TMTB: META AMZN AAPL TEAM thoughts; SHOP 3p revised up; 3P Roundup (RBLX, UBER/LYFT); TSLA recall
Good morning. QQQs are up 1% as we wait for NFP on the back of META AMZN prints last night. IWM not participating flat, while BTC, Crude and yields are also flattish.
Not a ton of research out this morning other than sell-siders recapping EPS reports from yesterday. Some high level notes first, then we’ll go into details below.
We don’t have a lot new to say on META (+17%) that we didn’t already say last night - a great, surprisingly strong print that undercuts decel fears. Other ad names — PINS, SNAP — up in sympathy as they should be. GOOGL is the big question this morning and what META means for them. I’ve seen several tech spec sales on sell-side say they are in dog house now; in other words, why aren’t they seeing the same numbers META did? We don’t agree: we think the META print is a strong-read through for GOOGL. META’s Q4 was good but not amazingly great like their Q1 guide; GOOGL’s Q4 print missed buyside expects, but wasn’t horrible. GOOGL doesn’t guide, and the 3p data we are seeing so far is showing a meaningful accel in search revs so far in Jan so it dovetails what META is seeing. Not sure what the stock does today, but we think the set up gets more interesting as sentiment gets more negative and it could get interesting to us on the long side again. We also thought commentary around continuing to invest in GenAI was interesting (more detail below). Zuck: We’re playing to win AI
AMZN +6%: while bullish buyside numbers don’t go up a lot after yesterday, #s strengthened the belief in the bull case, commentary/backlog around AWS accelerating was a positive, and retail was strong in Q4 and the guide implies Q1 is fine as well. No change to the story here. Cloud consumption stocks - MDB, SNOW, DDOG - should like it.
AAPL -3%: Investors not happy with China revs and the guide that implies down 5% yy in March vs expects for flat once 5B in benefits from demand pushout for Q2 are removed. The contrast between AAPL and other Mega-cap grows starker. Bulls will want to say look past March noise as tailwinds from Gen AI product launch and Vision Pro adoption ramp while GMs and services continue to outperform. Good pts, but definitely not very exciting and question is: does it outweigh China share loss fears and decelerating growth?
TEAM -9%: A miss vs some heightened expectations and HFs are piling on the short case this morning as they missed and decel’d Q2 (ex-loom), lowered the high end of FY24, then guided to an aggressive # next q despite comps getting tougher (cloud couldn’t accel on easier comps, what happens when they get tougher?). At 45x FCF and decelerating growth, looking like a Growth —> GARP transition. Print also strengthens strong enterprise vs. weak SMB narrative given commentary.
SHOP +5%: Weak yesterday on Yipit data which called out a bit decel in latest week, but today they came out saying that was a mistake and #s didn’t really decel all that much in the latest week. Will also be helped by AMZN #s. Wells also out with a note raising PT to $90 and calling out catalysts in 24 such as up-market and POS push driving GMV growth, Shop Pay continuing to ramp, increasing monetization from cross-selling upgrades, and GenAI initiatives.
META: Great numbers with a totally bonkers guide implying 25% at midpt vs street at 18% and high end at 29% y/y. This is on a 5 pt tougher comp. So long decel fears…
Not a ton new here, just recapping what I wrote last night…