Amazon’s Quarterly Revenue Beats Out Walmart… And Palantir’s Next Move 02/06/25

0:01Live from the Nasdaq market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. Another earnings bonanza tonight. Amazon whipsawing after hours and Pinterest hitting six-month highs. The headlines behind all the moves and more. And a Palantir pop. The stock hitting another record today and up nearly 35 percent this week. How to make sense of this seemingly unstoppable stock and what the options market is saying about what is next. Plus, Eli Lilly jumps even as its GLP-1 drugs disappoint. Coach parent Capistri bags an all-time high of its own. and what Qualcomm's struggles could say about the future for Apple.

0:37I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Carter Worth, Karen Feiderman, Dan Nathan, and Guy Adami. We start off with a volatile move in Amazon after earnings. A tech giant beating top and bottom line estimates, posting cloud unit growth in line with estimates. But a weak sales forecast for Q1 is weighing on shares in the after hours. The conference call kicking off moments ago. CNBC's Kate Rooney's got more. Kate. Mel, so Amazon didn't beat for the quarter on top and bottom line, as you mentioned. but underwhelming guidance and then this foreign exchange impact causing what we saw, that knee-jerk reaction in shares after hours.

1:09The initial drop was around 5%. It has pared back some of those losses. Amazon's cloud growth rate was really the key item investors were watching. It was right in line with the streets estimate of 19%. But if you look at the pure AWS revenue number for the quarter, it did come up just a hair short of estimates at$28.8 billion. On guidance, Amazon's Q1 revenue range was light. Same thing with operating income. Some of the company clarifying in the press release saying it's a foreign exchange impact here. It does see a potential dollar impact and, quote, anticipates an unusually large, unfavorable impact of approximately$2.1 billion from FX.

1:45They also call it a leap year effect from last year. Advertising did miss estimates, but the retail side of the business showing a lot of strength in the quarter thanks to holiday sales. Online sales beat$75.56 billion, and e-commerce margins, which are under this North America segment, were 8%. That was up from 5.9 % in the prior quarter. CEO Andy Jassy on the conference call. Kicking things off now, Mel. We are waiting for that CapEx number, any sort of color around spending, and then comments on tariffs potentially as well. Back to you. A lot to come on that call. Kate, thank you. Kate Rooney.

2:19Karen, you're deciphering the quarter. What do you make of it? Yeah, so, I mean, Kate touched on really the high points. I mean, retail is good. That North America margin was great. But I think the story really here is AWS and in line, right in line-ish is just not quite good enough right here. To me, the miss, whatever's being priced in for the guidance rather being weak, not that it was a miss, it was a beat. But I don't really give that much credence at all. They're not great at forecasting, and I don't think they really care about forecasting. And who wants to be a hero and give a strong forecast at the beginning of the year?

2:52With a volatile year. Right, right. Our tariffs are unknown, and lots of things are unknown. The leap year thing is just ridiculous. I mean, everybody's, like, surprised by leap year all of a sudden. It's not ridiculous. If you were born on February 29th, it's not ridiculous. It's not ridiculous if that's your one birthday every four years. I was just saying. But if you're a company that wants to give guidance. That's what you mean. And you're like, oh, but leap year. And you're putting in a number of days in the first quarter. Okay. I think the setup was not too different than Alphabet, right?

3:15When you think about it, it's trading at an all-time high. It rallied 10 % right into the print. It was down a little bit in sympathy when Google was down 8 % yesterday. But it's like the same thing that happened. You know, if you think about Azure, if you think about Google Cloud, they came in like basically in line, but it wasn't good enough. You know, I kind of disagree a little bit, Karen, on that operating income guidance that they gave. You know, the consensus was 18.2 billion. They guided to 16 or 14 to 18. So the midpoint is 16. That's not like 11 percent or so. And what I think is going on here, these companies have invested so much in the CapEx.

3:49And this company, they spent$75 billion last year. They said it's going to be higher. That's not too different than what we heard from Microsoft and Google and Meta. But, again, I'm surprised the stock's not down more, to be frank. Yeah, because, I mean, look where we are in the street. Look at how a lot of these names are also. They're seeing the fever break a little bit. So let's see how this thing trades tomorrow. I suspect it trades lower. Call me Pollyanna. But when the AWS numbers came in in line, I thought, oh, well, maybe it would actually catch a bid because there's relief after Microsoft and after Alphabet.

4:19There's relief that they were able to report an in line for cloud. I so much like Melissa better than Pollyanna. I know. It's completely different people. You know, operating margins to me, 11.3 percent, good for them. I mean, year over year improvement and obviously better than she was looking for. The CapEx number is probably scaring people. I'm sure that people are pouring through this now. I think it's up like almost 30 percent higher than the street was looking for. And it's up 91 percent year over year, which is either really good or really bad. I'm sure NVIDIA is probably higher on the back of this.

4:50I would imagine we'll see if that lasts. But I'm sort of in between Dan and Karen. Like, I think it's fine. Like, we've seen sell offs on the back of Amazon quarters before that a week and a half or so later get bought up. So I think that's what we're probably in the midst of now. Yeah, I'm kind of in the fine category, not exciting. But I think it's important to note this, that Amazon's performance to the market, which is important, to the Qs, which is important, to the XLY, to the entire consumer discretionary sector, all peaked during COVID. Right. So Amazon has been such a winner, of course, for the reasons everyone's ordering packets, staying at home.

5:24Its relative performance stands to this day almost four years ago. So the question is, does it have catch up potential with its sector, consumer discretion, with the Qs, with the market? Ultimately, I think yes. And I would say the weakness is something to take advantage of. Just one thing about the guidance. The operating margin guidance, that is pretty wide considering the revenue guidance. So it's just very vague. So I really don't think we should discount it entirely. If the CapEx number comes in in line with what the street is expecting for$25, which is$85 billion, which would be a step up from the$75 expected for the total of$24, is that going to be a positive?

6:02Well, it depends. I mean, listen, Amazon, you don't hear them about building the sort of foundation model that some of their competitors, right? So they're really building an infrastructure for AWS so they have the capacity to serve a lot of those clients, right? So they partner with companies like Anthropic that have the cloud, Claude, excuse me, Claude in the cloud. You know, that model there, they've invested$8 billion in that. So their infrastructure build, I think, is a little different than, let's say, Google that has Gemini and they want to support that. And then obviously Microsoft with their open AI relationship.

6:32So, again, I just don't think this is as interesting. Think about their cloud growth was, what, 19 percent. And, you know, Google and Microsoft got punished for coming in a little below that 30 billion dollar number. So I don't know. They have market share issues here, too. I think those other names have kind of kind of nipped at the at their butt a little bit. So that sounds but I don't know. I don't know. You know, FX impact. We're hearing it more and more, and they actually made a point of it in their guide to talk about the potential, the outsized impact of foreign exchange, which is, I think, again, we had Caleb on the other night, and he talked about that was something that's crept into the vernacular.

7:10So, again, I don't think there's anything to run away from. We've seen sell-offs before post-earnings with Amazon. If you go back and look at a chart, you'll see a number of them over the last year and a half. And I just think this is sort of that, you know, middle-of-the-road type of thing we've seen before with them. All right. For more on Amazon's results, let's bring in T. Rowe Price's Tony Wong. He's a portfolio manager of the firm's Science and Tech Fund, which counts Amazon as one of its top holdings. Tony, welcome to Fast Money. Thank you. What's your take of Amazon's quarter and how does it stack up to some of its AI competitors, so to speak, in large cap tech?

7:45Yeah, well, I think it's a really interesting position that Amazon is in. If you kind of look over the long term, there's a few things that are really going well for the company. One is that they have a lot of infrastructure through regionalization. And if you look at the retail margins, I think over the multi-year, they can go up a lot higher as they essentially fill in that capacity that they built during COVID. And then I think a second one is also their AWS cloud. I mean, it's still growing at 19 % and over the long term should be a nice compounder, especially when we look at what's going on in AI.

8:20lower cost models that can proliferate and drive more upside and sustainability. And then I think third is that you've got like a really nice advertising business on Prime that continues to grow nicely and then also be very margin accretive. So there's multiple drivers here. And then on top of that, you think about kind of the way that they are positioned with robotics. That's I think could be a new productivity boom and, you know, that cost to deliver, driving that down and passing it on to the customers, you know, is what I think is really exciting over the long term. Hey, Tony, so Amazon's not a name that you hear like the way you do with OpenAI and ChatGPT or, you know, some of the other competitors.

9:00When you think about Olympus and Nova, what they've been building versus their relationship with Anthropic, how do you see that playing out? Do you see them as a bit of an underdog building their own models? Yeah, well, I think that there's a lot of different cross-currents. It's like, do you need to own the Frontier model? Do you need to build it? Do you open source it? Do you have it more closed? And, you know, I think it's still a little bit TBD. What is the best strategy? But I kind of still come back to that if you have, you know, scale, if you have compute, you have AI expertise, you have the apps, I do think that is like kind of a good recipe to go in here with.

9:39And, you know, Amazon is kind of playing their own kind of e-commerce play here that they dominate. So I kind of think about it. Perhaps you don't need to own it to really benefit from it, especially you have other competitive advantages that you can drive ROI. And it's not a super competitive contested space. Hey, Tony, it's Karen. Thanks for being on tonight. So it sounds like you like the stock. What's your price target and sort of how do you get there among the pieces? Yeah, well, I mean, I think that long term, this one has been a really nice compounder. You look at the very different various businesses.

10:18It's hard to find this kind of growth at this kind of scale. And I think that one thing is that margins continue to go up and there probably is a long term progression there. So, you know, I think that, you know, we look at science and technology fund like, you know, above market revenue growth, accretive margins. over the multi-year and kind of great competitive advantages that can sustain high improving returns. And I think part of what Amazon like really attracts me to the story, there are multiple ways that you can win here. And they are well positioned for like kind of a new productivity boom, you know, when it happens.

11:01We're just showing your top eight portfolio holdings, Tony, and they are the biggest cap tech stocks out there, basically almost in order. And I'm wondering, what is your favorite pick at this point? What's your favorite stock, given we've seen most of the quarters? Well, I think that the portfolio is, you know, filled with, I would say, various groups of large, kind of stable compounders that are kind of the bread and butter of the portfolio. And then there's also more emerging tech players that I think can have, like, significant outsize impact. And so we looked at, like, having a risk-adjusted portfolio.

11:36We're not going to be swinging for the fences every year. We look to outperform every year and capture good upside and downside. But when I look at the themes that kind of are interesting to me, I think that we are seeing AI switch to kind of the app layer. When you think about what's going on with Palantir recently, that's been a really kind of remarkable move. And does AI kind of reshape the software landscape? You know, that's one. And I think like media and entertainment, like there's there's a really nice industry structures going on there, like pretty attractive stories where margins continue to improve.

12:10And after like some really intense competition, you know, areas like where Netflix and Spotify play are pretty interesting for for more stable returns. So, you know, I think that our framework is largely buying, you know, quality companies that are improving and have a multi-year story to them. Tony, great to have you with us. Thank you. Tony Wong of T. Rowe. What do you want to know from the call, which is ongoing? The spend is important. I think the spend is really important. I mean, I would be curious as, you know, the margin improvement, I think, is really important as well. But there's clearly, you know, again, this is sort of like a Facebook story almost.

12:48Margin improvement in a meaningful way on the backdrop against maybe things seemingly slowing down on the EPS and the revenue front. By the way, which is fine. I mean, given the choice between the two, I'd love to see the margin improvement. That's what I'd be focused on. We've got some breaking news now on data central to some economic reports. Steve Leisman's got the details here. Steve. Melissa, yes, CNBC has learned that many economic data sets from census.gov are now not available to the public. Census.gov website, when you call up normal data sets like how many people live in the country, population estimates, says access to the data is, quote, forbidden.

13:27Some data experts have found a workaround for some of these data sets, including going to another website, data.census.gov, but it's not all there and not all easy to do. Data normally downloaded by economists is just not there, according to several sources we've talked to. For example, Maureen Haver at Haver Analytics, who provides data with CNBC, says, My staff tried numerous economic releases and we could not access them through census.gov. Mike Horrigan, president of the Upjohn Institute for Employment Research, says, When was the last time that census just stopped publishing data? That just doesn't happen.

14:02It suggests that there may be internal pressures not to publish data that we rely on, and we need to figure out if that's true. It is unclear if this census data is a technical problem and part of a larger federal data purge that we've seen in things like health care and other areas of the government. We emailed the Census Bureau. We called them. They could not be reached for comment in the last several hours. Melissa, just very quickly, census does provide data for the household survey that the BLS releases tomorrow. I have no indication that there will be any problem with that data tomorrow.

14:36But obviously, economists are concerned about this data, and it is used widely throughout the economy. Another bit of data that's not available is Tiger mapping data that's used widely in mapping programs like Google and all sorts of things. Those files are also unavailable at this time, we understand. All right. Steve, do you know if this data is unavailable or if it has been deleted?

15:06I do not know that. I know that when you go to access these files, it says forbidden. I do know that many people have archived this data, Melissa, so it won't be unavailable forever. But from the government website census.gov, it could not be accessed by us and several data experts we've worked with over the past couple hours to confirm this story. All right, Steve, thank you. Steve Leisman, I know that a lot of doctors overnight have been desperately trying to download data from the FDA websites and from various health and human services websites because that data has also been removed from sites.

15:42This is data that is widely used in scientific research. So there are a lot of people out there very concerned about not having access to this normal data they would have access to in order to further scientific discovery. Right. And without being political at all, I think that's just one more sort of reason why volatility should be coming back in this market in a somewhat meaningful way. I mean, it's anecdotal. I get it. But it's just part of a pastiche we've been talking about. All right. Meantime, speaking of volatility, the Treasury bond tracking TLT ETF has been steadily climbing since hitting a 52-week low last month, that ahead of tomorrow's jobs report.

16:19The TLT move, Guy, was one that you flagged earlier today. Yeah, I think so. And Carter would love this one. I mean, if you go back to September of last year when it traded 101, the TLT has been in this pretty precipitous downtrend. The second point was in December. The third point was made today. So this downtrend is still intact. Now, we've obviously seen a sell off in yields down to, you know, 440 ish or so. The question is, is this the third point of a downtrend that will continue? I think it will, which means I think yields are going higher. Or are we about to break out on the upside for TLT, which means yields go lower?

16:49We're going to know a lot more in about, what, 13 or 14 or so hours when we get the jobs number. A hot jobs number to me suggests you could see a meaningful sell-off in TLT, which is what I'm expecting, and see yields go markedly higher. Yeah, it's such a big subject, and yet it keeps being maybe the subject that is not so big in the sense that rates are not too high, not too low. it's kind of Goldilocks, but it is important to say that the end of Q3 2022, we were at 435, and here we are almost three years later, 445. Not much has happened. I am short, TLT. I am short, but for just the reason you said.

17:26Look at Karen trading the trend. I love that. All right. Coming up, more after hours earnings action shares of Pinterest moving in the back of its results. The details and numbers from the quarter next. And Eli Lilly jumping after results this morning, what the pharma giant had to say about its weight loss drugs and the latest on its next generation medications when Fast Money returns.

17:56Welcome back to Fast Money. Pinterest spiking after hours following a Q4 earnings report that showed better than expected revenue. CNBC's Julie Borson's got the details. Hey, Julia. Hey, that call is going on right now. Pinterest showing its focus on shoppability, AI and direct response ads paying off with revenue, revenue guidance and user growth, all topping expectations. On the earnings call, CEO Bill Reddy touting the success of the Performance Plus AI tools driving advertiser efficiencies and a record number of clicks during the holiday season, driving the fourth quarter to its first$1 billion revenue quarter.

18:31Now, this year, Reddy says they will double down on their initiatives, especially leveraging AI to drive more personalized experiences for users and increasing the shopability of the platform. Now, in the Q &A going on right now, they're talking a lot about the growth outside of the U.S., strength in Europe, particularly around retail advertising and also just the massive growth rate internationally beyond Europe and the U.S. So we're going to be talking about all this and more with Pinterest CEO Bill Reddy. We have an exclusive interview with him coming up tomorrow at 1045 a.m. Eastern. Back over to you.

19:08All right, Julia, thank you. Julia Borsten. Dan, what do you think? Yeah, good quarter, good guidance. That's not something we've seen a whole heck of a lot, obviously, we did from Meta. But, you know, when they talk about growth overseas or specifically in Europe, the average revenue per user here that raised was up 9 % year over year is$9. In Europe, it's$1.38. So it's growing at 12 percent. That's fine. But 80 percent of the revenues come from here in the U.S. So I think doubling down on the U.S. makes a lot of sense. It's much higher margin business. So to me, great balance sheet. The stock's trading up.

19:40I think it's been in this trading range. I think a lot of people see an opportunity for a bright spot in big tech, which has kind of been pretty mediocre over the last couple weeks, at least the results and the guidance. And the expectation was that first quarter comps are going to be very difficult. So for them to come in with better than expected guide, sigh of relief here. Agreed. and monthly average users up 11 % year over year, I think people are excited. Now, the question is, do you chase this move, which is up, I think,$6 or so in the after hours? And I say, you know what? I actually think you do.

20:06I mean, last summer was cataclysmic, the move that we saw to the downside. But we held 30 like four or five times. I think we could be getting set to trade to the levels that we saw last June, July, which I think was about 44.5, 45. Well, that's exactly right. So last summer it plunged on its earnings, dropping from 40 to almost 30. and we're retracing that now. I would characterize a rally to a difficult level, so this is where overhead supply comes into play. But there's also this. This was a$90 stock, right, two, three years ago, and it's trading at$39. It's been a tough investment in general for anyone who's been engaged.

20:41I've always said I'd rather be in Meta. I mean, it's just very similar, so much bigger, so much better valuation. Only one thing, this could theoretically be acquired. Meta realistically could not. Right, that's true. A lot more Fast Money to come. Here's what's coming up next.

21:29Welcome back to Fast Money. Eli Lilly jumping over 3 % after reporting an earnings beat and guidance that came in in line with investor expectations. Revenue for the December quarter did fall short, though, with sales of weight loss drugs, Manjaro and Zetbound missing estimates for the second straight quarter. Still, the company giving a bullish outlook for its obesity pipeline, moving up the timeline for data on its next-gen injectable, Red Hatrutide. For more, let's bring in Leering Partners Senior Managing Director David Reisinger. David, great to have you with us. Yes. It's curious because, you know, they did get preliminary results back in January.

22:02So, you know, nothing was really too much of a surprise. But in terms of the pipeline, what are you most excited about here in the pipeline? Is it the oral, because we're going to get data in the second quarter, or is it the red of true tide? Yes. Well, it's a bit of both. The oral really can be transformational. So I think a big driver of the stock move up today was the fact that Managen was quite bullish about the likelihood of success of the oral small molecule GLP-1 candidate, which indeed will generate its first phase three results in the second quarter. What they discussed was that there will be no manufacturing constraints, that they will roll it out globally, aggressively like they would a normal launch.

22:47So they contrasted it with terzepatide, which is Munjaro and Zepound, which they had to hold back given supply constraints. But here they can manufacture it and roll it out globally. So we're hoping they blanket the world with it when they start to launch that drug, if successful, in 2026. What is the time to market after phase three results are posted and they get the go ahead? how much longer do we have to wait for that to actually hit that worldwide release? And how do you view that in terms of cannibalizing sales of the injectables? Yes, good question. So in terms of the filing, we're expecting a filing of what's called Orpher glipron, that small molecule in the second half of this year, and then a launch hopefully, you know, maybe in the middle of 26 or third quarter of 26.