August 7, 2024 • 5 mins
Rideshare giant Uber has reported its second quarter result - and shares were up +11 percent.
CEO Dara Khosrowshahi says the company is in a position to keep growing, despite an uncertain macroeconomic outlook and decreased consumer spending.
Milford Asset Management's Deborah Lambie unpacks these results.
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Episode Transcript
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Speaker 1 (00:00):
Now, it's been a hell of a week. As you know,
on Monday, the S and P five hundred was down
three percent. That's its biggest pullback since September twenty two.
Same day, Japan had its worst one day drop since
nineteen eighty seven, selling off a mass of twelve point
four percent, bringing the total fall from the peak to
around about twenty five percent. To talk us more through this,
Debra l Ambi of Milford Acid Management. Hey, Deborah, Hi,
how are you very well? Thank you? So can you
(00:20):
talk us through the market move? Since then? Has everybody?
Has everyone just recovered?
Speaker 2 (00:25):
Yeah, So what we've seen is overnight markets through the
little bit as buyers waited for him to buy the
dip and S and P was up around one percent.
So that's after on Monday the SMP was down three
as you've said, and Japan had its worst day since
nineteen eighty seven, and so this was reassuring to see.
But the index is still down around seven and a
half percent from its highs and investors have been worried
(00:46):
about the ability of big tech company to generate a
return on the huge art social intelligence D plus, they've
been some concerned about US growth, which made worse by
a week jobs report last week, and then what we've
seen is over. In Japan, the neatly two to five
closed up around ten percent, which signals that the worst
of the panic might be over. So after having that
(01:08):
worst day since nineteen eighty seven as your reference, on Monday,
overnight was actually it's es day since two thousand and eight.
So however, the total four from the peak in Japan
is still around eighteen percent. As investors have been processing
Japan's first interest rate height in seventeen years, and this
caused an unwind of the yen carried trade, which effectively
(01:29):
means that investors have produced some of their Japanese debt
and front of that by selling global assets like US
tech stops. So shot from what we've seen, as markets
have actually stabilized at these lower levels. And overnight what
we saw was the Japan Central Bank intelligent made a
coordinated announcement to try to show a united front and
restore some calm to financial markets. But we do expect
(01:52):
bullet floy to stay high.
Speaker 1 (01:54):
Okay, Overnight we also had Uber reported second quarter result
and as a result, the shares were up about eleven percent.
Speaker 2 (02:00):
Why'd they go up, so Uber reported high expected profit
and importantly return to profitability, so this isn't the first
time it's posted a profit. It was profitable last year,
but at the start of the shad slipped back the
losses on higher costs from equity investments in legal settlements.
So in its results it's reaven without sixteen percent, and
(02:22):
the CEO said it was well positioned to grow despite
the unserved macroeconomic environment and was very clear that they're
not yet seeing any weakness and demand from consumers, which
we do know has been slowing their spending in other
areas of the economy, including places like restaurants, So for
now Uber it doesn't seem to be impacted by this.
And then finally Uber's pushed into advertising continues and its
(02:44):
new ad business exceeded one billion dollar revenue runway in
the corter. That was all taken very well.
Speaker 1 (02:50):
Yeah, I can imagine we're about seventy five percent of
the way now through the US earning seasons. Being quite
a right, hasn't it. We've had Microsoft, Meta, Google, Amazon,
those really big tech names reporting their results. What are
you seeing here?
Speaker 2 (03:02):
Yeah, it has been a ride, all right, And so
overall i'd say, results from big tech have been quite mixed,
and the key theme has been increased capital spending on
artificial intelligence. So Amazon, it had a fantastic result in
its cloud computing business, but its retail business this week,
so it shares actually fell around nine percent. Metag digital
AD revenue grew rapidly. It posted a strong revenue forecast
(03:26):
and then talked to high capital spending on artificial intelligence,
and it shares up around five percent. Google saw she
strength and its cloud business, but its AD revenue actually
came in loads and expected, so its shares sold off
five percent. And then finally, Microsoft's cloud business actually missed
expectations for the first time in two years, but because
it was due to a lack of supply, not demand,
(03:47):
it shares only trader down one percent. So the big
common theme from all of those companies, so Microsoft, Amazon,
and Google Meta was all big increases in capital spending
to focus on building out there artificial intelligence infrastructure.
Speaker 1 (04:01):
Oh, interesting stuff. That increase in the AI investment. Would
that have been taken quite well by the likes of Nvidio.
Speaker 2 (04:07):
Yeah, And so we don't get in there's earning results
until the end of the month. And this has have
been really focused on what these big tech companies have
been saying and what means for in video. So while
that sounds great this high level of spend currently and
this is are increasingly concerned about how sustainable the level
of tech capex is in the sustainability of demands for
(04:28):
in videos chips. So these results show us that these
companies are spending tens of billions of dollars now, but
also that it's not yet translating to meaningful growth. So
on this is a questioning if the companies can actually
generate and accept your will return on these artificial intelligence investments,
and then how sustainable with spenders. And then on top
of that, these have been both exacerbated by a rumor
(04:52):
delay to the launch of the video's next generation AI chips,
and videos shares are actually down around twenty percent from
its hime early this year.
Speaker 1 (05:01):
Good stuff, Debraah thank you for talking to us through
a Deborah Landy of Milford Asset Management. For more from
Hither Duplessy Allen Drive listen live to news talks it'd
be from four pm weekdays, or follow the podcast on iHeartRadio.
Now, it's been a hell of a week. As you know,
on Monday, the S and P five hundred was down
three percent. That's its biggest pullback since September twenty two.
Same day, Japan had its worst one day drop since
nineteen eighty seven, selling off a mass of twelve point
four percent, bringing the total fall from the peak to
around about twenty five percent. To talk us more through this,
Debra l Ambi of Milford Acid Management. Hey, Deborah, Hi,
how are you very well? Thank you? So can you
(00:20):
talk us through the market move? Since then? Has everybody?
Has everyone just recovered?
Speaker 2 (00:25):
Yeah, So what we've seen is overnight markets through the
little bit as buyers waited for him to buy the
dip and S and P was up around one percent.
So that's after on Monday the SMP was down three
as you've said, and Japan had its worst day since
nineteen eighty seven, and so this was reassuring to see.
But the index is still down around seven and a
half percent from its highs and investors have been worried
(00:46):
about the ability of big tech company to generate a
return on the huge art social intelligence D plus, they've
been some concerned about US growth, which made worse by
a week jobs report last week, and then what we've
seen is over. In Japan, the neatly two to five
closed up around ten percent, which signals that the worst
of the panic might be over. So after having that
(01:08):
worst day since nineteen eighty seven as your reference, on Monday,
overnight was actually it's es day since two thousand and eight.
So however, the total four from the peak in Japan
is still around eighteen percent. As investors have been processing
Japan's first interest rate height in seventeen years, and this
caused an unwind of the yen carried trade, which effectively
(01:29):
means that investors have produced some of their Japanese debt
and front of that by selling global assets like US
tech stops. So shot from what we've seen, as markets
have actually stabilized at these lower levels. And overnight what
we saw was the Japan Central Bank intelligent made a
coordinated announcement to try to show a united front and
restore some calm to financial markets. But we do expect
(01:52):
bullet floy to stay high.
Speaker 1 (01:54):
Okay, Overnight we also had Uber reported second quarter result
and as a result, the shares were up about eleven percent.
Speaker 2 (02:00):
Why'd they go up, so Uber reported high expected profit
and importantly return to profitability, so this isn't the first
time it's posted a profit. It was profitable last year,
but at the start of the shad slipped back the
losses on higher costs from equity investments in legal settlements.
So in its results it's reaven without sixteen percent, and
(02:22):
the CEO said it was well positioned to grow despite
the unserved macroeconomic environment and was very clear that they're
not yet seeing any weakness and demand from consumers, which
we do know has been slowing their spending in other
areas of the economy, including places like restaurants, So for
now Uber it doesn't seem to be impacted by this.
And then finally Uber's pushed into advertising continues and its
(02:44):
new ad business exceeded one billion dollar revenue runway in
the corter. That was all taken very well.
Speaker 1 (02:50):
Yeah, I can imagine we're about seventy five percent of
the way now through the US earning seasons. Being quite
a right, hasn't it. We've had Microsoft, Meta, Google, Amazon,
those really big tech names reporting their results. What are
you seeing here?
Speaker 2 (03:02):
Yeah, it has been a ride, all right, And so
overall i'd say, results from big tech have been quite mixed,
and the key theme has been increased capital spending on
artificial intelligence. So Amazon, it had a fantastic result in
its cloud computing business, but its retail business this week,
so it shares actually fell around nine percent. Metag digital
AD revenue grew rapidly. It posted a strong revenue forecast
(03:26):
and then talked to high capital spending on artificial intelligence,
and it shares up around five percent. Google saw she
strength and its cloud business, but its AD revenue actually
came in loads and expected, so its shares sold off
five percent. And then finally, Microsoft's cloud business actually missed
expectations for the first time in two years, but because
it was due to a lack of supply, not demand,
(03:47):
it shares only trader down one percent. So the big
common theme from all of those companies, so Microsoft, Amazon,
and Google Meta was all big increases in capital spending
to focus on building out there artificial intelligence infrastructure.
Speaker 1 (04:01):
Oh, interesting stuff. That increase in the AI investment. Would
that have been taken quite well by the likes of Nvidio.
Speaker 2 (04:07):
Yeah, And so we don't get in there's earning results
until the end of the month. And this has have
been really focused on what these big tech companies have
been saying and what means for in video. So while
that sounds great this high level of spend currently and
this is are increasingly concerned about how sustainable the level
of tech capex is in the sustainability of demands for
(04:28):
in videos chips. So these results show us that these
companies are spending tens of billions of dollars now, but
also that it's not yet translating to meaningful growth. So
on this is a questioning if the companies can actually
generate and accept your will return on these artificial intelligence investments,
and then how sustainable with spenders. And then on top
of that, these have been both exacerbated by a rumor
(04:52):
delay to the launch of the video's next generation AI chips,
and videos shares are actually down around twenty percent from
its hime early this year.
Speaker 1 (05:01):
Good stuff, Debraah thank you for talking to us through
a Deborah Landy of Milford Asset Management. For more from
Hither Duplessy Allen Drive listen live to news talks it'd
be from four pm weekdays, or follow the podcast on iHeartRadio.
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