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tv   Whatd You Miss  Bloomberg  July 27, 2021 4:30pm-5:00pm EDT

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caroline: the u.s.'s most valuable company coming out with earnings and it is a beat. third quarter revenue, better than the expectation of $73 billion. earnings-per-share at $1.30. again, a big beat. iphone revenue at $39 billion overall. this is a company also declaring a cash dividend. romaine: it can't be stopped. every time you think apple will
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slow down. ipad revenue, mac revenue will above estimates. look at that services resident -- services revenue. joe: absolutely massive beats. iphone revenue, 39.5. what else is there to say? romaine: do your when services revenue became a thing? that will never be a thing. caroline: subscriptions? romaine: now look at us. joe: huge eps beat, $1.30 versus one dollar expected. caroline: apple is already up on the year but it has already -- but it has actually underperformed the rest of the nasdaq 100. joe: joining us with more, bloomberg senior semiconductor and hardware tech analyst.
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thanks to both of you for joining us. what is there to say? romaine, caroline, and i were kind of speechless. anand: work demand -- what demand problem? the only numbers we were slightly shy on were macs and ipads because they specifically called out a component shortage last quarter. this is not likely to fix itself in a quarter. obviously it has. if it has not, they have more demand in the pipeline. the full year set up is great. demand is strong. services business is solid. that will improve gross margins. this is a very strong quarter. romaine: we are talking about numbers that don't reflect what most assume will be a whole new slate of products announced in the fall in the u.s. what are your general expectations for a new iphone,
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new ipad? anand: that is a great point you bring up, in that one of the things we have consistently said about apple is the installed base matters. once you get the momentum going on and installed base refresh, the millimeter wave technology is only in the u.s., as it proliferates the rest of the world, you're going to start a massive refresh cycle. one of the things with this refresh cycle is that skew is to the high-end. this will push average prices higher, revenues higher with the same units, and that will trickle down to margins and eps. the second part is that drags along the services business. flashy new phone, wider communication capabilities, you will consume more content. caroline: just going through the press release, and jeremy brian is with us.
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they are saying firing on all cylinders globally as well. this is a company that we are wondering how china, in terms of strength, not only for me supply chain, from a demand perspective. 14.7 6 billion in the previous quarter. the ceo of apple saying that this is a record june quarter. all-time highs, and indeed, in each of our geographic segments. >> all three of these companies are performing phenomenally. at the end of the day, they are executing perfectly, they all have secular growth trends. this is a very positive trend. you are seeing it through the numbers. the numbers are all just really
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strong. from a fundamental case, you can't really ask for much more than these companies are giving you. joe: the stocks are up after hours, but does it mean that we have to take a pause on this rally? >> at the end of the day, yes, i think the bigger surprise would have been, had they just met or missed. that would have been a much more, something different happening. i think people from a general trend were expecting, maybe not this level of magnitude, but i think upside was expected. from our point going forward, again, the fundamentals are, any type of correction, any type of reversion based upon that stuff. romaine: we are getting headlines now, some commentary out of the ceo of microsoft.
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some of that applies to apple as well. the company saying that chip shortages will have some in act on the company this year but it also says that corporate and consumer pc demand remains strong. this idea that there is still a pretty healthy demand for the products. even with supply chain issues, it does appear at least according to the ceo of microsoft, that they will be able to work with it. >> at the end of the day, you will figure it out. if you are a supplier to apple or microsoft, you will figure it out or lose a lot of business. at the end of the day, they just hold strong sway. you talked about apple in services, that is a phenomenal business. microsoft, phenomenal. those are the things that are actually accelerating in their businesses or going exceedingly fast. even if the chip shortages a short-term dislocation, the main
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drivers are still doing very well and the numbers showed it today. caroline: some of the concerns, not only antitrust but also some of the ongoing relationship between the u.s. and china. anand: we wrote extensively on this last year, which is that the supply chain is fragmenting. over the course of the next three or four years, you would see capacity to the tune of about 30% electronics manufacturing move and redistribute among different southeast asian nations, south asian nations, and even stateside. we are seeing that in electronics already. go to malaysia, india. we are starting to see that in semiconductors as well. if this was a revenue beat, with the component shortages, and this is going to continue over the next couple of quarters, could you imagine what they would have done?
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pc demand, we have reiterated this again and again. pcs are not dead. they had a great year last year, they are having a great year this year, and they will have likely a decent year next year. i think we will have to change our tune on pcs from one pc per household to one pc per person. romaine: my son has about like six. anand: he deserves two. the other point i want to make is on margins. this cycle of the product's driving services, apple has got that nailed. this will improve eps continuously. joe: jeremy, you mentioned any dips in these mega caps could be a reason to buy. we have seen weakness in some of the more speculative areas of
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the market lately. i wonder what your view is on deck outside of these -- on tech outside of these clear winners. what is your view about the risk-reward when you go a little bit further out? >> great question. at the end of the day, if you own a lot of both companies, those are a lot of market cap right then and there. amazon, i know it is consumer discretionary, but amazon web services is a huge part of their business. if you combine those, you have a lot of market cap to play with then and there. on the more speculative side, it seems like in the semi cycle, that the speculative component of that seems to have gone away to a certain extent. i would be a little bit more cautious there in that regard. at the end of the day, there are secular trends, especially with larger companies. i think the speculative names,
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basically for most investors, you could hide at least four or five large cap technology names and be just fine. romaine: that seems the strategy many have taken. when the jitters came back to the market, that seemed to reawaken apple. they had several successive highs. i'm curious about the safety of these companies. there will always be that narrative out there that there is some sort of peak here. that this can't go any further. the evaluations are in the trillions and at some point, it has to top out here. is that really the case? jeremy: i think the worse and that at the hundreds million. that argument has been there for a long time. the question is, does somebody intervene, being a government entity, saying you are just too big now, we have to do something
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about that. that is something that frankly we can't put a real multiple around. what we pay a lot of attention to his multiples of the business. despite their size, they are still elevating their growth profile. 50% year on year. that is phenomenal. there are not many small businesses that are growing at that level. as far as when we hit capacity on that, i don't see it right now. i don't think there is much evidence that we are there. caroline: google, alphabet, youtube 15 million daily views at the moment. one question i want to ask apple on -- one question you would want to ask apple on the earnings call? jeremy: margins for the upcoming year. if we are talking about shortages, things they have to do, we have to know what the expense structure looks like coming into the following year.
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this is more illusionary than -- more evolutionary than revolutionary. we still have a lot of 5g capability coming. i want to hear stuff around that as well. romaine: our thanks, and our thanks to anand of bloomberg intelligence. while those gentlemen were speaking, were -- we were getting breaking news on visa. eps coming in, the street was looking for $1.35. the net revenue coming in at $6.1 billion. the street was looking for $5.9 billion the company not providing a fiscal year 2021 outlook at this time. this is bloomberg. ♪
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mark: i am mark crumpton with bloomberg's first word news. the u.s. centers for disease control and prevention says it recommends that even fully vaccinated people wear masks in public indoor settings in places where covid-19 is spreading rapidly. the cdc director says this could have been avoided if more people were vaccinated. president biden today was asked whether he would consider making vaccines mandatory for federal employees. >> would you require all federal employees to get vaccinated? pres. biden: that is under condition right now. -- that is under consideration right now. mark: a special house panel convened to investigate the january 6 insurrection at the capital with testimony from four of the police officers overrun by the mob of former president trump supporters, seeking to disrupt certification of the electoral votes from the 2020
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election. >> telling the truth should not be hard. fighting on january 6, that was hard. showing up on january 7, that was hard. the eighth, ninth, 10th, all the way until today. that was hard. when defense came down, that was hard. when we lost our layer of protection that we had. defense came down and still nothing has changed -- the fence came down and still nothing has changed. mark: another officer said he pleaded with his officers saying, "i got kids." officer fannone suffered a concussion, heart attack, and brain injury. olympic gymnast simone biles said she pulled out of the final to protect herself and her team. she said she needs to protect her mental health. on social media, she posted that
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she felt the weight of the world on her shoulders after an uncharacteristically sloppy showing in the qualifying round. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. romaine: alphabet shares are higher in the post-market. revenue in the most recent quarter, $51 billion. the street was looking for $46.1 billion. it is pretty much good all around here. youtube ad revenue, that was higher. other ad businesses, that was higher. its cloud division actually gaining some market share. joe: let's bring in bloomberg technology host emily chang, who just talked to alphabet ceo ruth porat. there is a lot going on at google.
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ads continue to be the name of the game. what is the outlook? emily: this was a huge bounce back quarter when you look at a year ago when we were at the height of the pandemic and advertisers pulled back broadly. she said that revenue growth this quarter was driven by growth in retail. followed by travel, financial services, media, and entertainment. she could not give us more color on the current quarter because she said things are changing so quickly. of course, this coming on the same day as this new cdc guidance. anyway you look at this, this is a strong rebound in quarter for alphabet. caroline: cloud posting impressive growth. what did they say about that? emily: cloud also up. she said, pleased with the momentum, pleased with the way they have been running the business. pleased with the result. she said, we are building out
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our global footprint and compute capacity globally. she specifically mentioned their efforts in india and strength and momentum. this is a company that had a hiring freeze last year at the height of the pandemic but the workforce still grew 13% a lot of that growth was in a cloud division in particular. romaine: three of the biggest technology companies, three of the biggest companies out there reporting earnings. she is going to be busy. be sure to check her out on bloomberg technology. coming up, the likes ofook and amazon are set to report later this week. we will have a preview next. this is bloomberg. ♪ . ♪
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caroline: we are focused on all things big tech earning after the bell. after the last hour, microsoft, alphabet, apple.
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all of them, strong. joe: the numbers are great. we just had apple most recently. there you see the market reaction after hours, kind of whatever. apple is now down a little bit. alphabet doing pretty well. amd up about 8%. obviously, all of these companies, incredible runs, who knows if it is really priced in. let's find out what is priced in. let's bring in bloomberg cross asset reporter katie graph l. what is priced in? katie: a lot of good news. this market has kind of been priced to perspective -- priced to perfection. this market is trading at 38 times earnings. that is a really high number, a really high bar to clear. you are seeing it playing out in after hours trading. apple posted very strong numbers. microsoft getting slammed. beat on sales and revenues.
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some worries over its cloud business. we will see. you also saw that with tesla today. it had a great report yesterday, and posted record sales, topped analyst estimates. still, it really felt today. it wasn't good enough. romaine: the stocks on the screen here, you talk about alphabet, apple, microsoft, that whole complex, some people say these are more defensive names, gravitate to them when they are more skittish about other things. some would make the argument that apple might be a value stock. where they are and where the price action should be going. katie: you can call them growth, you can call them defensive. romaine: have we not retired at the faang name? katie: not yet. i am still keeping it alive. since the end of june, the faang's have outperformed the
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s&p 500. you have seen inflation expectations cool off. that seems to be dequeue they are taking, it is time to rally again. those fears are out the windows. even though they are not as deflation sensitive as some of the true growth names, that is the cue that they seem to be responding. caroline: tomorrow, facebook has the earnings, but also the macro earnings. also the delta variant as well. katie: it will be interesting to hear from the fed tomorrow. not enough has changed. when we look about the delta variant concerns, it feels as if those are starting to boil to the surface. on the inflation front, we will see. i think inflation has been more persistent, those really high single digit numbers have been
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more persistent than most people expected. we will see if the taper to date has advanced at all. joe: how much is the clobbering of chinese stocks listed in hong kong and the mainland contributed the diminishment of risk appetite? katie: i have seen some people make the case that if you look at the correlation between chinese and u.s. tech, that they tend to move together. but the analysts i speak to seem to be not too concerned about u.s. tech at the moment. this is a broader risk off move in u.s. markets. china was probably a part of that but it does not seem that was the main driver at least today. caroline: thank you. romaine: faang's are dead. caroline: long live faang's. we did not even get to cheesecake factory. not so good after hours. romaine: have you had one of
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their pasta dishes? you cannot have room for cake after that. joe: there is always room for cake. caroline: we did not talk about wu tang clan either. romaine: are they back? joe: "bloomberg technology" is next. romaine: this is bloomberg. ♪ ♪
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>> from the heart of where innovation, money, and power collide in silicon valley and beyond. this is "bloomberg technology" with emily chang. emily: expected in september.


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