On Friday, Amazon $AMZN, one of the most significant stocks in the universe, had its worst earnings reaction since Q1 2023.
The company reported a total capital expenditure of $26.3B in Q4, which is expected to continue in 2025.
Andy Jassy, the CEO of AMZN, is all in on AI, and the market isn't thrilled about it.
Shareholders would rather have the money returned to them than have the company invest a tremendous amount in potential future growth.
Who has it right? Only time will tell...
Let's talk about what else happened 👇
Here are the latest earnings reactions from the S&P 500:
*click the image to enlarge it
Take-Two Interactive Software $TTWO reported mixed results but rallied 14% with a reaction score of 9.14. The market loved it!
The company reported stronger-than-expected NBA 2K sales. They sold over 7M units, increasing daily active users by nearly 20%.
Expedia Group $EXPE beat expectations and rallied 17%, with a reaction score of 7.86. But the market was most excited about the announcement to reinstate the quarterly dividend.
In March 2020, the company stopped paying a quarterly dividend because of the global coronavirus pandemic. After nearly five years, they're bringing it back and better than ever.
EXPE will pay a quarterly dividend of $0.40 per share, reflecting a 1% annual dividend yield. This is a record payout.
Monolithic Power Systems $MPWR beat its expectations and rallied 9% with a reaction score of 3.75. It was a great report, but the best part was the announcement of a 25% increase in the quarterly dividend and share repurchase program.
MPWR will now pay a dividend of $1.56 per share and repurchase $500M worth of stock over the coming three years.
Mr. Market has made it abundantly clear that he loves it when companies return capital to shareholders. 🤑
Now, let's look at some of the best and worst charts from Thursday's earnings reactions 👇
TTWO had its best earnings reaction since Q2 2015:
The stock is pressing against a shelf of former highs from the prior cycle and looks poised to blast through it soon.
If and when TTWO closes above 210, the path of least resistance will shift from sideways to higher.
EXPE engulfed the last 12 weekly candlesticks with its earnings reaction:
In addition to the bullish engulfing candlestick, the stock had one of its best earnings reactions ever. Everything about this reaction was bullish. 🐂
As long as EXPE holds the breakout above 185, the path of least resistance is higher for the foreseeable future.
AMZN had its worst earnings reaction since Q1 2023:
While the reaction wasn't what the bulls wanted to see, the stock still closed inside of the prior week. This signals indecision in the market.
We think this dip in AMZN will be bought, and the path of least resistance will remain higher toward the first Fibonacci extension level.
