Domain Daily: Uber's Up

The Dose

  • Uber Beats Estimates

  • Putting Down the Controller

  • Google's Got Something Brewing

Uber's Stock Surges After Earnings Report

The transportation company saw its stock jump by more than 13% after beating Wall Street's revenue estimates.

The Point: Like Amazon last week, Uber surprised analysts by reporting $8.07 billion in revenue vs. an estimate of $7.39 billion. And just like Amazon, Uber also posted a net loss for the quarter due to write-downs on investments like Aurora, Grab, and Zomato. However, the market forgave the company for its souring investments since its core business appears to be weathering higher fuel costs and record high inflation. But perhaps more importantly, the company's CEO noted that drivers, the lifeblood of Uber's business, aren't bailing on the platform. As gas prices hit record levels, many onlookers feared drivers would abandon Uber because of the pressure on their bottom lines. "Driver engagement reached another post-pandemic high in Q2, and we saw an acceleration in both active and new driver growth in the quarter," said Uber CEO Dara Khosrowshahi.  

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U.S. Video Game Sales Plummet

According to market research firm NPD, video game sales in the U.S. dropped by $1.78 billion last quarter compared to the year prior.

The Point: Obviously, this isn't great news for companies like Microsoft, Sony, or the various game studios. Both Microsoft and Sony have previously reported drops in gaming revenue. So these findings shouldn't come as a huge surprise. So what's the cause here? The simple explanation is that now that we're returning to normal, people want to spend less time in front of screens and more time outdoors. Still, there was some good news in NPD's report. Subscription content sales growth was positive during the quarter. While selling less is never good, seeing recurring revenue streams grow makes the overall loss easier to swallow.  

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Google's Mystery Product

Online sleuths discovered that the company submitted a new product application with the Federal Communications Commission (FCC).  

The Point: Google's customers look forward to every new device announcement. While we don't know what this product is, speculation points to a new Nest device. However, unless the company reveals its plans in the coming months, we'll have to wait until January, when the FCC can legally disclose the pictures, and manual Google submitted as part of its application. The safe bet is that this is merely an upgrade on an existing product. However, analysts will do their best to determine whether Google has a new game-changing device up its sleeve before any official announcement.  

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*The content team responsible for the above content uses primary and secondary sources they believe to be accurate, which includes but is not limited to Bloomberg, The Wall Street Journal, Financial Times, and CNBC, among others. 

*Domain Money Advisors, LLC, an investment adviser registered with the U.S. Securities and Exchange Commission and an affiliate of Domain Money, has (as of this writing) the following assets mentioned in this communication as part of its managed portfolios: UBER, MSFT, GOOGL