Hello everyone.

Welcome to a new week.

To recap where things stand in what has been a whirlwind of a month, last week we concluded our Apple 2Q23 earnings review. There were four updates dedicated to earnings:

Apple 2Q23: By the Numbers, Apple Device Upgrading Slows, Apple's Emerging Markets Strength
Reading Between the Lines of Apple's 2Q23 Earnings Q&A With Analysts
Apple 2Q23 10-Q Takeaways, Apple's Share Buyback Update, More on Apple's Stingy Dividend Increases
Apple's Paid Subscriptions Growth Reaccelerates, The Case for Higher Apple Gross Margins

Starting with today’s update, we will pick up where we left off by examining CY1Q23 earnings from Apple’s peers and competitors. In addition, developer conference season has kicked off with Google I/O last week.

The update begins with Neil’s thoughts on Amazon’s earnings. The discussion then turns to Amazon CEO Andy Jassy’s 2022 shareholder letter. We conclude with Amazon’s renewed pitch for having its corporate employees spend more time in the office instead of work from home.

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Let’s jump into today’s update.

Amazon Earnings

The big theme from Amazon’s CY1Q23 earnings was optimization. The company continues to work through an overinvestment cycle in which management thought pandemic-driven demand would continue seemingly unabated. Instead, Amazon ended up front-running demand by ramping up capex and investment spending. Management claims to have made some progress in working through the overinvestment, including substantial reconfigurations of its U.S. fulfillment network. Wall Street remains concerned (and somewhat confused) with what normalized profit margins will look like for Amazon.

From a product perspective, the Amazon story continues to be found with

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