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  • 😱 Alphabet Surprise Earnings Beat

😱 Alphabet Surprise Earnings Beat

+ Airlines to 2025 Forecasts: “We’re Good, Thanks”

April 24, 2025

Good afternoon! Tesla’s energy business may have saved its earnings but now it’s in tariff trouble. While net income plunged from $1.4 billion to just $409 million and vehicle sales dropped 20%, energy storage revenue surged 67% to $2.73 billion. Investor Ross Gerber summed it up best: “Looks like energy storage saved some pretty dismal numbers from Tesla.”

But the bright spot may not last. Tesla’s CFO warned that Trump's China tariffs will hit its energy unit hardest, since it imports key battery cells from China. While Tesla is trying to shift production to the U.S., it's running into equipment shortages and the clock is ticking.

MARKETS

  • Stocks rallied for a third straight day Thursday, with Big Tech leading the way. The Nasdaq popped 2.7%, while the S&P 500 rose 2.1% and the Dow gained 487 points. Alphabet’s earnings and a rebound in the “Magnificent Seven” helped push the rally into high gear.

  • The boost came after softer tariff talk from the White House and reassurances from Fed officials that they’d act if tariffs hit growth. Even as China denied negotiations, Trump claimed meetings were happening giving markets just enough hope to keep climbing.

STOCKS
Winners & Losers

What’s up 📈

  • ServiceNow soared 15.49% after the enterprise tech company posted a beat-and-raise earnings report. ($NOW)

  • Texas Instruments popped 6.56% thanks to a strong first quarter and healthy fiscal guidance. ($TXN)

  • Freeport-McMoRan shares increased 6.93% after posting a profit for the first quarter, slightly topping expectations. ($FCX)

  • Newmont gained 4.80% after reporting strong earnings thanks to gold’s incredible run. ($NEM)

  • Amazon rose 3.29%, indicating continued demand for AI data centers. ($AMZN)

  • Nvidia climbed 3.62% despite earlier losses. ($NVDA)

What’s down 📉

  • Nokia tumbled 8.47% following a big earnings miss last quarter, warning of tariff impacts. ($NOK)

  • Comcast sank 3.71% after losing 199,000 broadband customers despite beating estimates. ($CMCSA)

  • Procter & Gamble fell 3.74% after reporting a revenue loss and cutting full-year guidance. ($PG)

  • IBM dropped 6% despite topping first-quarter earnings and revenue expectations. ($IBM)

  • PepsiCo dipped 4.89% after a first-quarter report that reflected lower-than-expected earnings. ($PEP)

EARNINGS
Alphabet Beat Estimates on Google Search Advertising

Alphabet just reminded Wall Street that despite all the AI buzz, its search ads still print money. The tech giant reported Q1 revenue of $90.2 billion and net income of $34.5 billion, blowing past estimates thanks to a strong showing from Google’s core ad business. Search alone brought in $50.7 billion, and overall ad revenue hit nearly $67 billion—helped along by resilient spending from retail, travel, and healthcare.

Cloud Climbing, AI Costs Climbing Faster

Google Cloud continued its slow-and-steady glow-up, bringing in $12.3 billion in revenue and $2.2 billion in operating profit—outpacing estimates despite slightly slower growth. But Alphabet is burning cash to stay in the AI race, racking up $17.2 billion in capital expenditures this quarter and sticking to its plan to spend $75 billion this year. It also announced its largest acquisition ever: buying cybersecurity startup Wiz for $32 billion.

YouTube Stays Sticky, Antitrust Clouds Loom

YouTube pulled in $8.9 billion—just under forecasts—but the platform continues to grow its subscription and podcast footprint. Meanwhile, Alphabet’s AI-generated “Search Overviews” may be winning users but losing friends in the open web. And don’t forget: the company is still facing potential remedies from two major antitrust rulings that could eventually force a breakup.

No Guidance, But a $70B Flex

In true tech giant fashion, Alphabet gave no forward guidance. But it did announce a fresh $70 billion in share buybacks and a 5% dividend hike. Execs vaguely warned of a “slight headwind” from Trump’s latest tariff moves, especially the closing of the de minimis loophole that lets small-ticket imports dodge duties—a blow for ad-spending powerhouses like Shein and Temu.

Bottom Line: Search is keeping the lights on, cloud is gaining traction, and AI is eating the budget. Alphabet isn’t reinventing itself just yet, but it’s got the cash and apparently, the confidenceto keep investors on board.

NEWS
Market Movements

AIRLINES
Airlines to 2025 Forecasts: “We’re Good, Thanks”

American Airlines just became the latest major carrier to yank its full-year outlook, joining Delta, Southwest, and Alaska in what’s turning into a group retreat from 2025 forecasting. The airline posted Q1 revenue of $12.55 billion and a smaller-than-expected loss of $0.59 per share. But instead of mapping out the rest of the year, American shrugged and said... ask again later.

Tariffs, Uncertainty, and Checked Bags

Blame Trump’s tariffs, softening demand, or just plain nerves—whatever the cause, airlines are flying blind into summer. United was the only major U.S. airline that dared to issue two forecasts: one if the economy holds up, and one if it doesn’t. Southwest is trimming flights, cutting costs, and even abandoning its last major freebie—bags will soon come with a fee. Meanwhile, American’s CEO summed up the mood: “Aircraft cost too much already and I don’t want to pay any more.”

The industry’s about-face has wiped over $32 billion off the big four airlines’ market caps this year. Alaska Airlines says it expects a 6% revenue hit in Q2, citing softening leisure travel. Business and government travel are also drying up fast, and while premium-cabin flyers are still spending, economy seats are suddenly a harder sell.

Hotels and Booking Sites, You’re Next

It’s not just the skies that are getting cloudy. Analysts warn that hotel chains and travel platforms like Expedia and Airbnb could soon feel the pressure. U.S. lodging spend declined in Q1, and short booking windows mean companies with domestic footprints will be first in line for a slowdown.

Bottom Line: The airline industry was hyping 2025 as a comeback year. Now, no one wants to even guess. With tariffs looming and travel spending fading, carriers are playing defense—and hoping this economic turbulence passes before they run out of altitude.

Calendar
On The Horizon

Tomorrow

Tomorrow’s economic calendar is light, featuring just the final consumer sentiment reading. Spoiler alert: there won’t be much of a surprise here, as final numbers typically don’t stray far from the preliminaries.

On the earnings side of things, we’ve got a fascinating lineup: AbbVie ($ABBV), Phillips 66 ($PSX), Keyence ($KYCCF), HCA Healthcare ($HCA), Charter Communications ($CHTR), Schlumberger ($SLB), Centene ($CNC), Advantest ($ADELY), and LyondellBasell ($LYB) are all set to reveal their latest figures.

NEWS
The Daily Rundown

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