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  • Alphabet revenue only +3% in Q1 FY2023, operating margin down to 25% with restructuring charges

Alphabet revenue only +3% in Q1 FY2023, operating margin down to 25% with restructuring charges

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Top stories today:

  1. Alphabet revenue only +3%, as operating margin falls
  2. Microsoft revenue +13% to $56.5B in Q3
  3. Apple confirms Mac event on Oct. 30
  4. OpenAI faces price pressure from partner Microsoft, others
  5. Israel faces rockets from Gaza, Syria, Lebanon

0. Data and calendar

All values as of 6 AM ET / 3 AM PT, other than S&P500 close (4 PM ET / 1 PM PT).

All times are ET.

1. Alphabet revenue only +3% in Q1 FY2023, operating margin down to 25% with restructuring charges

Cloud was the segment with the highest growth, but even that has been slowing down

Operating income fell $2.7B, with $2.6B in severance, office restructuring charges

2. Microsoft revenue +13% to $56.5B in Q3, as operating margin +5 p.p. to 48%

  • Cloud revenue +19%, similar growth rate as Alphabet's.

Cloud, Azure, Office 365 Commercial led revenue growth, as Devices were the only drag

*Sponsored.

4. Apple confirms Mac event on Oct. 30

  • New iMac 24”, M3 Macbook Pros are expected. - MacRumors

5. OpenAI faces price pressure from partner Microsoft, others

  • Companies are opting to go through Microsoft's Azure to access OpenAI's APIs or using open-source alternatives. - The Information

6. Israel faces rockets from Gaza, Syria, Lebanon as S&P lowers outlook

  • Syria, Lebanon firing at and receiving fire from Israel.

  • Hezbollah chief meets leaders of Hamas, PIJ in Lebanon.

  • U.S. pressures Gulf states to curb Hamas fundraising.

  • Sea-borne Hamas infiltration thwarted, several terrorists killed: IDF.

  • S&P lowers Israel's credit outlook from stable to negative.

  • U.S. forces attacked 13+ times in ME.

  • Pentagon sending Israel 2 Iron Dome batteries.

  • Blinken suggests “humanitarian pauses”, in 1st for U.S. officials.

    • “If Iran or its proxies attack U.S. personnel,” response will be “decisive.”

  • UN: Israel denying officials visas, demands Guterres resignation after remarks.

    • UN wants more aid, fuel to Gaza.

  • Hamas terrorist calls family to brag about killing Israelis: IDF audio.

  • Polls show Americans sympathize more with Israel.

7. U.S. continues to lead global VC market, with France, Sweden growing

8. China expands lead over U.S. in AI patents, but translatability into better tech remain unclear

9. Crypto exchange delistings jump to record 3.4K in 2023

10. Confidence in mass media falls to record-low

11. Interesting videos, posts, and memes

12. Other headlines

AI

  • Perplexity raising ~$50M at $500M, from $150M in March, with $3M in ARR.

  • Humane Ai Pin has “Trust Light,” uses GPT.

  • Some Apple employees worried about whether AI/ML team can deliver.

  • New AI letter: companies should devote 1/3 of budget to manage risk.

  • Youtube Music now lets you make playlist art with AI.

  • SenseTime impacted by U.S.-China chip wars.

Tech

  • X: banks already expect $13B in debt to be worth $11B.

  • Spotify revenue +11% to €3.36B in Q3, income margin 2%.

  • Snap revenue +5% to $1.19B in Q3, net results still negative, at $-368M.

  • Apple's TV app to be revamped in December.

  • Texts, all-in-one messaging app, bought by Automattic for $50M.

  • Xreal Air 2, glasses that display video on your eyes, launches at $399+.

  • Pebble, Twitter clone, shuts down after reaching 3K DAUs.

  • Sidebar is a leadership program that accelerates your career.*

  • Meet Upway - The #1 Certified E-Bike Expert.*

*Sponsored.

Tech & law

  • Cruise's robotaxi permit suspended by CA's DMV.

  • Meta sued by CA, 30 states over alleged damages to teens, youths.

  • NVIDIA: U.S. curbs on AI chips to China came into effect, earlier than exp.

  • Taiwanese frontrunner: Beijing should “cherish” Foxconn, not probe it.

    • China: “normal law enforcement.”

  • Apple supports nationwide right-to-repair laws.

Biotech

  • Humanity crowdfunds $2M at $30M cap for longevity app.

  • 116-year-old woman, oldest in world, says she has no health problems.

  • FDA approves therapy for rare form of blood cancers.

  • Alzheimer's: study explores higher incidence on women.

Business

Crypto

  • SBF trial: defense has 6 witnesses, unclear whether SBF will testify.

  • FTX negotiating with 3 bidders to restart or sell exchange.

  • BlockFi emerges from bankruptcy, claims trading at 26-30%.

  • $235M BTC USB cracked, but owner wants to wait.

  • Paradigm's Fred Ehrsam steps down as partner, to focus on longevity.

U.S. politics

  • Biden preps $50B for domestic crises, on top of $106B for Ukraine, Israel.

  • House GOP to try Mike Johnson as speaker after Emmer's bid fails.

  • Meadows granted immunity on D.C. case, may have flipped: sources.

    • Trump lashes out on Meadows, “complete and total disaster.”

  • Ground News: news platform that shows you every side of every story.*

  • Tucker Carlson signs $1M+ ad deal with Public Square.

*Sponsored.

World

  • Xi: China willing to cooperate with U.S.

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