing program. And I know profitability of that will be directly related to interest rates but Apple seems to always find a way whether it's buy everything from me as a subscription. And I think that they will figure out this leasing program which essentially you can get a full Mac for $25 a month on this program. And it's very different from their buy everything their Apple one program. And I do believe that will limit the risk. Interest rate risk.
- [18:00]
Karen Finerman
It's Karen, thanks for being on. Can we switch to Amazon for a minute? What do you think of Cap Ex and do they. Do you think it's received well?
- [18:10]
Patrick Moorhead
Yes. So they had a very difficult bar coming in. Microsoft set the bar. Not only did Cathie Hood say we're going to be FCF positive in 2027, Azure hit and also Copilot hit but I think Amazon completely delivered. I mean we haven't seen us acceleration like this in I think 18 months. And the in a macro environment where memory costs and silicon costs are through the roof. But I think they're on the call going to have to deal with this negative $7.6 billion of FCF and their long term debt doubled to $129 billion. I think at least with this print they shows that they can monetize that capex but they're going to have to give some confidence to the street that they can keep this going.
- [19:06]
Melissa Lee
All right Patrick, thanks. We got to go. The stock is taking a leg higher up to after our session highs right now almost up 10%. Update on Amazon CapEx just came out. Kate Rooney's got those details.
- [19:17]
Kate Rooney
Kate Melissa, so Amazon is lifting its CapEx guidance. Andy Jassy on the earnings call saying right now we believe we will spend approximately $220 billion in cash capex for 2026. Remember they had forecasted $200 billion so this is higher. He talks about the higher cost of memory pushing this number up from their prior estimate of about $200 billion. Said as far as the US and AI demand, he said that's booming right now and said quote we're enthusiastic about the ROIC equation even with heavy capex over the next few years stock reacting not much. It was up higher after the print but investors seem to be willing to give Andy Jassy the benefit of the doubt here on that spending increase.
- [20:04]
Melissa Lee
Mel, Is there any capex number for 27?
- [20:09]
Kate Rooney
This is current year 2026. Not yet, we haven't gotten that any sort of update there but this is effective. Higher, higher memory costs. So the current year number lifting here Mel.
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Melissa Lee
Right. Okay Kate, thanks. Keep us Posted. Kate Rooney Capex goes to 220 again for the full year 26. Full year 27 was estimated to be 226 so pretty close to two years out.
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Guy Adami
It's hard to say why. Some companies get rewarded for it, others get punished for it. I have no idea what I'll tell you and you know, as you've come to realize I don't know a lot of things about a lot of things but I guarantee you sandisk, which had a day today is probably up in the after hours on the back of this as is probably Micron and Nvidia should as well because it speaks to this. Capex is not going away.
- [20:51]
Melissa Lee
Why do you think it breaks this breaks the mold of higher capex and the stock goes down higher capex stock goes up.
- [20:57]
Dan Nathan
Well they didn't use the word significantly and that was something that I think really think about that and obviously hurt Google too. I think it is worth noting as we're all kind of fawning over this quarter that anthropic and OpenAI are AWS is Two largest customers.
- [21:11]
Tim Seymour
Right.
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Dan Nathan
And we spent a lot of time talking about the risk of their ability to kind of fund these projects. So, you know, at the end of the day, this falls right into the circular sort of financing conversation. I know that was something we had a really serious conversation about late last week, early this week. And it seems like when you have a quarter like this or Microsoft yesterday, it's easy to forget those sorts of serious conversations. But I think we're going to get over this and start talking about that or focusing on that again in the next few weeks. Weeks.
- [21:38]
Karen Finerman
I'm sort of surprised. The stock took a little leg higher on that capex. $20 billion. That's a lot of money. I mean, Amazon has the balance sheet. They can still. It's fine. And they did that big debt raise and they have liquidity. But had, you know, had Metta come out with a $20 billion raise, that would have been even more disastrous than they were just tightening up the bottom end. And then Google, the reaction to their capex increase was also not good. So, I mean, I don't know if there's anything else there or just Amazon. Jassy is, you know, he has said over and over again, this is the most enormous opportunity. He's right.
- [22:15]
Melissa Lee
Well, you go back to that letter that Jassy had, Tim, and he was very clear on where he saw the opportunity and the run rates of the various businesses and that just the path, just a clearer direction, a clear path in terms of how we get there by spending this. Do you think that has made a difference? That he's able to articulate the vision of Amazon in a way that Mark Zuckerberg has not yet been able to do.
- [22:41]
Peter Bokvar
He's.
- [22:42]
Tim Seymour
He's been less than conservative. I mean, he's. He's been very aggressive in pointing out how optimistic he is and how strong he is. And also today, I mean, they gave you a $25 billion annualized run rate on their, you know, their return on that investment capital. So, you know, it still pales into the number we just got here. But, you know, again, we're talking about growth rates off of where they were. This is part of what's giving them the story. Again, I just think it's the fact that investors, one, that, you know, Amazon had underperformed the S and P by, by almost 25 points going into this print. But the other dynamic is you've got these multiple business lines that all seem to be going pretty well. And, you know, we are not talking about retail. I realize it's not sexy. I realize it's low margin but it is part of of that that the platform, the flywheel and I think it's also very strong.
- [23:34]
Melissa Lee
Here's from the conference call. Andy Jassy sees a clear line of sight to strong financial returns on AI and US spending speaking right.
- [23:42]
Guy Adami
Return on invested capital which is a conversation we've been having by the way. Andy Jassy also from the Mean streets Scarsdale.
- [23:50]
Dan Nathan
Why? Who else is.
- [23:51]
Guy Adami
Well that would be Tim Seymour, Blue Eyed Stars, Tom Rogers.
- [23:56]
Dan Nathan
One thing on Jazzy, if there's ever anyone who has the credibility as it relates to building out this infrastructure, it is him because he did this going back 20 some years ago and it was part of the bear case with Amazon for a long time and it ended up being a really great thing. Just want to say this, I'm going to belabor a point. Amazon has invested in anthropic $13 billion up to $33 billion and their largest AI customer on us. So like again, I just think this is. And they just had that big markup in their investments. So it's kind of going around.
- [24:27]
Melissa Lee
Remember that thing? Yes.
- [24:29]
Karen Finerman
No credit for the markup. I think, I don't, I don't know the markup. I don't for all of them.
- [24:35]
Melissa Lee
Right.
- [24:36]
Karen Finerman
Because it could go down and who
- [24:38]
Dan Nathan
knows but these companies, like if they were trading in the public markets, they'd be cut in half or down 30 or 40% like all the.
- [24:44]
Karen Finerman
So let's say Amazon next quarter or next year took a hit. Obviously those things wouldn't happen to go higher.
- [24:52]
Dan Nathan
They need everything to go higher. That's the.
- [24:54]
Karen Finerman
They don't need the price, they need demand.
- [24:56]
Dan Nathan
No, but if OpenAI marks down 50% in the private markets, the thing, the whole thing's dead. The whole ability for them to find one and a half trillion dollars in commitments and anthropic. The same thing. It's done.
- [25:09]
Karen Finerman
Let me how much do you think Open air were it public?
- [25:13]
Dan Nathan
Down 30% easily.
- [25:14]
Karen Finerman
Okay from okay.
- [25:15]
Dan Nathan
And maybe more. I mean look at, look at what happened to X as part of SpaceX.
- [25:19]
Melissa Lee
All right, well we got to go. Both conference calls are underway. We will keep you posted as we have the headlines out of them. Coming up, clouds clearing from Microsoft. But the tech giant said last night that century surging to their best day in 18 years. Plus Coinbase and Strategy both on the move after reporting all the headlines from those reports. And the next move for crypto straight ahead. Don't go anywhere fast when he's back into.
- [25:45]
Julia Boorstin
Mazda has been named Consumer Reports safest new car brand. It starts with approach every Mazda comes standard with proactive safety features so you're more aware of what's around you, more focused on the road ahead and ready before problems ever start. Mazda More of what matters most to you. Go to Mazda USA.com to learn more. Consumer Reports does not endorse or promote
- [26:12]
Melissa Lee
any product the board recommends approving.
- [26:14]
Tim Seymour
Regarding that seat on the committee, we're
- [26:16]
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- [27:14]
Melissa Lee
Welcome back to Fast Money a monstrous post earnings move for Microsoft. The tech giant shares surging more than 15% their best day since October 2008. Azure cloud revenues rose 43% topping a $100 billion mark for the first time. The move added nearly half a trillion dollars to Microsoft's market cap, its biggest one day value gain on record. Tim, you think this holds?
- [27:36]
Tim Seymour
I do, I do and I think it's a combination of the fact that the chart and the association with software as a group and a lot of existential risk for for software is is part of what that underperformance was. I think the Azure growth was extraordinary. I think the balance that with the margin side of this and copilot that that growth was exactly what you wanted to see. I think that's the biggest part of the move so I think you're finally getting some follow through and the market didn't expect that.
- [28:05]
Karen Finerman
Agree with everything Tim said the setup was huge in a good way being down a lot but also for them the capex right that was a bit of a surprise. Yeah no change very nice.
- [28:19]
Guy Adami
How do we so I think I want to go back to maybe end of May early June 460and change that was the high before we traded lower the double bottoms that Tim and Karen alluding to from April 25th and basically again April this year, stuck in there like a champ. And I think that's we're bouncing off of three times normal volume today. I'm sort of take the other side a little bit. The quarter was good. I don't think it was that good, but I think the setup was that good. So I start to fade this around 4, 6.
- [28:45]
Dan Nathan
So this camp, this might surprise you. OpenAI is Azure's largest customer. I'm just saying, I mean like it's all there in front of you and we don't have the transparency as far as open air and what they're doing and what they're saying and what their margins are and how much money they're losing and all that sort of stuff. So have a ball people.
- [29:03]
Melissa Lee
So you don't. So the setup, you just think this is going to fade? Like.
- [29:06]
Dan Nathan
Yeah.
- [29:07]
Melissa Lee
Do you think longer term is going to have problems?
- [29:09]
Dan Nathan
I mean like I think what Tim said about Copilot and you know, that is the opportunity. But the opportunity doesn't lie in using ChatGPT within Copilot. The opportunity gives a lot of choice as far as the models and they might be, you know, deep seeks models, they might be moonshots models, they might be a whole host of other models because a lot of the users going from token maxing to token, what are they called, minimizing or whatever, that's where you're going to get a lot of bang for your buck. And for Microsoft, if they can get folks to convert on Copilot like that's the deal for them, that's how they win.
- [29:40]
Melissa Lee
Coming up, a crypto report card. What Coinbase results say about the digital asset trade. All the details in the report next index plus a currency conundrum. The yen surging against the dollar today. What's driving that move and how it could impact investors across the globe? You're watching Fast Money live from the NASDAQ markets site in Times Square. Back right after this.
- [30:03]
Karen Finerman
The board recommends approving regarding that seat on the committee.
- [30:06]
Julia Boorstin
We're most quarterly earnings.
- [30:08]
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Julia Boorstin
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- [31:05]
Melissa Lee
that you could do something that hadn't been done before? I have no fear of failure.
- [31:10]
Julia Boorstin
Trailblazing women, Changing the Game One of
- [31:13]
Kate Rooney
my favorite pieces of advice Think about
- [31:15]
Pippa Stevens
what your boss's boss needs.
- [31:17]
Melissa Lee
Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [31:22]
Julia Boorstin
Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday. Wherever you get your podcasts,
- [31:37]
Melissa Lee
Apple Chair is taking a leg lower off the company's conference conference call. The shares are down 8 and a half percent. Let's get to Mackenzie Sagalas who's got some guidance from the call. Mackenzie hey Mel, you saw those shares
- [31:48]
Mackenzie Sigalos
sank when CFO Kevin Perech gave guidance saying that they expect the impact from supply constraints and certain forex exchange issues to be a sequential headwind for overall revenue. They said that will also specifically affect iPhone, Mac and iPad in the September quarter. Now for that September quarter, they say that total company revenue is expected to grow between 9 and 11% year over year. Expectations were for 12% and then for iPhone. They're expecting revenue to be impacted by foreign exchange headwinds. They're looking at a growth rate there to be in the mid teens, year over year on services. They're expecting a similar growth rate to what we saw in the June quarter. They said that after removing the negative sequential impact of about two and a half percentage points from foreign exchange, expect gross margin to be between 47 and 48%. But Mel, that includes an expected benefit of around 1 percentage point again related to tariff refund dividends, which puts us in that 46 to 47% margin. So it really answers that question of whether did we hit peak margin last quarter at nearly 50%. Finally, John Ternus, incoming CEO was in the room, but not on the call we didn't hear from him. And those shares now sinking over the course of this earnings call down more than 8%.
- [32:57]
Melissa Lee
All right, Mac, thank you. Mackenzie Sagalos with the guidance there. Disappointing in terms of revenue growth services about the same gross margin margins also disappointing. What do you think?
- [33:07]
Guy Adami
There's the first level of support that we talked about at the top of the show. So we'll see sort of the May highs. Ish. What do I think again it goes to the setup. Now this guidance isn't great and when valuation is a problem, the first thing people going to do on the back of guidance like this is sell first, ask questions later. I don't know if Dan's level comes into play over the next couple of weeks, but this is a critical support level right here.
- [33:26]
Melissa Lee
You know, it strikes me as calling out the current, the currency headwinds which is interesting because you never say on the ups like when it's in your favor, you're not like oh X this benefit from currency. Here we are, here we are.
- [33:37]
Karen Finerman
We were. You're not hedged.
- [33:38]
Kate Rooney
Yeah.
- [33:39]
Melissa Lee
Either way really been an issue before.
- [33:42]
Karen Finerman
Right. So yeah, that's not ideal for sure. I'll be interested to see how the analysts respond to the whole call. I think again, I just come again to the setup. The setup. The setup.
- [33:54]
Melissa Lee
Yeah.
- [33:54]
Dan Nathan
Yeah. I mean I don't down 8%. I mean I honestly don't think it's a big deal because of what you said. And if you're going into this quarter where you have to relaunch Siri, you have to to get, you know, consumers behind a higher priced phone with supposed AI capabilities that we have not seen yet. I think it makes sense to have moderated sort of anticipation right here because we know that we've been disappointed again and again over the last few years as far as what they are going to be able to roll out as it relates to AI. So to me, I think taking some of that froth out and having the thing banging around, you know, just above 300. I just want to be clear about the 275 I meant mentioned. I mean that's where the stock sold off after they announced that they were going to be raising prices.
- [34:35]
Melissa Lee
There are some comments from the call about memory prices as well. Tim Cook saying that Apple pays significantly more for memory in the third quarter than in the second quarter. They do expect costs to rise sequentially in the fourth quarter and they see memory prices rising past the fourth quarter. They talked about supply constraints already and Tim, if you piece of. I mean this just paints a picture of margins diminishing quarter after quarter after quarter and maybe a slowdown in the uptake of iPhones as the price hikes get bigger. If they don't those costs.
- [35:08]
Tim Seymour
Yeah, I don't know. And very possible. Although Apple's been very resilient on that Front in the past in terms of price increases. The 48% gross margin level is really what I felt it needed to hold for next quarter as we're all saying we know the margins coming down and the question is how long. I find it also just interesting, right why we're having this conversation and if anything wouldn't we be talking, you know, in constant currency kind of terms? Are they actually indicating that they have been on the wrong side of affects or are they indicating that it's just translated back into, into dollars? It's an issue. I don't care about that. I mean and I guess, I guess I don't care as much about if it was necessary hedging issues or dynamics translated back. But it is fascinating as we've said here. I don't it the backside why these numbers look that much different out the next quarter is puzzling.
- [36:07]
Guy Adami
The effects thing, I mean I think Karen actually might agree with me twice in one show which would be a miracle. But it's like when companies say no, go ahead. Hopefully you know there was one less day in the buying cycle. Weather had an impact. Okay. I mean that's the affecting. They should shelve that in my opinion.
- [36:22]
Melissa Lee
Okay, we'll keep you posted on any further headlines from this call. But the stock is down about 7%. Fast money's back into. Welcome back to Fast Money. The yen surging against the dollar. The Nikkei reporting that the bank of Japan intervened to support the currency ahead of its interest rate decision tonight. The yen hitting 40 year lows against a greenback yesterday. For more on the potential ripple effects, let's bring in CNBC contributor Peter Bookmark. He is a chief investment officer at one point BFG Wealth Partners. Peter, always good to see you especially in person. What do you expect to happen out of the meeting? I think it's not much is expected.
- [37:01]
Peter Bokvar
Well that's the interesting thing. So just another quiet earnings morning 930. I see the Yang go from 164 to 159 in a matter of seconds. And that clearly was intervention sort of confirmed at the end of the day. Ideally if you want to have that follow through that yen strength, you want to have the BOJ hike tonight or if they don't hike tonight, they tell you they're going to hike in September because right now the market is not pricing it in until December because you totally dilute and neuter this intervention if you don't follow up. So I think the markets could be surprised tonight. And having that yen strength, we don't know to the extent but how much is in the carry trade that needs to go unwound? Does the, does the BOJ hike control long end rates for the Japanese but also maybe for the rest of the world? So there are a lot of ripple effects here. If something happens what is the level
- [37:53]
Melissa Lee
of the yen that you get concerned at in terms of the carry trade?
- [37:57]
Peter Bokvar
That's a good question. I think it's two things. It's difficult to determine the extent at which it's still on after it reversed a couple of years ago and at what level you get that pain point. I would say anything below 150 which is still a far cry from where we are now but this would be a big thing if there is a follow through because it's the BOJ's lack of hiking is why it's gotten so weak to the point where Taka Ichi's approval ratings have fallen very sharply because people are very upset about the loss of purchasing purchasing power and the persistent inflation.
- [38:27]
Guy Adami
Peter was a Thursday in 2024 in July where dollar yen was 161 CPI print came out in about five minutes was trading 157 and by August few weeks later volatility was through the roof and our market was cascading lower on this yen unwind the yen carry trade unwind. It's a different set of circumstances but it's the same type of situation this time maybe worse given the state of their bond market. Thoughts on that?
- [38:53]
Peter Bokvar
Well that, that's going to be the most interesting thing. Is a hike going to control the long end or is it going to further raise global interest rates? Because what happens in Japan flows directly into Europe, flows directly into us. Japan was the architect of modern day interest rate repression and those days are far from over and it's rare to see a BOJ do what the market hasn't, hasn't priced in. So it would be quite the surprise But I think the intervention is telling you that well, well, you're not going to wait till December for a hike. It's coming much sooner.
- [39:28]
Dan Nathan
Peter worse seems pretty focused on getting inflation down to 2%. Right. We had a GDP print of 1 1/2% today. We have a lot of inflationary pressures that literally the Fed will not be able to control. As far as geopolitics and the like here, what's your sense for the US economy right now? Because again we've had a moving target as it relates to a lot of inflationary readings but the 10 year yield keeps, keeps Kind of moving higher, a little tick by tick.
- [39:54]
Peter Bokvar
So in 2025, growth was about 2% so far in the first half of this year, growth's about 2%, give or take, with a huge contribution obviously from constructing data centers and upper income spend. And so that's really the main pillars that the economy is resting on. We know that. And that's why these capex numbers are so hugely important, because it flows through to activity, whether it's the construction work of pouring cement or it's the person in the dark room with semiconductors. So now Kevin Wash's job is really complicated because trying to calibrate monetary policy around geopolitical events is extraordinarily difficult. And that's why I think he's sort of being patient and he wants to like hear what the market has to say without everyone staring at him. And I think that's, people are not used to that. You know, all day everyone's saying, oh, we want to hear more from the Fed. Well, that's, we've heard so much over the last 20 plus years. Now let's give the market a chance to give its own opinion on what they should do.
- [40:50]
Melissa Lee
Okay, so what did the market tell you?
- [40:53]
Peter Bokvar
So because rates are rising without a further acceleration in economic growth, because we're still stuck at two, tells me that debts and deficits now finally matter. And whether it's successive corporate debt issuance or it's US Debt issuance or it's in Japan and Europe that now matters. And that's why rates, in my opinion, on the long end are going up.
- [41:13]
Melissa Lee
Peter, good to see you. Thank you. Peter Bokvar. Tim, just quickly, you think the BOJ moves?
- [41:20]
Tim Seymour
I do, I do. It would be interesting to see them respond at this juncture because they've actually acted like they don't need to be pushed around. But I think weaker dollar is something to continue to think about. The trades around it and the trades that were hurt very badly by that dollar's move through 100 on the D.
- [41:42]
Melissa Lee
Coming up, much more after hours activity tonight. The details behind the moves in roadblocks, Reddit and more.
- [41:47]
Julia Boorstin
Stay tuned.
- [41:56]
Melissa Lee
Welcome back to Fast Money. Stocks rallying back after yesterday's sell off. The Dow adding 600 points. S&P gaining a percent and a half of the NASDAQ led the charge rising almost 3%. All three indices now positive for the week. Jersey Mike's ending the session 6% below its $23 IPO price. The stock made its debut on the New York Stock Exchange today, opening at $21 a share. Target meanwhile down nearly a percent. Wells Fargo out with a bullish call, upping its price target to 165 for 140. Analysts expecting a beat and raise when the company reports on August 19th, and they say the bull narrative has enough tailwinds for now. Shares up nearly 50% this year and Eli Lilly dropping four and a half percent. The company expanding its partnership with manufacturer Resilience investing $750 million to boost production of the devices used to inject GLP1 shots and some more after hours action here. Coinbase dropping after posting a wider than expected loss for the quarter. Roadblock sinking after bookings came in below expectations. Reddit also lower despite top and bottom line beats and revision modestly higher after topping at estimates coming up Refiner rally Valero painting a bullish picture for oil markets inside those results and what it could mean for the other big oil names on deck to report for Fast Money in two. Welcome back to Fast Money. Valero rallying about 3 1/2% today after the refiner posted a record quarterly profit more than five times year ago. Numbers results come a day before ExxonMobil and Chevron reports. The NBC's Pippa Stevens has more PIPA, but the refiners have really been benefiting from the situation here.
- [43:31]
Pippa Stevens
That's right, so the refiners have really been reaping the rewards of the very tight global fuel markets that we've seen in with Valero's adjusted EPS coming in at 12:54. That was up from 422 last quarter and 450% higher than a year ago. These results are prior to the sustained move higher we've seen in products and record crack spreads, meaning management said margins for the current quarter look even Stronger than for Q2, supported by low global inventory, limited excess refining capacity and strong fuel demand. Exxon and Chevron report tomorrow morning with Exxon having the larger refining footprint of the two, while Chevron is more upstream weighted. Now the majors are benefiting from higher commodity prices with analysts expecting both companies to at least double EPS year over year. But they also both have interests in the Middle east with impacts to production. Exxon has much more exposure to the region than Chevron strong so price outlook, capex and potential Venezuela ramp will be top of mind on the call now. For more on the quarter, be sure to catch Exxon CEO Darren woods on Squawk box tomorrow morning.
- [44:29]
Guy Adami
The network is fortunate to have PIPA covering the energy space. I'll just say that flat out agree number one and she does a great, amazing job. I'll say this quickly. Look, the crack spreads have been ridiculous. We just made an all time high but for the first time in like a month they're starting to turn a little bit lower. Something to watch. But, but I think the numbers out of Exxon and Conoco can be extraordinary. Tomorrow we'll see how the stocks react. But I think it's be very good quarters.
- [44:52]
Melissa Lee
Well, let's say the conflict ends in the Middle east tomorrow and there's normal traffic that the Strait of Hormuz and Baba Mandab. Do the refiners still stand to benefit? I mean are a lot of the factors still in place that, that are benefiting them right now?
- [45:05]
Pippa Stevens
So the overwhelming factor is just reduced refining capacity worldwide. Apart from Dangote in Nigeria. We haven't really seen new refiners come online and they always really fly under the radar. They just kind of hum away, continue to produce and they don't really want to be in the headlines. They don't really want these types of blowout quarters and they never really emphasize that because if they're posting record profits then typically consumers are the ones who are suffering. But it's just, you know, for so long it was seen as a sunset industry and we didn't have a new refiner. President Trump just announced one last year but the last one that came online in the US was 76, 1976. So it's been a very long time because it is such a heavy capex costs up front and with all the calls for peak oil there hasn't really been anyone who's been willing to take that on and build a new one.
- [45:46]
Melissa Lee
So yeah, I mean even beyond, even beyond the Middle east conflict, yeah, the conditions are still tight.
- [45:51]
Karen Finerman
I got to say kudos to Guy. He has been on the Valero trade for, I don't know, a couple hundred points.
- [45:57]
Guy Adami
Tim Seymour as well. I mean with Pippa's work we've been able to sort of figure out what's going on. I wouldn't be able to do it without that work. I'm just telling you Tim, I think
- [46:07]
Tim Seymour
Exxon over Chevron, if we're picking one of those two, I think Exxon historically hasn't been given enough credit for their downstream, their refining business and in fact has been punished for not growing enough in the top line. The Venezuelan news is fascinating and I think Chevron is set to, to, to gain from that in a way that the market hasn't priced in. In other words, I think we right away price that in for Chevron. I think there's more to go. I think you can own integrated around the world European integrated also look really fascinating.
- [46:35]
Melissa Lee
Pippa, thank you. Great to see you here. Stevens up next, final trades. Quick check on tech here. Apple is down by under 7%. Some interesting comments from the Amazon call though here the Amazon CEO saying that there won't be one model on top that you need to companies will be able to use all sorts of different models and that Amazon itself is exploring its own model to reduce costs. So that's sort of interesting there. Amazon shares up 9% time for the final trade. Let's go around the horn.
- [47:12]
Peter Bokvar
Tim Seymour, you mentioned that target upgrade.
- [47:15]
Tim Seymour
I think not only in Timbo but I think the merchandising growth part of the strategy and I think it's working. They report in three weeks.
- [47:22]
Karen Finerman
Karen yes actually we're just talking about refining the biggest holding in the xle.
- [47:30]
Dan Nathan
Yeah K Web I think Internet in China gotten too negative. I think you're having the China you have a bearish to bullish reversal in the K1.
- [47:42]
Guy Adami
You see that corner of Bristol Myers. Mel I know you did bmy breaking out.
- [47:47]
Melissa Lee
All right thank you for watching Fast Money. See you back here tomorrow. Five Mad Money starts right now.
- [47:53]
Julia Boorstin
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer when you partner with CDW, you get more from your devices with solutions purpose built for your toughest tasks. CDW experts are creating seamless workplaces using HP's suite of PCs, printers and peripherals so remote teams can work flexibly and designers can display their brilliance, all while keeping your customers data safe. Make amazing happen. Learn more@cdw.com HP.