Amazon's Cloud Sales Win, AMD Disappoints on AI Chips | Bloomberg Technology

Amazon

• Amazon reported its strongest sales growth in a year, with AWS generating an annual revenue run rate of $100 billion.
• Amazon's profitability for AWS was significant, accounting for two-thirds of its profit despite contributing less than 20% of total revenue.
• Amazon's consumer business showed signs of weakness, with a smaller average order size impacting margins in the e-commerce segment.
• The advertising business on Amazon's website remains dominant, but there was limited clarity on the contribution from video ads.
• Amazon's recent conference call was the most bullish in years, with CEO Andy Jassy emphasizing the tremendous opportunity in AI and willingness to spend tens of billions of dollars on it.
• Amazon's profitability and multiple short businesses, such as AWS, logistics, and others, could mitigate the impact of aggressive spending on profitability.
• AWS remains the cash cow and bright spot for Amazon, but the European consumer business showed weaker guidance.

AMD

• AMD disappointed investors despite upgrading its sales forecast, with concerns about a slowdown in gaming demand and the performance of its MI 300 X chip.
• AMD's disappointing forecast and sluggish gaming demand weighed on investor sentiment, leading to a decline in the company's stock price.
• AMD clarified that demand for its AI accelerator product continues to exceed supply, but there are constraints in meeting the high expectations set by investors.
• AMD's raised forecast fell short of expectations, with GPU guidance revised to $4 billion, lower than anticipated.
• AMD has potential growth opportunities in enterprise refresh, especially in the second half of 2025, due to the need for companies to replace old legacy systems.

Pinterest

• Pinterest's revenue surged, but the company's guidance for the current quarter was light, indicating potential challenges in the e-commerce business.
• Pinterest's Q1 sales and user growth were impressive, with Gen Z users being their largest demographic.
• The platform's focus on actionability and shoppable content has led to increased user engagement and revenue growth.
• Partnerships with third-party advertisers like Amazon and Google have contributed to the advertising uptick.
• Pinterest's global monthly active users surpassed 1 billion for the first time, driven by factors such as actionability, positivity, and inclusivity.
• Cross-border shopping has been a contributor to Pinterest's growth, with retailers finding success in reaching hard-to-find shoppers on the platform.
• Pinterest's differentiation from other social media platforms, particularly in terms of positivity and user intent, has resonated well with Gen Z users.
• While Pinterest has a dominant user base outside the U.S., there is significant potential for revenue growth in international markets.

Cryptocurrency

• Bitcoin experienced a decline of 4.3%, trading at around $57,000.
• Binance founder received a four-month prison sentence for failures that allowed cybercriminals and terrorist groups to freely trade on the world's largest cryptocurrency exchange.

Media

• Paramount Global agreed to extend contract talks with Charter Communications.
• Charter and one of the largest cable TV providers have extended their talks to prevent Charter's channels from going dark on the cable service.

Tesla

• Tesla has partnered with a local Chinese company for a mapping license to enter the Chinese market, despite Elon Musk's previous claims that Tesla can offer self-driving without HD maps.
• Tesla has eliminated its entire Supercharger organization, including the head of the business, leading to confusion and concern within the auto industry.
• Tesla's senior director of HR has left the company, marking the second high-profile departure of a senior woman in two days.
• Elon Musk, CEO of Tesla, believes he should have accelerated the transition to electric vehicles (EVs) sooner.
• Tesla's stock has increased by over 1300%, and the company has met or exceeded expectations in 35 out of the last 36 quarters.
• Musk admits that the stock's performance can be frustrating, but ultimately, it is the company's responsibility.

Technology Sector

• The broader technology sector was dragged down by disappointing earnings, with the Nasdaq Composite Index falling by 2.5%.
• Supermicro, a server maker crucial to the AI story, disappointed investors with results just below expectations, leading to a significant stock drop.
• Microsoft's motivation for investing heavily in and partnering with OpenAI came from a sense of falling behind Google in the field of artificial intelligence, as revealed in an internal email released in the Justice Department's antitrust case against Google.
• Dan Loeb's Third Point hedge fund now has nearly half of its equity portfolio invested in artificial intelligence-related companies, as Loeb believes the AI revolution favors incumbents who are deploying their skills in this area.
• The stock market is experiencing cautious trading ahead of the Fed's press conference, with the Nasdaq index declining due to concerns about the chip industry and the pace of interest rate hikes.
• Bitcoin is trading below the $57,000 mark, while individual stocks like IPG Photonics are performing poorly due to tepid forecasts in the AI sector.

General Motors (GM)

• GM CEO Mary Barra discussed the company's commitment to electric vehicles, acknowledging that the industry is still in its early days and facing challenges such as battery chemistry and cost.
• Barra addressed the slowing down of hype surrounding EVs and emphasized the need to find a balance between overhyping and underestimating the potential of the technology.
• GM scaled back some of its U.S. EV targets due to challenges in manufacturing new processes.
• GM is looking to generate digital revenue through its alternative to Apple CarPlay, which is the default home screen on many vehicles.
• GM is taking a risk by betting that consumers will overcome their inertia and switch from CarPlay to GM's system, which offers more features.
• However, GM's new system has faced some initial issues and bugs, and the company will need to ensure its software is reliable to convince consumers to switch from CarPlay.
• If GM can successfully execute its strategy, it stands to gain significant rewards in terms of digital revenue.

Venture Capital

• Palantir CEO and venture capitalist Venona Cosa, among other heavyweights, traveled to Washington, D.C. for a summit on the role of AI and escalating competition between the U.S. and China.
• Renegade Partners, a venture capital firm, focuses on investing in durable technology companies, which are large markets that are relatively untouched by technology and can drive meaningful parts of GDP.
• The firm takes a generalist approach but looks at the market broadly to identify companies in sectors such as aerospace intelligence, biotech, and access to the debate market.
• Despite the market feeling softer, Renegade Partners maintains a competitive edge by offering a bespoke boutique firm approach, with a focus on partnership dynamics and limited investments per fund, allowing them to spend more time helping companies.
• The firm assists startup leaders in pivoting their businesses to incorporate AI, recognizing that every company will eventually become an AI company.