Greetings from San Francisco! 👋🏼
Over 92,000 How They Make Money subscribers turn to us weekly for business and investment insights. Glad you're here.
February delivered a packed schedule of earnings reports.
Stay tuned for our biggest monthly report yet dropping tomorrow.
📊 Earnings Visuals (2/2024) will include over 100 slides.
This exclusive high-resolution report, available only to Premium subscribers, provides a bird's eye view of earnings of the past month, offering a holistic look at the businesses shaping our world.
Here's a sneak peek at the companies featured in tomorrow’s report.
Another month has gone by, so here's a recap of recent insights you might have missed to keep you up to speed.
❄️ Snowflake Gets a New CEO
Snowflake (SNOW) plunged more than 20% after posting its Q4 FY24 results.
Frank Slootman, 65, is retiring as CEO. He previously led ServiceNow to IPO and had an impressive track record.
So who’s the new CEO? Sridhar Ramaswamy was previously SVP of AI at Snowflake. He spent 15 years at Google, leading the advertising business from $1.5 billion to over $100 billion.
It didn’t help that the company forecasted product revenue to grow only 27% next quarter to $750 million, missing consensus by $9 million. It gets worse for the full year FY25, with product revenue growth expected to slow to 22% year-over-year.
It’s not uncommon for companies to sandbag when a new leadership team takes over. But there is more to the story here.
CFO Mike Scrapelli explained during the call:
“We are forecasting increased revenue headwinds associated with product efficiency gains, tiered storage pricing and the expectation that some of our customers will leverage Iceberg Tables for their storage.”
Iceberg is an open-source table format initially developed by Netflix.
Remember, Snowflake is more than storage, with its applications in data science, machine learning, and data sharing holding significant growth potential. We’ll have to see if the company continues to underpromise and overdeliver.
☁️ Amazon: Ads Take the Cake
Amazon (AMZN) had a stronger-than-expected quarter, with overall revenue and operating profit well above consensus. Advertising was the fastest-growing segment, surging 27% year-over-year.
What to expect from Prime Video with ads?
Meet Rufus, the generative AI-powered shopping assistant.
Could advertising become a more significant contributor than AWS?
⚙️ Semiconductor Titans Visualized
Amid the AI gold rush, knowing who's crafting the picks and shovels—the semiconductor industry—is crucial.
Why is the industry so cyclical and volatile?
What are companies you may be overlooking?
Who’s playing a critical role in this AI supercycle?
👽 Reddit IPO: Key Takeaways
Reddit filed for an IPO under the ticker symbol RDDT. There’s a lot to unpack, including the compensation package of executives. A portion of Reddit’s shares will be available to its most loyal Redditors at the IPO price before the general public.
How does Reddit make money, and what’s the growth strategy?
What are the main risks to consider, from LLMs to meme stock 2.0?
Why does Reddit look a lot like Snap and, to an extent, the old Twitter?
☁️ Microsoft: AI at Scale
Of all the insights from this earnings season, a crucial data point came from Microsoft’s earnings. CFO Amy Wood revealed that Azure revenue growth (+28% year-over-year) benefited from a 6 percentage point contribution from AI services (compared to 3 percentage points in the prior quarter).
What are the early signs of success for Copilot?
Why is Activision Blizzard changing the game for Microsoft?
What are Small Language Models (SLMs), and why are they critical?
🤖 NVIDIA Shocking Q4: AI' Tipping Point’
NVIDIA (NVDA) had the largest one-day gain in history for a public company, adding more than Netflix’s entire market cap. We learned that inference workloads represented roughly 40% of NVIDIA’s Data Center revenue in the past year.
What’s the difference between training and inference?
What is driving the meteoric rise in Data Center revenue?
Is the run-up in the stock price justified, or is NVDA the next CSCO?
💰 Hedge Funds’ Top Picks in Q4
Every quarter, funds managing over $100 million must share their portfolio moves as part of their 13F filings. Let’s review what we learned.
Did hedge funds continue to buy NVDA in Q4?
Which stocks were notably absent from the list?
What made companies like AMD (AMD) and Block (SQ) top picks?
Join us on social media for a daily dose of company earnings and news, and stay tuned for our continued coverage of earnings season in the coming weeks.
⚫️ X: EconomyApp
🔴 YouTube: HowTheyMakeMoney_
🧵 Threads: app_economy_insights
🔵 LinkedIn: App Economy Insights
🟠 Instagram: app_economy_insights
That’s it for today.
Stay healthy and invest on!
Sponsor Us
We're offering new sponsorship opportunities for B2B and B2C brands to get in front of our audience of investors and business leaders. Reach out to me to learn more.
Get Your Business a Custom Chart
Interested in custom charts for your organization or brand? Complete the form, and we'll get in touch.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
Disclosure: I am long AMD, AMZN, NVDA, SQ, and SNOW in the App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Thanks for publishing great articles. I have been thinking of getting subscribed to your investment hub ($149 subscription). I had one question - if I take that subscription, will it include the $19 subscription which I have already taken or are these two separate things ? (Sorry to ask this question here -I couldn't find this information anywhere and didn't know any other way to get an answer)
Using the listen to article feature takes How They Make Money to a new level🎉