| Here’s your daily business briefing. - 📱 Apple's $110B buyback despite 10% iPhone drop
- 🔍 Deep Dive: Amazon's $150B AI data centers
- 🎰 Dave and Buster’s dive into betting
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Apple's ($AAPL) stock rose by 7% in after-hours trading following the release of better-than-expected fiscal second-quarter earnings, which included a record $110B share repurchase authorization. Despite a 4% decline in overall sales and a 10% drop in iPhone sales, Apple exceeded estimates with earnings per share of $1.53 and revenue of $90.75B. More: - Mac revenue hit $7.5B, exceeding the predicted $6.86B, while iPhone revenue reached $45.96B, a little less than the projected $46.00B.
- Revenue from other products decreased by 10% to $7.9B, while iPad revenue fell by 17% to $5.6B.
- Positively impacted by subscription services and licensing agreements, the Services division had a 14.2% increase in sales to $23.9B.
- Sales in Greater China dipped 8% to $16.37B, outperforming expectations and suggesting resilience against domestic rivals.
- The Cupertino-based firm revealed that it will showcase new projects and products at the Worldwide Developers Conference and an iPad product event.
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| 2 | | Amazon.com Inc. ($AMZN) intends to invest around $150B in data centers over the next 15 years to address rising demand for cloud computing and AI applications. 
What the numbers say: Amazon's real estate holdings, including data centers and office space, have doubled since 2020, underscoring its commitment to leading the cloud services market. Despite a slight decrease in data center spending in 2023, Amazon's planned investments surpass those of Microsoft and Google, aligning with its strategy to enhance infrastructure for AI projects and digital services. Relevance: Amazon's robust investment in data centers reflects the vital role of cloud infrastructure in meeting rising demands for AI and digital services. This commitment underscores Amazon's determination to expand its footprint, secure resources, and stay competitive in cloud computing. More data: Amazon's data center expansion spans multiple regions, facing challenges like securing electricity and meeting regulatory requirements. While the company has committed to renewable energy projects, concerns persist about the environmental impact of its expansion and its reliance on fossil fuels. | | | |
| 3 | | Dave and Buster's ($PLAY), known for its restaurant and entertainment offerings, is venturing into the betting industry to leverage the expansion of online sports betting platforms. Instead of conventional sports betting, the company plans to focus on the $6B social betting market, emphasizing its five million loyalty program members. More: - The company collaborated with gamification technology company Lucra to integrate a feature allowing members to place modest bets, typically between $5 and $10, on arcade games via its app.
- The American restaurant and entertainment business plans to leverage its network of 222 North American venues and 50 million annual visitors to introduce low-stakes social gaming as an additional revenue source.
- Lucra presents its offerings as skill-based games instead of conventional betting, which would help Dave and Buster get beyond licensing and gambling laws.
- Some fans doubt Dave and Buster's new betting initiative, questioning the need for the company to profit from friendly competitions, but details on associated fees remain undisclosed.
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| 4 | | Illinois has granted Rivian Automotive Inc. $827M in incentives over 30 years to support the expansion of its electric vehicle plant, primarily through tax benefits provided by the Reimagining Energy and Vehicles in Illinois program. Additionally, the company will receive $75M in capital funding as part of a separate state initiative. More: - Rivian's ($RIVN) choice to expand in Illinois follows the suspension of its plans for a separate facility in Georgia, a move intended to achieve savings of $2.25B.
- The company intends to invest $1.5B to boost capacity at its current Normal, Illinois, facility from 150,000 to 215,000 units annually.
- The expansion project is anticipated to generate around 550 employees in the following five years.
- Following the news of the Illinois incentives, shares of the American electric vehicle manufacturer rose by 9.7%.
- The development is seen as a win for Illinois Governor J.B. Pritzker's efforts to establish the state as a center for emerging technologies like electric vehicle production.
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| 5 | | Moderna ($MRNA) posted a better-than-anticipated loss of $3.07 per share for Q1, beating estimates of $3.58, with revenue hitting $167M, exceeding projections of $97.5M. In Q1, Moderna incurred a net loss of $1.18B, or $3.07 per share, contrasting with a net income of $79M, or $0.19 per share, in the previous year's quarter. More: - Efforts to reduce costs resulted in declines in operating expenses, with a decrease of 88% in cost of sales and a 6% decrease in research and development expenses compared to Q1 2023.
- Selling, general, and administrative expenses decreased by 10% year-over-year.
- The pharmaceutical and biotechnology company's stock surged over 12% after the announcement, reaching $317.65 in premarket trading.
- Moderna's COVID-19 vaccine sales plummeted by around 90% compared to the previous year, significantly impacting its revenue.
- As global demand for COVID shots declines, Moderna edges towards launching another product, a crucial step for the company.
- The Massachusetts-based firm maintained its 2024 sales forecast at about $4B, which includes revenue from its RSV vaccine.
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| 6 | | On Wednesday, Carvana's shares skyrocketed more than 30% after unveiling record-breaking first-quarter results and profitability. They reported earnings per share of $0.23, surpassing the anticipated loss of $0.74, and revenue reached $3.06B, exceeding the expected $2.67B. More: - Carvana's ($CVNA) net income soared to $49M, marking a substantial turnaround from the $286M loss in the previous year.
- Adjusted EBITDA surged to a record $235M, a significant increase from the $24M loss reported a year ago.
- The quarter's adjusted EBITDA profit margin was 7.7%, and gross profit per unit (GPU) was $6,432.
- The business ascribed its success to operational efficiency improvements, particularly in car reconditioning and sales, general, and administrative costs.
- The online used car retailer aims to boost profitability by cutting costs, improving efficiency, and expanding vehicle reconditioning capabilities to tackle limited inventory levels.
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| 7 | | Quick Hits: - Sony and Apollo present Paramount Global with a bid outline totaling $26B, just before the expiration of the exclusivity period for competitor Skydance Media.
- Banana Republic's CEO, Sandra Stangl, who joined in 2020 and introduced home goods, her specialty, during a challenging period for the category, has stepped down.
- Nio Inc.'s shares surged by 20% on Thursday following a significant increase in vehicle deliveries, with April's figures more than doubling year-over-year to 15,620 vehicles.
- Ferrari introduces the 12Cilindri, a $423,000 sports car with a 1960s heritage, boasting 819 horsepower, a top speed of 211 mph, and being available in both coupe and convertible versions.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Shriram Jeevakumar | |
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