>>> OKAY.
SO WITH APOLOGIES TO JOANIE
MITCHELL, WE’RE GOING TO LOOK AT
CLOUDS FROM BOTH SIDES.
MICROSOFT MINUTES AWAY FROM
RELEASING ITS FISCAL FOURTH
QUARTER REPORT.
IT IS EXPECTED TO POST EARNINGS
PER SHARE OF $2.29 OF REVENUE OF
$52.44 BILLION AND ANALYST DO
EXPECT GOOGLE PARENT ALPHABET TO
SHOW PROFIT OF $1.28 OF SHARE ON
REVENUE OF $69.88 MILLION FOR
THE SECOND QUARTER.
NOW, AHEAD OF THE REPORTS WE’RE
GOING TO KEEP CHECKING THE
NUMBERS BECAUSE THEY MATTER.
MICROSOFT, BY THE WAY WHICH HAS
LOST 25% YEAR TO DATE COMPARED
TO THE S&P, WHICH IS DOWN 18%
YEAR TO DATE, IS DOWN ABOUT
THREE AND A THIRD PERCENT RIGHT
NOW AND ALPHABET GOOGLE ABOUT
TWO AND A THIRD PERCENT AND IT’S
BEEN CLIPPED 27% THIS YEAR.
BOTH HAVE MADE THEIR CLOUDS
SERVICES A CENTERPIECE OF THEIR
BUSINESSES BUT JUST AS SOON AS
THOSE TWO REPORT, MAKE NO
MISTAKE ANALYSTS AND INVESTORS
LOOKING AHEAD TO META’S EARNINGS
TOMORROW AFTER THE BELL AND
APPLE AND AMAZON REPORTING ON
THURSDAY.
AHEAD OF THE BIG REPORT, THEY’RE
TINGED IN RED.
MICROSOFT ALREADY TRIMMED ITS
EARNINGS OUT LOOK IN JUNE DUE TO
THE BLACK CLOUD OF STRONGER
DOLLAR RAINING ON THE PARADE.
THE CLOUD BUSINESS, SEE WHAT I’M
DOING HERE, COULD THE CLOUD
BUSINESS COUNTER SOME OF THE
STORM?
SENIOR ANALYST AND MANAGING
DIRECTOR AT DA DAVIDSON.
TOM, WHAT WILL YOU BE REALLY
SCRUTINIZING HERE, AND I’D LIKE
TO SAY THE CLOUD BUSINESS
BECAUSE WE COULD START WITH
SOMETHING POSITIVE, THAT’S BEEN
A GREAT REVENUE GENERATOR.
>> SURE, IF YOU LOOK AT AMAZON
IN PARTICULAR, THEIR CLOUD
COMPUTING BUSINESS AND
ADVERTISING BUSINESS HAVE BEEN
BRIGHT SPOTS.
WHEN I THINK ABOUT
GOOGLE/ALPHABET’S EARNINGS AND
MICROSOFT’S EARNINGS, THEIR
RESPECTIVE CLOUD COMPUTING
DIVISIONS THOUGHT TO BE DOING
VERY WELL.
THE CHALLENGE AS YOU POINTED OUT
IS THAT THEY’RE BOTH
MULTINATIONAL FIRMS AND WHILE
THE STRONG DOLLAR IS WONDERFUL
FOR AMERICANS WHO WANT TO TRAVEL
IN EUROPE, IT’S NOT SO GOOD FOR
MULTINATIONAL FIRMS.
YOU’RE SEEING SOME 20 YEAR HIGHS
VERSUS THE JAPANESE YEN UP AT
PARODY WITH THE YEAR EURO AND ST
AGAINST THE BRITISH POUND.
CLOUD COMPUTING IS STRONG WHEN
ALPHABET AND MICROSOFT REPORT
AND AMAZON LATER THIS WEEK BUT
FOR THE MULTINATIONAL FIRMS, THE
STRONG DOLLAR IS A UNIQUE AND
NEW CHALLENGE IN THE
JUNE-QUARTER.
>> DIG DOWN INTO THE CLOUD
BUSINESS FIRST BECAUSE THESE ARE
SOME HEADY NUMBERS. THE MARKET
SHARE HAS PRETTY MUCH REMAINED
STATIC LOOKING AT THE RANKINGS
HERE.
NUMBER ONE OF 600-POUND GORILLA
HERE, AMAZON WEB SERVICES, 33%
OF THE MARKET’S SHARE.
AZURE IS MICROSOFT AND GOOGLE
CLOUD PULLING UP THE REAR AT 10%
AND WHAT ASK IT ABOUT THE CLOUD
BUSINESS THAT IS SO VALUABLE AT
THIS POINT THAT IT’S SORT OF
TAKEN -- I DON’T WANT TO SAY THE
LEAD OVER AD SALES BUT WHERE DO
YOU SEE BOTH OF THEM IN RELATION
TO EACH OTHER IF THAT MAKES
SENSE?
>> SO THE GOOD NEWS ABOUT CLOUD
COMPUTING VERSUS ADVERTISING IS
AN ARGUMENT CAN BE MADE IT’S
LESS OF A DISCRETIONARY SPEND
AND MORE OF AN INVESTMENT FOR
COMPANIES TO SAVE MONEY.
WHEN YOU THINK ABOUT COMPANIES
GOING FROM THEIR OWN SERVERS TO
GOOGLE’S OR AMAZON’S OR
MICROSOFT’S, GENERALLY SPEAK
THAT’S A MONEY SAVING EFFORT,
AND THE GOOD NEWS IS YOU’VE SEEN
IMPROVEMENTS IN TRAVEL.
A LOT OF SECTORS THAT HAD SCALED
BACK THEIR CLOUD COMPUTINGOUSAGE
DURING THE EARLY STAGES OF THE
PANDEMIC, SO I THINK, AGAIN,
CLOUD COMPUTING RIGHT NOW IS IN
A GOOD PLACE.
ADVERTISING ESPECIALLY DIGITAL
ADVERTISING IS IN A VERY
DIFFICULT PLACE.
I’M CONCERNED THEY’RE ENTERING A
RECESSION.
>> I DON’T LIKE TO MAKE THE
COMPARISON BETWEEN GOOGLE AND
SNAP BECAUSE THEY ARE TWO VERY
DIFFERENT BUSINESSES, BUT SNAP
WAS A PRETTY BIG DISASTER THERE.
YOU CAN CERTAINLY TRIANGLATE OR
DIS-’TIL SOMETHING FROM WHAT
SNAP REPORTED IN ITS NUMBERS SO
THEREFORE I’M LOOKING AT AD
SALES AND THINKING EVERYBODY IS
GOING TO HAVE TROUBLE WITH THIS;
AM I WRONG?
>> SO I THINK APPLE ESSENTIALLY
BROKE SNAP CHAT.
THAT WAS KIND OF THE INITIAL
CHALLENGE FOR SNAP CHAT AND
FACEBOOK AND OTHERS AND APPLE’S
EFFORTS THAT ARE PRIVACY RELATED
AND MAKING IT MORE DIFFICULT FOR
ADVERTISERS TO DETERMINE DOES
THEIR SOCIAL NETWORKING
ADVERTISEMENT WORK?
FOR GOOGLE, THEIR SEARCH
OPTIZATION BENEFITED FROM
APPLE’S MOVE AND ADVERTISERS
SAID I’M GOING TO PUT MORE IN
SEARCH ENGINE OPTIZATION AND
THAT CONTINUES TO WORK AND I’LL
SCALE BACK MY BUDGET ON SOCIAL
NETWORKING.
WHETHER OR NOT YOUTUBE IS IMMUNE
TO SOME OF THE DIGITAL
ADVERTISING PRESSURES OF SNAP
CHAT, THAT’LL BE INTERESTING TO
FIND OUT.
>> YEAH, INDEED.
WE’RE ABOUT 40 MINUTES AWAY FROM
MICROSOFT AND GOOGLE REPORTING.
YOU KNOW, WE BRING UP META AND
TALK ABOUT THE STRONG DOLLAR.
WE TALK ABOUT AD SALES.
WE HAVE TO TALK ABOUT TIKTOK AND
THE COMPETITION THAT IT HAS JUST
SHOVED IN META’S FACE, AND YOU
SEE IT WITH YESTERDAY’S NEWS
WHERE KIM KARDASHIAN AND KYLIE
JENNER IN A VERY ILL TIMED --
WAS IT AN INSTAGRAM POST?
IT WAS AN INSTAGRAM POST AND
SAID STOP TRYING TO BE TIKTOK.
MEANTIME META REPORTS TOMORROW.
THAT IS CERTAINLY NOT GOOD NEWS.
THE INSTAGRAM PIECE OF THIS
THEY’VE TRIED TO GET ATTENTION
FROM REELS AND THAT BUSINESS BUT
TIKTOK IS STILL THE REAL LEADER
HERE; RIGHT?
>> SO WE’RE WORKING ON XY PAPER
THAT WE’LL BE PRESENTING AT BIG
SKY CONFERENCE AT AUGUST 21 AND
AUGUST 23 AND TALKING ABOUT
DISRUPTIVE FORCE OF TIKTOK.
FOR FACEBOOK META IT’S AN
INCREDIBLY WELL RUN COMPANY, AND
THE PLAY BOOK IN 2022 IS VERY
DIFFERENT FROM THE PLAY BOOK IN
2012.
THERE’S TOO MUCH REGULATORY HEAT
ON FACEBOOK/META AND CAN’T
ACQUIRE THE COMPETITION IT’S
DISRUPTING.
WHEN YOU LOOK AT PORTFOLIO OF
BRANDS USING INSTAGRAM TO TRY
AND COMBAT TIKTOK, THAT’S THE
BEST FACEBOOK/META CAN DO RIGHT
NOW.
>> OKAY.
AND A QUICK MENTION OF APPLE, WE
WANT EVERYBODY TO KNOW THAT A
GOOD CHUNK OF APPLE’S REVENUE
COMES FROM OUTSIDE OF THE
AMERICAS.
WHAT IS THE FOREIGN EXCHANGE
HEAD WIND RISK YOU SEE WITH THE
STRONG DOLLAR?
>> THERE’S SIGNIFICANT RISK TO
APPLE’S EARNINGS.
MANAGEMENT INDICATED A 300 BASIS
POINT NEGATIVE IMPACT IN THE
JUNE-QUARTER EXPECTED FROM CON
SEIZURE DISORDERS THAT COULD BE
THAT MUCH FROM THE
SEPTEMBER-QUARTER AND IT’LL BE
CHALLENGING FOR APPLE WITH A
LARGE PERCENTAGE OF SALES
OUTSIDE THE U.S..
>> GOOD TO SEE YOU, TOM.
TOM FORTE AND HE’LL BE GLUED TO
THE REPORTS THAT COME OUT AFTER
THE BELL.
YES, I HAVE ACTUALLY EMBRACED
TIKTOK.
I HOPE YOU FOLLOW ME, TOMATO.
TOM.
I’M ON TIKTOK@REDFOXLIZ.
I DO MORNING REPORTS.
WRONG ANSWER.
NO ANSWER IS WRONG ANSWER.