Discussing the second fiscal quarter results of the top 5 companies with the highest market caps in 2024.

NVIDIA

On Wednesday, NVIDIA reported revenues of $30.04B in the last quarter, exceeding last year by 122%. It beat expectations by almost $3B- analysts have predicted the number to be $28.7. NVIDIA further indicates that the push for AI investment and development is not in vain, and doesn’t plan to slow down any time soon.

Earnings per share rose to 68 cents on the dollar. NVIDIA expects a further increase to over $32B by next quarter. CEO Jensen Huang says they plan to manufacture and ship even more chips and hardware while developing even more powerful and sophisticated chips with the aid of AI. NVIDIA codenamed this new class of chips ‘Blackwell’. Huang said he wants to awaken the next industrial revolution.

Microsoft

Their revenue rose above expectations to $62.0 billion, up 18% year-over-year (16% in constant currency). Operating income rose to $27.0 billion, increasing 33% (25% non-GAAP, 23% in constant currency). Net income is now $21.9 billion, up 33% (26% non-GAAP, 23% in constant currency). Diluted earnings per share: $2.93, increased 33% (26% non-GAAP, 23% in constant currency). The key highlight and driver of their success was their Microsoft Cloud revenue- $33.7 billion, up 24% (22% in constant currency)

CEO Satya Nadella emphasized the company’s focus on applying AI at scale across its tech stack, driving new customers and productivity gains across sectors. The company’s strong execution in sales, particularly in the cloud segment, contributed to these positive results. Microsoft also noted that they’re seeing continued cautiousness in the spending environment, although AI drives more interest in Azure.

Apple

Revenue: $90.8 billion, down 4% year-over-year from $94.8 billion in Q2 2023. Net income fell slightly to $23.6 billion, or $1.53 per diluted share, down from $24.1 billion, or $1.52 per share, in the year-ago quarter. Gross margin: 46.6%, up from 44.3% in the previous year’s quarter. iPhone and iPad revenue fell from last year- $46 billion, down 10% year-over-year, and $5.6 billion, down 17% year-over-year respectively.

Mac revenue, however, had a positive result of $7.5 billion, up by 4%.

Apple set new revenue records in over a dozen countries, including Canada, India, and Turkey. Apple’s board approved an additional $110 billion for share repurchases and increased the dividend to $0.25 per share. However, even in 2024, the company faced challenges from macroeconomic variables and the lingering effects of COVID-19 disruptions on its supply chain.

CEO Tim Cook emphasized Apple’s focus on delivering superior products and services, as well as the company’s commitment to innovation and future product announcements.

Amazon

Second quarter revenue surged to $148.0 billion, up 10% year-over-year (11% excluding foreign exchange impact). Net income was $13.5 billion or $1.26 per diluted share, almost doubling from $6.7 billion or $0.65 per share in Q2 2023. However, $90 billion of sales came from North America- only $31B being purely international. Amazon’s push for AI came in the form of AWS (Amazon Web Services), which generated revenue of $26.3B, up 19% since Q2 2023. Amazon also noted their increased AI integration into consumer services and customisation.

Prime Day 2024 was the company’s biggest shopping event yet. Amazon achieved its fastest delivery speeds for Prime members globally. The company expanded into South Africa with the launch of Amazon.co.za. The company secured major deals in entertainment, including with the NBA and NFL

Amazon demonstrated strong growth across its segments, with AWS, Prime services, and international expansion being key contributors to its performance in Q2 2024. They predict revenues in the third quarter to rise to $154B.

Alphabet (Google)

Revenue reported at $84.742 billion, up 14% year-over-year (15% in constant currency). Net income was $23.619 billion, up from $18.368 billion in Q2 2023.

Google Services revenue:

• $73.928 billion, up 12% year-over-year Google Search & other: $48.509 billion, up 14%
• YouTube ads: $8.663 billion, up 13%
• Google Network: $7.444 billion, down 5%

Google showed strong performance in Search and momentum in Cloud with ongoing innovation in AI across various services. YouTube showed healthy watch time growth and continued momentum in Connected TV. Google Cloud delivered operating income of $1.2 billion with an 11% operating margin. The company continues to invest in AI infrastructure and Generative AI solutions

CEO Sundar Pichai emphasized the company’s focus on AI innovation and its strong position due to infrastructure leadership and in-house research teams. CFO Ruth Porat noted the company’s commitment to creating investment capacity through ongoing efforts to re-engineer its cost base.

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