🐻 Amazon’s bearish forecast

Primed for a slowdown… Yesterday Amazon became the latest techie to deliver uninspiring third-quarter earnings. The ecomm staple missed both sales and profit expectations, but what disappointed investors most was a weak forecast for this quarter. After the bell, Amazon shares tumbled by as much as 20%.

• The bull(ish): Amazon’s sales returned to double-digit growth, and it posted its first profit of the year (though it was 9% lower than last year).
• The bearish: Amazon expects this holiday quarter’s sales to be up just 2% to 8% from last year — a major growth slowdown from previous quarters.
• The bear: Investors sent Amazon shares plunging, marking the second time this year the stock has suffered a double-digit-percentage selloff.

Quote of the quarter… from the mouth of Amazon CEO Andy Jassy to investors’ ears: “There is obviously a lot happening in the macroeconomic environment.” Amazon’s much-lower-than-expected Q4 sales guidance includes a big hit from the strong US dollar.

• Because the USD has appreciated relative to other currencies, foreign earnings are now worth less in USD. That’s a problem, because S&P tech giants earn about 60% of their revenue abroad.
• Amazon’s international sales fell 5% year over year, but they would’ve been up 12% if it weren’t for changes in foreign exchange rates.

Spend 100 days in a circle, win $500K… typical MrBeast. YouTube star MrBeast has 107M+ subscribers thanks to viral videos featuring elaborate stunts and giveaways (his “Squid Game” reenactment has nearly 300M views). Now he’s said to be looking for $150M in fresh funding to expand his Beast-based businesses:

• In January: MrBeast launched his snacks biz (dubbed: Feastables), which has already made $10M+ in sales.
• Last month: The first MrBeast Burger restaurant opening attracted 10K fans, and the burger brand is forecast to earn millions this year.
• Beasty billions: The desired funding round would value MrBeast’s empire at $1.5B — the largest valuation for an influencer-led biz.

Venture capital → creator capital... Investors are racing to put their money in social-media startups as overnight sensations emerge from platforms like TikTok and YouTube. VC funding for creator startups has already topped $637M this year, on pace to beat last year’s record. Now some of the biggest social stars want in:

• TikTok big shot Charli D’Amelio and her family launched a venture-capital fund called 444 Capital in March.
• Last year a venture firm invested $15M in startup Pietra, which helps influencers launch their own product lines (think: skincare).

• 🤖 Techy… Apple stepped in it (it = NFT community). It seemingly embraced NFTs by saying apps could list and sell the tokens. The catch: purchases have to go through the App Store (read: Apple wants its 30% cut).
• 🪙 Coins… Sam Bankman-Fried said his crypto exchange, FTX, would "very likely" launch a stablecoin. The exchange is the world's third largest, and would likely be well positioned to compete with stablecoin giants Tether and Circle.
• 📜 Policy… Bring on the rules: a recent survey found that slightly over half of US voters want greater crypto regulation. Stability and fraud-fighting were called out as the desired top priorities of any future regs.

• Shiny: Apple reported expectation-beating record sales, but the news wasn't all good: iPhone and services revenue came in low. Inflation may’ve played a role in tempering scrolly-tappy sales.
• Faceplant: Meta said it's laying off staff and slowing hiring as it looks to cut costs. Meanwhile, the VR-loving biz is set to invest $15B in the metaverse this year — with no immediate plans to cut those costs.
• $hell: Energy behemoths Shell and Total reported monster earnings (almost $10B each). Oil and gas prices boosted by Russia’s war on Ukraine helped push their profits to more than double what they were last year.
• Treat: Hershey’s stock is up over 20% this year, while the S&P 500 is down 20%. One reason: the chocolate icon grew investor appetite by buying brands like Pirate's Booty (salty + sweet = winning combo).
• Happy: McDonald's beat earnings expectations as customers kept McOrdering. Execs credited price hikes and higher-income diners opting for McD's instead of full-service spots.

• Earnings expected from: Exxon, Chevron, AbbVie, NextEra Energy, and Colgate

Authors of this Snacks own: shares of Amazon, Apple, Exxon, and Google

ID: 2562365