Meta Platforms Inc (META US, NEUTRAL, TP US$235)
Comment: Meta’s results were relatively lukewarm. They came in slightly above expectations but still showed growth headwinds persisting. Earnings also continued to decline, although less than previous quarters which was a positive. 2Q23e guidance was the main catalyst for its share price performance, with revenue growth expected to re-accelerate to 7% at the midpoint, and 11% at the top end, indicating that we could see some positive revenue trends for Meta. Reels monetisation is also improving rapidly, narrowing the gap between Feed/Stories, which should be less of a revenue headwind moving forward. Additionally, Meta also reduced its FY23e total expenses guidance by another 5%, indicating no YoY expense growth.
Apple Inc (AAPL US, ACCUMULATE, TP US$183)
Comment: We expect Apple’s FY23e revenue to contract, relative to FY22, as we believe customers will defer their iPhone purchases until the expected iPhone 15 launch in September. This should create a pent-up demand and result in positive growth returning in FY24e.
Amazon Inc (AMZN US, ACCUMULATE, TP US$120)
Comment: Amazon’s 1Q23 results were within our expectations. We think AWS slowing growth is short-term in nature and we believe growth will re-accelerate in FY24e as AWS lands new customers and existing customers extend their expiring contracts. This should provide tailwind for the segment as both new and existing customers are expected to increase their computing demand when the macro improves.
Netflix Inc (NFLX US, ACCUMULATE, TP US$388)
Comment: Netflix’s results showed a healthy start to the year for the company. Memberships continued to grow at a healthy rate, with a significant proportion of additions for the quarter coming from the APAC region – which currently does not monetise as well as more developed regions. We do think the operating metrics will only continue to improve with the introduction of Netflix’s new paid-sharing program, as well as higher-margin advertising revenue continuing to tick up due to strong demand.
Alphabet Inc (GOOGL US, BUY, TP US$131)
Comment: Alphabet’s earnings were fairly positive. Even as revenue growth remained relatively slow, profitability in one of its fastest growing segments (Cloud) should help to expand bottom line margins moving forward. Like Meta’s Reels, Shorts monetisation is also improving, with the platform seeing strong user momentum continue.