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Last Week’s Highlights
Amazon falls on slower AWS growth
Amazon reported that the revenue growth of its Amazon Web Services (AWS) division is going through a slowdown, which led the value of its shares to fall. This problem occurs mainly because its business customers prepare for uncertain times and reduce spending, this causes sales to decline and therefore also the company’s quarterly profits. Investors are fearful that these services from the company will be beaten by rival companies such as Alphabet and Microsoft, who are making the most of high-profile artificial intelligence tools. To cope with what the company has called an uncertain economy, Amazon has set its sights on cutting spending across a wide range of divisions.
Exxon hits record first-quarter profit
Exxon achieved a record profit in the first quarter due to higher oil and gas pumping. The company exceeded specialists’ estimates and raised its figures to a historic result. Compared to the same period last year, the company doubled its profit because higher production offset lower energy prices. “We achieved a record first quarter even though energy prices and refining margins are softening a little bit,” CFO Kathryn Mikells said in an interview. Exxon’s net profit totaled $11.43 billion, up from $5.48 billion a year ago. Following Friday’s data, the company’s shares rose 2.3% to an all-time high of $119.52 per share.
Coming Up This Week
Intel keeps an upbeat view on margins
Intel Corp announced last Thursday that falling gross margins will improve in the second half of the year, sending its shares up 4%. In tough economic times, Intel projected that adjusted gross margins will exceed 40% in the second half of the year, after hitting record lows in the first half of the year. Apparently, that was enough to overcome concerns about current profitability. The company also rushed the shipment of its most powerful data center chip, codenamed Sapphire Rapids, which had been delayed for more than a year. Intel forecast revenue for the second quarter of the year at a midpoint of $12 billion, above analysts’ estimate of $11.75 billion.
Pinterest sank on below-estimates forecast
Pinterest shares fell as advertising woes hurt revenue growth. On Thursday, the company announced that its revenue will come in below Wall Street analysts’ estimates as it grapples with a pullback in ad spending. Its shares fell 13%. Similarly, shares of its counterpart Snap Inc. were down 18% on weak first-quarter revenue, and it would appear that something similar is going to happen in the second quarter. Companies like Pinterest and Snap, considered smaller digital advertising sellers compared to Alphabet and Meta Platforms, are losing ground. In a weak economy with various problems, advertisers prefer to stick with tried and tested platforms. To try to change this situation, Pinterest announced that it was opening up demand for third-party ads, which would allow other parties to offer ads on its platform. The strongest announcement was that Amazon is its first partner, as it looks to attract more brands and products to its platform.
