Bloomberg Businessweek

Apple's fourth-quarter revenue edged past analysts’ estimates despite a surprise sales decline in China, where it’s been struggling to stage a comeback. Total sales rose 7.9% to $102.5 billion in the period, which ended Sept. 27, the company said in a statement Thursday. That slightly beat the $102.2 billion average estimate. The company benefited from stronger-than-expected services growth, helping offset the China slowdown. The Mac and wearables division also performed better than anticipated. Apple shares gained more than 3% in late trading after the results were released. They had been up 8.4% this year through the close.

For more, Bloomberg Businessweek Daily spoke with Jay Goldberg, Senior Analyst, Semiconductors & Electronics with Seaport Research Partners and Mark Gurman, Bloomberg News Managing Editor for Global Consumer Tech.

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Amazon's cloud unit posted the strongest growth rate in almost three years, reassuring investors concerned that the largest seller of rented computing power was losing ground to rivals. Amazon Web Services posted revenue of $33 billion, an increase of 20% from the prior year and the biggest year-over-year rise since the end of 2022. Analysts, on average, estimated 18% growth. The shares jumped about 10% in extended trading after closing at $222.86 on Thursday. The stock has lagged behind that of its industry peers this year, with investors worrying that the company has yet to benefit enough from its AI products. Microsoft Corp. and Alphabet Inc.’s Google have both generated faster growth in their cloud computing businesses than AWS.

For reaction, Bloomberg Businessweek Daily spoke with Bloomberg Intelligence Senior Analyst for E-Commerce and Athleisure Poonam Goyal, Ed Ludlow, host of Bloomberg Tech Ed Ludlow, and Eric Clark, Chief Investment Officer at Accuvest Global Advisors.

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Founded in 2002, True Religion emerged onto the Los Angeles denim scene by disrupting the construction of the classic five-pocket jean. With its five-needle thread at two-stitch-per-inch process, the True Religion Super T stitch was instantly recognized for style that was unlike any other denim brand in the world. Today, True Religion is worn by athletes, musicians, artists, and loyal customers alike with the company putting its focus on producing high quality premium denim, sportwear and other apparel for men, women and kids.
Michael Buckley, the CEO of True Religion, discusses the apparel brand's growth strategy and pursuit of becoming a billion-dollar business in the coming years. Michael speaks with Carol Massar and Tim Stenovec on Bloomberg Businessweek Daily.

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Meta Platforms Inc. said it expects total expenses to significantly increase in 2026, and the company will continue to spend at historic levels on data centers and other equipment to fuel its effort in artificial intelligence. The shares dropped in extended trading.
The company also reported third-quarter net income of $2.71 billion, which included a one-time, non-cash income tax charge of $15.9 billion due to the implementation of the tax bill signed into law in July, Meta said in the statement. Without the accounting charge, Meta said net income would have increased 19% to $18.6 billion.
Meta reported third-quarter sales of $51.2 billion, which beat analysts’ average estimate of $49.6 billion. The company has used profits from the advertising business to fuel its AI ambitions. While Meta has argued that its AI investments are paying off now by helping the company better target ads and content, a slowdown in ad sales could damp investor enthusiasm for Chief Executive Officer Mark Zuckerberg’s long-term vision for AI.
Meanwhile Microsoft Corp. reported a steeper climb in spending than Wall Street expected, fueling anxieties about the high costs of providing AI infrastructure.
First-quarter capital expenditures including leases, an indication of data center spending, came in at $34.9 billion, up from $24 billion in the preceding quarter, the company said Wednesday.
Alphabet Inc. reported quarterly sales that beat analysts’ estimates, buoyed by the performance of its cloud unit, which is surging as artificial intelligence startups seek Google’s support and computing power.
Third-quarter sales, excluding partner payouts, rose to $87.5 billion, Alphabet said in a statement Wednesday. That topped the $85.1 billion expected on average by analysts, according to data compiled by Bloomberg.
Net income was $2.87 per share, compared with Wall Street’s estimate of $2.26.The company is investing record amounts to try to push progress in AI, and infuse answers and assistance from its large language model, Gemini, into its popular products including search. The company said capital expenditures for the year will be $91 billion to $93 billion, up from the $85 billion earlier estimate.

Today's show features:

• Bloomberg Intelligence Senior Technology Analyst Anurag Rana on Microsoft earnings and Alphabet’s AI ambitions
• Ivan Feinseth, Research Director and Chief Investment Officer with Tigress Financial Partners, with reaction to Wednesday's big tech earnings
• Brooke May, Managing Partner at Evans May Wealth, breaks down Microsoft and Alphabet earnings
• Bloomberg News Senior Technology Reporter Kurt Wagner, on Meta’s latest earnings

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Microsoft Corp. reported a steeper climb in spending than Wall Street expected, fueling anxieties about the high costs of providing AI infrastructure. First-quarter capital expenditures including leases, an indication of data center spending, came in at $34.9 billion, up from $24 billion in the preceding quarter, the company said Wednesday. Microsoft continues “to increase our investments in AI across both capital and talent to meet the massive opportunity ahead,” Chief Executive Officer Satya Nadella said in a statement. Total revenue increased 18% to $77.7 billion in the fiscal first quarter, while profit was $3.72 a share. Analysts on average estimated sales of $75.6 billion and per-share earnings of $3.68. The Azure cloud-computing unit posted a 39% revenue gain in the quarter when adjusting for currency fluctuations, beating the Wall Street estimate of 37%. Investor expectations for Microsoft were high heading into earnings, with all but one analyst tracked by Bloomberg rating the stock a buy.

Meta Platforms said it expects total expenses to significantly increase in 2026, and will continue to invest at historic levels in artificial intelligence. The company also reported third-quarter net income of $2.71 billion, which included a one-time, non-cash income tax charge of $15.9 billion due to the implementation of the tax bill signed into law in July, Meta said in the statement. Without the accounting charge, Meta said net income would have increased 19% to $18.6 billion.
Looking beyond the third-quarter, the company said it expects a “significant reduction” in US federal cash tax payments for 2025 and years to come due to the new law. Meta reported third-quarter sales of $51.2 billion, which beat analysts’ average estimate of $49.6 billion.

For analysis of the tech earnings, Bloomberg Businessweek Daily spoke with Bloomberg Intelligence Senior Technology Analyst Anurag Rana and Ivan Feinseth, Research Director and Chief Investment Officer with Tigress Financial Partners.

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Bloomberg's Tom Keene, Jonathan Ferro and Lisa Abramowicz discuss remarks from Fed Chair Jay Powell following the Federal Reserve's latest policy decision on a special edition of Bloomberg Surveillance.

Treasuries extended losses after Federal Reserve Chair Jerome Powell said a December interest-rate cut was not set in stone, even after delivering a widely expected quarter-point reduction to prop up the labor market. The central bank reduced its benchmark lending rate to 3.75%-4% in its second straight cut — though two officials dissented.

“A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it,” Powell said in the opening comments of his press conference. In their post-meeting statement, Fed policymakers on Wednesday repeated their assessment that “job gains have slowed” and said “risks to employment rose in recent months.”

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Wayfair shares rose to their highest level since April 2022, after the e-commerce home furnishing retailer reported third quarter results that easily topped expectations. On the earnings call, management gave guidance for the current quarter that also topped consensus estimates, and spent much of the call discussing its efforts to leverage artificial intelligence technology.
Kate Gulliver, Wayfair's CFO and CAO, discusses her company's long-term prospects for increasing its share of the $500 billion home-goods market with Carol Massar and Tim Stenovec on Bloomberg Businessweek Daily.

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Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
OpenAI is giving its long-time backer Microsoft Corp. a 27% ownership stake as part of a restructuring plan that took nearly a year to negotiate, removing a major uncertainty for both companies and clearing the path for the ChatGPT maker to become a for-profit business.
Under the revised pact, Microsoft will get a stake in OpenAI worth about $135 billion, the companies said in a statement Tuesday. In addition, Microsoft will have access to the artificial intelligence startup’s technology until 2032, including models that achieved the benchmark of artificial general intelligence (AGI), a more powerful form of AI that most say does not exist yet.
Microsoft will also continue to be entitled to receive 20% of OpenAI’s revenue, according to people familiar with the matter, who spoke on condition of anonymity as the information is not public. But as part of the new pact, OpenAI can pay more later. In a blog post, the companies said a revenue share agreement remains in effect until an expert panel verifies AGI.
With the agreement, OpenAI said its corporate restructure is now complete. The company had spent much of this year working to form a more traditional for-profit company, which is considered more attractive to investors. Microsoft, which backed OpenAI with some $13.75 billion, was the biggest holdout among the ChatGPT maker’s investors, Bloomberg News has reported.

Today's show features:

• Bloomberg Intelligence Senior Technology Analyst Anurag and on Microsoft taking a 27% stake in OpenAI
• Danielle DiMartino Booth, CEO and Chief Strategist at QI Research, on this week’s FOMC meeting and interest rate decision
• Bloomberg News Climate Reporter Eric Roston on impact of Hurricane Melissa in the Caribbean and beyond, as well as his recent Big Take on the growing “disaster economy”
• James Walker, Chief Executive Officer of NANO Nuclear Energy, on the launch of the firm’s KRONOS MMR drilling program at the University of Illinois at Urbana-Champaign (with Bloomberg News Energy Reporter Will Wade)

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Long before it became the biggest collection of knowledge in the history of the world, Wikipedia had to overcome its greatest challenge: getting strangers on the Internet to trust each other. They had to trust that others would not be abusive or uncivil, that others would not unfairly change or erase their contributions, and that people had good intentions.

Jimmy Wales, the internet entrepreneur who founded Wikipedia, details the global experiment in sharing knowledge and expertise online that has become part of the fabric of our modern, connected life. It's all laid out in his new book, "The Seven Rules of Trust: A Blueprint for Building Things That Last." Jimmy speaks with Carol Massar and Tim Stenovec on Bloomberg Businessweek Daily.

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Amazon.com Inc. plans to cut corporate jobs in several key departments, including logistics, payments, video games and the cloud-computing unit, according to people familiar with the matter.

The terminations, expected as soon as Tuesday, could affect as many as 30,000 jobs, Reuters reported on Monday, citing sources.

Cuts on that scale would be the largest since rolling reductions in late 2022 and early 2023 that ultimately totaled more than 27,000 corporate employees, as Chief Executive Officer Andy Jassy looked to cut costs after expanding rapidly during the pandemic. Since then, there has been a steady drip of more modest layoffs targeting individual teams. An Amazon spokesperson declined to comment. 

Jassy in June signaled that Amazon’s workforce would likely get smaller as the company increases its use of artificial intelligence to complete tasks normally handled by people. The comment touched off panic among workers, who trawled anonymous online chat rooms for insights about potential job cuts that often leak piecemeal, making it difficult to assess their full size and scope.

Today's show features:
Bloomberg News Big Tech Team Leader Sarah Frier on Amazon's expected layoffs and Qualcomm’s new semiconductors aimed at competing with Nvidia
Jan van Eck, Chief Executive Officer of VanEck Funds, on the market outlook heading into mega-cap tech earnings
Sarah Hunt, Chief Market Strategist, Alpine Saxon Woods, on the Monday trade and market outlook
Bloomberg News Boston Bureau Chief Brooke Sutherland and Bloomberg News Senior Economic Writer Shawn Donnan on their Businessweek feature: AI Data Center Boom Threatens Trump’s Manufacturing Revival

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