Alberto Poli
๐˜ฟ๐™š๐™–๐™ง ๐˜พ๐™ค๐™ฅ๐™ž๐™š๐™ง๐™จ ๐™–๐™ฃ๐™™ ๐™›๐™ค๐™ก๐™ก๐™ค๐™ฌ๐™š๐™ง, ๐™ฌ๐™š๐™ก๐™˜๐™ค๐™ข๐™š ๐™—๐™–๐™˜๐™ . ๐™Œ๐Ÿญ ๐Ÿฎ๐Ÿฌ๐Ÿฎ๐Ÿฑ ๐™€๐™–๐™ง๐™ฃ๐™ž๐™ฃ๐™œ๐™จ ๐˜พ๐™ค๐™ข๐™ฅ๐™–๐™ฃ๐™ฎ ๐™Ž๐™ฅ๐™ค๐™ฉ๐™ก๐™ž๐™œ๐™๐™ฉ โ€“ ๐˜ผ๐™ˆ๐˜ฟ AMD beat expectations in Q1, reporting adjusted EPS of $0.96 versus the expected $0.94 and revenues of $7.44 billion versus $7.13 billion expected. The data center segment grew by 57%, driven by AI chip sales. However, U.S. export restrictions on advanced chips are expected to cost AMD about $800 million this quarter and $1.5 billion for the full year. Despite this, AMD projected $7.4 billion in Q2 sales and a 43% gross margin. ๐™€๐™–๐™ง๐™ฃ๐™ž๐™ฃ๐™œ๐™จ ๐™ˆ๐™ค๐™ข๐™š๐™ฃ๐™ฉ๐™ช๐™ข ๐˜พ๐™ค๐™ฃ๐™ฉ๐™ž๐™ฃ๐™ช๐™š๐™จ ๐™›๐™ค๐™ง ๐™Ž&๐™‹ ๐Ÿฑ๐Ÿฌ๐Ÿฌ ๐˜ฟ๐™š๐™จ๐™ฅ๐™ž๐™ฉ๐™š ๐™Ž๐™ค๐™›๐™ฉ๐™š๐™ง ๐™๐™š๐™ซ๐™š๐™ฃ๐™ช๐™š ๐˜ฝ๐™š๐™–๐™ฉ๐™จ At this stage of the earnings season, S&P 500 companies are delivering solid performance, with a blended earnings growth rate of 13.4% for Q1. The strongest contributions come from the Health Care, Communication Services, Information Technology, and Utilities sectors, while the Energy sector continues to lag behind. The market reacted more positively than usual to these earnings surprises. On average, companies with positive earnings surprises saw their stock prices rise by 1.9% over the four-day window (two days before and after the announcement), compared to a 5-year average increase of 1%. If this trend holds, it would be the best market reaction since Q3 2022. Conversely, negative earnings surprises were penalized less than usual, with an average price drop of 1.7%, compared to the typical 2.3% decline. This milder reaction to bad news and stronger reward for good news may be linked to improved guidance for the upcoming quarter. For Q2 2025, 45% of companies that issued guidance projected positive EPS, above the 5-year average of 43% and the 10-year average of 38%. However, analysts have also made bigger-than-average cuts to Q2 forecasts early in the quarter, suggesting some caution due to the international situation. 90% of companies in the S&P 500 have released their earnings, with 78% reporting earnings per share above analystsโ€™ expectations. This figure is slightly higher than the 5-year average (77%) and the 10-year average (75%). Overall, earnings exceeded forecasts by 8.5%, which is just below the 5-year average (8.8%) but higher than the 10-year average (6.9%). Regarding revenues, 62% of companies exceeded estimates, which is below the 5-year (69%) and 10-year (64%) averages. Revenue beats were modest, at 0.7% above estimates. The Health Care sector was the biggest driver of revenue growth. Ten out of eleven sectors reported revenue growth, with only Industrials showing a decline. For the rest of the year, analysts forecast earnings growth of 5.2% in Q2, 7.4% in Q3, and 6.7% in Q4. For the full year 2025, earnings are expected to grow 9.3%. The forward 12-month price-to-earnings (P/E) ratio is 20.5, above the 5-year average (19.9) and the 10-year average (18.3), and also higher than the 20.2 recorded at the end of Q1. ๐™€๐™˜๐™ค๐™ฃ๐™ค๐™ข๐™ž๐™˜ ๐™„๐™ฃ๐™™๐™ž๐™˜๐™–๐™ฉ๐™ค๐™ง๐™จ โ€“ ๐™.๐™Ž. ๐™Ž๐™š๐™ง๐™ซ๐™ž๐™˜๐™š๐™จ ๐™Ž๐™š๐™˜๐™ฉ๐™ค๐™ง The ISM Services Index showed short-term strength but potential longer-term slowdown. The headline index rose to 51.6, indicating expansion. New orders hit a 5-month high (52.3).While the near-term outlook is solid, underlying signs point to future weakness. ๐™๐™š๐™™๐™š๐™ง๐™–๐™ก ๐™๐™š๐™จ๐™š๐™ง๐™ซ๐™š (๐™๐™Š๐™ˆ๐˜พ) ๐™‹๐™ค๐™ก๐™ž๐™˜๐™ฎ The Fed kept interest rates steady (4.25%โ€“4.50%) amid economic uncertainty. Fed Chair Jerome Powell emphasized caution and said the Fed is in no rush to cut rates. The direction of future policy will depend on data and trade developments. The Fed acknowledged that tariffs could fuel both inflation and slower growth. ๐™๐™ง๐™–๐™™๐™š ๐˜ฟ๐™š๐™ซ๐™š๐™ก๐™ค๐™ฅ๐™ข๐™š๐™ฃ๐™ฉ๐™จ Donald Trump announced a new โ€œmajor trade dealโ€ with the UK, though markets saw little reaction, suggesting it was already priced in. More significantly, U.S. imports from Europe surged, indicating that companies anticipated potential trade changes. This โ€œfrontloadingโ€ of goods hints that businesses expect more trade friction with China. Shipping traffic from China to the U.S. has resumed, and major retailers like Walmart are willing to pay tariffs to restore supply chains. This suggests a critical window of 20โ€“40 days for trade agreements to be finalized before these shipments arrive. U.S. Treasury Secretary Scott Bessent described the trade talks with China as "productive," although details will be provided at a later time. ๐˜พ๐™ค๐™ฃ๐™˜๐™ก๐™ช๐™จ๐™ž๐™ค๐™ฃ The earnings season for Q1 2025 has been strong, with the market rewarding good news more than usual and being less harsh on disappointments. Improved forward guidance and resilient economic indicators support investor optimism, despite underlying risks such as inflation, regulation, and trade tensions. Thank you for your support $AMD (Advanced Micro Devices Inc) $NVO (Novo-Nordisk A/S SPONS ADR) $BTC (Bitcoin) $ETH (Ethereum)
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