Latest / Best of Business / Stephanie Batchelor: Milford Asset Management expert unpacks Google's financial results

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Stephanie Batchelor: Milford Asset Management expert unpacks Google's financial results · Best of Business

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  Speaker 2: So we've got US companies reporting their results. Last week
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  Speaker 2: we've got covered Microsoft, we covered MESA. Since then, we've
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  Speaker 2: had both Apple and Google. Stephanie Bachelor from Milford Asset
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  Speaker 2: Managements with me, Hey, Stephanie Hi, Ryan Steff. Starting with Google,
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  Speaker 2: China has started an anti trust investigation. Tell us what
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  Speaker 2: is that about? What's going on?
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  Speaker 3: Yeah, So last night China retaliated to Trump's tariffs by
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  Speaker 3: saying that they would put Levy's on some US goods,
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  Speaker 3: but they also announced that they would investigate Google for
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  Speaker 3: alleged antitrust violations. Now, Google doesn't operate any search services
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  Speaker 3: in China they pulled out back in twenty ten, but
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  Speaker 3: Chinese companies like Timu and Shean, for example, they do
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  Speaker 3: advertise on Google to access international consumers, and Google also
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  Speaker 3: provides its Android operating system to Chinese smartphone makers. So
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  Speaker 3: there hasn't actually been any d tell on what exactly
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  Speaker 3: they're going to investigate. So at this stage, it's still
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  Speaker 3: a little bit of a wait and see.
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  Speaker 2: Okay. At the same time, we've had the Gurgle's results reported,
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  Speaker 2: and we've seen a sell off. What seven percent down?
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  Speaker 3: Yeah, lots lots going on. So shares that's right, they're
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  Speaker 3: down about seven percent post the result, and it was
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  Speaker 3: due to a couple of things. The advertising revenue actually
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  Speaker 3: came in better than expected, so there was a very
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  Speaker 3: strong retail holiday season, but the cloud revenue was slower,
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  Speaker 3: grew slower than the market expected, and that's a little
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  Speaker 3: bit of a concern because at the same time, they're
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  Speaker 3: continuing to invest more and more in building out that
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  Speaker 3: cloud infrastructure. So the market was thinking that they might
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  Speaker 3: spend somewhere in the realm of sixty billion dollars next
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  Speaker 3: year on this cloud capex, and the companies said it
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  Speaker 3: would be more like seventy five billion, So investors are
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  Speaker 3: a little bit worried as to whether they'll actually be
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  Speaker 3: able to generate a decent return on that investment.
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  Speaker 2: Interesting, what about Apple? They've come back with results, right, Yes.
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  Speaker 3: So they reported end of last week, and the expectations
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  Speaker 3: for Apple had actually fallen going into the results, so
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  Speaker 3: it actually met that low that lowered bar, but it
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  Speaker 3: was a little bit underwhelming, and shares were down kind
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  Speaker 3: of half a percent so iPhone sales were sluggish. China
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  Speaker 3: sales was still very weak, but the CEO talked up
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  Speaker 3: a lot its new AI system called Apple Intelligence, which
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  Speaker 3: they think has a lot of potential going forward. But
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  Speaker 3: I think that the market is still a little bit
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  Speaker 3: skeptical on that one.
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  Speaker 2: How's Apple fearing, you know, given Trump's tariffs on China,
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  Speaker 2: How's that affecting Apple? Because a lot of their stuff
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  Speaker 2: that they put on their phones comes from China.
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  Speaker 3: Right, Yeah, that's right. So about ninety percent of iPhones
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  Speaker 3: are assembled in China, So any phones going from China
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  Speaker 3: into the US would then be subject to the new
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  Speaker 3: ten percent tariffs. And so when that news on the
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  Speaker 3: tariff came out, shares fell three and a half percent.
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  Speaker 3: But interestingly, the last time Trump put tariff on China,
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  Speaker 3: he actually gave Apple an exemption because he didn't want
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  Speaker 3: to risk moving market share away from US Apple to Samsung,
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  Speaker 3: which is a South Korean company, And in exchange for that,
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  Speaker 3: Apple committed to manufacturing the Mac pro domestically in the US.
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  Speaker 3: So it'll be interesting to see if something similar happens
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  Speaker 3: this time. But still early days on that one.
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  Speaker 2: All right, stephanih wait and see thank you very much
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  Speaker 2: for that twenty eight minutes after six, that's Stephanie Bachelor
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  Speaker 2: from Melford.
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