Eq: Tech

(San Francisco)

The market fell in a big way yesterday. The root cause? Apple. Apple has cut its iPhone sales guidance, and it now seems a recession is coming to the whole Apple universe. The numerous companies that make their living supplying Apple seem set for a severe correction and are paring their estimates back sharply. Investors didn’t seem ready for this slowdown in the iPhone, perhaps misguided by the hype that has recently surrounded new models. The fact is that the iPhone is now a mature product, and maintaining the kind of growth it once had is likely untenable, a fact that even Wall Street analysts are starting to admit.


FINSUM: Apple’s business is changing and it seems to be doing a good job managing that transition, though everyone hopes it will have a new dynamite product. That said, a general recession surrounding the iPhone universe seems likely.

(Seattle)

Amazon has seen some significant volatility lately. A weak earnings report sent the stock plummeting, and weaker top line growth is making some worry. The stock is down 17% since the beginning of October. However, the company’s bottom line seems likely to grow strongly as it starts to benefit from its massive scale. A Nomura analyst summarized the situation best (and interestingly), saying “AMZN’s size and scale are eclipsing its ability to suppress margins … Put simply, it seems AMZN sales and GP [gross profit] dollars are growing faster than their ability to spend”.


FINSUM: We don’t think Amazon is in trouble by any means. The company is just transitioning into a more mature state where topline growth will slow, but margins will rise.

(San Francisco)

In what seems like a dramatic development considering all the other news that comes out on self-driving cars, people close to the situation say Waymo, Google’s self-driving car subsidiary, will launch an autonomous car service next month. The service is supposed to compete directly with Uber and Lyft.


FINSUM: Doesn’t this seem a little soon considering how recently fatal accidents were occurring? This could be a frivolous headline, but it could also be a major technological moment and potentially a good time to buy Alphabet.

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