Qualcomm tops estimates, Facebook warns of growth slowdown, Ford posts surprise profit

Brian Sozzi, Julie Hyman, and Myles Udland break down earnings which include: Facebook warning of a significant growth slowdown in the coming quarters despite beating analysts’ Q2 expectations, Qualcomm topping earnings and revenue estimates on 5G wave, and Ford overcoming the chip shortage to post a surprise profit.

Video transcript

MYLES UDLAND: So let's start with what we got from Facebook last night. We see Amazon will come out with their results tonight, finally finishing off the FAANG group. A beat on the top line, a beat on the bottom line, but pretty much Alphabet right now is the only exception of a company that investors haven't sold, following these results.

JULIE HYMAN: Yeah, although, again, I know we keep going back to Snap and Twitter last week, but I'm going to go again back to Snap and Twitter last week because what's interesting here is that a rising tide does not seem to be lifting all boats. Yes, it did last quarter, right? Ad sales are strong at the social media companies, so the question is, what's going to happen going forward? And Facebook is not super sanguine about that. It seems like one of the things that's hitting it, right, are these Apple-- or not Apple, excuse me-- app tracking changes, right? And I saw a fig--

MYLES UDLAND: At Apple, among other places.

JULIE HYMAN: At Apple, among other places, but just the general changes. I saw a figure this morning that users are opting to give apps permission to track their behavior only 25% of the time, not just on Facebook, but across. But maybe it's affecting Facebook more-- who knows-- than it's affecting some of these other companies.

BRIAN SOZZI: Yeah, and I think we could pretty much say confidently that Snap had the best quarter among Twitter and Facebook. I mean, Snap's quarter was a true full on blowout here. And you're having Facebook, I think, mirror some of the comments Twitter made about a slowdown in revenue growth later this year.

But one of the-- two takeaways. One, the Reels business, Facebook's Reels business, it seems to be coming on strong, which raises the question, can Snap continue the momentum it saw in the most recent quarter, as Reels come on strong? And then Mark Zuckerberg talking at length about the metaverse.

JULIE HYMAN: Oh, yeah, we gotta get into that.

BRIAN SOZZI: So it set me back to researching what is the metaverse and what companies could partake in that.

MYLES UDLAND: All right, so everyone, the assigned homework now is, you got to go home, you got to read "Snow Crash." And then we can come back and, as a class, discuss the metaverse.

JULIE HYMAN: Wait, we gotta read which?

MYLES UDLAND: "Snow Crash."

BRIAN SOZZI: OK.

MYLES UDLAND: What? Book Julie Hyman doesn't know "Snow Crash?"

JULIE HYMAN: I am surprised.

MYLES UDLAND: Oh my goodness, here we go.

JULIE HYMAN: I saw "Spider-Man, Into the Metaverse" with my kids.

MYLES UDLAND: Oh, Neal Stephenson, "Snow Crash." It's like from 199--

JULIE HYMAN: OK, I'm writing this down.

MYLES UDLAND: Oh, so there you go. So there's the origins, really, of the metaverse. And you can sound very fancy, whatever. So I think what's interesting about the metaverse commentary, Sozzi, 20 times, it comes up on the earnings call. And there was a question that came to Mark Zuckerberg-- it came to the management team, but Zuckerberg talked at length-- from an analyst, basically about what's the business model there. And we all remember the famous moment when Zuckerberg said to Orrin Hatch, "Senator, we sell ads. That's how we make money."

And his conversation about how the metaverse fits in with this long discussion of the portability of your online identity across physical and virtual spaces and he's talking about immersion as kind of the key point to it, it all sounds very exciting. But it really wasn't about Facebook making a ton of money, which they did once again.

BRIAN SOZZI: Yeah, well, the way I took it, it is him trying to market perhaps more Oculus glasses and selling virtual reality devices. But are we at that point? What, now, let's say I am at home at work. I am watching Julie Hyman and Myles Udland on here. I can really port myself onto set here. I like your jacket. I can click on it and buy something from Bonobos. I don't know, but it's very interesting. So I'm actually--

JULIE HYMAN: Is it?

BRIAN SOZZI: I think it's very fascinating and a potential opportunity for chip makers. Nvidia has been talking about the metaverse.

JULIE HYMAN: Can we--

BRIAN SOZZI: But the CEO is talking about it.

JULIE HYMAN: --back up just one second?

BRIAN SOZZI: OK.

JULIE HYMAN: We all spent the last year at home. I don't want a metaverse. I want to be in person with people.

BRIAN SOZZI: OK--

JULIE HYMAN: Forget about the metaverse. Let's live in real life. That's-- OK, sorry.

BRIAN SOZZI: You got to read the book now.

JULIE HYMAN: Rant over.

BRIAN SOZZI: Wow. Wow.

MYLES UDLAND: Well, I-- so, again-- well, OK, so we've played--

JULIE HYMAN: I know it's not the exactly the same, but.

MYLES UDLAND: We've played the Sims, yes?

JULIE HYMAN: I know of it.

MYLES UDLAND: OK, OK, so the Sims, you know, there's, like, a metaverse, like, a very low-fi version of a met--

JULIE HYMAN: Right.

MYLES UDLAND: But I-- to your point, Sozzi, I feel like we pretty much live in a metaverse of sorts.

BRIAN SOZZI: Wow.

MYLES UDLAND: I mean--

BRIAN SOZZI: That's deep. That's deep.

JULIE HYMAN: Yes, fair. I get what you're saying. But I don't want to push it too far.

MYLES UDLAND: Right, no, no, I--

JULIE HYMAN: I would prefer not to.

MYLES UDLAND: I agree. I guess--

JULIE HYMAN: But I'm a boomer. So as you said, yes, sir, I'm a Gen Xer type of boomer.

MYLES UDLAND: So I know you say he wants to sell Oculs glasses. Then he talked about selling devices. But ultimately, he says we want to keep those things inexpensive. So I don't think it's about $1,500 Oculus glasses. I guess it kind of comes to, like, a philosophy 101 question. Is slacking and broadcasting this onto the web, where most people experience us as digital avatars-- I mean, the vast majority of people who know I exist do not-- have never met me in person and never will, right? And same is true for the both of you. So isn't that a metaverse of sorts?

BRIAN SOZZI: I've never thought about it that way.

MYLES UDLAND: I'm just saying. All right, let's-- I-- personally, I would do this all show, but we have other stuff to get to. Let's go to Qualcomm. They're out with their latest results last night. And I know you guys will have more, Julie and Brian, from your conversation with Qualcomm yesterday afternoon. But let's just kind of go through the top line numbers here, Julie. I mean, the themes continue to beat on the top and bottom.

JULIE HYMAN: Yeah, beat on the top and bottom for Qualcomm. It's all about 5G for the company. But as Christiano was-- the CEO-- was quick to remind us, they're trying to branch out beyond 5G, right? Beyond smartphones.

Even though Qualcomm is far and away the largest smartphone chip maker in the world, he was quick to say, well, we're building up our revenue from the internet of things, from automotive, from other types of chips. So that's a message that Qualcomm really wants to get across. And the revenue is, to be fair, growing from those other areas. And it's growing more quickly than the smartphone chips are growing.

BRIAN SOZZI: Yeah, and I think that message is getting across here. Shares of Qualcomm up 3% in the premarket. And we'll have more from our chat with Christian Amon, CEO of Qualcomm, later on. But I really thought what he said about the chip shortage was fascinating. He sees light at the end of the tunnel. And he's not the only one in the industry to voice that recently.

JULIE HYMAN: But at the same time, he sees demand continuing, which was also interesting. Even as supply improves, he says demand is going to continue to be robust.

MYLES UDLAND: Yeah, I just thinking that, though, you know, we're starting to see a few more folks talk about the end of the demand curve. And look, I mean, that-- you know, these supply problems will not last forever. They showed up in the GDP report this morning, but they will not last forever. And we're starting to hear some of that from executives.

Another company, Sozz, I know you have your eye on very closely, Ford out with its results and, of course, really all about what they're saying on the cybertruck. And we can talk about cybertrucks in just a second.

BRIAN SOZZI: That's very metaverse of you, Myles, but I will hit the high points here on these notes I took on the subway ride in here. One, they have now seemed to be driving a strategy. They want to incentivize consumers less. In other words, we will likely be paying more or just higher prices for vehicles because they want to put less inventory on the lots of dealers. That is something very interesting to watch out for. There's a change in tone by the likes of new Ford CEO Jim Farley.

Number two, 120,000 preorders for the new Lightning Electric F-150. That's up from 70,000 about a month ago. I have a more of a deeper story on this now on Yahoo Finance. Number two-- number three, they're calling it a $2 billion commodities hit in the second half of this year versus the first half of this year. I would suppose that is, in large part, due to steel. And they also, too, see an easing of the semiconductor shortage this year. They're saying their business is, quote, "spring-loaded" because they're going to be getting more chips.

JULIE HYMAN: Just a quick question on those Lightning preorders. Does it work like Tesla, where you put down 100 bucks and you've got in your preorder? Like, what do people have to do to--

BRIAN SOZZI: When--

JULIE HYMAN: What counts as a preorder?

BRIAN SOZZI: When Ford says they have a preorder, it is not a Nikola preorder. It is not a Lordstown preorder. It's an actual order where somebody is putting actual cash down, and they're ordering this truck. And they will get it delivered, again, unlike a Lordstown and, again, unlike a Nikola.