Why buyers rewarded Apple however fled Amazon, Google, Fb after earnings

The explanations various. Meta struggled with shrinking free money move because it continued its metaverse spending spree. Alphabet mentioned advert gross sales had been slowing as YouTube reported its first-ever income decline. And Microsoft was pressured by weak steering and cloud income that missed expectations. Amazon missed income estimates and signaled a weak vacation quarter and narrowing income.

However Apple now seems to be much more secure than its friends, particularly as fears of a recession begin weighing on advert gross sales and potential vacation spending. It is largely as a result of Apple depends on {hardware} and providers that persons are nonetheless shopping for.

Mac income was up 25% yr over yr, for instance. And whereas iPhone income missed estimates, it nonetheless rose 9.67% yr over yr. Providers additionally popped 4.98% yr over yr, regardless of lacking analyst estimates.

And Apple managed this whereas the bigger telephone and PC trade noticed massive declines. Worldwide smartphone shipments declined 9% through the third quarter, whereas Apple’s shipments elevated by 8%, regardless of its higher-priced units, in response to an estimate from analysis agency Canalys this week.

“Demand for premium units stays intact,” wrote Cowen’s Krish Sankar in a notice Friday.

In brief, Apple’s enterprise stays sturdy, and demand for its merchandise stays excessive around the globe, even in rising markets, bucking downward traits for world smartphone gross sales from different manufacturers.

“Following Apple’s F4Q22 outcomes, it stays our prime decide and, we imagine, will seemingly stay a relative protected haven for a lot of because the macroenvironment stays extremely unsure and uneven,” Cross, of Credit score Suisse, mentioned. Cross added that Apple’s outcomes confirmed the corporate continues to develop in each area it sells in, regardless of current worth will increase and weakening shopper sentiment.

Apple’s quasi-guidance additionally was largely in step with expectations, versus firms equivalent to Amazon that recommended a weaker vacation quarter.

Apple CFO Luca Maestri mentioned complete year-over-year income would develop in December however slower than the 8.1% progress through the September quarter.

However the stat nonetheless confirmed many analysts that Apple would proceed its gross sales progress streak that is been in impact for the reason that begin of the pandemic. Take into account, subsequent quarter’s progress should be off an enormous $124 billion base of gross sales from final yr’s December quarter.

Nonetheless, the best way that Apple now offers steering by information factors leaves a number of room for interpretation, and a few analysts imagine that the present quarter may very well be worse than the market is pricing in. At the least one even thinks Apple’s information level suggests a down quarter.

“Apple is actually saying revenues are going to be down subsequent quarter,” Bernstein’s Toni Sacconaghi mentioned on CNBC’s “Squawk Field” on Friday, mentioning that Apple’s December quarter has an additional week this yr.

Sacconaghi mentioned a few of Apple’s Large Tech friends additionally appeared to have points controlling prices, whereas Apple stays pretty lean and worthwhile.

Whereas Apple CEO Tim Cook dinner advised analysts that the corporate was seeing the results of inflation on its prices, notably in logistics, it additionally has managed the chip provide scarcity nicely and mentioned Thursday that it had no silicon shortages through the quarter.

Apple is not resistant to the promoting slowdown hitting Meta and Alphabet, although Cook dinner mentioned Thursday that advertisements are a really small a part of Apple’s providers enterprise.

Add all of it up, and it is attainable to see why some analysts contemplate Apple to be immune to a recession.

“Total, our viewpoint stays constant that Apple stays recession resilient given its merchandise, providers and wearables companies,” wrote Piper Sandler’s Harsh Kumar.

— CNBC’s Michael Bloom contributed to this report.