NASDAQ Earnings Summary (February 1)
The NASDAQ-100 index rose by +0.89% during this period, but beneath the surface, a fierce competition was underway. At the heart of earnings season were the tech giants, with investors weighing the costs of AI investments against actual returns. The picture was mixed: some stocks rallied, while others fell sharply. RYTM's automated analysis helps bring clarity to this information noise.
Results: Microsoft's numbers were strong, with net profit soaring by 59.5% and revenue up 16.7%. Growth continues to be driven by cloud services.
Reason: Yet, the stock fell 10.7%. The main concern for investors is the sharp increase in spending on artificial intelligence infrastructure. The market fears that these massive investments will eat into profit margins in the short term before they start generating real returns.
Results: Apple delivered a positive surprise, showing 15.7% revenue growth and 15.9% profit growth.
Reason: The main driver was a powerful 23.3% growth in iPhone sales, marking a strong recovery in the critical Chinese market. Although the stock's reaction was modest (+0.5%), the company provided a strong forecast for the next quarter, alleviating fears of a growth slowdown.
Results: Meta's stock rose 7.1% as its advertising business is in excellent shape, with revenue in the segment growing by 24.3%.
Reason: This strong cash flow convinced investors that the company can fund its ambitious and costly artificial intelligence plans. Although costs are rising rapidly (+40.5%), a strong sales forecast has given the market confidence that the investments will pay off.
Results: Intel's struggles continue. While operating profit showed growth on paper due to cost cuts, actual sales are down (-3.7%), and the company is operating at a loss.
Reason: The stock plummeted 14.5% due to a weak future outlook and market rumors that a hoped-for partnership with Nvidia may not materialize. This casts doubt on the viability of Intel's new strategy as a chip manufacturer.
Results: KLA Corporation's results were actually strong, with operating profit growing by 35.8% thanks to demand for AI chips.
Reason: Nevertheless, the stock fell 15.2%. The reason lies in investors' overly high expectations: the company's forecast for the next quarter fell short of hopes, and supply chain constraints are a concern. The market punished the stock for a "good news, bad forecast" scenario.
Results: Texas Instruments' stock jumped 10.3%, despite the quarterly results themselves being rather mediocre.
Reason: The surge was driven by an unexpectedly strong forecast from management. Investors interpret this as a sign that the cyclical downturn in the analog chip market is over and demand from the industrial sector and data centers is recovering.
Results: The coffee giant's profit fell 62.4% year-over-year as costs are growing faster than revenue.
Reason: The "Back to Starbucks" strategy is bringing customers back, but it requires significant investments in labor and stores. The stock fell 3.4% as investors await proof that these expenditures will also improve profit margins, not just increase costs.
Results: Comcast's net profit dropped sharply (-54.6%) due to costs in its media unit and the opening of a new theme park.
Reason: However, the stock rose 1.7% as investors see potential in the growth of theme parks and the Peacock streaming service. These new ventures help balance the internet services business, which has been battered by intense competition.
Results: Baker Hughes' numbers were overshadowed by an accounting loss from an investment revaluation, but revenue grew by nearly 30%.
Reason: The stock remained stable (-0.4%) as investors looked past the one-off charges. The focus was instead on the success of its technology unit and a new major contract with a large gas producer, which confirms its long-term potential.
Results: ADP showed solid profit growth (+9.7%) and beat expectations, but the stock still fell 1.5%.
Reason: Macroeconomics played a role here: investors fear a cooling labor market, which would directly impact the payroll services provider. The good results were not enough to dispel broader economic uncertainty.
Results: Roper's net profit fell 19.4%, and the results from its technology segment were disappointing.
Reason: The stock initially dropped on the news but recovered by the end of the week (+0.5%). Investors digested the weak forecast but still see value in the company, although confidence has taken a hit, and they are waiting for clearer signs of improvement.
Results: Lam Research's profit grew by 33.8%, supported by demand for AI chip manufacturing equipment.
Reason: However, the stock fell 2.6% due to market concerns about the Chinese market—the policy there of favoring domestic suppliers could cut into Lam Research's revenue in the long run, despite the current strong results.
Conclusion
This week's results painted a clear picture: strong profits alone are not enough if the future outlook is uncertain. Artificial intelligence remains the primary growth driver, but investors have become more demanding regarding costs. The RYTM platform helps you keep your finger on the pulse of upcoming announcements and understand the real story behind the numbers.
RYTM content is for informational purposes only, not financial advice or recommendations. You are solely responsible for your investment decisions. Always consult a professional.