Earnings Reports

Wall Street experienced a volatile Friday, with the S&P 500 recovering from early losses amid tech sector concerns. Jim Cramer advised focusing on profitable companies like Nvidia, Microsoft, and Alphabet. The CNBC Investing Club is considering exiting Disney due to linear TV challenges and is reducing its BMY position after trial pause and management concerns. This week, the Club is monitoring earnings from Home Depot, TJX, Nvidia, and Palo Alto Networks, focusing on specific growth drivers and management strategies.

Tech giants like Alphabet, Meta, Microsoft, and Amazon are significantly increasing AI investments, projecting over $380 billion in combined capital expenditures. This shift aims to meet surging demand for AI services, driven by advancements in generative AI and machine learning. While Amazon and Alphabet saw positive investor response, Microsoft’s shares dipped slightly, and Meta’s plummeted due to unease regarding its AI strategy and revenue prospects. Concerns remain about a potential AI bubble and the long-term sustainability of these massive investments.

Wall Street saw mixed trading, pressured by Meta and Microsoft’s AI spending concerns despite strong earnings. Honeywell spun off Solstice Advanced Materials (SOLS), receiving an “outperform” rating from BMO. DuPont is set to separate Qnity Electronics (“Q”). Goldman Sachs CEO David Solomon remains confident despite stock performance, citing strong global banking and markets division performance. He sees a low recession risk and AI infrastructure investment as an economic tailwind. Investors await earnings reports from Apple, Amazon, Cloudflare, and Linde.

The Federal Reserve implemented a 25 basis point rate cut, but tempered expectations for further cuts. Alphabet, Meta, and Microsoft reported earnings surpassing estimates, with Alphabet’s revenue exceeding $100 billion for the first time. Notably, all three companies are significantly increasing capital expenditure (capex) for AI and data center infrastructure. Alphabet revised its 2025 capex forecast to $91-93 billion. Finally, a high-stakes meeting between President Trump and President Xi Jinping is anticipated, focusing on trade relations.

U.S. Treasury Secretary Bessent stated that the U.S. is considering industrial policy, including price floors, in response to China’s dominance and unfair pricing in the rare earth minerals market. This aims to protect domestic industries. Meanwhile, Bank of America, Morgan Stanley, JPMorgan Chase and Goldman Sachs reported strong earnings, fueling investor optimism despite U.S.-China trade tensions. The market’s future hinges on upcoming earnings from tech giants like Tesla and Intel.