Welcome to episode 149 of Magic Markets. It’s the middle of US earnings season, and two international tech giants have released results last week. This is a tale of two stocks, with one garnering a very positive reaction from the market and the other… well, not so much.
Join us as we discuss Amazon and Alphabet (the holding company of Google), answering the following questions along the way:
- Something has happened that has swung the market’s opinion on Amazon this year. Has Artificial Intelligence won the hearts of investors, or is something else afoot? Could it be free cash flows?
- When we covered Alphabet a little over a year ago, we concluded that the stock was cheap on its trailing multiple, but not on its forward multiple, and we highlighted the fact that a weaker dollar might actually help this company out. Did our predictions come true? And how did old favourite Microsoft perform in comparison?
- AWS is seen as the jewel in Amazon’s crown. Can we explain this using margin mix, which means comparing the margins in AWS to the eCommerce business?
- How is the core advertising business at Alphabet performing relative to the rest of the group? And is the group making progress with Artificial Intelligence?
- Can we learn anything about investing from cats and dogs?
- And of course – if we could only pick one of these companies, which would we pick? Are there any other insights about the US market?
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