WEBVTT - Instant Reaction: Apple Earnings

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>You're listening to Bloomberg Business Week with krol Messer and

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<v Speaker 2>Tim Stenebek on Bloomberg Radio and Television. All right here,

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<v Speaker 2>the Apple numbers third quarter revenue coming in above estimates

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<v Speaker 2>at eighty five point seven eight billion dollars. Estimates were

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<v Speaker 2>for eighty four point four to six billion. Third quarter

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<v Speaker 2>iPhone revenue coming in above estimates at thirty nine point

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<v Speaker 2>three billion. Estimates are for thirty eight point nine to

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<v Speaker 2>five billion third quarter Great Greater China revenue coming in

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<v Speaker 2>below estimates. That one certainly watched very closely fourteen point

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<v Speaker 2>seven three billion dollars. But we did see third quarter

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<v Speaker 2>services revenue come in above estimates at twenty four point

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<v Speaker 2>twenty one billion dollars. Shares of Apple bouncing around in

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<v Speaker 2>the after hours. They were at first hire when these

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<v Speaker 2>numbers first cross, now down about one percent.

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<v Speaker 1>Yeah, they are bouncing kind of flat, if you will, right,

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<v Speaker 1>They're bouncing around here. So we're trying to make sense

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<v Speaker 1>of it. So let's get to it with our co

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<v Speaker 1>host of Bloomberg Technology on Bloomberg Television, Ed La La.

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<v Speaker 1>Here in our Bloomberg Interactive Broker studio up, Big Week,

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<v Speaker 1>Big Day ed first Blush, What are you taking away from.

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<v Speaker 3>THEE I kind of alluded to this in the preview

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<v Speaker 3>in the top Live blog. Great beat for iPhone revenue

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<v Speaker 3>in the quarter, which is interesting because we're pre sixteen.

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<v Speaker 2>Yeah, like, why are people buying phones right now? They

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<v Speaker 2>should be waiting right.

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<v Speaker 3>There was a lot of waiting in markets like China

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<v Speaker 3>that they were buying the fifteen generation with the intention

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<v Speaker 3>of holding onto it. And then I go to the

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<v Speaker 3>grater China revenue missing estimates and the third party data.

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<v Speaker 3>Third party data is not always right, but he did

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<v Speaker 3>tell us that Apple was slipping in greater China.

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<v Speaker 2>Is the IDC data, the IDC data.

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<v Speaker 3>There's counterpoint research, there's loads, But my point is that

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<v Speaker 3>there was worried they would They did really face domestic

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<v Speaker 3>pressure on the handset market there, and you always look

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<v Speaker 3>to China as a point of focus. So you have

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<v Speaker 3>to read between the lines because on the earnings call,

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<v Speaker 3>CFO Lookame Street often addresses that issue head on how

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<v Speaker 3>they did in the market in China, specifically.

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<v Speaker 2>Erning's for share, earnings for share coming in one dollars

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<v Speaker 2>and forty cents per share. That beat estimates of one

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<v Speaker 2>dollar and thirty five cents, So a beat.

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<v Speaker 4>There as well.

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<v Speaker 1>Yeah, I don't know, you know, I'm looking at kind

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<v Speaker 1>of our right through buyer mark Erman, you know, marking

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<v Speaker 1>a return to revenue growth last quarter, he says, topping

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<v Speaker 1>analyst estimates, indicating that upgraded iPads and a strong services

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<v Speaker 1>business helped make up for some of those headwinds in China.

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<v Speaker 1>So sales were up five percent to eighty five point

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<v Speaker 1>eight billion in that fiscal third quarter, the iPhone maker, saying,

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<v Speaker 1>putting out that statement, analyst had predicted eighty four point

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<v Speaker 1>five So that's a beat. Three months ago, the CFO

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<v Speaker 1>had said the company would grow by a percentage in

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<v Speaker 1>the low single digits during the period. So some comparisons there. Again,

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<v Speaker 1>just quick check on what Apple's doing here in the aftermarket,

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<v Speaker 1>pulling it up here on my Bloomberg and because we

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<v Speaker 1>said it's been bouncing around here, it's now up about

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<v Speaker 1>two percent here in the aftermarket. Keep in mind, Apples

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<v Speaker 1>up about thirteen percent so far in twenty twenty four.

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<v Speaker 2>Okay, overall revenue beat, iPhone revenue beat, MAC revenue beat,

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<v Speaker 2>iPad revenue beat, wearables, homes and accessories also beat, so

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<v Speaker 2>looking pretty good. There was that miss on China. Of course,

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<v Speaker 2>Tim Cook saying in a statement that Apple's reporting a

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<v Speaker 2>new June quarter revenue record of eighty five point eight billion,

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<v Speaker 2>up five percent from a year ago. Talking about announcing

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<v Speaker 2>software platforms at WWDC, Apple Intelligence ed, Apple Intelligence, what's

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<v Speaker 2>the question that investors are going to be looking to

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<v Speaker 2>the answer for the fun the call.

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<v Speaker 3>Actually important to us what investors are looking for a

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<v Speaker 3>lot of people looked at what the Apple Intelligence was

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<v Speaker 3>and said, actually, it's fantastic. They understand the logic that

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<v Speaker 3>what Apple wants to do is make the things already

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<v Speaker 3>on iOS better. That's based on the conversations I've had

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<v Speaker 3>with investors. The thing is that they had already accepted

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<v Speaker 3>to a large extent, because it's priced into the stock

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<v Speaker 3>that it's not ready for the primetime. It's not like here,

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<v Speaker 3>and so I do think that it's going to be

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<v Speaker 3>interesting to get some very specific detail from the call

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<v Speaker 3>on geographic rollout, generation of iPhone roll out.

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<v Speaker 4>Mark German has reported on all of this right.

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<v Speaker 3>The delay by a few weeks post iOS eighteen generation

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<v Speaker 3>software update, But that's what investors are looking at. They're

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<v Speaker 3>trying to do the math on what prompts and individuals

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<v Speaker 3>buy a new iPhone or up their subscription to Apple services,

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<v Speaker 3>because how compelling that product is.

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<v Speaker 4>That's it.

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<v Speaker 1>Yeah, exactly. Well, like you know, we said, I'm going

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<v Speaker 1>to buy a new phone. I know, postling he's going

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<v Speaker 1>to buy a new phone.

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<v Speaker 5>I know.

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<v Speaker 1>I look at the end of the year all the

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<v Speaker 1>money that goes out to Apple and all the various

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<v Speaker 1>services and cloud storage and so on and so far.

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<v Speaker 2>Well, here the CFO taking notes right now, Carol. Two

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<v Speaker 2>new phones will be sold in the fourth quarter or

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<v Speaker 2>third quarter of the year.

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<v Speaker 1>Now, it's kind of interesting, right exactly. And you know,

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<v Speaker 1>I'm looking at our live blog too. There isn't a

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<v Speaker 1>single mention of the Vision Pro and Apple's earnings release.

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<v Speaker 1>The thirty five hundred dollar our headset is Apple's first

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<v Speaker 1>major new product in nearly a decade. There's not a

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<v Speaker 1>ton left in the cupboard in terms of innovation with

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<v Speaker 1>the company canceling itself driving card Viebruary. That's coming from

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<v Speaker 1>our Mark Garment.

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<v Speaker 2>What's interesting is that there's a post from Ed Lovelow

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<v Speaker 2>in the live blog.

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<v Speaker 1>How did he do that?

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<v Speaker 2>While he's here in our studio with us.

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<v Speaker 4>Yeah, I mean the fingers move fast to and the

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<v Speaker 4>mouth sometimes.

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<v Speaker 1>How are you thinking about We've been talking with you

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<v Speaker 1>throughout the week about the tech reporting set, you know,

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<v Speaker 1>season and the big megacap tech companies that have reported.

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<v Speaker 1>How are you thinking about them? I don't know that

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<v Speaker 1>there's one trend line to do.

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<v Speaker 3>There is a trend line excluding Apple, which is capital expenditures.

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<v Speaker 3>And what's so interesting is, like I was talking a

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<v Speaker 3>bit about this in the blog earlier, Apple's capex is

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<v Speaker 3>always low. A lot of investors always bemoaned it's cash balance.

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<v Speaker 3>You know, it's so ginormous, right. I look at the

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<v Speaker 3>release and I see Apple's board of directors declares a

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<v Speaker 3>cash dividends of twenty five cents per share. There's one

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<v Speaker 3>really important thing when you cover a stock like this,

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<v Speaker 3>you need to remind yourself how widely held is the

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<v Speaker 3>stock around the world.

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<v Speaker 4>Yes, there are many.

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<v Speaker 3>Institutional investors that hold it in volume. One of them

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<v Speaker 3>was on my show today, Denny Fish of Janis. Think

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<v Speaker 3>all the individuals that buy Apple stock because they think

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<v Speaker 3>it's prestigious. I always find that fascinating. So little divvy

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<v Speaker 3>goes a long way.

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<v Speaker 1>It does go a long way. Hey, listen, we've been

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<v Speaker 1>reading his comments along with Ed's on the blog. We

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<v Speaker 1>read a story on Apple. Let's bring a bit. Mark

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<v Speaker 1>German is Bloomberg News chief technology correspondent. We call them

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<v Speaker 1>our Apple guru joining us right now. Coming off of earnings,

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<v Speaker 1>Mark walk us through what you think the Bloomberg audience

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<v Speaker 1>needs to know about this release.

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<v Speaker 5>Yeah, the through line here is that Apple be across

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<v Speaker 5>the board in every product category iPhone, iPad, wearables, home

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<v Speaker 5>and accessories, mac and services. So nice beats across the board.

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<v Speaker 5>There still the iPhone one percent year of a year decline,

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<v Speaker 5>not terrible, especially given that we are going into the

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<v Speaker 5>new iPhone season. The other thing to note though is

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<v Speaker 5>Greater China. Greater China's down about six percent. This came

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<v Speaker 5>in both below expectations and obviously is an annual decline.

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<v Speaker 5>That's something that I think a lot of analysts and

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<v Speaker 5>investors are going to want to take a look at.

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<v Speaker 5>Why is China's performance continuing to decline. Apple does say

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<v Speaker 5>though that they still see this as an improvement over

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<v Speaker 5>the China situation in the first half of the year,

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<v Speaker 5>but still this is not great. Looking ahead, we're going

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<v Speaker 5>to want to know any color that Apple may have

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<v Speaker 5>on its call about how they're thinking they're going to

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<v Speaker 5>do in the current quarter. The fourth quarter. The new

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<v Speaker 5>iPhone line, the sixteen, will go on sale towards the

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<v Speaker 5>very end of Q four, towards the end of September,

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<v Speaker 5>so that's going to be a significant moment obviously contribute

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<v Speaker 5>quite significantly to the bottom line in the current period,

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<v Speaker 5>which obviously we're looking ahead at that. Another thing I

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<v Speaker 5>want to call out is the iPad. iPad grew twenty

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<v Speaker 5>four percent, not entirely a surprise. I'm surprised that Wall

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<v Speaker 5>Street estimated so low on the iPad. Let's not forget

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<v Speaker 5>that Apple hadn't released a new version of the iPad

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<v Speaker 5>for about a year and a half and then released

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<v Speaker 5>two major versions of the new iPad in May, along

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<v Speaker 5>with major updates to their accessories. So no surprise there.

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<v Speaker 2>Mark. They're not giving guidance anymore for the current quarter,

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<v Speaker 2>But what do you expect them in terms of color

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<v Speaker 2>to give about how sales are going to be in

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<v Speaker 2>the current quarter. And then you know, obviously they're not

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<v Speaker 2>going to talk about new iPhones that haven't been announced yet,

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<v Speaker 2>but what kind of tidbits could we get.

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<v Speaker 5>Well, it's anyone's guess what they're going to say. I'm

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<v Speaker 5>not going to speculate. It really can go, you know,

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<v Speaker 5>one way or another.

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<v Speaker 2>They could.

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<v Speaker 5>They're probably going to give some sort of indicator of

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<v Speaker 5>how the iPhone is going to do in the fourth quarter,

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<v Speaker 5>and there's really three options they're going to say. You know,

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<v Speaker 5>let me take a step back. There's really two options

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<v Speaker 5>of what they're going to say on the skull. Either

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<v Speaker 5>going to say that the iPhone performance for Q four

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<v Speaker 5>is going to be in line with iPhone performance in

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<v Speaker 5>Q four last year, or they're going to say iPhone

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<v Speaker 5>performance will accelerate in Q four in comparison to last year.

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<v Speaker 5>If they don't say either of those things, I think

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<v Speaker 5>it's a pretty good indicator that they think it's probably

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<v Speaker 5>going to decline a little bit, or they're not entirely sure.

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<v Speaker 5>They're probably not going to come out and say that

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<v Speaker 5>in the iPhone launch cord or the iPhone is going

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<v Speaker 5>to do more poorly than it did last year.

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<v Speaker 3>Hey, Mark, it's unbelievable that you and I are speaking

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<v Speaker 3>on Bloomberg Radio and simultaneously blogging live on the Bloomberg terminal.

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<v Speaker 3>There are going to be terminals subscribers around the world

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<v Speaker 3>that just understand what's happening. One thing I'd love to

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<v Speaker 3>do with you, and I know it's hard, is the

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<v Speaker 3>math on China. You know you get that three Q

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<v Speaker 3>iPhone B and then the weakness in Greater China.

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<v Speaker 4>Is it likely to be.

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<v Speaker 3>Products specific in terms of iPhone or where does Apple

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<v Speaker 3>tend to point to us when they have a specific

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<v Speaker 3>geographic weakness.

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<v Speaker 5>Well, the thing is is Apple never really gets into

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<v Speaker 5>geographic weakness on a product ed product basis. What they

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<v Speaker 5>have said over the past several quarters as people have

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<v Speaker 5>asked about the declines in China is that these declines

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<v Speaker 5>are not due to the iPhone. Now, they're not saying

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<v Speaker 5>what those other products are that are contributing to the declines.

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<v Speaker 5>Whether it's the iPad, whether it's the Math, whether it's wearables.

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<v Speaker 5>They're not sharing that information, So who knows what they're

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<v Speaker 5>going to tell us this time. I believe personally that

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<v Speaker 5>it does have to do with the iPhone and some

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<v Speaker 5>of the softness we're seeing there. A lot of people

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<v Speaker 5>are buying Huawei Vivo Opah, the local phonemakers instead of

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<v Speaker 5>the iPhone. At this point, so I would say this

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<v Speaker 5>has to do with the iPhone this quarter. Whether or

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<v Speaker 5>not Apple's going to come out and say that that's

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<v Speaker 5>another story.

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<v Speaker 1>We're talking with Mark German, We're talking with Ed Ludlow.

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<v Speaker 1>Apple third quarter iPhone revenue that's a beat. Third quarter

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<v Speaker 1>Greater China revenue that was a miss. Third quarter revenue overall,

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<v Speaker 1>that was a beat. Mark in terms of AI and

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<v Speaker 1>Apple Intelligence, which they showed off a lot at the

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<v Speaker 1>Developers conference in June. What would be a question that

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<v Speaker 1>you'd want to know about that. I know they're still developing,

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<v Speaker 1>they're working on it, but what do you want to know?

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<v Speaker 5>I want to know if they think it's going to

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<v Speaker 5>drive sales, because I can tell you after using it

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<v Speaker 5>for the past few days or so, I don't think

0:10:30.679 --> 0:10:33.080
<v Speaker 5>there's any reason why anyone should buy a new iPhone

0:10:33.280 --> 0:10:36.320
<v Speaker 5>based solely on the new features that are currently available

0:10:36.559 --> 0:10:38.640
<v Speaker 5>or will be available from Apple Intelligence at the get go.

0:10:39.559 --> 0:10:42.240
<v Speaker 5>I happen to think that Apple Intelligence is really a

0:10:42.440 --> 0:10:45.360
<v Speaker 5>late twenty twenty five story, and maybe next year is

0:10:45.360 --> 0:10:47.120
<v Speaker 5>one of that's going to drive sales, but the current

0:10:47.160 --> 0:10:51.480
<v Speaker 5>incarnation it shouldn't be a sales driver. Quite frankly, based

0:10:51.520 --> 0:10:54.680
<v Speaker 5>on their marketing and some some ridiculous comments I've seen

0:10:54.720 --> 0:10:57.840
<v Speaker 5>from Wall Street analysts and others who cover Apple. Maybe

0:10:57.880 --> 0:10:59.839
<v Speaker 5>they'll still grow based on it. Some people will be

0:10:59.840 --> 0:11:02.559
<v Speaker 5>just appointed if they buy the iPhone based on Apple intelligence,

0:11:02.640 --> 0:11:03.640
<v Speaker 5>at least from the beginning.

0:11:04.160 --> 0:11:05.800
<v Speaker 2>Ed come on back in here to remind us about

0:11:05.840 --> 0:11:07.920
<v Speaker 2>capex and why CAPEX should be looked at differently with

0:11:08.000 --> 0:11:11.320
<v Speaker 2>Apple than with that Microsoft Alphabet, Amazon and Meta just.

0:11:11.360 --> 0:11:14.160
<v Speaker 3>Because historically capital expenditures for Apple are just kind of

0:11:14.200 --> 0:11:16.520
<v Speaker 3>a non event. They're not at the ten percentage point

0:11:16.559 --> 0:11:20.040
<v Speaker 3>to twenty percentage point range that the hyperscalers have, particularly

0:11:20.080 --> 0:11:22.600
<v Speaker 3>in the current environment. Right, It's just not a part

0:11:22.679 --> 0:11:25.280
<v Speaker 3>of their story. And Mark always correct me if I'm wrong.

0:11:25.320 --> 0:11:27.880
<v Speaker 3>But what I find so interesting about Apple strategy is

0:11:27.960 --> 0:11:29.720
<v Speaker 3>the cost of where they're trying to get to, which

0:11:29.800 --> 0:11:30.800
<v Speaker 3>is Apple intelligence.

0:11:31.080 --> 0:11:32.400
<v Speaker 4>Think about the partnerships, right.

0:11:32.720 --> 0:11:35.880
<v Speaker 3>You know, Apple is not as hyper focused on the

0:11:35.960 --> 0:11:38.120
<v Speaker 3>building of its own large language model. It has some

0:11:38.240 --> 0:11:41.160
<v Speaker 3>activity there, but it partners with open ai, so open

0:11:41.200 --> 0:11:43.680
<v Speaker 3>ai takes the R and D cost. How does Apple

0:11:44.000 --> 0:11:48.000
<v Speaker 3>facilitate its cloud It relies on GCP Google Cloud platform,

0:11:48.320 --> 0:11:50.079
<v Speaker 3>you know, and Google does its own R and D

0:11:50.120 --> 0:11:52.760
<v Speaker 3>investment on the silicon side, and I find that so interesting,

0:11:52.840 --> 0:11:54.760
<v Speaker 3>And you know that's why I'm a tongue in you know,

0:11:54.960 --> 0:11:56.480
<v Speaker 3>you guys know what I'm like, tongue in cheek. But

0:11:56.600 --> 0:11:59.439
<v Speaker 3>it's why I post in the blog about the divvy

0:11:59.760 --> 0:12:03.720
<v Speaker 3>and about cash generation and the growing balance sheet because

0:12:03.880 --> 0:12:06.040
<v Speaker 3>investors always say, I wonder what they'll do with that

0:12:06.120 --> 0:12:06.480
<v Speaker 3>one day.

0:12:06.559 --> 0:12:07.199
<v Speaker 4>Do you know what I mean?

0:12:07.440 --> 0:12:09.440
<v Speaker 1>Like, well, listen, they say, during the quarter of our

0:12:09.440 --> 0:12:13.080
<v Speaker 1>record business performance generated EPs growth of eleven percent, nearly

0:12:13.160 --> 0:12:16.000
<v Speaker 1>twenty nine billion in operating cash flow, allowing us to

0:12:16.000 --> 0:12:19.040
<v Speaker 1>return over thirty two billion to shareholders. I mean, I

0:12:19.120 --> 0:12:21.040
<v Speaker 1>always think about this mark whenever we talk with you,

0:12:21.160 --> 0:12:22.640
<v Speaker 1>and whenever we talk with that I mean, just the

0:12:23.080 --> 0:12:26.920
<v Speaker 1>law of large numbers when it comes to Apple specifically,

0:12:27.800 --> 0:12:31.440
<v Speaker 1>as you continue to look at this this report and release,

0:12:31.960 --> 0:12:33.880
<v Speaker 1>I don't know what should we leave our investors with.

0:12:34.040 --> 0:12:35.560
<v Speaker 1>What do you think that they should be thinking at

0:12:35.600 --> 0:12:37.000
<v Speaker 1>top of mind when it comes to Apple.

0:12:38.480 --> 0:12:42.720
<v Speaker 5>I'll simplify it for you. From a financial standpoint, everything

0:12:42.880 --> 0:12:46.319
<v Speaker 5>is just fine, right, a little bit of concern in China.

0:12:46.840 --> 0:12:50.439
<v Speaker 5>But my concerns about Apple aren't the financials today. It's

0:12:50.520 --> 0:12:54.240
<v Speaker 5>that this company is not pushing out products at the

0:12:54.320 --> 0:12:57.480
<v Speaker 5>pace that they used to. I'm simply not seeing that

0:12:57.720 --> 0:13:00.880
<v Speaker 5>game changing innovation that we used to see. I'm simply

0:13:01.000 --> 0:13:03.959
<v Speaker 5>not seeing them leap frog ahead of the competition. I'm

0:13:04.000 --> 0:13:06.240
<v Speaker 5>seeing a lot of response to the competition. Like with

0:13:06.320 --> 0:13:08.920
<v Speaker 5>Apple Intelligence, I'm seeing something that's not as good as

0:13:08.960 --> 0:13:13.360
<v Speaker 5>the competition with Apple Intelligence. I'm seeing them add features

0:13:13.400 --> 0:13:16.120
<v Speaker 5>to iOS that Android has had for a number of years.

0:13:16.920 --> 0:13:20.200
<v Speaker 5>I'm seeing really impressive new technology like the Vision Pro

0:13:20.720 --> 0:13:23.760
<v Speaker 5>that's not a product, it's more of a prototype or

0:13:23.880 --> 0:13:24.520
<v Speaker 5>developer kit.

0:13:24.679 --> 0:13:24.920
<v Speaker 1>Yeah.

0:13:25.160 --> 0:13:29.600
<v Speaker 5>So I'm concerned about Apple products right now, and obviously

0:13:30.080 --> 0:13:32.480
<v Speaker 5>products hardware surprives this company.

0:13:33.360 --> 0:13:35.640
<v Speaker 2>Yeah, so long term Mark, because you have such a

0:13:35.679 --> 0:13:37.920
<v Speaker 2>good view into the pipeline, much to the chagrin of Apple,

0:13:37.960 --> 0:13:42.000
<v Speaker 2>I imagine no car coming Vision Pro, as you mentioned

0:13:42.040 --> 0:13:44.880
<v Speaker 2>the live blog, not even mentioned in this report.

0:13:44.960 --> 0:13:46.839
<v Speaker 5>Is that right? That's right?

0:13:47.040 --> 0:13:50.760
<v Speaker 2>So what is the big picture for the pipeline over

0:13:50.800 --> 0:13:51.600
<v Speaker 2>the next five years.

0:13:53.280 --> 0:13:56.520
<v Speaker 5>I think we're probably two or three years away from

0:13:58.320 --> 0:14:03.080
<v Speaker 5>a bigger new product push, whether that's augmented reality glasses,

0:14:03.760 --> 0:14:08.880
<v Speaker 5>foldable phones, new types of touchscreen devices, new home devices,

0:14:09.000 --> 0:14:11.600
<v Speaker 5>new macs. But I'm not seeing anything in the next

0:14:11.679 --> 0:14:15.679
<v Speaker 5>two to three years that you know is going to

0:14:17.000 --> 0:14:19.920
<v Speaker 5>be a game changer, right, division pro technology is a

0:14:19.960 --> 0:14:22.760
<v Speaker 5>game changer. Nobody wants it. It's too heavy, it's too expensive,

0:14:23.080 --> 0:14:23.840
<v Speaker 5>there's no content.

0:14:24.400 --> 0:14:26.040
<v Speaker 1>All Right, we're gonna leave it there. Listen your gem.

0:14:26.120 --> 0:14:28.560
<v Speaker 1>You have so much going on and so appreciate it. Markerman,

0:14:28.560 --> 0:14:31.400
<v Speaker 1>he's Bloomberg News chief technology correspondent joining us out there

0:14:31.480 --> 0:14:33.280
<v Speaker 1>from the West Coast. We're not gonna let Ed lad

0:14:33.320 --> 0:14:36.120
<v Speaker 1>logo yet because Ed, you know, we lean on you

0:14:36.240 --> 0:14:38.120
<v Speaker 1>like we lean on Mark. I feel like we've been

0:14:38.160 --> 0:14:39.520
<v Speaker 1>going through a lot of the tech news.

0:14:39.720 --> 0:14:41.080
<v Speaker 2>That's why we flew him out to New York this

0:14:41.200 --> 0:14:42.480
<v Speaker 2>week on the.

0:14:42.720 --> 0:14:47.080
<v Speaker 1>On the Bloomberg Jet, the good and the bad of

0:14:47.200 --> 0:14:49.160
<v Speaker 1>the big tech that have been reporting.

0:14:49.400 --> 0:14:51.200
<v Speaker 4>Yeah, that's a really, really smart question.

0:14:51.480 --> 0:14:53.920
<v Speaker 3>So there's one thing that I learned very quickly, which

0:14:54.000 --> 0:14:56.600
<v Speaker 3>was Microsoft, do not miss Wall Street estimates.

0:14:56.920 --> 0:14:57.880
<v Speaker 4>That won't go well for you.

0:14:58.000 --> 0:15:00.440
<v Speaker 3>And I think that it's because we've just about the

0:15:00.520 --> 0:15:03.960
<v Speaker 3>money machine, but now the investors are really starting to

0:15:04.000 --> 0:15:06.000
<v Speaker 3>do the math on it. You know, the Capex number

0:15:06.080 --> 0:15:08.240
<v Speaker 3>was everything. I think I even Heardy and King on

0:15:08.280 --> 0:15:10.920
<v Speaker 3>the phone to you just say couples of expenditures and

0:15:11.040 --> 0:15:15.360
<v Speaker 3>then hang up. It's because with that you can basically

0:15:16.160 --> 0:15:20.280
<v Speaker 3>do the math on the timing of sales growth from

0:15:20.320 --> 0:15:23.320
<v Speaker 3>bottom line growth from artificial intelligence, and then you can

0:15:23.400 --> 0:15:26.680
<v Speaker 3>sort of extrapolay it out further afield. That's why Amazon's

0:15:26.680 --> 0:15:29.080
<v Speaker 3>so interesting. Until the call, we're not really going to

0:15:29.160 --> 0:15:31.160
<v Speaker 3>know if it's a capex issue for AI or if

0:15:31.160 --> 0:15:32.880
<v Speaker 3>their retail business wasn't very good.

0:15:34.520 --> 0:15:36.320
<v Speaker 1>It's a really great point. Yeah, right, Like you need

0:15:36.400 --> 0:15:37.720
<v Speaker 1>to know these details.

0:15:37.800 --> 0:15:40.440
<v Speaker 2>Amazon in the after hours. Now as we do wait

0:15:40.520 --> 0:15:43.280
<v Speaker 2>for details from that call. Down five point seven percent.

0:15:44.240 --> 0:15:45.520
<v Speaker 1>I'm like, do we want to they'll let them go?

0:15:45.560 --> 0:15:46.000
<v Speaker 1>I guess we need to.

0:15:46.160 --> 0:15:47.840
<v Speaker 2>Yeah, we gotta let them go because we got another

0:15:47.880 --> 0:15:48.360
<v Speaker 2>interview to do.

0:15:48.840 --> 0:15:48.960
<v Speaker 5>Well.

0:15:49.040 --> 0:15:51.440
<v Speaker 3>I just got a day's point. So on the CFO call,

0:15:51.480 --> 0:15:54.760
<v Speaker 3>there's a media call that's just started with Amazon. Amazon

0:15:54.840 --> 0:15:58.560
<v Speaker 3>spent thirty five billion dollars on capital expenditures in the

0:15:58.760 --> 0:16:01.680
<v Speaker 3>first half of twenty twenty four, So we don't have

0:16:02.240 --> 0:16:04.680
<v Speaker 3>a number for the quarter, but it was thirty five

0:16:04.760 --> 0:16:07.080
<v Speaker 3>billion in one h and it will be more than

0:16:07.160 --> 0:16:10.680
<v Speaker 3>that in two h which is largely due to investments.

0:16:10.360 --> 0:16:13.160
<v Speaker 4>In AWS infrastructure. So I think I answered that question.

0:16:13.440 --> 0:16:15.960
<v Speaker 1>We did answer it. Astin answered all right, Kit, I listen.

0:16:16.080 --> 0:16:17.760
<v Speaker 1>Thank you so much, So great to have him here

0:16:17.800 --> 0:16:19.840
<v Speaker 1>on the East Coast this week, the co host of

0:16:19.840 --> 0:16:23.040
<v Speaker 1>Bloomberg Technology on Bloomberg TV. Catch them eleven am Wall

0:16:23.040 --> 0:16:26.200
<v Speaker 1>Street Time, Monday through Friday on Bloomberg Television. Of course,

0:16:26.200 --> 0:16:27.440
<v Speaker 1>the one and only Edla Love