Nasdaq 100 Heavyweights Report: Apple Shines, Intel Stumbles, Snap and Amazon Miss Targets

Tech Giants’ Q2 Earnings: Mixed Results Signal Sector Volatility

Major technology companies reported their fiscal second-quarter earnings, revealing a complex landscape of challenges and opportunities in the sector.

Apple Surpasses Expectations

Apple’s fiscal Q3 earnings beat Wall Street estimates, with revenue rising 5% to $85.78 billion and EPS at $1.40. Despite a slight year-over-year decline, iPhone revenue outperformed expectations at $39.30 billion. The Services segment continued its robust growth, increasing 14% to $24.21 billion. CEO Tim Cook highlighted increased AI-related spending and strong growth in the iPad division, which saw a 24% year-over-year increase to $7.16 billion in sales.

Snap’s Guidance Disappoints

Snap’s shares plummeted over 20% in after-hours trading following Q3 guidance that fell short of analyst expectations. While Q2 earnings met projections at $0.02 per share, revenue slightly missed at $1.24 billion. The company cited a weaker brand advertising environment as a factor impacting sales. Monthly active users grew to 850 million, with Snapchat+ subscribers exceeding 11 million.

Amazon’s Advertising Growth Slows

Amazon’s online advertising business grew 20% year-over-year to $12.77 billion in Q2, slightly missing the $13 billion analyst estimate. Overall Q2 sales reached $147.98 billion, falling short of the expected $148.56 billion. This performance, while strong, indicates a potential slowdown in the rapidly growing advertising segment.

Intel Announces Major Restructuring

Intel reported disappointing Q2 results, with EPS at $0.02, well below the expected $0.10. Revenue declined 1% year-over-year to $12.83 billion. In response, the company announced a significant cost-reduction plan, including laying off over 15% of its workforce and suspending its dividend in fiscal Q4 2024. CEO Pat Gelsinger cited the need to align costs with a new operating model and fundamentally change operations.

Market Outlook

The tech sector’s mixed earnings results suggest a cautious short-term outlook. Apple’s strong performance, particularly in services and iPads, contrasts with challenges faced by Snap in advertising and Intel in chip manufacturing. Amazon’s ad business, while growing, shows signs of deceleration. These varied results highlight the sector’s volatility and the need for investors to closely monitor individual company performances and broader economic trends affecting the industry.

As the market digests these results, expect continued fluctuations in tech stocks. The sector’s ability to navigate challenges such as advertising headwinds and manufacturing issues will be crucial in determining its trajectory in the coming quarters.