Apple and Amazon Miss Analysts Estimates, Crypto Tanks
Apple and Amazon: Bitcoin and Ethereum fell after Apple and Amazon earnings announced their latest financial results in after-hours trading.
Bitcoin fell sharply from $20,621.23 at about 4:00 PM ET to $20,293.40, while Ethereum fell from $1,561.40 to $1,515.33. Bitcoin has since recovered to $20,362.
ADA fell from $0.401457 to $0.390022, and DOGE fell from $0.082271 to $0.078966.
Apple misses analysts’ expectations
In its full-year results, iPhone maker Apple announced that iPhone sales were up 9.7% from the previous year to $42.6 billion. This amount represents about half of the Cupertino company’s revenue. It missed analysts’ expectations by $400 million.
The company’s annual revenue is 8% higher than a year ago at $90.1 billion. Net income reached $20.7 billion.
Prior to the annual earnings announcement, analysts predicted that Apple would have benefited from increased demand for the latest two iPhone 14 Pro models. In July 2022, CEO Tim Cook said that the company had no material data to suggest that difficult macroeconomic conditions significantly affected the company’s smartphone sales.
While other PC manufacturers Intel faces strong headwinds, the iPhone manufacturer has experienced considerable popularity for its Pro models. Consumers have recently been willing to pay extra for 5G technology. Apple introduced 5G in 2020.
But an analyst at Bernstein research believes that rising interest rates could affect demand for Apple’s products. This demand adjustment can occur while high inflation and Fed rate hikes keep consumers locked in a delicate dance. And with the Fed set to reduce the frequency and size of rate hikes, demand for Apple’s hardware could be renewed.
Amazon earnings hit hard
Amazon has experienced significant growth in its Amazon Web Services cloud computing division.
But its third-quarter results revealed that Amazon’s revenue rose 15% to $127.1 billion compared to last year. This number slightly missed Wall Street estimates. The e-commerce giant’s net income fell 0.3% to $2.9 billion this year, including non-operating income from a partnership with electric car company Rivian.
CEO Andy Jassy said, “…there is a lot going on in the macroeconomic environment and we will balance our investments to become more streamlined without compromising our important long-term efforts.”
The company’s shares fell 20% in after-hours trading after it announced a revenue forecast of $140 billion to $148 billion. Wall Street had expected over $155 billion.
Cloud competitor Alphabet posted $39.5 billion in search revenue for the third quarter, up 4% from the previous quarter. Given that search was previously a consistent moneymaker, analysts suggest the moderate numbers show small businesses pulling back from advertising on the platform. Google’s cloud business earned $6.9 billion in revenue in the third quarter, up 37.6% from the second quarter.
Cupertino-based Apple’s shares closed the trading day 3% lower at $144.80, and Amazon’s share price fell 4.06% to $110.96.
The Nasdaq Composite is down 3% to 11059.8.
Given the recent correlation between tech stocks and crypto, a drop in the tech-heavy Nasdaq stocks and tech stocks themselves could indicate that crypto could be in for a slight bearish pivot in the coming days.
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