The Overnight Report: Amazon Beats Meta

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Big Tech earnings releases saw Meta and Microsoft being punished, but Amazon beat forecasts after the close.

Atlassian, ResMed and Capstone Copper did not disappoint.

SPI futures are signalling a positive start to Friday for the local bourse, after a downer on Thursday.

Amazon after the close on Thursday posted stronger-than-expected quarterly earnings as rapid growth in its cloud unit and surging AI demand lifted results, sending its shares up 10% in extended trading.

Equally important for Australian investors: ResMed ((RMD)) and Capstone Copper ((CSC)) both reported their quarterlies as well (Champion Iron ((CIA)) preceded yesterday but will talk to local analysts today).

Quick response from RBC Capital to ResMed’s release:

“RMD reported a result that was in line with RBC and consensus expectations. Revenue was in line and gross margin was 40-50bps higher than RBC and consensus expectations.

“Non-GAAP net income from operations was a 2-3% beat but non-GAAP net income was only a ~1% beat due to a $6m loss on equity investments.

“Statutory net income was a miss due to $16m of restructuring expenses. Divisionally Americas devices, Americas masks and RoW devices were in line with expectations.

“However RoW masks and SaaS revenues missed. Overall we view this an in-line result. Given the weakness leading into the result, we see the potential for a slight relief rally in the share price.”

Moelis on Capstone:

“At first glance ahead of the conference call and working through very comprehensive disclosure, this looks like a cost-lead financial beat for the September quarter.

“We’ll take more time to unpack the key drivers, but at the headline it looks like production at a group level was slightly softer than we expected, however, the financials suggest a better performance with lower unit costs the likely driver.

“EPS appears in line with our forecast, but we flag the numerous inputs in arriving at this metric. The timing of sales and some working capital moves have seen net debt increase ~US$33m QonQ to US$725.8m, but following the recent announcement of the sell down of a stake in Santo Domingo and undrawn amounts on the corporate revolver we continue to classify CSC’s balance sheet as ‘healthy’ for a business of this scale.”

Shares in Atlassian rallied 12% upon release of quarterly results.

Commentary by J.L. Bernstein:

AI Spending Spooks Tech Investors

Meta and Microsoft both beat earnings but fell anyway. Meta raised capital spending to US$70-72bn and took a -US$16bn charge.

Microsoft took a -US$3.1bn hit from OpenAI. Investors are questioning who profits from this AI buildout.

Trump-Xi Trade Truce Delivers Modest Gains

U.S. cut China tariffs to 47% from 57% after their first meeting in six years. China will delay rare earth export curbs for one year and buy 12m tons of U.S. soybeans this season. April’s rare earth restrictions stay in place. Markets expected more.

Eli Lilly Extends Weight-Loss Drug Dominance

Eli Lilly beat estimates and raised its outlook. Zepbound and Mounjaro sales hit US$25bn year-to-date.

Zepbound tripled from last year, Mounjaro doubled. Rival Novo Nordisk is in a bidding war with Pfizer for obesity drug developer Metsera worth up to US$9bn.

The weight lost drug industry is well and thriving.

Commentary from Ipek Ozkardeskaya, Senior Analyst Swissquote

Despite massive AI infrastructure spending, Microsoft said its Azure cloud unit hit capacity constraints last quarter. Revenue, cloud growth and earnings beat expectations, but the need for even more spending to meet insatiable cloud demand discouraged investors — sending the stock -4% lower in after-hours trading.

A similar reaction followed Meta’s results. Meta reported better-than-expected revenue and adjusted earnings but said it must spend more aggressively on AI next year to avoid “underinvesting.” The stock plunged more than -7%.

Google, however, pulled it off. Revenue surpassed the US$100bn mark, EPS came in far above expectations, and the 34% jump in Cloud revenue pleased investors.

They also pledged to keep spending on AI, but Google’s growth in cloud revenue pleased investors more than Azure’s 39% growth versus 37% expected.

Commentary by National Australia Bank:

The ECB held rates as expected. Lagarde in the press conference repeated that policy was in ‘a good place’, that there was absolute unanimity on ECB decision and that downside risks to growth have eased.

With no surprises from the ECB, there was limited reaction in European rates. Markets remain biased towards the next move being down, with a cumulative -11bp of cuts priced by late 2026.

Also out of the eurozone was advanced GDP data, up 0.2% qoq, a tenth stronger than expected. France (+0.5% qoq) and Spain (+0.6% qoq) drove growth even as Germany and Italy flatlined. National stats offices flagged export weakness in Germany and softer domestic demand in the quarter in Italy.

US treasury yields were little changed, sustaining the post-FOMC move higher. 10-year treasury yields did edge up to 4.11% intraday, a two-week high, before retracing to 4.09%, 1bp higher over the day.

The BoJ was also on hold as expected. Two board members dissented in favour of a hike, in line with the September meeting.

“We held today as we want to see more data on domestic wage-setting behaviors, while uncertainty remains high in overseas economies,” Ueda said in his post-decision presser.

“If we’re convinced, we’ll adjust rates regardless of the political situation.”

CPI and GDP forecasts were little changed, and Ueda indicated that the central bank’s outlook is now closer to being realised than in July.

While all of that indicates some further normalisation is likely in December or January, the lack of a clearer steer towards a December move saw the yen underperform.

USDJPY was 0.9% higher at 154.09 with yen the standout G10 underperformer against the broadly stronger dollar. Daily moves in all other G10 currencies were tightly clustered and 0.2-0.4% lower against the USD.

The AUD lost 0.4%, touching an intraday low of 0.6536 and currently sitting around 0.6550.

Commentary by: Rania Gule, Senior Market Analyst at XS.com – MENA

In light of recent developments in global markets, gold continues to spark debate among investors and analysts over the direction it may take in the near term.

The precious metal has managed to regain some positive momentum after a period of decline, benefiting from the slight weakness in the U.S. dollar and renewed demand for safe-haven assets. However, the picture is far from one-sided; behind the scenes lies a mix of conflicting factors that make forecasting gold’s future path a delicate task—one that requires a careful reading of monetary, political, and economic developments altogether.

From my perspective, the current movement in gold appears more like a “technical correction supported by psychological factors” rather than the start of a strong new bullish wave.

The weakness in the U.S. dollar certainly provides some support for the metal, but that support seems fragile given the Federal Reserve’s continued relatively hawkish stance.

Although the Fed recently cut interest rates by 25 basis points, Chair Jerome Powell’s statements effectively curbed market expectations for further rate cuts in the near term, which has dampened investor appetite for non-yielding assets such as gold.

Consequently, any attempts by gold to break above current resistance levels may face strong headwinds as long as U.S. monetary policy remains relatively tight.

At the same time, renewed global economic concerns are providing gold with some psychological support, especially amid lingering uncertainty surrounding global trade prospects between the United States and China.

Despite the cautious optimism expressed by U.S. President Donald Trump regarding the outcome of discussions with his Chinese counterpart Xi Jinping, markets have yet to translate that into full confidence.

Past experiences have taught investors that “trade optimism” often fades at the first sign of a negotiating obstacle or a hawkish statement. Therefore, gold is likely to retain part of its appeal as a safe haven, particularly as the U.S. economy enters a phase of relative slowdown and discussions about the possibility of a technical recession resurface for the coming year.

Historically, gold has proven to be more sensitive to future interest rate expectations than to actual policy decisions. Based on my current reading of the Fed’s direction, the central bank seems keen to keep market expectations disciplined, avoiding the formation of a broad belief that the easing cycle is ongoing.

This means that any strong economic data in the U.S.—particularly in labor or inflation—will put renewed pressure on gold and limit its ability to achieve sustained gains. Conversely, any signs of weakness in consumer spending or industrial production could restore gold’s shine and encourage investors to re-enter long positions.

Another factor offering temporary support for gold is the ongoing political deadlock in the United States, particularly the government shutdown that has cast a shadow over market confidence.

These developments undermine trust in U.S. fiscal and economic performance, prompting some investors to seek safer assets. However, I believe this factor’s influence will be short-lived; once a political compromise is reached, gold will likely lose part of this temporary support.

On the other hand, it should be noted that part of gold’s recent gains may be due to short-term short-covering rather than genuine investment demand. This makes the current uptrend vulnerable to sudden corrections if U.S. dollar data improves or new signs of global economic resilience emerge.

Therefore, I believe any sharp moves above key psychological resistance levels will require stronger fundamental momentum—perhaps stemming from an actual shift in the Fed’s tone or a renewed escalation in geopolitical tensions.

That said, gold undeniably retains its core role in investment portfolios as a hedge against risk, particularly amid ongoing global uncertainty. 

In conclusion, gold currently stands at a delicate crossroads between psychological support and monetary pressure. The limited weakness in the U.S. dollar provides short-term breathing room, but the Fed’s hawkish tone and market confidence in U.S. economic stability impose a clear ceiling on any major bullish breakout.

In my view, it is still too early to speak of a new sustainable uptrend unless we witness a tangible shift in U.S. monetary policy or a significant resurgence in global economic fears.

Until then, gold will likely remain in a fragile balance—shining with temporary brilliance, yet without the lasting luster to propel it to new highs.

On the calendar today:

-AU 3Q PPI

-AU RBA Sep Pvt Credit

-EZ Oct Flash CPI

-ALCOA CORPORATION ((AAI)) Investor Day

-AMCOR PLC ((AMC)) Q1 earnings report

-ARCHTIS LIMITED ((AR9)) 1Q26 Update/Investor Call

-BETMAKERS TECHNOLOGY GROUP LIMITED ((BET)) AGM

-CAR GROUP LIMITED ((CAR)) AGM

-COBRAM ESTATE OLIVES LIMITED ((CBO)) AGM

-CHAMPION IRON LIMITED ((CIA)) 1H26 Earnings Investor Call

-CAPSTONE COPPER CORP. ((CSC)) 3Q25 Earnings/Investor Call

-CARAVEL MINERALS LIMITED ((CVV)) AGM

-ENDEAVOUR GROUP LIMITED ((EDV)) 1Q26 Update

-EUREKA GROUP HOLDINGS LIMITED ((EGH)) AGM

-FORTESCUE LIMITED ((FMG)) AGM

-GWA GROUP LIMITED ((GWA)) AGM

-INTEGRAL DIAGNOSTICS LIMITED ((IDX)) AGM

-IONEER LIMITED ((INR)) AGM

-JUPITER MINES LIMITED ((JMS)) 1Q Activity Report

-MACH7 TECHNOLOGIES LIMITED ((M7T)) 1Q26 Update/Investor Call

-MADER GROUP LIMITED ((MAD)) AGM

-ORIGIN ENERGY LIMITED ((ORG)) Sept Quarterly

-PINNACLE INVESTMENT MANAGEMENT GROUP LIMITED ((PNI)) AGM

-PACIFIC SMILES GROUP LIMITED ((PSQ)) AGM

-RESMED INC ((RMD)) Q1 Earnings/Investor Call

-STEADFAST GROUP LIMITED ((SDF)) AGM

-SANDFIRE RESOURCES LIMITED ((SFR)) AGM

-SKYCITY ENTERTAINMENT GROUP LIMITED ((SKC)) AGM

-VULCAN STEEL LIMITED ((VSL)) AGM

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

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