News and analysis

Wall Street got a new favourite hero in this week of corporate earnings. While the external background has limited further growth in major techs for a while, businesses that directly receive their income from retail clients arrived on the scene. Boosting shares of consumer staples like Walmart, the Coca-Cola Company and McDonald's was followed by even more impressive surging of a vacation home rentals leader Airbnb. The pre-market trading on Valentine's Day, February 14, suddenly revealed a 14% jump in Airbnb's market value.

Waiting patiently for such a pleasant surprise for many months, why not on Christmas Eve, we began to share the reasonable concept of buying this issuer on mid-term expectations since early August. Perceiving Airbnb as the most underestimated asset of the budget-conscious segment was not a mistake, in which investors can be easily convinced by looking at the charts right at the moment. Shares of Airbnb are trading above $160 where the stock was last time detected last May. Fair valuation of the entity came back to provide up to 40% of profit to all those who were clamouring to buy Airbnb on its late summer dips. This happened after the company's quarterly numbers showed a clear booking growth in Latin America and a more stable cross-border travel demand in Europe and Asia Pacific. The Middle Eastern and African customers' activity is following closely behind as well.

Airbnb reported its Q4 2024 EPS (equity per share) of $0.73 to beat average consensus estimates of $0.59. This is extremely great, compared to a shocking $0.55 loss in the same three-month period of 2023. Much water has flowed since that time. Airbnb business metrics are fully revitalized, so that the company is generating good profits for the fourth subsequent quarters in a row. Its Q4 2024 sales came out at $2.48 billion, ahead of expert pool estimates of $2.43 billion and much better than $2.2 billion a year ago. Airbnb CEOs also offered their positive forward guidance for Q1 2025, including sales indications within a range between $2.23 billion and $2.27 billion, against $2.14 in the same quarter of 2024, if we take into consideration that January to March time usually represents a poor period for rentals worldwide. However, the current quarter supposedly offers a 4% to 6% surplus in revenue.

The timing of Easter may promise even more gains, yet we feel that many in the market are ready to partially take profit soon. Price levels above $160 are halfway to testing three-year-old highs for Airbnb around $200, which may be postponed because of unusual one-off activity on a popular asset. Lower interest rates in Europe already begun to help bookings. Cheaper loans in the U.S. are likely to follow in the second half of the year, which will provide some weaker U.S. currency. Too strong U.S. Dollar still puts pressure on sales and also makes it a more expensive procedure when Airbnb converts its booking abroad into dollars.

When calculating the impact of foreign exchange rates, Airbnb said its revenue may increase in the range of 10% to 12% soon. As to the current quarter, Airbnb CEOs expect its Nights and Experiences Booked could be rather flat vs 133 million in the same period of 2024. But later its business metrics are going to benefit from launching its co-host network to allow a manager to take care of guests and the property on behalf of the owner. The program started four months ago and already earned about twice as much as other Airbnb listings. Airbnb is also investing $200 million to $250 million for scaling new businesses in the course of the year.

ApeCoin (APE) is up 14.0% this week to $0.746, significantly outperforming the broader crypto market, where Bitcoin (BTC) has gained 2.0% to $96,958. While this appears to be an impressive rebound, APE remains near its all-time low of $0.473.

Earlier in February, the altcoin dropped to $0.538, its lowest level since August 4, 2024. The current surge is likely a minor recovery following a sharp decline. Additionally, Bored Ape Yacht Club (BAYC) NFT collectibles have erased all their 100% Trump-driven gains, limiting fundamental support for APE. At this point, the token’s price is largely reliant on broader market trends.

Dash (DSH) is up 9.3% this week to $27.42, significantly outperforming the broader crypto market, where Bitcoin (BTC) has gained only 0.8% to $96,093. This strong rebound follows a sharp pullback after the Trump-driven 223% rally in November–December 2024.

Prices have returned to a key support zone between $20.00 and $30.00, even briefly touching a low of $19.94. This level has historically provided strong support, pushing prices higher five times before, with rallies reaching up to $40.00. Given this trend, a potential 45% upside from current levels is expected, targeting another move towards $40.00.

Let's now come back to benchmarking between the two powerful megacaps: Amazon and Apple. Which of the two has better chances for further upside? I feel our discussion on this subject as a fine tradition, which can become long-standing and perfectly suited for February, as both firms reported for the ending quarter  to expose their major weaknesses and strengths. What is more important, this is exactly the moment when the crowd clearly shows its attitude to the balance of those pros and cons. IMHO, just like in February 2024, investing in Amazon looks preferable.

Shares of the largest e-commerce platform in the world traded around $170 nearly a year ago, then rose 18% over the next five months and now are about 35% higher year-over-year. This great move happened despite a brief loss of widely expected pace in the delivery of cloud storage capacities, which led to losing upside momentum in early August with a technical rollback even below the starting levels. But the overall annual growth of Amazon stock still exceeded similar achievements of Apple, whose value eventually provided investors with 25% of income. Besides, Apple declined gradually until April 2024 before recovering later, so that the iPhone-maker did not provide any tangible income to its shareholders until mid-summer.

At the first half of 2025 the history could repeat itself. Why does it seem so? Apple came under notable pressure once again, as massive profit taking had started immediately after its share price jumped by nearly 4% to follow the upbeat quarterly report. The next wave of a volatile market's response even pushed Apple share price 5% down from above $247 to as low as $225.70 when the dust settled. This pullback completed more than 13% of Apple stock's cyclic correction from all-time highs detected around $260 in the pre-Christmas time. Meanwhile, Amazon is still shining, just holding the heights about a 5.5% away from its corresponding historically record peaks, which were detected only several days ago. A relative weakness in Amazon's cloud segment, called Amazon Web Services (AWS), is responsible for a moderate retracement of the stock again. However, the market is already aware of this pitfall from the movements in 2024, and so the majority on Wall Street no longer perceives this reason as a serious obstacle in 2025.

The company's cloud unit reported a 19% rise in sales to $28.79 billion, which was only slightly falling short of analyst pool's estimates of $28.87 billion. AWS could be growing even faster, "if not for some of the constraints on capacity, and they come in the form of chips from our third-party partners coming a little bit slower than before," Amazon CEO Andy Jassy commented. When there is no decline in demand, but there are delays in capacity due to counterparties, then this is a completely different matter, isn't it? Again, Amazon joined the club of smaller cloud paces headed by other leading providers, including Microsoft and Google, but both of them showed a more notable difference between elevated hopes and actual cloud numbers. Thus, Amazon is still a clear winner in this race compared to its major competitors.

Again, the sun of the holiday shopping season boosted Amazon's retail numbers to offset the cloud shadows from what one may interpret as weakness. E-commerce provided sales growth of 7% in the quarter to reach $75.5 billion, which was $1 billion above consensus estimates of $74.5 billion. The total Q4 revenue of Amazon was $187.8 billion, compared with the average pool bets on $187.3 billion. Its Q4 EPS (earnings per share) of $1.86 went far through the roof of $1.47 in average Wall Street projections. Amazon is investing heavily in AI software, which strategy probably began to bear fruit. AI is "probably the biggest technology shift and opportunity in business since the [appearance of] internet", as "virtually every application" currently in existence today is on track to be "reinvented" by AI technology, according to Jassy.

As to Apple's AI strategy, it now looks less convincing. Apple is positioning AI features like fast drafting emails or transcribing phone calls, but it is still rolling them out too slowly in most regions beyond the U.S. Apple has not yet defined and secured a constant partner to release AI features in China through the regulation and language barriers. In markets where we have "rolled out Apple Intelligence, the year-over-year performance on the iPhone 16 family was stronger than those where Apple Intelligence was not available," its CEO Tim Cook admitted. He added that Apple Intelligence is still coming in French and German in April, with no timeline so far for when it would be available in China.

That's why iPhone quarterly sales dropped from $69.70 billion a year earlier to $69.14 billion, compared with the $71.03 billion that analysts were expecting, but iPhone sales decreased by 11% to $18.51 billion in Greater China vs $20.82 billion in the same quarter of 2024 and $21.5 billion of consensus analyst projections. The results are very poor amid rising competition from Chinese makers of quality gadgets. And that's why the Wall Street crowd became so sceptical of new investment into Apple right here and now, despite all Apple's widely expected records on earnings of $2.42 per share and total revenue of $124.3 billion, thanks to Apple Pay and App Store offerings, which gained by around 14%.

Wearables, home & accessories unit reported sales of $11.75 billion, also below estimates of $11.95 billion, and only Mac and iPad contributions with a new M4 chip were better at $8.99 billion and $8.09 billion respectively, beyond consensus estimates of $7.94 billion and $7.32 billion. The explanation here turned out to be very simple. AI features are more widely available on Apple Macs and iPads because their larger size allows using more powerful chips to create a "very key compelling reason for people to upgrade," according to Tim Cook again.

Apple suggested total sales for the current quarter might rise "in the low- to mid-single digit range" vs a 5% sales surplus expected by the analyst pool from January to March. The upbeat forward guidance was exactly what helped the stock to spike shortly in the night of the report. However, these are all again promises and projections, and the near future is often in doubt when there are unresolved problems in the present. Actually, no honours came here and now, as iPhone sales in 2024 were below previous achievements, so the 12-month average analyst target for Apple is only 6.8% above the current price, being at $252 now. Meanwhile, similar average estimates are at nearly $265 for Amazon, which is almost 15% higher than the current price range.

Above I cited analyst estimates compiled by Reuters. But if you ask my own opinion, I personally believe that Apple can repeat or exceed $260 for a while, but more waves of profit taking on any solid upticks will follow. As to Amazon, it is better positioned and may well technically hit $280 or higher. So, I plan to increase my stake in Amazon, taking advantage of the additional small pullback, but I will wait at least another six months to buy new Apple shares.