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NEWS
Lots Of Effort For Little Movement

Bulls battled bears to claw back gains following a weak start to the trading day. The earnings picture remains mixed, with many stocks popping and dropping by double digits. Meanwhile, investors are eying tomorrow’s nonfarm payrolls data to see just how much the labor market’s cooling will impact the Fed’s rate path. 👀 

Today's issue covers Amazon’s post-guide slide, the top after-hours earnings movers, and other noteworthy pops and drops. 📰

Here’s the S&P 500 heatmap. 8 of 11 sectors closed green, with financials (+0.79%) leading and energy (-1.88%) lagging.

And here are the closing prices: 

EARNINGS
Amazon Slides On Revenue Guide 🙃 

The tech giant’s earnings and revenue topped expectations. Its closely-watched Amazon Web Services revenues of $28.8 billion met estimates, while its advertising segment’s $17.3 billion figure missed analysts by $0.1 billion.

The real issue was its revenue guidance of $151 to $155.5 billion, which fell short of the consensus estimate of $158.5 billion. 🔻 

Management noted this forecast anticipates an unusually large (1.5%), unfavorable impact from foreign exchange rates. However, analysts are focused on the implied 5% to 9% revenue growth of that first-quarter guidance, with the low end of that range marking the slowest growth rate in its history as a public company.

With revenue growth slowing, Amazon continues to focus on trimming expenses and growth in its higher-margin business units. Operating margins rose to 11.3% from 11% last quarter and 7.8% in the same quarter of 2023. 🔺 

Still, Amazon is investing heavily in artificial intelligence (AI) and other growth areas to reaccelerate revenues, guiding to $104 billion in CapEx during 2025. For context, Alphabet guided for $75 billion, showing that the biggest tech companies will invest hundreds of billions annually in this space.

Amazon shares are down roughly 4% after the bell, but Stocktwits sentiment remains in ‘extremely bullish’ territory. Additionally, a fresh poll on the site indicates that 61% of respondents view this earnings reaction as “overblown.” Time will tell if the bulls’ optimism pays off! 👍️ 

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