Fast Money Blog- 11/4/22
This was an incredibly active week on Wall Street as earnings were released for many of our Wealthy Investor stocks.
On Tuesday, Nov. 1st, 2022 Advanced Micro Devices, Inc. (AMD) reported Q3 2022 earnings with top-line revenue of $5.6 billion, up 29% year-over-year. This increase was driven by strong growth across its Data Center, Gaming and Embedded segments.
AMD is a company with several divisions. Here is how the revenue broke down:
The Data Center segment revenue was $1.6 billion, up 45% year-over-year.
The Gaming segment revenue was $1.6 billion, up 14% year-over-year.
The Embedded segment revenue (which includes their cloud server sales) was $1.3 billion, up 1,549% year-over-year.
However what disappointed Wall Street was the fact that AMD’s PC chip sales fell 40% during Q3 to $1 billion.
Keep in mind that PC sales across the consumer market place were slower, which translated into slower PC chip sales for semi-conductor chip manufacturers such as AMD.
Even with slower chip sales AMD is a winner.
On Thursday, Nov. 3rd, Starbucks, Inc. (SBUX), Block, Inc. (SQ) and PayPal Holdings Company (PYPL) released earnings reports.
Starbucks reported Q4 2022 top-line revenue of $8.4 billion, up 3% year-over-year.
Some earnings highlights:
In the U.S., comparable sales jumped by 11%, primarily driven by a 10% increase in average ticket size.
In the U.S. Starbucks Rewards loyalty program rose to a total of 28.7 million, up 16% compared to a year ago.
For Q3 2022 Block reported outstanding earnings, with revenue of $4.52 billion, up 17% year-over-year.
Major categories broke down like this:
Subscription and services-based revenue was $1.19 billion in the third quarter of 2022, up 71% year over year.
Cash App generated $2.68 billion of revenue for the quarter, up 12% year-over-year.
Square, AMD’s mobile payment company (which offers processing, point of sale software, and a variety of other services to small businesses) generated $1.77 billion of quarterly revenue, up 27% year-over-year.
Block also had outstanding GPV and Transaction Based Revenue, as its Gross Payment Volume (GPV) came in at $54.4 billion up 20% for the quarter year-over-year , while Transaction-based revenue for the quarter was $1.52 billion up 17% year-over-year.
PayPal Holdings Company (PYPL) released their Q3 2022 earnings with total revenue of $6.85 billion, a growth of 11% year-over-year.
When it comes to online payment processors, remember it is the Total Payment Volume (TVP) that is the most important figure. TPV for the quarter came in at $337 billion, growing 9% year-over-year, but falling slightly quarter-over-quarter.
In addition, PayPal ended the quarter with a total of 432 million active accounts, up 4%. During Q3 they added 2.9 million net new active accounts.
In other important news, on Wednesday, Nov. 2nd, the Federal Reserve raised interest rates .75% for the 4th consecutive time. Currently the Fed is waiting for the December CPI Report to see if their rate hike increases have had a positive effect in slowing down inflation.
On Friday, Nov. 4th the U.S. Labor Department released its monthly jobs report for October. Employment data has moderated in recent months, but hiring remained strong in October despite efforts by the Federal Reserve to slow it down. The U.S. economy added 261,000 jobs, bringing the unemployment rate to 3.7%.
In closing, here’s what’s most revealing about this week on Wall Street:
AMD, PayPal, Block and Starbucks are all great dates from a fundamental point of view. However I don’t see these shares rising significantly between now and Christmas. That means your most profitable trades will be 30 day covered calls.
Plan your trades according.
Stay patient. Stay positive.
Tyrone Jackson, The Wealthy Investor