Apple and Amazon are struggling, so investors may want to look to these tech stocks instead

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OPINION: Companies focused on getting goods to consumers are struggling with supply-chain issues heading into the holidays, writes tpoletti, but enterprise software companies are looking strong.

Both Apple Inc. and Amazon.com Inc. had rare earnings disappointments on Thursday, which may lead investors to look in another direction for big holiday returns.

Apple reported a rare revenue miss — its first since the December quarter of 2018 — with revenue of $83.4 billion coming in $1.7 billion below analysts’ estimates of $85.1 billion for its fiscal fourth quarter. Since the pandemic, Apple no longer gives revenue guidance, but the bulk of the revenue shortfall came from iPhone sales, which came in $2.1 billion below analysts expectations. Sales of Macs and iPads, however, exceeded estimates.

These higher fulfillment and employee costs, like Apple’s supply-chain constraints, will continue in the fourth quarter, usually the biggest for consumer-related tech companies. Amazon CEO Andy Jassy said in a statement that Amazon expects to incur “several billion dollars of additional costs” in its consumer business, as it deals with “labor supply shortages, increased wage costs, global supply-chain issues, and increased freight and shipping costs.

 

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