Apple and Amazon Earnings… And What’s Next for Global Markets 7/30/26

23:24I realize it's not sexy. I realize it's low margin. But it is part of that platform, the flywheel. And I think it's also very strong. Here's from the conference call. Andy Jassy sees a clear line of sight to strong financial returns on AI and AWS spending. Speaking of return on invested capital, which is a conversation we've been having, by the way, Andy Jassy, also from the mean streets of Scarsdale. Who else is? Well, that would be Tim Seymour.

23:56One thing on Jassy, if there's ever anyone who has the credibility as it relates to building out this infrastructure, it is him. Because he did this going back 20 some years ago and it was part of the bear case with Amazon for a long time. And it ended up being a really great thing. I just want to say this. I'm going to belabor a point. Amazon has invested in Anthropic$13 billion up to$33 billion in their largest AI customer on AWS. So, like, again, I just think this is and they just had that big markup in their investments. So it's kind of going around. Remember that thing? Yeah. They had no credit for the markup, I think.

24:31I don't I don't I just ignore the markup. I don't for all of them. Right. Because it could go down and who knows. Yeah, but these companies, like if they were trading in the public markets, they'd be cut in half or down 30 % or 40 % like all the component suppliers. So let's say Amazon next quarter or next year took a hit. Obviously, those things wouldn't happen in a vacuum. But my point is they all need it to go higher. They need everything to go higher. They don't need the price. They need demand to go higher. No, but if OpenAI marks down 50 % in the private markets, the whole thing's dead. The whole ability for them to fund$1.5 trillion in commitments and Anthropic, the same thing.

25:07It's done. How much do you think OpenAI, we're at public, would be? Down 30 % easily. Okay. And maybe more. I mean, look at what happened to XAI as part of SpaceX. All right. Well, we got to go. Both conference calls are underway. We will keep you posted as we have the headlines out of them. Coming up, clouds clearing from Microsoft with the tech giant said last night that sent shares surging to their best day in 18 years. Plus, Coinbase and Strategy both on the move after reporting all the headlines from those reports. And the next move for crypto straight ahead. Don't go anywhere fast when he's back in two.

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27:14Welcome back to Fast Money, a monstrous post earnings move for Microsoft. The tech giant's share surging more than 15 percent, their best day since October 2008. Azure cloud revenues rose 43 percent, topping a 100 billion dollar mark for the first time. The move added nearly half a trillion dollars to Microsoft's market cap, its biggest one day value gain on record. Tam, you think this holds? I do. I do. And I think it's a combination of the fact that the chart and the association with software as a group and a lot of existential risk for software is part of what that underperformance was. I think the Azure growth was extraordinary.

27:51I think the balance that with the margin side of this and co-pilot, that growth was exactly what you wanted to see. I think that's the biggest part of the move. So I think you're finally getting some follow through. And the market didn't expect that. I agree with everything Tim said. The setup was huge in a good way, being down a lot. But also for them, the CapEx. Right. That was a bit of a surprise. Yeah. No change. Very nice. How we saw, I think I want to go back to maybe end of May, early June for 60 and change. That was the high before we traded lower. The double bottoms that Tim and Karen are alluding to from April of 25 and basically, again, April this year, stuck in there like a champ.

28:34And I think that's what we're bouncing off of. Three times normal volume today. I'm sort of taking the other side a little bit. The quarter was good. I don't think it was that good. But I think the setup was that good. So I start to fade this around 460. So this might surprise you. OpenAI is Azure's largest customer. I'm just saying. I mean, like, it's all there in front of you. And we don't have the transparency as far as OpenAI and what they're doing and what they're saying and what their margins are and how much money they're losing and all that sort of stuff. So have a ball, people. So the setup, you just think this is going to fade?

29:06Yeah. Do you think longer term is going to have problems? I mean, I think what Tim said about Copilot, and that is the opportunity. But the opportunity doesn't lie in using ChatGPT within Copilot. The opportunity gives a lot of choice as far as the models. And they might be DeepSeq's models. They might be moonshots models. They might be a whole host of other models because a lot of the users going from token maxing to token, what do they call, minimizing or whatever. That's where you're going to get a lot of bang for your buck. And for Microsoft, if they can get folks to convert on copilot, like that's the deal for them.

29:39That's how they win. Coming up, a crypto report card. What Coinbase results say about the digital asset trade, all the details from the report next, plus a currency conundrum. The yen surging against the dollar today. What's driving that move and how it could impact investors across the globe? You're watching Fast Money live from the NASDAQ MarketSite in Times Square. Back right after this.

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31:38Apple shares taking a leg lower off the company's conference call. The shares are down eight and a half percent. Let's get to Mackenzie Cigales, who's got some guidance from the call. Mackenzie. Hey, Mel, you saw those shares think when CFO Kevin Parekh gave guidance, saying that they expect the impact from supply constraints and certain forex exchange issues to be a sequential headwind for overall revenue. They said that it will also specifically affect iPhone, Mac and iPad in the September quarter. Now, for that September quarter, they say that total company revenue is expected to grow between nine and 11 percent year over year.

32:11expectations were for 12 percent. And then for iPhone, they're expecting revenue to be impacted by foreign exchange headwinds. They're looking at a growth rate there to be in the mid-teens year over year on services. They're expecting a similar growth rate to what we saw in the June quarter. They said that after removing the negative sequential impact of about two and a half percentage points from foreign exchange, they expect gross margin to be between 47 and 48 percent. But, Mel, that includes an expected benefit of around one percentage point, again related to tariff refunds, which puts us in that 46 to 47 percent margin.

32:43So it really answers that question of whether did we hit peak margin last quarter at nearly 50 percent. Finally, John Ternus, incoming CEO, was in the room but not on the call. We didn't hear from him. And those shares now sinking over the course of this earnings call, down more than 8 percent. All right, Mac, thank you. Mackenzie Sigalos with the guidance there. Disappointing in terms of revenue growth. Service is about the same. Gross margins also disappointing. What do you think? This is the first level of support that we talked about at the top of the show, so we'll see sort of the May highs-ish.

33:13What do I think? Again, it goes to the setup. Now, this guidance isn't great, and when valuation is a problem, the first thing people are going to do on the back of guidance like this is sell first, ask questions later. I don't know if Dan's level comes into play over the next couple of weeks, but this is a critical support level right here. You know what strikes me is calling out the currency headwinds, which is interesting because you never say on the ups, like when it's in your favor. You're not like all excess benefit from currency. But here we are. Wait, were you not hedged? Yeah. Either way, it's never really been an issue before.

33:43Right. So, yeah, that's not ideal for sure. I'd be interested to see how the analysts respond to the whole call. I think, again, just coming into the setup, the setup, the setup. Yeah. Yeah. I mean, I don't down 8%. I mean, I honestly don't think it's a big deal because of what you said. And if you're going into this quarter where you have to relaunch Siri, you have to get, you know, consumers behind a higher price phone with supposed AI capabilities that we have not seen yet. I think it makes sense to have a moderated sort of anticipation right here because we know that we've been disappointed again and again over the last few years as far as what they are going to be able to roll out as it relates to AI.

34:23So to me, I think taking some of that froth out and having the thing banging around, you know, just above 300. I just want to be clear about the 275 I mentioned. I mean, that's where the stock sold off after they announced that they were going to be raising prices. There's some comments from the call about memory prices as well. Tim Cook saying that Apple paid significantly more for memory in the third quarter than in the second quarter. They do expect costs to rise sequentially in the fourth quarter, and they see memory prices rising past the fourth quarter. They talked about supply constraints already in a few pieces.

34:54I mean, this just paints a picture of margins diminishing quarter after quarter after quarter and maybe a slowdown in the uptake of iPhones as the price hikes get bigger if they don't meet those costs. Yeah, I don't know. And very possible, although Apple's been very resilient on that front in the past in terms of price increases. The 48 percent gross margin level is really what I felt it needed to hold for next quarter. As we're all saying, we know the margin's coming down. And the question is how long. I find it also just interesting, right, why we're having this FX conversation. And if anything, wouldn't we be talking in constant currency kind of terms?

35:38Are they actually indicating that they have been on the wrong side of FX or are they indicating that it's just translated back into dollars? It's an issue. I don't care about that. I mean, and I guess I don't care as much about if it was necessarily hedging issues or dynamics translated back. But it is fascinating, as we've said here. I don't it. The FX side, why these numbers look that much different out the next quarter is puzzling. The FX thing. I mean, I think Karen actually might agree with me twice in one show, which would be a miracle. But it's like when companies say, hopefully, you know, there was one less day in the buying cycle or weather had an impact.

36:19OK, I mean, that's the FX thing. They should shelve that, in my opinion. OK, we'll keep you posted on any further headlines from this call. But the stock is down about seven percent. Fast Money is back in two.

36:36Welcome back to Fast Money. The end surging against the dollar. of the Nikkei reporting that the Bank of Japan intervened to support the currency ahead of its interest rate decision tonight. The yen hitting 40-year lows against the greenback yesterday. For more on the potential ripple effects, let's bring in CNBC contributor Peter Buchlar. He's the chief investment officer at One Point BFG Wealth Partners. Peter, always good to see you, especially in person. What do you expect to happen out of the meeting? I think it's not much is expected.

37:02Patrick Moorhead:Well, that's the interesting thing. So just another quiet earnings morning, 9.30, I see the yen go from 1.64 to 1.59 in a matter of seconds. And that clearly was intervention, sort of confirmed at the end of the day. Ideally, if you want to have that follow through, that yen strength, you want to have the BOJ hike tonight. Or if they don't hike tonight, they tell you they're going to hike in September, because right now the market is not pricing it in until December. Because you totally dilute and neuter this intervention if you don't follow up. So I think the markets could be surprised tonight.

37:35Patrick Moorhead:And having that yen strength, we don't know to the extent, but how much is in the carry trade that needs to go unwound? Does the BOJ hike control long end rates for the Japanese, but also maybe for the rest of the world? So there are a lot of ripple effects here if something happens. What is the level of the yen that you get concerned at in terms of the carry trade? That's a good question. I think it's two things. I mean, it's difficult to determine the extent at which it's still on after it reversed a couple of years ago. And at what level you get that pain point. I would say anything below 150, which is still a far cry from where we are now.

38:13Patrick Moorhead:But this would be a big thing if there is a follow through, because it's the BOJ's lack of hiking is why it's gotten so weak to the point where Takeichi's approval ratings have fallen very sharply. Because people are very upset about the loss of purchasing power and the persistent inflation. Peter, it was a Thursday in 2024, in July, where dollar-yen was 161, CPI print came out, and by five minutes was trading 157. And by August, a few weeks later, volatility was through the roof and our market was cascading lower on this yen unwind, the yen carry trade unwind. It's a different set of circumstances, but it's the same type of situation, this time maybe worse given the state of their bond market.

38:53Thoughts on that?

38:53Patrick Moorhead:Well, that's going to be the most interesting thing. Is a hike going to control the long end or is it going to further raise global interest rates? Because what happens in Japan flows directly into Europe, flows directly into us. Japan was the architect of modern day interest rate repression. And those days are far from over. And it's rare to see a BOJ do what the market hasn't priced in. And so it would be quite the surprise. But I think the intervention is telling you that, well, you're not going to wait till December for a hike. It's coming much sooner. Peter, Wors seems pretty focused on getting inflation down to 2 percent, right?

39:34We had a GDP print of one and a half percent today. We have a lot of inflationary pressures that literally the Fed will not be able to control as far as geopolitics and the like here. What's your sense for the U.S. economy right now? Because, again, we've had a moving target as it relates to a lot of inflationary readings. but the 10-year yield keeps kind of moving higher, a little tick by tick.

39:54Patrick Moorhead:So in 2025, growth was about 2%. So far in the first half of this year, growth's about 2%, give or take, with a huge contribution, obviously, from constructing data centers and upper income spend. And so that's really the main pillars that the economy is resting on. We know that. And that's why these CapEx numbers are so hugely important, because it flows through to activity, whether it's the construction worker pouring cement, or it's the person in the dark room with the semiconductors. So now Kevin Walsh's job is really complicated because trying to calibrate monetary policy around geopolitical events is extraordinarily difficult.

40:30Patrick Moorhead:And that's why I think he's sort of being patient. And he wants to hear what the market has to say without everyone staring at him. And I think that people are not used to that. All day, everyone's saying, oh, we want to hear more from the Fed. Well, we've heard so much over the last 20 plus years Now let's give the market a chance to give its own opinion on what they should do. OK, so what did the market tell you? So because rates are rising without a further acceleration in economic growth, because we're still stuck at two, tells me that debts and deficits now finally matter. And whether it's excessive corporate debt issuance or it's U.S.

41:08Patrick Moorhead:debt issuance or it's in Japan and Europe, that now matters. And that's why rates, in my opinion, on the long end are going up. Peter, good to see you. Thank you. Peter Bokvar. Tim, just quickly, you think the BOJ moves? I do. I do. It would be interesting to see them respond at this juncture because they've actually acted like they don't need to be pushed around. But I think weaker dollar is something to continue to think about the trades around it and the trades that were hurt very badly by that dollar's move through 100 on the Dixie. All right. Coming up, much more after-hours activity tonight.

41:45The details behind the moves in Roblox, Reddit, and more. Stay tuned.

41:56Welcome back to Fast Money Stocks. Rallying back after yesterday's sell-off, the Dow adding 600 points. S &P gaining a percent and a half in the Nasdaq led the charge, rising almost 3 percent. All three indices now positive for the week. Jersey Mike's ending the session 6 percent below its$23 IPO price. The stock made its debut on the New York Stock Exchange today, opening at$21 a share. Target, meanwhile, down nearly a percent. Wells Fargo out with a bullish call, upping its price target to$165 for$140. Analysts expecting a beaten raise when the company reports on August 19th. And they say the bull narrative has enough tailwinds for now.

42:31Shares up nearly 50 percent this year. And Eli Lilly dropping four and a half percent. The company expanding its partnership with manufacturer Resilience, investing$750 million to boost production of the devices used to inject GLP One Shots. And some more after hours action here. Coinbase dropping after posting a wider than expected loss for the quarter. Roblox sinking after bookings came in below expectations. Reddit also lower despite top and bottom line beats. And Rivian modestly higher after topping estimates. Coming up, a refiner rally. Valero painting a bullish picture for oil markets inside those results and what it could mean for the other big oil names on deck to report for Fast Money in two.

43:16Welcome back to Fast Money. Valero rallying about three and a half percent today after the refiner posted a record quarterly profit more than five times year ago numbers. Results come a day before ExxonMobil and Chevron report. CNBC's Pippa Stevens has more Pippa, but the refiners have really been benefiting from the situation here. That's right. So the refiners have really been reaping the rewards of the very tight global fuel markets that we've seen. And with Valero's adjusted EPS coming in at 1254, that was up from 422 last quarter and 450 percent higher than a year ago. These results are prior to the sustained move higher we've seen in products and record crack spreads, meaning management said margins for the current quarter look even stronger than for Q2, supported by low global inventory, limited excess refining capacity, and strong fuel demand.

44:00Exxon and Chevron report tomorrow morning, with Exxon having the larger refining footprint of the two, while Chevron is more upstream weighted. Now, the majors are benefiting from higher commodity prices, with analysts expecting both companies to at least double EPS year over year. But they also both have interests in the Middle East with impacts to production. Exxon has much more exposure to the region than Chevron. So price outlook, CapEx and potential Venezuela ramp will be top of mind on the call. Now, for more on the quarter, be sure to catch Exxon CEO Darren Woods on Squawk Box tomorrow morning.

44:30The network is fortunate to have PIPA covering the energy space. I'll just say that flat out. I totally agree. Number one. And she does a great, amazing job. I'll say this quickly. Look, the crack spreads have been ridiculous. We just made an all-time high. But for the first time in like a month, they're starting to turn a little bit lower. Something to watch. But I think the numbers out of Exxon and Conoco are going to be extraordinary tomorrow. We'll see how the stocks react, but I think it's going to be very good quarters. Let's say the conflict ends in the Middle East tomorrow. And there's normal traffic.

44:57The Strait of Hormuz and Babel Mundeb. Do the refiners still stand to benefit? I mean, are a lot of the factors still in place that are benefiting them right now? So the overwhelming factor is just reduced refining capacity worldwide. Apart from Dengote in Nigeria, we haven't really seen new refiners come online. And they always really fly under the radar. They just kind of hum away, continue to produce. And they don't really want to be in the headlines. They don't really want these types of blowout quarters. And they never really emphasize that because if they're posting record profits, then typically consumers are the ones who are suffering.

45:27But it's just, you know, for so long it was seen as a sunset industry and we didn't have a new refiner. President Trump just announced one last year, but the last one that came online in the U.S. was 76, 1976. So it's been a very long time because it is such a heavy capex cost up front. And with all the calls for peak oil, there hasn't really been anyone who's been willing to take that on and build a new one. So, yeah, I mean, even beyond even beyond the Middle East conflict. Yeah, the conditions are still tight. I guess the kudos to Guy. He has been on the Valero trade for, I don't know, a couple hundred.

45:57Points? Tim Seymour as well. I mean, with PIPA's work, we've been able to sort of figure out what's going on. I wouldn't be able to do it without that work. I'm just telling you. Tim? I think Exxon over Chevron, if we're picking one of those two, I think Exxon historically hasn't been given enough credit for their downstream, their refining business, and in fact, has been punished for not growing enough on the top line. The Venezuela news is fascinating, and I think Chevron is set to gain from that in a way that the market hasn't priced in. In other words, I think we right away priced that in for Chevron.

46:30I think there's more to go. I think you can own integrators around the world. European integrators also look really fascinating. Pippa, thank you. Great to see you here on set, Pippa Stevens. Up next, Final Trades.

46:52Quick check on tech here. Apple is down by under 7%. Some interesting comments from the Amazon call, though, here. The Amazon CEO saying that there won't be one model on top, that companies will be able to use all sorts of different models, and that Amazon itself is exploring its own model to reduce costs. So that's sort of interesting there. Amazon shares up 9%. Time for the final trade. Let's go around the board. Tim Seymour. You mentioned that target upgrade. I think not only is it the T &P growth, but I think the merchandising growth is part of the strategy, and I think it's working every four and three weeks.

47:23Karen? Yes. XLE, we were just talking about refining, the biggest holding in the XLE. Yeah, K-Web. I think Internet in China has gotten too negative. I think you're having the China. You have a bearish to bullish reversal in the K-Web. Guys. What? Did you see that quote out of Bristol-Myers, Mel? I know you did. BMY breaking out. All right. Thank you for watching Fast Money. See you back here tomorrow at 5. Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, internet, or another medium.

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48:50at Edens Plaza and Wilmette.