Apple, Amazon Report Results… And Jamie Dimon Weighs In On Markets, Fed 7/31/25

0:02Live from the Nasdaq market side in the heart of New York City's Times Square this is fast money Here's what's on tap tonight. Another earnings palooza. Apple, Amazon, Coinbase and more all out with results in just the last hour. We are dialed into the calls, bringing you all the action and diamond on the record. The CEO of J.P. Morgan sitting down with our Leslie Picker to talk markets, the economy trade and more. We've got all the headlines from that exclusive interview. Plus, pharma stocks taking a hit after the president calls for lower drug prices. A buzzkill for Budweiser as customers pass on the pints and Figma flies.

0:32the newest stock on the block, more than tripling in its first day on the market. What's it say about the appetite for IPOs? We will debate that. I'm Melissa Lee, coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Bono and Eisen, and Steve Grosso. And we start off with another monster night of earnings. Two more members of the MAG7, Coinbase, Roku, and Reddit all on the move. Taneya McKeel is watching Coinbase. Mackenzie Cigalos is digging in on Amazon's numbers. But we start off with Steve Kovac, who's got all the details on Apple rising, rising, although off the best sessions, best levels of the session, I should say, after it posted its best revenue growth in nearly four years.

1:07Steve, what's the latest? Yeah, this is just a killer quarter here, Mel, for Apple, just beating expectations by a long shot here. EPS was a beat$1.57 compared to$1.43. Revenue,$94 billion. That's 10 % growth. And like you said, best growth since the December 2021 quarter when we're in the middle of the pandemic and everyone's out there buying a bunch of Apple products. iPhone revenue is up more than 13 % to$44.58 billion. Also smashing expectations and services just humming along here, continuing to grow like crazy. $27.42 billion. Street was looking for$26.8 billion. And China, it is growing again.

1:46Return to growth up 4 % to$15.37 billion. I chatted with CEO Tim Cook about all of these results. And specifically on China, he told me part of what contributed to that was the government subsidies that helps for the lower end iPhones, giving some credit towards those. Plus, there's that JD.com shopping holiday that offered some discounts. Also talked to Cook about the tariff impact and that idea of pull forward demand for iPhones contributing to that big record quarter. He told me, quote, on the buying ahead relative to worrying about prices and so forth in tariffs. We did see some evidence of that in the early part of the quarter.

2:27We would estimate it to be about one point of the 10 points of company growth. And then, of course, we had to talk about artificial intelligence and all the investment we've been seeing from Apple's peers like Microsoft yesterday, Amazon today. What he told me was we're significantly increasing investment. I'm not giving you an exact number today about what that means, but we significantly increase in the June quarter and we're significantly increasing in the September quarter. He later told me that is for both talent, the artificial intelligence talent awards we've been seeing with Meta and others, and of course, compute chips and other servers and so forth.

3:04And then on the M &A front with artificial intelligence, you know, there's been a lot of talk about Apple potentially acquiring its way into this artificial intelligence moment. He told me Apple's acquired seven startups so far this year, not all necessarily AI companies. Also telling me, quote, none of those have been huge in terms of dollar amount, but we're open to M &A that accelerates our roadmap. And so we're not closing anything off there. By the way, the call just got started. Cook told me to expect some more comments on how the tariffs impacted the quarter and what they expect for the rest of the year on the tariff front, Mel.

3:40All right. Steve, keep us posted on that. Steve Kovac out in Cupertino. What do we make of this quarter? What do we make about the commentary that one point of 10 points of growth was from pull forward as opposed to the other nine points? And also the fact that they're not breaking out their AI spend as the others are, Karen. Well, the one point of 10, well, I first sort of wonder, how do you know? How do you know what is a pull forward? Do you have to sign up as a pull forward buyer? I don't really know. So if that is the case, let's say they do know, then I think that's pretty good. That's better than I thought it would be.

4:15So, I mean, you know, it was a nice beat for iPhone. Some beat, some less on some of the other hardware. Nice beat on services. So I'm surprised. I mean, it wasn't like the stock was on fire going in. So this is somewhat of a muted response to what was far better than feared quarter. And it's not like it got any. And I'm not an Apple fan. Right. It's not like it got any boost either in today's session on the back of yesterday's earnings, as a lot of the other tech stocks did. Right. So it went in kind of flat. And here it is. It's up a percent. I mean, lots can change on this conference call. But what do you make of it so far, Bono?

4:49I think it was a solid chord. In fact, I think if they had even doubled that pull forward number and said it was two to even three percent, you would still be positively relieved by the fact that you're actually seeing some revenue growth here. I thought they said 10 percent. No, one of 10. And I'm saying 10 points. Oh, you're saying two of three of 10. I see. Even if it were 20 to 30 percent of that number, I still think you'd be in a positive situation and positively surprised. And all of this still comes without them essentially having a significant AI push. Now, they mentioned the seven startups that they bought.

5:19I don't know to what extent those are involved there, but it at least does show that they are somewhat open to AI via acquisition. And I probably brings forth the, you know, probably a little bit more heat around that perplexity purchase discussion. I think definitely kind of restoring some momentum back in China. Also, clearly, you still have this eight, nine hundred million dollar overhang from tariffs there. But I think you're seeing that offset. That's why I would say that the tariff pull forward might be positive. In fact, you're finding a way to actually offset what we've all now accepted as being a negative.

5:50So and then the last thing I'll say is the services revenue. So that addressed iPhones. The services revenue, which is the other kind of key driver in terms of multiple expansion here, a multiple defense, I think that was also, what is it, 13%, 17%. So, again, I think this is firing on all cylinders for something that's kind of been the laggard of the MAG-7. And I'm with the rest of you in terms of thinking that I would have expected a lot more upside here. And I think you likely will see that follow through once we kind of get past the overhang that was the conference call with Powell and probably lowering of odds of that September rate cut.

6:22I think the overhang is that people thought that Apple's growth days are behind it. So think about what stalled. China. So China's back to growth. AI spend. September and June. As Bono had said, iPhone sales, Mac sales, services, all double digit. This is going to be a hell of a catch-up trade going into the end of the year. Oh, you sound very bullish. I wish I could redo my acronym. It would be like Baxter instead of Boxer. I just think that people, just think about every analyst. You're looking for really extraordinary growth companies now. Apple's not on that list, right? But if you look at 2.4 billion installed base, how can it not be on that list?

7:07There's so many things that they could actually convert. So whether it's M &A for AI or if they go full bore and go right into quantum. That's quite a leap. Well, because I own a quantum stock. I'd like to buy. Yeah, I didn't realize it. Let's say the pull forward is not repeatable. And let's say that in the back half of the year there are price increases. And let's say that there is no AI product, because right now we don't know of an AI product that would spur any sort of super cycle. Tim, do you think that Apple can repeat this? I think that the stock reaction tells you that there is some skepticism about the ability to repeat this kind of growth going forward, given the headwinds.

7:49Yeah, there's no question about that. And this is a catch up trade implies all of that. And I think we have this conversation regularly. And my view has been that there's nothing in the price on AI. So why isn't that good news? Ultimately, when the stock's been able to weather a lot of dynamics, technically, I think the chart holds well, somewhere around$200. And but what we heard today are a couple things that I think are very encouraging. The record services revenue is something that I think will continue. And with the spend on CapEx in June and September quarters is something we can begin to at least estimate where more that will go higher.

8:27I think the U.S. telco kind of equipment sales and some of it's that's the best number in terms of buying from U.S. telcos in the last six or seven quarters. I think that's bullish. I think the higher ASP on the 17 of$50 or more is very good. and we saw a gross margin that beat. And that's a dynamic that I think also people have been concerned about. Apple has not given this phone away. They are not cutting their margin. They are not doing anything. If anything, they're going in the other direction. I love that as a shareholder. We know about the underperformance as a trader and as an investor.

9:01I like this name here. All right. Let's get to Amazon. Meantime, the stock is lower. The company gave weak guidance for operating income in the current quarter. The conference call kicked off at the top of the hour. Mackenzie Cigalos has got the latest here. Mac. Hey there, Mel. Despite beating on revenue and earnings, Amazon's weak operating income guidance for the current quarter rattled investors who want to see the company's massive AI and cloud investments start to pay off. Amazon plans to spend up to$100 billion this year, expanding its cloud infrastructure and software. CEO Andy Jassy is on the call now, and we are waiting to see whether they up that CapEx number after Microsoft raised its spending target to$120 billion for the current fiscal year.

9:44Now, most of that money is being spent on infrastructure, and it's going into AWS, Amazon's profit engine. It is still very much the market leader, and it did beat on revenue growth at nearly 18%, but it now faces fierce competition from Microsoft's Azure and Google Cloud, who accelerated 39 % and 32 % in the most recent period, respectively. Now, these platforms have become the backbone of AI computing, with demand so strong that even Microsoft has struggled to handle all of open AI's workloads. And for the second quarter in a row, Amazon flagged tariffs and shifting trade policies as potential risks, even as its retail business beat in online sales and North America revenue.

10:28We're listening closely for more on possible tariff headwinds as that call continues, Mel. All right, Matt, keep us posted. So thank you, Mackenzie Cigalos, in San Francisco for us. Third quarter, operating profit guidance at the midpoint of the range. That was below consensus. That's a huge. I don't think it matters. You don't think it matters? I don't. They've never been good. That's not what they do. They're not good at. So it's the Azure. It's the Azure. I mean, I think it's the Azure. Microsoft was gangbusters and Amazon was good. No, I think the. Well, there's two parts of it. What they talk about operating income for next quarter.

11:03They've never been good at telling you what. I don't think they care so much on that. To me, the one thing I want to understand. So AWS was good. Not good enough. Yeah. Right. Not quite good enough, given the ones that we've seen before this. I'm wondering why I have to go through why the revenue was up and yet operating income was up a lesser percentage in the revenue. What's what's going on there in expenses? Is there something else there? So definitely want to hear the call for that. The retail part, which is not the biggest part of the story. was pretty good. North America was good. International, which is the smallest of any of the parts, was quite good.

11:39But that's not really the story here. It's AWS and the spend. And I've got to get a better handle on that. But I'm not concerned about that guidance. Yeah, kind of piggybang after your point, Karen, I really think AWS was the focus here, should be. And I think 17.5%, 18 % is actually quite strong growth, but it's half of what the peer group has delivered. And I think with that backdrop, it kind of presents itself as disappointing. I think in a vacuum, perhaps you don't see it as such. But them being only 20 percent, AWS or cloud growth only being 20 percent of revenue, but 60 percent of operating income.

12:11I think that might be why investors are keying on, because that's really your growth engine towards that margin expansion there. And if you have some hiccup there, again, we have to kind of read the fine print to understand what might be the hiccup. As you mentioned, revenue not kind of tying out to that to that income number. Barring something there, I am with you. I'm not sure this really matters. The last thing I'll say is Free Castle is down significantly, and clearly that's going to be tied into CapEx. But you're looking at tracking at$53,$54 billion in terms of last year's TTM, and this trailing 12 months is only about$18 or$19 billion.

12:46So clearly they are continuing to ramp up that CapEx. And if those margins, the operating margins, are not kind of marching upward in tandem with that spin, that's what's going to raise eyebrows and perhaps cause people to drill down a bit more. I think people, as you said, or someone else said, AWS is the growth engine behind Amazon's story. And if their market share has dropped recently from 31 % down to 29%, and Azure is growing, they're at 21, 23, Google's at around 12, they're nervous that their golden egg is going to start to crack. So you have to decide, did I run this stock? You look back to February, there's a double top scenario that could be building, and the top was 242.5-ish.

13:34So we're not there right now. But this could be a good time to take some profits on Amazon. How concerned are you, Tim, about this quarter? I think the AWS miss from consensus, even though the growth itself in absolute terms was fine, was closer to 17%, 18 % on just the miss, on the expectations. So the 17 and a half percent versus wherever the street was. And that's what it comes down to. Margin AWS is has to be coming in, has to be coming in for all of them. And so I still think it's a very interesting story. I continue to believe that it's cheap relative to its history, that the e-commerce business is actually interesting, more interesting than it gets credit for.

14:20Back to where these stocks have performed, which is where Steve was talking. Amazon has outperformed Apple by 25 % in the last three months. It's outperformed Apple by 30 % in the last calendar year. So not that a lot of the mega cap techs haven't outperformed Apple, but Amazon's been a strong performer. So it's always that relative bar to where we've come from. There's nothing wrong with these numbers. We do want to hear about spend, but I get a little worried about margins across the cloud space for all of them. It's wildly competitive and it's getting more competitive. All right, let's bring in Gene Munster, managing partner at Deepwater Asset Management.

14:57First take on the quarters. Gene, let's kick it off with Amazon since we were just talking about it. What's wrong with the quarter? What's wrong with these numbers in your view? AWS is what's wrong. The whisper was plus 20 percent growth. I thought it was going to be like 22 percent. They did the 17.5. Why this matters is that this, of course, is one of the focus areas because the profitability piece. But if you look at the gap between what happened with AWS, Azure and Google Cloud over the last three months, they have been losing share over the past couple of years. They lost at a greater pace in the June quarter.

15:34That's a problem. And just given the tailwinds, I mean, we had blowout Google Cloud and Azure numbers. And the fact that we basically had similar growth in June versus March, 17-ish percent growth. I mean, that says something. The guidance, I mean, just to put in a perspective of how much the street focuses on AWS, their revenue guidance for June, if you take the top end of their guidance, which typically they exceed that, means 13 % growth for September. The street was at 9%. I mean, it was a great guide. And the operating income guide, they always guide low. You got to look at the top end. If you look at the top end of the operating income, they would guide it higher.

16:15So I think this really speaks to it's all about AWS. And I don't know what's wrong with it. I don't know why it shouldn't be growing faster, given all the goodness that's happening in the cloud side. Gene, it's Karen. Thanks for being on. So getting at the heart of the matter there, is there an explanation that would make you more comfortable? What's the one that, oh, that makes me comfortable, demand's still there. You just have to gear up and spend, and then it will fill in, the margins will improve, or we're seeing a slowdown, pricing's under pressure. Well, again, the tide is so much in AWS's favor.

16:53the one piece that we need to find out is how much of that performance was capacity constrained. They said in the March quarter that they were capacity constrained on AWS and that led to analysts expectations inching up for growth rates in the back half of the year. But that question I think ultimately is going to, my guess is they're gonna say they're supply constrained, but even, I mean they would have to be really supply constrained to have justified that number. So I think there just is still something deeper here. I think the automation piece, there's so much goodness going on in their retail business.

17:26Gross margins are going up. Operating margins two years ago were 3.5%. They're 11.4 % this quarter. I mean, just a lot of good things in retail, but I'm kind of tone deaf if I focus on the retail business. It's all about AWS. So what do you suspect is going on with the AWS business? I mean, is their product inferior? I don't understand what it could be. Microsoft's just marketing better. There's a better stack there. I don't know. Yeah, I think that they're probably just doing a better job of integrating those AI models into the overall system that's Azure. It's just been a cloud-first company for Azure, and I think that that probably is impacting it.

18:12hard to say. They should be benefiting. They wrote the playbook, and now they're not seeing it. You know, Barron's had a headline, Gene, today, or it was a line in an article today. Microsoft is evolving into the world's most important company. And when you talk about how Microsoft is maybe superior now to AWS and inherently superior to Alphabet, given its positioning, do you agree with that? I mean, Microsoft's obviously important, but they're just not innovating at the same pace. I mean, Azure's, it's great, it's breathtaking what's going on there. But if you look at the breadth of what's going on, not only just in the public companies, but the big private companies, I think that you're gonna see still a shifting of the guard.

18:55And I think ultimately, just look at the growth rates, Microsoft got it to 18 % revenue growth. I think that that's great up from 14%. This is for their September quarter. But for a company to be like truly magnetic, I think that it's I think it needs to be kind of in this mid to high 30 percent growth. And that's probably not Microsoft. All right. Do you want to check in with you in a bit? We want to go back to Steve Kovach, who's got more from Apple. Steve. Hey there, Mel. Yeah, I was just listening to the earnings call and Tim Cook gave us more color on the tariff impact for Apple. So for the June quarter, it was an eight hundred million dollars in tariff related costs.

19:36They said they had originally guided towards 900 million, so a little bit better than expected. As for the September quarter, it's going to go up. They're now expecting one point one billion dollars in tariff related costs, warning that this is assuming all the rates stay the same as they are and there are no further changes. Obviously, tomorrow is the August 1st deadline. We might see some rate changes for different countries and including China, Vietnam and others and India that do impact Apple. And also, Cook saying on the call about tariffs, they're not going to be guiding beyond the September quarter just because of all the volatility we've been seeing in these changing tariff rates and the whole back and forth there.

20:16So$1.1 billion, that's the headline number for tariff-related costs for the September quarter, Apple's guiding towards right now, Mel. Have they talked at all about how they're going to mitigate those costs in terms of, I mean, there's a wide belief and expectation probably that iPhone costs will go higher, at least by 50 bucks. the phone. Yeah, we haven't gotten there yet. I imagine that will come up in the Q &A a little bit. But yes, that is one lever they do have to pull is obviously increasing costs. We heard a quarter ago, of course, you know, shifting some of the supply from India into the United States.

20:49India, of course, has that lower tariff rate. Still not enough supply coming out of India to fulfill all the demand we have here in the U.S. So there's still got to be a little bit of workarounds there. So we'll see as the call goes on if they do talk about price increases and things like that. I I would be a little surprised if they talked about that before the big September announcement of the next crop of iPhones, though, Melissa. Right. Steve, thanks. Steve Kovach. Tim, when do you make of that$1.1 billion, the hit because of tariffs in September?

21:21In absolute terms, it sounds extraordinary. In relative terms, I'm not sure where the street was on this, but I do think there's still a lot of open-ended dynamics. But you can't tell me that in some level, Apple hasn't priced in concerns around China, concerns around other parts of the tariff dynamics. Weren't they one of the first ones to get to get crushed? Have they really received much of a tailwind? So, you know, the headlines in terms of the relative expectation, frankly, I have no idea. I can tell you I'm sure the stock is priced at it. Yep. All right. We're going to keep an eye on the Amazon and Apple conference calls.

22:01They are getting underway right now, about 22 minutes in. The headlines and all the other after-hours action straight ahead. But first, a flurry of pharma letters, how President Trump is tackling drug prices and the names he is targeting to make the cuts. Do not go anywhere. Fast Money is back in two.

22:22Welcome back to Fast Money. Eli Lilly, Novo Nordisk, Pfizer, Merck, and Regeneron dropping today after President Trump posted letters to them and 12 other drug makers directing them to cut prices within 60 days. In May, Trump signed an executive order to bring U.S. drug costs more in line with other countries or what's known as most favored nation policy. Our Angelica Peebles has got more on this. Angelica. Hey, Melissa. Well, the White House is saying that the proposals it received in response to that May executive order fell short. And from now on, President Trump will only accept actions that provide immediate relief from drug prices.

22:57So the letters outline four actions that Trump wants to see drug makers act on. He wants them to provide most favored nation pricing to Medicaid, guarantee the U.S. will receive the best price for newly launched drugs, raise prices overseas, and reinvest those higher revenues into lowering domestic prices, as well as selling drugs directly to patients at most favored nation pricing. Now, bullet number two, guaranteeing low prices for all new drugs in all markets, Medicare, Medicaid, and commercial. To me, that's the most interesting piece of this. And it's hard to see how drug makers agree to that, since you would essentially cap your prices right out of the gate and or you would limit your sales overseas.

23:38And yes, this is all voluntary. These are not mandates, but clearly this issue is not going away. And that's what this signals. And just the threat of drug pricing reform is weighing on pharma stocks. GSK, AstraZeneca, Novo and Merck, among the names getting hit the hardest today. And so this certainly does not help the sentiment around pharma, Melissa. The letter seemed interesting to me, Angelica, in light of that EO back in May, since the EO says if no significant progress is made, it directs the HHS to go ahead and create some sort of policy that would lower prices through a DTC program, for instance, as well as possibly allowing the importation of medicine into the United States.

24:18So where does this letter fall? I mean, is this like the last warning before HHS actually steps in? You know, it's hard to know exactly what the last straw is here, but it's certainly an escalation, at least in rhetoric. But again, these are all voluntary actions that the president is asking companies to make, giving them another 60 days. Now, I have heard that companies did go in, you know, they talked to the White House, they talked to this administration, and those were difficult discussions. You know, Now, this White House wants to see lower drug prices, this most favored nation across the board.