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Motley Fool Hidden Gems Investing

Earnings and Elections

Motley Fool Hidden Gems Investing

The Motley Fool

Business, Investing

4.33.1K Ratings

🗓️ 30 October 2020

⏱️ 39 minutes

🧾️ Download transcript

Summary

Alphabet surges on strong earnings. Microsoft reports higher profits but disappoints with guidance. Amazon reports record quarterly sales. Facebook falls on concerns over a decline in U.S. and Canadian users. Starbucks serves up a surprise. Apple dips on weak iPhone sales. And Netflix raises prices. Motley Fool analysts Andy Cross, Ron Gross, and Jason Moser discuss those stories and dig into the latest results from Etsy, Pinterest, Shopify, Tupperware, Twitter, and Under Armour. Our analysts share three stocks on their radar: Wix.com, Inphi, and EPAM Systems. And we talk about what the upcoming election means for investors. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

Everybody needs money. That's why they call it money.

0:07.0

From full global headquarters, this is Motley Fool Money. It's the Motley Fool Money Radio Show. I'm Chris Hill joining me this week. Andy Cross and Jason Moser. Good to see you gentlemen.

0:25.0

Hey Chris. Hey, it's earnings. Paloza. We have so many big earning stories to get to. We have no time for a guess, but it's always we do have time for a few stocks on our radar.

0:36.0

Let's begin with a few trillion dollar companies. Alpha bits third quarter profits came in much higher than expected.

0:43.0

Google's online ad business continues to do well revenue for Google cloud was up and YouTube revenue top five billion dollars.

0:52.0

Jason Moser, a lot to unpack. What stood out to you?

0:56.0

I think generally speaking, the thing that stood out to me, this was a nice recovery from what was a pretty whole home quarter last quarter.

1:05.0

Facebook, Alphabet continues to benefit from this massive move from offline to online and kind of harken back to Satya Nadella's quote from from back in April where he said we've seen two years worth of digital transformation in two months.

1:18.0

And Alphabet certainly one of the companies helping spearhead that in benefiting from it as well. But 15% top line growth very, very encouraging nine services with one billion users each.

1:30.0

I mean, it's just amazing to really think about to your point, a lot to unpack their Google cloud continues to perform very well. They had ended the previous quarter with a backlog around $15 billion and for this quarter, they they brought in revenue of $3.4 billion.

1:46.0

It was up 45% clearly well behind Amazon and AWS, but they're picking up share, which is encouraging to YouTube, YouTube ad growth was really strong.

1:56.0

It was up 32% from a year ago, nice recovery last quarter, if you recall, they chalked up about 6% revenue growth. And that was due to some weakness and brand advertising that brand advertising is starting to come back and certainly YouTube is is benefited from that.

2:11.0

So so all things considered, I mean, this is this is a business that has a lot of different ways to win.

2:17.0

Interesting, interesting little factoid, couple of factoids from the call, I just thought that we're kind of noteworthy. They said as a sign of the times views for guided meditation videos are up 40% since March in DIY face mask tutorials have been viewed over one billion times.

2:36.0

So so clearly they are seeing themselves as part of the solution as opposed to part of the problem. And I think that's good investor should be happy.

2:45.0

That I'm not a shareholder, but that just makes me happy. I am a shareholder and yet it makes me happy too Chris. I got to go over there and look at some of those videos because I can never get those masks on properly.

2:55.0

So Microsoft's first quarter profits and revenue came in higher than expected, but guidance for the second quarter came in low shares of Microsoft down more than 7% this week.

3:06.0

Andy, I get the short term concern of people on Wall Street, but this is such an impressive business.

3:15.0

Chris, absolutely the sales growth of 12% was I think really respectable and higher than expectations powered by its cloud business, not to be forgotten. It's office and the productivity segment did really well.

3:27.0

So teams continued to show lots of rapid growth and the cloud expectation growth for coming for the next quarter up 6% sequential. I think what is what people focus on, but just looking at the quarter Chris sales up 12% now 37.2 billion for the quarter that productivity and business process business.

3:48.0

So it was 365 linked in the dynamics business that was 11% in sales much better than last quarter the intelligent cloud business was up 20% that was up up versus the 17% growth in the fourth quarter.

4:04.0

So I think that was a short business that the big cloud business that revenue was up 48% among that division that was an acceleration off last quarter so that acceleration I think may not be continuing as much going forward. I think that's what sent some some investors a little bit worried and sent the stock down.

...

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