Big Tech Fall Hard

[The Daily Peel... ]() Oct 27, 2022 | Peel #325 Score WSO swag by checking out our sponsors [HoneyBricks. ](=) By signing up with one of our sponsors, you’ll automatically get entered to win one of 5 WSO t-shirts we give away each and every week, AND free access to our Excel Modeling Course. It takes less than 1 minute and helps keep The Daily Peel running. Thanks for your support! Market Snapshot Meh Q3 results from Microsoft and Alphabet point to an ugly upcoming report from Meta, and all three weighed on the Nasdaq Wednesday. Oil prices jumped on the back of U.S. crude exports [hitting record highs]() and a weakening dollar. Bond yields are retreating, with the 10-year yield losing nearly 30 basis points in the past week. [image] Banana Bits - Somehow this was allowed before, but the SEC just approved a new rule that will force executives to [pay back bonuses]() if their financial statements are wrong - Troubles with supplying military equipment led Boeing to lose over [$3 billion in Q3]( - The layoff train made its latest stop at Oracle after the cloud giant [announced cost cuts]() - A triple whammy of flu, RSV, and C-19 could mean [viruses galore this winter]( Keep The Peel Going... [image](=) If the last time you learned about financial statements was in college, check out M&A Science’s “An Introduction to Financial Modeling” course from November 5-6. This intensive, two-day online course teaches participants how to leverage the annual report of a public company to construct a financial model and discounted cash flow, and gain exposure to shortcuts and efficiencies. This course is ideal for new and experienced practitioners alike, so give it a go! [Learn more]( Macro Monkey Says Big Tech Showing Cracks The S&P 500 has a total market cap of about [$30 trillion](). Just four giants—Apple, Microsoft, Amazon, and Alphabet—make up nearly a fifth of that total. Big Tech has had an epic run over the past decade, but cracks are starting to form. - Zuck is happily [burning billions]( on his metaverse pipedream and has seen his stock cut in half as a result - Apple has fared the best out of the group this year, but iPhone demand is slowing, and anger is growing over its anticompetitive App Store policies - Despite Alphabet’s sales growth [continuing to slow](=) in Q3, the company shows no concern over costs and continues to swell its employee ranks - Antitrust suits around the world are threatening the lucrative walled gardens these companies have fiercely protected Meme of the Day [image] [Source](=) What's Ripe Wingstop ($WING) - Inflation is everywhere…except wings, which have seen [prices drop 43%]( YoY - Reduced opex and a wildly successful new chicken sandwich line meant big profit gains in the quarter Harley Davidson ($HOG) - HOG demand hasn’t been the issue for Harley as of late—it’s getting enough bikes into stores - Easing supply chain snags helped replenish inventories and notch a Q3 beat on the top and bottom line What's Rotten Spotify ($SPOT) - A week after its Netflix feature was released, $SPOT reported a loss of 1 euro/share in Q3 and barely met its revenue target - Price increases could be a necessary evil to protect margins amid a weakening ad spending market Alphabet ($GOOGL) - Like its smaller Swedish cousin, Alphabet is being forced to reckon with slower online ad spending - Most concerning is the slowdown in YouTube and online search revenue, which have been cash machines in the past Data Peel [image] [Source]( Thought Banana One Swedish Boi vs. Trillions Imagine hearing a few decades ago that a Swedish startup would hold twice the music market share as the maker of the iPod. It’s been an improbable rise, and Spotify is on a mission to own the market for everything that hits your ears. - Spotify has a vice grip on the music streaming market, but lags behind Apple and Amazon in podcasts and audiobooks, respectively - Apple controls how most of Spotify’s users reach its service, and it’s exploited this benefit before (just ask Meta) - Daniel Ek and team are taking the fight to antitrust court, and judges could be the ones that ultimately determine a winner - Apple can lose plenty of money in music without pissing off investors. Spotify can’t. The big question: Will an industry backlash against Apple exploiting its gatekeeper position force it to allow more competition in the App Store? Banana Brain Teaser Yesterday — Which word does not belong in the following list: Stop cop mop chop prop shop or crop? “Or.” Today — It’s 100 bananas off the [Valuation Modeling Course](=). LFG! I know a word; six letters it contains. And yet if you take one away, twelve is what remains. What’s the word? Shoot us your guesses at [vyomesh@wallstreetoasis.com](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) with the subject line “Banana Brain Teaser” or simply [click here to reply!](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? Sign up for the WSO Daily Peel [here](). [ADVERTISE](=) // [WSO ALPHA]() // [COURSES](=) // [LEGAL](=) Don't want The Daily Peel? [Unsubscribe here](. Click to [Unsubscribe]( from ALL WSO content IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States