August 1, 2025 • 20 mins
Watch Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Intelligence hosted by Paul Sweeney and Alexandra Semenova
-Poonam Goyal, Senior U.S. E-Commerce and Retail Analyst at Bloomberg Intelligence, recaps Amazon earnings. Amazon.com Inc. projected weaker-than-expected operating income and trailed the sales growth of its cloud rivals.
-Angelo Zino, Senior Vice President and Equity Analyst, at CFRA Research, recaps Apple earnings. Apple Inc. reported its fastest quarterly revenue growth in more than three years, with revenue rising 9.6% to $94 billion in the fiscal third quarter.
-Vincent Piazza, Bloomberg Intelligence Senior Equity Research Analyst, Oil & Gas, recaps Chevron and Exxon earnings. Exxon Mobil Corp. and Chevron Corp. posted better-than-expected results after record oil production cushioned the impact of lower crude prices.
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Episode Transcript
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Speaker 1 (00:02):
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Speaker 2 (00:23):
I'm looking at Amazon stocks down seven point two percent today.
I don't know anytime I see Amazon trade down like that,
I'm like, boy, if I had a portfolio manager, you
got to be thinking about this is a good time.
It's flat ear to date, so certainly underperforming the marketplace here.
They put out some numbers last night a little bit
disappointing on their guidance, and some questions about the cloud
and kind of the growth rates there and all that
(00:44):
kind of stuff.
Speaker 3 (00:44):
Put them boil.
Speaker 2 (00:45):
She follows the company, she follows the stock. She's a
senior US e commerce and retail analysts for Bloomberg Intelligence.
Put on, what did you take away from the quarter
last night?
Speaker 4 (00:55):
Yeah, thanks, Paul, So I think you know. The quarter
had two mixed streets. The first found the reach side
things were actually pretty well. Sales grew double digits on
the retail front, and that was higher than we expected
shows that value is driving shoppers to amaz about Amazon
dot COM's retail platform, and prices aren't going up, so
shoppers are still buying, at least on Amazon dot Com.
(01:16):
The second side of the story is Amazon's AWS business,
and I think that's where you're seeing the sell off
come from. They were disappointing, plain and simple. We saw
Microsoft and Google. They both outperformed when they reported, and
Amazon was just in line on the sales side, but
operating margins were much weaker thirty two percent. That's off
(01:36):
of thirty nine plus percent in the last quarter. The
guidance was also weak on the margin side, and I
think that's really what's causing the stops slide today morning.
Speaker 5 (01:46):
Anyone who was watching Sharer's postmarket yesterday after their results
watched them fall, you know so much. During that earnings call,
during Andy Jase's comments, what did he say that was
so concerning to investors.
Speaker 4 (02:00):
I think it was basically that it's a slow and
steady climb from here. It's not overnight, right. Amazon is
not getting the benefit of like the chat GBT that
my soft is seeing. They are investing in enterprise clients.
The B to B side of the cloud business, and
that has plenty of growth ahead. But that growth isn't
going to come overnight. It's going to come year by year.
(02:23):
We're still very, very optimistic that Amazon has a long
runway for growth here, both on the cloud and the
retail side, and also advertising, which grew nicely at over
twenty two percent. So the results to us, you know,
suggest a small slow down, but we think Amazon's earnings
will e've and flow, but the path forward is still
(02:44):
up in our mind.
Speaker 2 (02:46):
It's August first, so I guess I have to ask
this question. I hate to do it because I'm personally saying, hey,
we're only halfway through summer here, but the reality is
back to school spending. What's Amazon saying here about back
to school spending here?
Speaker 4 (03:00):
So they're saying much yet, but back to school is
clearly the second largest holiday shopping season of the year.
We think, given Amazon's outperformance here to date on the
retail side, they will continue to draw in back to
school spending at this time. Consumers want value. They think
prices are going up. Prices are going up to some extent,
but they haven't gone up that much, which is why
(03:20):
retails holding up. When you're looking for school supplies. You're
going to Amazon, You're going to Walmart, You're going to
where you can find value.
Speaker 5 (03:28):
How much of this reaction in Amazon has to do
with the facts that it was just bad timing for them,
that they're facing much tougher comparisons after some of the
other megacaps reported results.
Speaker 4 (03:39):
Comparisons are going to remain tough on the cloud side
for years to come, because you will continue to see
growth in the double digit range. I think more of
it has to do with just Amazon's results were not bad.
They were pretty good. It's just say weren't as good
as Microsoft and Google. And that does go back to
what I said earlier. They own to get the benefit
(04:01):
of the C two C side of cloud growth that
those two competitors get.
Speaker 3 (04:08):
So on the retail side.
Speaker 2 (04:10):
Here with teriffs, we now have a clear picture of
kind of how the TERFF situation might shake out. I
got to feel like Amazon, I mean, nobody's got more,
you know, buying power than Amazon, so I can't somebody
tries to raise the prices on me, I'd be like,
don't take a walk.
Speaker 3 (04:24):
I mean, what are they saying?
Speaker 4 (04:26):
Yeah, I think you know, clearly prices are going to
rise slightly. Is Amazon more shielded than the rest of retail?
I think absolutely. As to your point, Paul, seven hundred
plus billion dollars in global GMB, forty percent of the
business or less than forty percent is first part which
is which means that's the inventory that they own, and
(04:47):
that's the inventory where they have pricing control over still
sizable and therefore they do have that buying power advantage.
And they also have o their offsets. Right, Amazon has
more than just retail in its house. It's got a WS,
it's got advertising, which you are very very high profit margins.
So could they eat some of that cost absolutely? Will
(05:08):
they pass them along, yes, but not on the basics
right retail, one on one, you don't raise the price
of milk. You raise the price of something else. So
the items that you draw you to the platform, they're
not going to raise the price of materially there or
we don't expect them to. And on the third party side,
that's on Amazon's problem. They have over two hundred million sellers.
(05:28):
You can go between the seller. I'm sure that there
will be intense competition as prices may rise there for
shoppers to have choices.
Speaker 5 (05:37):
We have more clarity on tariffs than we did before.
But there's this idea that tariff policy is still in
a flux in the final framework could change. How much
do you think that will impact Amazon's decision making from
this point?
Speaker 4 (05:50):
I think for Amazon, you know, tariffs right now the
way we look at them as they're changing. China is
still on a ninety day pause, right, so we don't
know where things will end up in China, and that's
a very very important country to watch for. So I'd
say we're very much in fox Vietnam, the tariffs have
gone up from the ten percent post to twenty percent.
They're also going up in other Asian countries India speculated
(06:13):
or said to be around twenty five percent. These are
countries where the last round of tariffs, companies had moved
out of China into many of these countries. Right, so
while the teriff freight is still better, right, twenty percent
is still better than the thirty percent pause, and who
knows what it'll be among their two months from now.
Speaker 3 (06:30):
All right, for the thanks so much, Punem, thanks so much,
appreciate it.
Speaker 2 (06:33):
She covers all the retail for Bloomberg Intelligence, including Amazon.
Speaker 1 (06:38):
You're listening to the Bloomberg Intelligence Podcast. Jetch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (06:51):
Alexamanova from Bloomberg News on pulps when you were live
here on our Bloomberg and Active Broker Studio streaming live
on YouTube as well. All right, Applestock down one and
a half percent today, down eighteen percent year to date.
I thought their quarter last night was really good. The
fastest quarterly revenue growth in more than three years. Revenue
is of nine point six percent. People telling me this
(07:11):
is a low, maybe mid single digit growth story. It
looked pretty darn good to me. They said China was
even pretty good. And for me, one of the biggest
head wins for Apple story has always been how are
you going to operate in China? So I thought it
was a pretty solid, if not actually kind of really
good quarter. Angelo Zeno he's the pro who'll give us
the load down here. He's a senior vice president of
Equitiani sid C fr A research Angela. What was your
(07:34):
takeaway from the Apple print last night?
Speaker 6 (07:36):
Yeah, so thanks for having me, I think overall, to
your point, the results were really good, better than I
think we anticipated in anybody else out there. And again
to your point, I mean, this was probably the I
think the best growth rate we've seen since late calendar
twenty twenty one.
Speaker 7 (07:51):
And again with China, the return to.
Speaker 6 (07:53):
Growth, the first quarterly growth rate that we saw in
two years. All kind of positives here for Apple. And
I think to me that the biggest takeaway or the
biggest positive on the call was actually the services number.
They grew thirteen percent year of a year. They actually
didn't give guidance three months ago, you know, due to
some fears whether it had been related to they got
(08:14):
the Games case or what have you, and they actually
provided guidance for the September quarter as far as services
is concerned, also about thirteen percent are consistent with the
June quarter. So the services, we think continues to be
the key growth story and why we like it. But
I will say this, as far as the guidance is concerned,
and what they had to say forward looking in nature,
(08:36):
they didn't really answer or kind of alleviate the concerns
out there that some of the bears have, and you know,
I'd say the biggest thing is really the fact that
when they did provide guidance, it essentially assumes no changes
to tariffs, and we.
Speaker 7 (08:48):
Think that's unlikely.
Speaker 6 (08:49):
We actually think there are going to be changes to tariffs,
because you're going to get something from the two thirty
two semi conductor investigation, likely in the next couple of weeks,
and when you do see that, that is going to
have an impact. We think on Apple, probably their decision
on what they're going to do in terms of pricing
in their margin strategy.
Speaker 5 (09:06):
Angelo is speaking of tariffs. How sustainable is that revenue
growth number that we saw, How much of it is
related to a tariff related pull in?
Speaker 7 (09:14):
I mean, for the June quarter, they said it was
one out of their ten points.
Speaker 4 (09:17):
Right.
Speaker 6 (09:18):
Whether or not you want to believe that, you know,
is up to you know, every individual out there. We
expect We thought that, you know, when we originally saw
the print, we would have, you know, bet on the
fact that it probably would have been more than that. Again,
for the September quarter, the guidance of you midt to
high single digit growth where we were looking for about
three percent growth. It just seems like the growth rates
(09:40):
at least right now for the for these two quarters,
you can call they obviously attributed to the fact that
the iPhone sixteen cycle is just seeing maybe better upgrades
than what we saw in prior cycles. But it's just
hard to imagine that's all that's happening because you didn't
necessarily see those type of growth rates right in the
December quarter, in the March quarter when the cycle first started.
Speaker 7 (10:01):
So you know, it's.
Speaker 6 (10:03):
Probably a little bit more than what they're leading us
out to believe. But you know, well, again, we'll get
better clarity as we kind of go into the iPhone
seventeen cycle and into December quarter.
Speaker 3 (10:14):
ANGELA.
Speaker 2 (10:15):
One of the headwinds for Apple, real or perceived, I'm
not sure, is the belief that they don't really have
a solid AI play AI angle to the story A.
Speaker 3 (10:26):
Do you believe it? Do you agree with that? And
be what do you think they should be doing on
that front?
Speaker 7 (10:31):
No, we believe it. You know, they don't have They're not.
Speaker 6 (10:34):
This is the problem right when you kind of look
at some of these other stories across the tech space,
there are much better stories as far as the as
far as.
Speaker 7 (10:42):
Investing in AI.
Speaker 6 (10:43):
We know AI is going to be a huge disruptive
trend here over the next decade and longer than that.
But if you're not in this AI kind of ecosystem,
and you know you're not playing a role in the
whole AI space, you know you're missing out and investors
are going to get frustrated with that.
Speaker 7 (10:59):
The biggest is with.
Speaker 6 (11:00):
Apple has been the fact that they haven't they haven't
made good on their promise. You know, back in June
of twenty twenty four at the Developers Conference when they
essentially said by this year we were going to see
you know AI or you know, Cirie integration across that
app store, and we just haven't seen it yet.
Speaker 7 (11:19):
What we did like last night on the.
Speaker 6 (11:21):
Call was Tim Cook seemed like he was he remains
committed that we are going to see at some point
here over the next couple of quarters. We continue to
say they've got to get this right. By the time
we hit the Developers Conference in June of next year.
That's the absolute latest that they can get this AI
story right. We think they will get it right. They've
got all the money in the world to kind of
throw at it, and whether it be done internally via
(11:42):
partnerships or some m and a strategy all which it
seems like they were open to on the call last night.
Speaker 7 (11:48):
We think they'll get it right.
Speaker 5 (11:50):
Obviously a lot of investors want to hear what companies
are doing on AI. But does Apple actually risk losing
customers if they don't come up with an AI strategy
or will they be okay with using each hot GPT
app on their phones.
Speaker 7 (12:04):
That's a great question.
Speaker 6 (12:05):
You know, I don't know if they really risk losing
you know, customers at this point in time. I do
think it's going to have a huge impact on the
upgrade cycle. If you see them get this AI story
right and we see some really cool AI capabilities, integration
across the app store, get these developers to really developing
some you know, really great apps out there, you're going
(12:27):
to see consumers really start to upgrade. And Apple's going
to benefit from a monetization perspective on the hardware side,
and we think they're also going to be able to
charge some nice features from a services perspective as well.
So that's how they can make money from an AI
standpoint on both hardware and services. But maybe to your point,
our consumers all of a sudden depart not necessarily.
Speaker 7 (12:51):
But listen, Samsung is a formidable threat out there.
Speaker 6 (12:55):
They've got you know, some decent people out there as well.
You know, they've got some really good integration with with Alphabet.
So you know, we'd rather see Apple get it right
and that have to necessarily worry about that issue.
Speaker 3 (13:08):
Angel thirty seconds left.
Speaker 2 (13:10):
I kind of like the aqua higher kind of strategy
that are seeing across the tech space where companies will
buy a majority stake, not the whole thing so the
regulators don't jump down their throat.
Speaker 3 (13:19):
Is that something Apple would considered, do you think?
Speaker 6 (13:22):
I mean, it doesn't seem like it's in their DNA
right now. And when we kind of see you know,
some of the moves that they've met as of late,
they've actually been you know, they've actually been hurt by
the Aqua higher strategy, right, just given some of the
key departures that we've seen.
Speaker 7 (13:37):
But yeah, I mean, Apple's got.
Speaker 6 (13:38):
The They've got the ability to kind of benefit from
that theme. My guess is again they're going to have
to get this AI story right so they could use
it towards their advantage.
Speaker 7 (13:48):
But I agree with you, I like the.
Speaker 6 (13:49):
Whole Aqua hier theme for the broader, you know, AI,
space ecosystem and the tech sector.
Speaker 2 (13:54):
All right, angel I thank you so much. We appreciated that.
Angel Is, you know, senior vice president equity analyst at
CFRA Research. I mean, look, it's not like they don't
have the money, folks, Apple Scott one hundred and thirty
billion dollars of cash on the balance sheet.
Speaker 3 (14:06):
They can borrow whatever they want.
Speaker 2 (14:07):
They're gonna have free cash flow, you know, north of
one hundred billion dollars over the next several years, one
hundred and twenty billion dollars.
Speaker 3 (14:13):
So it's not like the of the cash to go
all in on AI.
Speaker 2 (14:17):
The question is kind of what's their strategy, and that's
still kind of up in the air for a lot
of investors. I'm not sure we're gonna get much cloudy,
but as angel is saying, that needs to come.
Speaker 1 (14:28):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 3 (14:42):
All right, let's switch over to the energy biz.
Speaker 2 (14:45):
I'm just going to quote Wtech houd to oil because
I watch Landman four season. I know all about the
oil and gas businesses. Down at dollar eighty seven sixty
seven dollars and thirty eight cents. Chevron, Exon it reported
some numbers here today. Let's break it all down for
the big oil companies. Vince piaz a senior equity and
I'll see covers all the energy space for Bloomberg Intelligence.
He has done that for decades on both the south
(15:06):
side and.
Speaker 3 (15:06):
The buy side.
Speaker 2 (15:07):
Evince, what you what'd you see? What you learn from
the Exons of the world, the Chevrons of the world.
Speaker 8 (15:13):
Hey, so today what we definitely picked up is, you know,
the view that Exxon and Chevron are closely mirroring one another.
So you know, Permian growth, Permian basin growth for both
the Chevron and Exon was there. Chevron topped out at
(15:35):
a million barrels a day h in the Permian. But
you know, going forward that will likely sort of temper
down a bit because of just you know, the indecision
of around wt I and just the the energy environment
in general. So we'll probably see some more free cat
flow flowing out of their More importantly though, for Chevron,
(16:00):
Paul the Hess deal closed. So now the hard part
starts for Chevron to integrate this very large footprint after
you know, almost two years of legal hassles with Exon.
The good news here is that both parties are now
(16:20):
partners in what is the most prolific offshore international asset
that we've seen in decades. And so I think going forward,
what you see here for both of these entities is
the upstream side of the equation stinning more of a
light on the upstream side because of not only developments
(16:44):
that they've had offshore, but also here shorter cycle permium growth,
which will likely provide tax flow going forward for both
of these entities.
Speaker 5 (16:57):
Vince, one thing that stood out to me is, in
addition to the off its surprise, Exon said it's keeping
an eye out for more acquisitions after it's sixty billion
dollars dollar takeover of Pioneer Natural Resources. What do you
think that this activity will mean for the company.
Speaker 8 (17:12):
Well, look, they have been very proficient in picking up pieces,
first the XTO several years ago, now Pioneer. This is
not a play just for volume. It is strategic. The
permium basin can still use some consolidation. There aren't very
(17:33):
many pieces of size left. There are a lot of
other smaller entities. So for Exon, in order to move
that needle, it would need to make a a very
sizable acquisition. They're still out there and they do have
some scale. The issue here is this isn't just about volume.
(17:54):
It's also about consolidating and expanding the resource play within
the Permian and there is and there are a few
of size in the region that would make sense. But
we're not going to lead the witness and tell you
what's coming up in the next couple of weeks for us.
Speaker 2 (18:12):
So, Vince, I think about that the Chevron deal, and
I know you know from talking to you and reading
your research. A big part of that attraction for Hess
by being bought by Chevron was Hess had a stake
in or a big property or find down a Gian
to tell us about that, because that was.
Speaker 3 (18:28):
A sure real opportunity.
Speaker 8 (18:30):
Yeah, I think that is the crown jewel of this acquisition,
and that's what the arbitration really was about. It was
about Exxon's writer or first refusal to that particular asset.
Of course, uh that decision went in favor of Chevron. No,
Guyana is a very large asset the straybook block is
(18:54):
a very large, prolific piece. There are more than a
dozen developments that will be ongoing, and that asset base
will provide decades of production growth that will facilitate the
short run short cycle development, short cycle production here in
(19:17):
the US in the permium basin for both Devron and Exon.
So having two very large entities that understand these longer
cycle large developments, I think is a positive. And it's
also a positive that both have fairly deep pockets and
good experience doing these types of things.
Speaker 2 (19:40):
Vince, thanks so much for joining us. Always appreciate getting
a few minutes of your time, Vince Piazza. He is
the go to voice Bloomberg Intelligence for all things energy,
oil and gas for Bloomberg Intelligence and again on the
Landman front. You got to watch it if you want
to be an expert like I am now in oil
and gas.
Speaker 5 (19:58):
I'm still learning a lot about oil and gas every
day at I don't.
Speaker 3 (20:01):
Know, I just it's a tough life. That's one of
my takeaways.
Speaker 2 (20:03):
I mean, that's hard to get that stuff out of
the ground is not easy, and these companies make huge investments. Again,
Chevron's excellon spending sixty billion dollars for Pioneers, Chevron buying hes.
Speaker 3 (20:15):
I mean, it is a tough business, but I'm a act.
Speaker 2 (20:18):
They are filming season two of land Man, so it
is coming, so that is cool.
Speaker 3 (20:21):
I'm all fired up for that.
Speaker 4 (20:23):
There.
Speaker 1 (20:24):
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Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (00:23):
I'm looking at Amazon stocks down seven point two percent today.
I don't know anytime I see Amazon trade down like that,
I'm like, boy, if I had a portfolio manager, you
got to be thinking about this is a good time.
It's flat ear to date, so certainly underperforming the marketplace here.
They put out some numbers last night a little bit
disappointing on their guidance, and some questions about the cloud
and kind of the growth rates there and all that
(00:44):
kind of stuff.
Speaker 3 (00:44):
Put them boil.
Speaker 2 (00:45):
She follows the company, she follows the stock. She's a
senior US e commerce and retail analysts for Bloomberg Intelligence.
Put on, what did you take away from the quarter
last night?
Speaker 4 (00:55):
Yeah, thanks, Paul, So I think you know. The quarter
had two mixed streets. The first found the reach side
things were actually pretty well. Sales grew double digits on
the retail front, and that was higher than we expected
shows that value is driving shoppers to amaz about Amazon
dot COM's retail platform, and prices aren't going up, so
shoppers are still buying, at least on Amazon dot Com.
(01:16):
The second side of the story is Amazon's AWS business,
and I think that's where you're seeing the sell off
come from. They were disappointing, plain and simple. We saw
Microsoft and Google. They both outperformed when they reported, and
Amazon was just in line on the sales side, but
operating margins were much weaker thirty two percent. That's off
(01:36):
of thirty nine plus percent in the last quarter. The
guidance was also weak on the margin side, and I
think that's really what's causing the stops slide today morning.
Speaker 5 (01:46):
Anyone who was watching Sharer's postmarket yesterday after their results
watched them fall, you know so much. During that earnings call,
during Andy Jase's comments, what did he say that was
so concerning to investors.
Speaker 4 (02:00):
I think it was basically that it's a slow and
steady climb from here. It's not overnight, right. Amazon is
not getting the benefit of like the chat GBT that
my soft is seeing. They are investing in enterprise clients.
The B to B side of the cloud business, and
that has plenty of growth ahead. But that growth isn't
going to come overnight. It's going to come year by year.
(02:23):
We're still very, very optimistic that Amazon has a long
runway for growth here, both on the cloud and the
retail side, and also advertising, which grew nicely at over
twenty two percent. So the results to us, you know,
suggest a small slow down, but we think Amazon's earnings
will e've and flow, but the path forward is still
(02:44):
up in our mind.
Speaker 2 (02:46):
It's August first, so I guess I have to ask
this question. I hate to do it because I'm personally saying, hey,
we're only halfway through summer here, but the reality is
back to school spending. What's Amazon saying here about back
to school spending here?
Speaker 4 (03:00):
So they're saying much yet, but back to school is
clearly the second largest holiday shopping season of the year.
We think, given Amazon's outperformance here to date on the
retail side, they will continue to draw in back to
school spending at this time. Consumers want value. They think
prices are going up. Prices are going up to some extent,
but they haven't gone up that much, which is why
(03:20):
retails holding up. When you're looking for school supplies. You're
going to Amazon, You're going to Walmart, You're going to
where you can find value.
Speaker 5 (03:28):
How much of this reaction in Amazon has to do
with the facts that it was just bad timing for them,
that they're facing much tougher comparisons after some of the
other megacaps reported results.
Speaker 4 (03:39):
Comparisons are going to remain tough on the cloud side
for years to come, because you will continue to see
growth in the double digit range. I think more of
it has to do with just Amazon's results were not bad.
They were pretty good. It's just say weren't as good
as Microsoft and Google. And that does go back to
what I said earlier. They own to get the benefit
(04:01):
of the C two C side of cloud growth that
those two competitors get.
Speaker 3 (04:08):
So on the retail side.
Speaker 2 (04:10):
Here with teriffs, we now have a clear picture of
kind of how the TERFF situation might shake out. I
got to feel like Amazon, I mean, nobody's got more,
you know, buying power than Amazon, so I can't somebody
tries to raise the prices on me, I'd be like,
don't take a walk.
Speaker 3 (04:24):
I mean, what are they saying?
Speaker 4 (04:26):
Yeah, I think you know, clearly prices are going to
rise slightly. Is Amazon more shielded than the rest of retail?
I think absolutely. As to your point, Paul, seven hundred
plus billion dollars in global GMB, forty percent of the
business or less than forty percent is first part which
is which means that's the inventory that they own, and
(04:47):
that's the inventory where they have pricing control over still
sizable and therefore they do have that buying power advantage.
And they also have o their offsets. Right, Amazon has
more than just retail in its house. It's got a WS,
it's got advertising, which you are very very high profit margins.
So could they eat some of that cost absolutely? Will
(05:08):
they pass them along, yes, but not on the basics
right retail, one on one, you don't raise the price
of milk. You raise the price of something else. So
the items that you draw you to the platform, they're
not going to raise the price of materially there or
we don't expect them to. And on the third party side,
that's on Amazon's problem. They have over two hundred million sellers.
(05:28):
You can go between the seller. I'm sure that there
will be intense competition as prices may rise there for
shoppers to have choices.
Speaker 5 (05:37):
We have more clarity on tariffs than we did before.
But there's this idea that tariff policy is still in
a flux in the final framework could change. How much
do you think that will impact Amazon's decision making from
this point?
Speaker 4 (05:50):
I think for Amazon, you know, tariffs right now the
way we look at them as they're changing. China is
still on a ninety day pause, right, so we don't
know where things will end up in China, and that's
a very very important country to watch for. So I'd
say we're very much in fox Vietnam, the tariffs have
gone up from the ten percent post to twenty percent.
They're also going up in other Asian countries India speculated
(06:13):
or said to be around twenty five percent. These are
countries where the last round of tariffs, companies had moved
out of China into many of these countries. Right, so
while the teriff freight is still better, right, twenty percent
is still better than the thirty percent pause, and who
knows what it'll be among their two months from now.
Speaker 3 (06:30):
All right, for the thanks so much, Punem, thanks so much,
appreciate it.
Speaker 2 (06:33):
She covers all the retail for Bloomberg Intelligence, including Amazon.
Speaker 1 (06:38):
You're listening to the Bloomberg Intelligence Podcast. Jetch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (06:51):
Alexamanova from Bloomberg News on pulps when you were live
here on our Bloomberg and Active Broker Studio streaming live
on YouTube as well. All right, Applestock down one and
a half percent today, down eighteen percent year to date.
I thought their quarter last night was really good. The
fastest quarterly revenue growth in more than three years. Revenue
is of nine point six percent. People telling me this
(07:11):
is a low, maybe mid single digit growth story. It
looked pretty darn good to me. They said China was
even pretty good. And for me, one of the biggest
head wins for Apple story has always been how are
you going to operate in China? So I thought it
was a pretty solid, if not actually kind of really
good quarter. Angelo Zeno he's the pro who'll give us
the load down here. He's a senior vice president of
Equitiani sid C fr A research Angela. What was your
(07:34):
takeaway from the Apple print last night?
Speaker 6 (07:36):
Yeah, so thanks for having me, I think overall, to
your point, the results were really good, better than I
think we anticipated in anybody else out there. And again
to your point, I mean, this was probably the I
think the best growth rate we've seen since late calendar
twenty twenty one.
Speaker 7 (07:51):
And again with China, the return to.
Speaker 6 (07:53):
Growth, the first quarterly growth rate that we saw in
two years. All kind of positives here for Apple. And
I think to me that the biggest takeaway or the
biggest positive on the call was actually the services number.
They grew thirteen percent year of a year. They actually
didn't give guidance three months ago, you know, due to
some fears whether it had been related to they got
(08:14):
the Games case or what have you, and they actually
provided guidance for the September quarter as far as services
is concerned, also about thirteen percent are consistent with the
June quarter. So the services, we think continues to be
the key growth story and why we like it. But
I will say this, as far as the guidance is concerned,
and what they had to say forward looking in nature,
(08:36):
they didn't really answer or kind of alleviate the concerns
out there that some of the bears have, and you know,
I'd say the biggest thing is really the fact that
when they did provide guidance, it essentially assumes no changes
to tariffs, and we.
Speaker 7 (08:48):
Think that's unlikely.
Speaker 6 (08:49):
We actually think there are going to be changes to tariffs,
because you're going to get something from the two thirty
two semi conductor investigation, likely in the next couple of weeks,
and when you do see that, that is going to
have an impact. We think on Apple, probably their decision
on what they're going to do in terms of pricing
in their margin strategy.
Speaker 5 (09:06):
Angelo is speaking of tariffs. How sustainable is that revenue
growth number that we saw, How much of it is
related to a tariff related pull in?
Speaker 7 (09:14):
I mean, for the June quarter, they said it was
one out of their ten points.
Speaker 4 (09:17):
Right.
Speaker 6 (09:18):
Whether or not you want to believe that, you know,
is up to you know, every individual out there. We
expect We thought that, you know, when we originally saw
the print, we would have, you know, bet on the
fact that it probably would have been more than that. Again,
for the September quarter, the guidance of you midt to
high single digit growth where we were looking for about
three percent growth. It just seems like the growth rates
(09:40):
at least right now for the for these two quarters,
you can call they obviously attributed to the fact that
the iPhone sixteen cycle is just seeing maybe better upgrades
than what we saw in prior cycles. But it's just
hard to imagine that's all that's happening because you didn't
necessarily see those type of growth rates right in the
December quarter, in the March quarter when the cycle first started.
Speaker 7 (10:01):
So you know, it's.
Speaker 6 (10:03):
Probably a little bit more than what they're leading us
out to believe. But you know, well, again, we'll get
better clarity as we kind of go into the iPhone
seventeen cycle and into December quarter.
Speaker 3 (10:14):
ANGELA.
Speaker 2 (10:15):
One of the headwinds for Apple, real or perceived, I'm
not sure, is the belief that they don't really have
a solid AI play AI angle to the story A.
Speaker 3 (10:26):
Do you believe it? Do you agree with that? And
be what do you think they should be doing on
that front?
Speaker 7 (10:31):
No, we believe it. You know, they don't have They're not.
Speaker 6 (10:34):
This is the problem right when you kind of look
at some of these other stories across the tech space,
there are much better stories as far as the as
far as.
Speaker 7 (10:42):
Investing in AI.
Speaker 6 (10:43):
We know AI is going to be a huge disruptive
trend here over the next decade and longer than that.
But if you're not in this AI kind of ecosystem,
and you know you're not playing a role in the
whole AI space, you know you're missing out and investors
are going to get frustrated with that.
Speaker 7 (10:59):
The biggest is with.
Speaker 6 (11:00):
Apple has been the fact that they haven't they haven't
made good on their promise. You know, back in June
of twenty twenty four at the Developers Conference when they
essentially said by this year we were going to see
you know AI or you know, Cirie integration across that
app store, and we just haven't seen it yet.
Speaker 7 (11:19):
What we did like last night on the.
Speaker 6 (11:21):
Call was Tim Cook seemed like he was he remains
committed that we are going to see at some point
here over the next couple of quarters. We continue to
say they've got to get this right. By the time
we hit the Developers Conference in June of next year.
That's the absolute latest that they can get this AI
story right. We think they will get it right. They've
got all the money in the world to kind of
throw at it, and whether it be done internally via
(11:42):
partnerships or some m and a strategy all which it
seems like they were open to on the call last night.
Speaker 7 (11:48):
We think they'll get it right.
Speaker 5 (11:50):
Obviously a lot of investors want to hear what companies
are doing on AI. But does Apple actually risk losing
customers if they don't come up with an AI strategy
or will they be okay with using each hot GPT
app on their phones.
Speaker 7 (12:04):
That's a great question.
Speaker 6 (12:05):
You know, I don't know if they really risk losing
you know, customers at this point in time. I do
think it's going to have a huge impact on the
upgrade cycle. If you see them get this AI story
right and we see some really cool AI capabilities, integration
across the app store, get these developers to really developing
some you know, really great apps out there, you're going
(12:27):
to see consumers really start to upgrade. And Apple's going
to benefit from a monetization perspective on the hardware side,
and we think they're also going to be able to
charge some nice features from a services perspective as well.
So that's how they can make money from an AI
standpoint on both hardware and services. But maybe to your point,
our consumers all of a sudden depart not necessarily.
Speaker 7 (12:51):
But listen, Samsung is a formidable threat out there.
Speaker 6 (12:55):
They've got you know, some decent people out there as well.
You know, they've got some really good integration with with Alphabet.
So you know, we'd rather see Apple get it right
and that have to necessarily worry about that issue.
Speaker 3 (13:08):
Angel thirty seconds left.
Speaker 2 (13:10):
I kind of like the aqua higher kind of strategy
that are seeing across the tech space where companies will
buy a majority stake, not the whole thing so the
regulators don't jump down their throat.
Speaker 3 (13:19):
Is that something Apple would considered, do you think?
Speaker 6 (13:22):
I mean, it doesn't seem like it's in their DNA
right now. And when we kind of see you know,
some of the moves that they've met as of late,
they've actually been you know, they've actually been hurt by
the Aqua higher strategy, right, just given some of the
key departures that we've seen.
Speaker 7 (13:37):
But yeah, I mean, Apple's got.
Speaker 6 (13:38):
The They've got the ability to kind of benefit from
that theme. My guess is again they're going to have
to get this AI story right so they could use
it towards their advantage.
Speaker 7 (13:48):
But I agree with you, I like the.
Speaker 6 (13:49):
Whole Aqua hier theme for the broader, you know, AI,
space ecosystem and the tech sector.
Speaker 2 (13:54):
All right, angel I thank you so much. We appreciated that.
Angel Is, you know, senior vice president equity analyst at
CFRA Research. I mean, look, it's not like they don't
have the money, folks, Apple Scott one hundred and thirty
billion dollars of cash on the balance sheet.
Speaker 3 (14:06):
They can borrow whatever they want.
Speaker 2 (14:07):
They're gonna have free cash flow, you know, north of
one hundred billion dollars over the next several years, one
hundred and twenty billion dollars.
Speaker 3 (14:13):
So it's not like the of the cash to go
all in on AI.
Speaker 2 (14:17):
The question is kind of what's their strategy, and that's
still kind of up in the air for a lot
of investors. I'm not sure we're gonna get much cloudy,
but as angel is saying, that needs to come.
Speaker 1 (14:28):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 3 (14:42):
All right, let's switch over to the energy biz.
Speaker 2 (14:45):
I'm just going to quote Wtech houd to oil because
I watch Landman four season. I know all about the
oil and gas businesses. Down at dollar eighty seven sixty
seven dollars and thirty eight cents. Chevron, Exon it reported
some numbers here today. Let's break it all down for
the big oil companies. Vince piaz a senior equity and
I'll see covers all the energy space for Bloomberg Intelligence.
He has done that for decades on both the south
(15:06):
side and.
Speaker 3 (15:06):
The buy side.
Speaker 2 (15:07):
Evince, what you what'd you see? What you learn from
the Exons of the world, the Chevrons of the world.
Speaker 8 (15:13):
Hey, so today what we definitely picked up is, you know,
the view that Exxon and Chevron are closely mirroring one another.
So you know, Permian growth, Permian basin growth for both
the Chevron and Exon was there. Chevron topped out at
(15:35):
a million barrels a day h in the Permian. But
you know, going forward that will likely sort of temper
down a bit because of just you know, the indecision
of around wt I and just the the energy environment
in general. So we'll probably see some more free cat
flow flowing out of their More importantly though, for Chevron,
(16:00):
Paul the Hess deal closed. So now the hard part
starts for Chevron to integrate this very large footprint after
you know, almost two years of legal hassles with Exon.
The good news here is that both parties are now
(16:20):
partners in what is the most prolific offshore international asset
that we've seen in decades. And so I think going forward,
what you see here for both of these entities is
the upstream side of the equation stinning more of a
light on the upstream side because of not only developments
(16:44):
that they've had offshore, but also here shorter cycle permium growth,
which will likely provide tax flow going forward for both
of these entities.
Speaker 5 (16:57):
Vince, one thing that stood out to me is, in
addition to the off its surprise, Exon said it's keeping
an eye out for more acquisitions after it's sixty billion
dollars dollar takeover of Pioneer Natural Resources. What do you
think that this activity will mean for the company.
Speaker 8 (17:12):
Well, look, they have been very proficient in picking up pieces,
first the XTO several years ago, now Pioneer. This is
not a play just for volume. It is strategic. The
permium basin can still use some consolidation. There aren't very
(17:33):
many pieces of size left. There are a lot of
other smaller entities. So for Exon, in order to move
that needle, it would need to make a a very
sizable acquisition. They're still out there and they do have
some scale. The issue here is this isn't just about volume.
(17:54):
It's also about consolidating and expanding the resource play within
the Permian and there is and there are a few
of size in the region that would make sense. But
we're not going to lead the witness and tell you
what's coming up in the next couple of weeks for us.
Speaker 2 (18:12):
So, Vince, I think about that the Chevron deal, and
I know you know from talking to you and reading
your research. A big part of that attraction for Hess
by being bought by Chevron was Hess had a stake
in or a big property or find down a Gian
to tell us about that, because that was.
Speaker 3 (18:28):
A sure real opportunity.
Speaker 8 (18:30):
Yeah, I think that is the crown jewel of this acquisition,
and that's what the arbitration really was about. It was
about Exxon's writer or first refusal to that particular asset.
Of course, uh that decision went in favor of Chevron. No,
Guyana is a very large asset the straybook block is
(18:54):
a very large, prolific piece. There are more than a
dozen developments that will be ongoing, and that asset base
will provide decades of production growth that will facilitate the
short run short cycle development, short cycle production here in
(19:17):
the US in the permium basin for both Devron and Exon.
So having two very large entities that understand these longer
cycle large developments, I think is a positive. And it's
also a positive that both have fairly deep pockets and
good experience doing these types of things.
Speaker 2 (19:40):
Vince, thanks so much for joining us. Always appreciate getting
a few minutes of your time, Vince Piazza. He is
the go to voice Bloomberg Intelligence for all things energy,
oil and gas for Bloomberg Intelligence and again on the
Landman front. You got to watch it if you want
to be an expert like I am now in oil
and gas.
Speaker 5 (19:58):
I'm still learning a lot about oil and gas every
day at I don't.
Speaker 3 (20:01):
Know, I just it's a tough life. That's one of
my takeaways.
Speaker 2 (20:03):
I mean, that's hard to get that stuff out of
the ground is not easy, and these companies make huge investments. Again,
Chevron's excellon spending sixty billion dollars for Pioneers, Chevron buying hes.
Speaker 3 (20:15):
I mean, it is a tough business, but I'm a act.
Speaker 2 (20:18):
They are filming season two of land Man, so it
is coming, so that is cool.
Speaker 3 (20:21):
I'm all fired up for that.
Speaker 4 (20:23):
There.
Speaker 1 (20:24):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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