This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Amazon beat top- and bottom-line expectations, posting 13% revenue growth and 33% growth in earnings per share.

• Amazon Web Services (AWS) revenue grew by 17%, but that falls short of the momentum rivals reported just a day ago.

• Amazon remains a powerful competitor with a lot of ways to win, but investors were closely scrutinizing profitability forecasts in light of continued spending on capital assets.

Here's our initial take on Amazon's (NASDAQ: AMZN) financial report.

Key Metrics

Amazon's Focus on AI Implementation and Payoff

Investors had big expectations for Amazon, and in particular the company's AWS cloud unit, following strong results from Microsoft (NASDAQ: MSFT). Amazon revenue and earnings were up 13% and 33%, respectively, beating expectations, and AWS sales grew by 17% to $30.9 billion.

Amazon's release boasted about its largest Prime Day to date and new partnerships including a Nike (NYSE: NKE) storefront. But the focus was clearly on AI. CEO Andy Jassy in a statement said that "our conviction that AI will change every customer experience is starting to play out," noting the company's moves not just at AWS but across Alexa, robotics, and other areas.

Amazon sees more growth ahead, predicting net sales to come in between $174 billion and $179.5 billion in the current quarter. That would be up 10% to 13% from a year ago, and even at the low end is above the $173 billion consensus.

But all of that growth is coming at a price. Operating expenses in the quarter were up 11% to $148.5 billion, and free cash flow decreased to $18.2 billion for the trailing 12 months, from $53 billion a year ago. AWS's operating margin for the quarter fell to 32.9%, from 35.5% a year ago.

Operating income in the current quarter is expected to come in between $15.5 billion and $20.5 billion. At the midpoint that suggests little growth over last year's $17.4 billion, and is slightly below analyst expectations.

Immediate Market Reaction

Investors were underwhelmed by the results. Amazon shares fell 3% in aftermarket trading following the release of the report but ahead of the company's call with investors.

What to Watch

The AWS growth, while impressive, on a percentage basis fell short of Microsoft's reported 34% growth at Azure. Microsoft surged post-earnings because the company successfully articulated the benefit of all of the AI spending. Investors will be eager to hear Jassy and other Amazon execs make the same case on the earnings call.

Amazon is a lot more than AWS, posting 11% growth in product sales to $68 billion, while its advertising business was up 23% year over year.

The company remains well positioned on many fronts, and is set up well to be a long-term winner. But in an environment where all eyes are on the investment -- and payoff -- of AI, investors have set a high bar on results and outlook.

Helpful Resources

• Full earnings report
• Investor relations page

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lou Whiteman has positions in Nike. The Motley Fool has positions in and recommends Amazon, Microsoft, and Nike. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Microsoft, and Nike. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Amazon, Microsoft, and Nike. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Apple posted double-digit revenue and earnings growth, topping Wall Street's quarterly expectations.

• iPhone revenue continues to climb, and the company returned to growth in China.

• Expect Apple to continue to face questions about tariffs and AI, but its core franchises remain strong.

Here's our initial take on Apple's (NASDAQ: AAPL) fiscal 2025 third-quarter financial report.

Key Metrics

Apple Posts Strong Growth Despite Macro Headwinds

Investors came into earnings season with questions about Apple's ability to weather the impact of tariffs, and the company answered by reporting robust growth. Apple said revenue grew by 10% and earnings per share by 12%, boosted by stronger-than-expected iPhone growth in the quarter.

The sales growth, in a quarter marred by tariff talk, is a reminder of the enduring popularity of the iPhone and the success of a new, more affordable model released earlier this year. Apple has responded to the tariff concerns by shifting shipping patterns, with a majority of iPhones sold in the U.S. now reportedly assembled in India and not China.

Apple had forecast low- to mid-single-digit growth in the quarter, predicting a $900 million headwind from tariffs in the period.

Apple also returned to growth in China, posting sales of $15.4 billion for the quarter compared to $14.7 billion in the same three months of 2024.

The company did not provide a Q4 forecast in the earnings report, but is likely to give some guidance about what it expects in the second half of calendar year 2025 during its call with investors.

Immediate Market Reaction

Investors were happy with the results. Apple stock was up 2% in aftermarket trading immediately following the release but ahead of the company's call with investors.

What to Watch

Apple's numbers were strong, but that was expected. The big question with Apple is not about the numbers, but about what comes next. Apple's AI efforts have floundered so far, and top execs have fled to rivals. There have been reports that Apple could find a partner to bring AI to its devices instead of continuing to develop in-house.

Expect a lot of investor questions about AI on the call, as well as a focus on future devices that Apple can add to its offering along with phones, computers, iPads, and wearables. There is also still a looming uncertainty about tariffs, with tariff exemptions on smartphones expected to lapse and talk of new India tariffs that could further complicate supply chains.

Apple is yet to answer the question about the "next big thing," be it AI or a new device, but the company's core franchises remain massively profitable and show no signs of sputtering from here.

Helpful Resources

• • Full earnings report
  • Investor relations page

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Here's our initial take on Apple's (NASDAQ: AAPL) financial report.

Key Metrics

Apple Makes Progress Navigating Trade Issues

Investor focus coming into this quarter centered on how Apple is navigating ongoing trade wars. The answer was a mixed message.

First, the good news: Apple said a majority of its devices shipped into the U.S. in the June quarter will originate from India and Vietnam, alleviating concerns about how China-focused tariffs would eat into profits in 2025. But Apple also said that China revenue fell by more than 2% to $16 billion in its fiscal second quarter, falling slightly below analyst expectations.

Overall, the quarter was solid. Apple grew revenue by 5% and earnings per share by 8%, topping analyst estimates. Overall iPhone sales were up slightly, while services revenue posted solid 12% year-over-year gains.

Apple generated $24 billion in operating cash flow in the quarter and continues to boost the cash it is returning to shareholders. The company announced a new $100 billion share-repurchase program and said it is boosting its quarterly dividend by 4% to $0.26 per share.

Immediate Market Reaction

Apple shares were down nearly 15% year to date heading into earnings, and the latest results were not enough to turn the momentum favorable. Apple shares were down 2% in after-market trading after the release of earnings but ahead of the company's call with investors.

What to Watch

The comments on sourcing iPhones outside of China will come as a relief, but investors are likely to still have questions about what lies ahead for Apple. A shift toward local brands in China could accelerate if U.S.-branded products lose favor due to ongoing trade tensions, a potential worry given that iPhone sales still account for roughly half of overall revenue.

Other profit centers are also at risk. Apple's lucrative business getting royalties from Alphabet (NASDAQ: GOOG) in return for making Google the default search engine on the iPhone is at risk due to antitrust concerns.

Investors will likely be eager to hear Apple's outlook in the face of so many headwinds as well as details on Apple product refreshes and AI enhancements designed to stimulate future sales.

Helpful Resources

• Full earnings report
• Investor relations page

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Apple. The Motley Fool Australia has recommended Alphabet and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Here's our initial take on Nvidia's (NASDAQ: NVDA) fourth-quarter results.

Key Metrics

Nvidia's AI business sees continued "amazing" demand

Nvidia's results for the fourth quarter of fiscal 2025 provided a dose of optimism during what has been a volatile few weeks for AI bulls, reporting blockbuster revenue and earnings-per-share growth that topped sky-high analyst expectations.

Revenue from data centres accounted for 90% of Nvidia's total, with AI-related demand more than offsetting setbacks in other parts of the business. Networking revenue fell 9% year over year, which the company said should be a temporary hiccup as it transitions to new products. Sales of gaming chips also fell 11% year over year.

CEO Jensen Huang said demand for Nvidia's Blackwell chip, its latest chip for powering AI servers, "is amazing" and predicted more to come. "AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionize the largest industries," Huang said.

With demand comes pricing power. Costs related to Blackwell ate into margins, but Nvidia was still able to post a gross margin of 73% in the quarter, generating $24 billion in operating income on its $39.3 billion in revenue.

Nvidia said inventory at the end of the quarter totalled $10.1 billion, up from $7.7 billion in the prior period. Typically, rising inventories can be viewed as a warning sign. But in Nvidia's case, it could simply be that the company is stocking up on chips to meet the demand for its top-end products.

Immediate market reaction

In recent quarters, Nvidia shares have made dramatic moves post-earnings. But the response this time around was more muted. Nvidia shares were down slightly in after-market trading heading into the company's call with analysts, recovering most of the 3% they lost immediately after the release of earnings.

What to watch

Some of that subdued response was likely due to Nvidia's outlook for the quarter to come. Nvidia is anticipating more growth but perhaps not at the levels analysts had expected.

The company forecasted first-quarter sales of $43 billion, plus or minus 2%, and GAAP gross margins of 70.6%, plus or minus 50 basis points. The lower ends of both ranges are below consensus estimates.

Investors will be listening closely on the call for further commentary from Huang about Nvidia's long-term demand forecast, inventories, and thoughts on what China's DeepSeek and other new AI models might mean for the future of AI. The company is also likely to try to reassure investors who have been worried that Blackwell might be limited by supply chain issues.

Helpful resources

• Full earnings report
• Investor relations page

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Elon Musk, as expected, has sold a sliver of his Tesla (NASDAQ: TSLA) stake to help fund his acquisition of Twitter. Investors are now left to wonder whether Musk is done selling, which is creating volatility in the stock. Shares of Tesla opened Wednesday up as much as 2.4% before beginning a steady decline, trading down more than 6% for the day as of 2 p.m. ET as investors try to figure out what comes next.

So what

Shares of Tesla are down more than 30% in the last three months, and at least part of that decline is likely due to concerns about how Musk will fund and manage his Twitter adventure. Investors got at least part of the answer on Tuesday night, when Musk disclosed in a regulatory filing the sale of 19.5 million Tesla shares via 38 separate transactions over the past few days.

The executive raised about $3.95 billion from the sales, a significant part of the total cash outlay Musk needs for his $44 billion cash-and-debt purchase of Twitter. Musk has previously sold about $15 billion worth of Tesla shares in order to fund the acquisition.

A large shareholder selling into the open market tends to put pressure on the share price because supply and demand can become temporarily unaligned. If Musk's sale is all the funding he needs to complete the Twitter deal and that overhang can be removed, it could be a positive for the Tesla share price from here. But Musk has said previously he hoped to avoid further sales, and investors are likely to be cautious, at least for now.

Tesla shares could also be under pressure due to the electric vehicle manufacturer issuing a recall of about 40,000 vehicles over concerns they could lose power steering. The problem can be fixed via an over-the-air software update, according to reports.

Now what

For Tesla investors, there is little to suggest the volatility will subside anytime soon. Despite whatever reassurances Musk provides, it is hard to say for sure that there will be no further stock sales. And Twitter adds another distraction to Musk, who already runs SpaceX and The Boring Co. in addition to serving as CEO of Tesla, at a time when the automaker is dealing with macroeconomic pressures.

For long-term-focused investors, the bull and bear case for Tesla is largely unchanged from where it was a year ago. This remains a highly valued stock, but one with much potential for growth from here. But no matter where you think Tesla will be in five years, there is a good chance that this current spate of volatility will continue in the weeks and months to come.  

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.   

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla Inc (NASDAQ: TSLA) is dumping radar for driver assistance in its lower-priced vehicles, instead putting all of its focus on camera-based technologies to power Autopilot features including lane control and adaptive cruise control.

The electric vehicle (EV) manufacturer said in a Tuesday blog post that beginning this month, Model 3 sedans and Model Y SUVs built for the North American market will no longer be equipped with radar. CEO Elon Musk telegraphed the change in a March 12 tweet, saying the company is moving toward a "pure vision" approach for Autopilot. 

Tesla has long been at odds with much of the auto industry over the need for radar and related lidar systems. The technology, which provides measurements of distance to help guide automated driving, is relatively expensive and requires sophisticated processing power on vehicles to manage the data in real time. Musk in the past has called lidar "a crutch."

But Tesla is not abandoning radar entirely. All new Model S and Model X vehicles, which tend to be higher priced, and vehicles built for markets outside of North America will continue to come equipped with radar and will have radar-supported Autopilot functions.

The company said that for now, it is focused on its "higher volume vehicles" but intends to transition all models to the new system, which it calls Tesla Vision, over time. "Transitioning them to Tesla Vision first allows us to analyze a large volume of real-world data in a short amount of time, which ultimately speeds up the rollout of features based on Tesla Vision," the company said.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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When the time comes for Warren Buffett to step aside as CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), vice chairman Greg Abel will be the person who replaces him.

Investors have been speculating for years about who would step in once Buffett, who is 90, and 97-year-old vice chairman Charlie Munger retire. Most assumed Abel, who runs Berkshire's non-insurance business, and Ajit Jain were the most likely candidates.

On Saturday, Munger inadvertently provided the answer. Speaking at Berkshire's annual meeting, Munger said he is confident "Greg will keep the culture" that he and Buffett have put in place well after the duo are gone.

On Monday, Buffett confirmed on CNBC that Abel was the choice, saying that "the directors are in agreement that if something were to happen to me tonight, it would be Greg who'd take over tomorrow morning." Buffett also praised Jain, who runs Berkshire's insurance operations, saying, "If, heaven forbid, anything happened to Greg tonight, then it would be Ajit."

Abel and Jain were both promoted to vice chairmen in 2018, and observers have assumed that the two were the primary candidates to one day take over. While Jain runs Berkshire's core insurance businesses, which provide the capital and fuel that make the conglomerate tick, Abel arguably has a broader view of the global economy and different industries through his position.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lou Whiteman owns shares of Berkshire Hathaway (B shares). The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short June 2021 $240 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) reported better-than-expected earnings in the first quarter thanks in part to a $101 million "positive impact" from the sale of Bitcoin (CRYPTO: BTC), the electric vehicle maker has said.

On Monday after markets closed, Tesla reported a $438 million profit. It earned $0.93 per share, well ahead of the $0.79 estimate.

Tesla's quarterly results as usual include both automotive sales and the sale of environmental regulatory credits. But the first-quarter results also included a $101 million gain on the sale of Bitcoin. In its update to shareholders, the company reported a purchase of $1.5 billion of "digital assets" in the quarter, as well as $272 million in proceeds from such sales.

The sales serve as a fresh reminder that for all of Tesla's growth, its automotive division is still lagging in terms of profitability. Absent the crypto sales and $518 million in sales of regulatory credits, the company would have reported a $181 million loss — and not a profit — despite record deliveries.

The company's auto business has been impacted by the pandemic, and a shift in preference toward newer, lower-margin models as its higher-priced Models S and X age. Tesla expects to update those models, as well as introduce new products, in the quarters to come.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin and Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

On Tuesday, a SpaceX Starship prototype exploded while attempting to land, the fourth consecutive test launch to end up in flames in recent months.

SpaceX launched the SN11 prototype from its Boca Chica, Texas, facility for a high-altitude test, with the goal of having the spacecraft execute a "belly flop" maneuver in space before returning to Earth in a controlled vertical soft landing. Elon Musk's space company is developing Starship as its heavy launch vehicle that the company hopes will eventually travel to the Moon and beyond.

While all four launches have gone off without a hitch, the company continues to have issues nailing the landing. SpaceX's live stream froze as the SN11 was coming in for a landing, but reports from the scene indicate there was a large explosion that scattered debris around the area.

In a tweet, Musk said one of the engines appeared to have issues on ascent, and that "something significant happened" shortly after the engines fired for landing. He said SpaceX hopes to learn more as it examines the wreckage.

Space, by its nature, involves a lot of trial and error, and SpaceX has said it will likely need to run through 20 prototypes before Starship is fully developed. Still, the setbacks are high-profile disappointments for a company with grand ambitions and in constant need of new funding.

SpaceX was also dealt a setback on Earth, as a judge ruled it should be forced to comply with a Department of Justice subpoena as part of a probe into whether the company has illegally discriminated against foreign job applicants. The judge rejected SpaceX's arguments that the subpoena constituted government overreach.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Amazon (NASDAQ: AMZN) has invested in a battery recycling start-up founded by former Tesla chief technology officer J.B. Straubel, part of the e-commerce giant's pledge to commit $2 billion to green initiatives.

Amazon's Climate Pledge Fund announced on Thursday that it has invested an undisclosed amount in Redwood Materials, which was founded by Straubel in 2017. Redwood and Amazon will also work together to recycle electric vehicle (EV) batteries and other lithium-ion batteries from electronics.

"To fight climate change, we need to solve the impact products have on the environment," Straubel said in a statement. "We're honored to be part of the Amazon's Climate Pledge Fund and to build the closed-loop supply chain that will recycle batteries, electronics and other end of life products for Amazon."

In addition to Redwood, Amazon also announced stakes in Rivian, an electric-truck start-up backed by Ford Motor that has a deal to supply Amazon with up to 100,000 vehicles.

Amazon said it has also made investments in:

• CarbonCure Technologies, which aims to reduce the carbon emissions from the manufacture of cement.
• Pachama, a technology exchange that verifies the impact of carbon capture in the world's forests to allow organisations and individuals to offset emissions by supporting reforestation and forest conservation projects.
• Turntide Technologies, a maker of energy-efficient motors.

In a statement, Amazon CEO Jeff Bezos said, "I am excited to announce that we are investing in a group of companies that are channeling their entrepreneurial energy into helping Amazon and other companies reach net zero by 2040 and keep the planet safer for future generations."

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Lou Whiteman owns shares of Ford. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and Tesla and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Amazon. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla Inc (NASDAQ: TSLA) after markets closed Tuesday announced a planned five-for-one stock split, a move that could make the stock more attractive to price-sensitive investors.

Shares of Tesla have had an incredible run in 2020, up 229% year to date. The stock closed Tuesday at $1,374.39 apiece, well above its $211 52-week low. Although stock investing 101 teaches to ignore share price and instead rely on valuation metrics, some investors anchor in on share prices, tending to shy away from high numbers.

A stock split reduces the price of a stock without changing the value of the investment. In Tesla's case, the company intends for holders as of August 21 to receive four additional shares for every one they own. At Tuesday's closing price, each of those five shares (four additional + the original share held) would be worth about $274.88, for total consideration matching the current share price.

While the value of an investment in Tesla shouldn't change due to the split, the lower price could attract new investors to the stock.

Shares of Tesla traded up 7% in after-hours trading, adding more than $15 billion to the company's market capitalisation despite no change to the automaker's fundamentals. For context, the market cap of fellow automaker Fiat Chrysler Automobiles (NYSE: FCAU) is currently $23 billion.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.