This week on 7 Market Movers, Portfolio Consulting Director Aya Yoshioka discusses the results coming out of earnings season, specifically highlighting the six members of the Magnificent Seven who have reported so far. Microsoft and Alphabet (Google’s parent company) saw strong growth in their cloud computing services while Tesla saw a rally despite missing earnings expectations. Watch the video for additional insights into how Microsoft, Alphabet, Tesla, Apple, Amazon, and Meta are performing.

If you have further questions about how the current economy and market environment could affect your financial plan, reach out to a Wealth Enhancement advisor today.

TRANSCRIPT:

Hi, everyone. My name is Aya Yoshioka. I'm a portfolio consulting director and senior investment strategist here at Wealth Enhancement. Thanks so much for joining me today.

Aren't you all glad that we closed the books on April? But can you believe that we just closed the month of April, and the S and P five hundred was only down zero point seven percent for the month of April? Doesn't seem that way. Right? We all know that we've seen a nearly twenty percent decline from the February nineteenth highs, in the S and P five hundred.

But the lows were reached on April 8th, at least so far. And those since those lows, we have seen a 12% rally in the S&P 500. So what has helped?

Well, we know that tariffs and trade policy dominated the conversation in the early days of April, really fueling all of this uncertainty that we saw. But we are now in the midst of earning season. And even though we haven't seen, the uncertainty completely go away, we have seen some great insights from great companies, in the S&P 500. So what have we seen? Well, generally, earnings have been slightly better than expected, just given how poor sentiment was coming into earning season, and we saw some strength out of many of the, banks early on.

But over the last week, we saw six of the Mag seven companies report. And I'll give a quick little rundown of what we've seen on those six companies.

So Alphabet was the first to report within, the Mag seven, and they posted a solid quarter with double digit revenue growth in both their search or their Google segment, as well as YouTube. And we also saw 28% year over year revenue growth out of Google's cloud segment, and they showed very strong, profitability. So nice cost constraints, on Google's behalf there.

Microsoft also posted a better than expected quarter, and they saw strength in their cloud segment as well. They posted growth in Azure, their cloud segment, of 35% in the first quarter.

And they also guided second quarter revenue growth to be near that same number, around that 35%, in terms of year over year revenue growth. Very strong numbers out of Microsoft, and they noted that AI demand is growing slightly faster than they had initially expected. 

Meta, the owner of Facebook, Instagram, and WhatsApp, had a great quarter as WEG. And this is a little bit more difficult, versus some of the others because expectations may have been a little bit more elevated. The bar was a little bit higher as they had shown a really strong quarter back in January. And they delivered solid results with revenue growth of sixteen percent year over year and operating margins of forty one percent.

Amazon's quarter was slightly more in line with Wall Street estimates, but their Q2 guidance fell short of Wall Street estimates. And I think there this is the company that is impacted most by the tariff situation, especially on the retail side. Even though profitability is really tied to their cloud segment as well also known as AWS.

Apple's quarter was in line and they did see a decline in sales in China of about 2%. But overall, sales were up five percent for Apple in the first quarter. Apple also announced plans for a fairly large buyback increasing their buyback program by one hundred billion dollars.

Tesla missed their quarter by a pretty wide margin both on revenues and on earnings. But the stock actually has rallied since they reported. Again, expectations were low, and Elon Musk has pledged to sort of reengage and recommit to Tesla, and spend more time at Tesla, alongside sort of their future endeavors such as, Robo taxis.

That's the recap for six out of the Mag seven names in the S&P 500, and we will get, the last of the Mag Seven, NVIDIA, in the coming weeks.

One last point before I leave. We did see economic data for the first quarter, on April 30, and the first quarter GDP estimate, was for a contraction of 0.3% on an annualized basis. We did we did see a surge in imports partly, as a result of some of the front running related to tariffs, but consumer spending was actually positive. It was still growing around 2%, and so we did see some strength out of the consumer despite, the tariff situation.

Thank you again for listening me to me today, and we hope to continue to provide these videos to you. And if you have any questions, please reach out to your financial adviser or our investment management team. Thanks so much. Have a great one.

This information is not intended as a recommendation. The opinions are subject to change at any time and no forecasts can be guaranteed. Investment decisions should always be made based on an investor's specific circumstances. Investing involves risk, including possible loss of principal.

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