$PINS Q2 earnings report: Pinterest misses on revenue and earnings, but great ARPU growth sends stock higher.

Revenue: $666M +9% 🟢

MAU: 433M -5% 🔴

Global ARPU: $1.54 +17% 🟢

US & Canada ARPU: $5.82 +20% 🟢

Guidance: mid-single digits revenue growth

Shares: +20% AH 🟢

The FTC sues to block the $META acquisition of VR app firm Within, arguing that the $400M deal would "substantially lessen competition" and "tend to create a monopoly" 🤡

Just a few days ago, I talked about UK regulators arguing about the small Giphy acquisition and how Meta is under massive scrutiny from regulators worldwide. The FTC in particular seems to have clear instructions from the current administration to cause as much trouble for Meta as possible.

That’s why it’s very important for Meta to stay innovative since they can not buy bigger competitors anymore and thus have to build new products on their own. Any signs of key product talent leaving the company, or trouble with hiring new competent people should be viewed extra critical in this case.

However, I’m not seeing trouble on that front right now. The company’s AI division periodically publishes cutting-edge research. Their VR hardware is the best in the world. As long as their innovation stays high-quality, I do not doubt that Meta will prevail.

After a crazy earnings week, this one is less intense. Still, there are a few companies from my selection and portfolio reporting:

Mon: $PINS

Tue: $SPGI $PAYC $IDXX

Thu: $ZTS $PCTY $BABA $HUBS

What are you looking at?

Weekly portfolio review (total return, week/YTD)

$SPY +4.28%/-12.99%

$QQQ +4.46%/-20.61%

$VTV +3.20%/-5.31%

$VUG +5.05%/-21.40%

$ARKK -2.42%/-52.29%

Portfolio +3.28%/-11.78%

A busy week with mostly positive earnings reports from the big tech companies.

17 of the 40 companies from my selection reported earnings last week. Overall, the results were encouraging. Even with the obvious macro headwinds of inflation, a strong US dollar and economic downturn, $AMZN, $MSFT and $GOOG did very well.

But even quality companies are not immune to macroeconomic conditions. The advertising business from $META is slowing, while $NOW cut its subscription revenue forecast.

However, this is a far cry from the speculative growth stocks that got bid up to the moon during the recent tech bubble and are now coming down to earth. In downturns, quality companies show strong relative strength compared to the likes of story stocks like $TDOC or $ROKU

Quarterly results from $META were a bit disappointing again. Revenue came in at $28.8B, -1% YoY. On a constant currency basis, revenue inched up +3%. Revenue guidance is well below expectations, which is not encouraging. It looks like the economic downturn, a strong US dollar and increasing competition are taking their toll.

IMO, Meta will have to cut costs soon if the economic downturn continues like this. After all, they depend on advertising revenues which are a bit cyclical. Unfortunately, I think it’s only a matter of time until the company announces some layoffs.

On the plus side, Meta saw continuing user growth even with taking a hit in Europe due to the Ukraine war. The monetization of Reels is coming along with a $1B revenue run-rate and should meaningfully contribute to the recovery in the next quarters. As is already visible to users, Meta is changing its products to incorporate more content from its AI discovery engine. The first results of these changes are positive, increasing time spent in the apps.

Although I’m lowering my intrinsic value because of this earnings report, the stock is still very undervalued in my opinion. I know this is a somewhat controversial company and people have wildly different opinions. However, it’s not like I’m betting the farm on Meta. It is a reasonably sized part of my diversified portfolio of quality companies. Even if the stock doesn’t recover for some time, it’s not the end of the world.

$SPY $QQQ

$MSFT calms fears with robust guidance despite a challenging environment. The company’s fundamentals remain strong as it was mainly hurt by things outside of its control, like a strong US dollar, supply chain issues, and general macro pressures.

The awesome thing about Microsoft is that it has multiple great product segments with many years of growth at scale left. I’m talking about Azure, Dynamics 365, LinkedIn, and the gaming segment.

The stock is undervalued in my book and should be a great long-term holding, that’s why I have it in my portfolio.

$AMZN is raising prices for Amazon Prime in Europe two days before its earnings report. The company cites "increased inflation and operating costs" and expanded services. It has been a few years since the last hikes, but these are still quite steep.

Germany: 69.00€ -> 89.90€ +30%

UK: £79 -> £95 +20%

Spain, Italy & France: increases between 39% and 43%

In Q1 2022, passive index fund assets officially overtook active managers for the first time. ETFs offer a simple and cheap way to invest for most people. As an investor, an excellent way to profit from this trend is to own $BLK and $SPGI

Big week with a lot of earnings reports and on top of that the FED is raising interest rates 🔥

17 out of the 40 companies from my selection are reporting:

Tue: $GOOG $MSFT $V $TXN $MCD $CMG

Wed: $META $NOW $LRCX $ADP $ETSY

Thu: $AMZN $AAPL $MA $TMO $KLAC $EW

Weekly market review (total return, week/YTD)

$SPY +2.59%/-16.56%

$QQQ +3.47%/-24.00%

$VTV +1.51%/-8.24%

$VUG +3.72%/-25.18%

$ARKK +4.85%/-51.10%

Portfolio +2.96%/-14.58%

Great up week for the markets until Snap ruined it for everybody 😅

Last week wasn’t really that important because this week will be absolutely crazy. All the big tech companies are reporting earnings which will have a huge impact on the market and finally give us more information about the real state of the economy.

On top of that, the FED is going to raise interest rates between 75bps and 100bps this week. This has been anticipated of course, but who knows what additional comments on the economy come out of the meeting. This could move the market in either direction, too.

Since I’m mainly invested in the companies reporting this week, there probably will be volatility in the portfolio. In the short term, everything can happen. However, I’m invested in high-quality companies that I bought below intrinsic value, so long-term everything should work out.