Google tanks after earnings miss! 05/02/2025

HOT stories for today

Google tanks after earnings miss
 

• Alphabet shares fell as much as 9% in after-hours trading Tuesday after reporting lower-than-expected fourth-quarter revenue and announcing a $75 billion investment in AI expansion for 2025. The company posted revenue of $96.47 billion, slightly missing estimates, while cloud revenue disappointed at $11.96 billion versus the expected $12.19 billion. Despite a 30% year-over-year cloud growth, Alphabet struggles to keep pace with Amazon Web Services and Microsoft Azure.
• Overall revenue growth slowed to 12% from 13% a year ago, with ad revenue and search growth also slightly declining. The company plans higher capital expenditures, expecting up to $18 billion in the first quarter, exceeding analyst projections. Alphabet’s “Other Bets” segment, including Waymo and Verily, fell short of expectations, though Waymo continues expanding its robotaxi operations.
• In a controversial move, Google quietly removed its pledge to refrain from using AI for weapons and surveillance, raising concerns over the ethical implications of its AI expansion. Despite the revenue miss, Alphabet remains committed to AI-driven growth, though rising costs, slowing momentum, and ethical questions surrounding its AI policies add uncertainty to its long-term outlook.

 
Stocks on the move:       

• Advanced Micro Devices (AMD): Shares of the semiconductor company declined 4% after reporting weaker-than-expected fourth-quarter data center revenue. The segment generated $3.9 billion, falling short of the $4.14 billion consensus estimate from StreetAccount.
• Lumen Technologies (LUMN): The telecom stock jumped 8% following stronger-than-expected fourth-quarter earnings. The company posted adjusted earnings of 9 cents per share on revenue of $3.33 billion, surpassing analyst forecasts on both metrics.
• Electronic Arts (EA): The video game publisher’s stock edged up 1% despite exceeding third-quarter expectations. EA reported earnings of $1.11 per share, with net bookings reaching $2.22 billion for the quarter.
• Chipotle Mexican Grill (CMG): Shares of the fast-casual restaurant chain slid nearly 5% after fourth-quarter same-store sales growth came in lower than anticipated. The company also projected only low- to mid-single-digit growth for the key metric in fiscal 2025.
• Snap (SNAP): The social media company’s stock surged almost 8% after delivering better-than-expected fourth-quarter results. Snap reported adjusted earnings of 16 cents per share on revenue of $1.56 billion, exceeding Wall Street estimates.

 
Today’s action

• Asian markets largely advanced on Wednesday, following Wall Street’s overnight gains, as investors shrugged off ongoing trade tensions between the U.S. and China. Despite newly announced Chinese tariffs in response to U.S. duties, market sentiment remained resilient, with attention turning to China’s return to trading after the Lunar New Year break. China’s retaliatory tariffs on U.S. imports are seen as largely symbolic, according to Morningstar Asia equity analyst Kai Wang, who noted that only around 12% of total U.S. imports to China would be affected. Meanwhile, fresh economic data signaled a slowdown in China’s services sector, with the Caixin Services PMI for January coming in at 51.0, down from 52.2 in December. Hong Kong’s Hang Seng Index declined 1.34%, reversing gains from the previous session, as concerns over China’s economic growth persisted.
• In the U.S., stock futures slipped Tuesday night after Alphabet reported weaker-than-expected revenue, tempering optimism from earlier gains in major indices. S&P 500 futures dipped 0.2%, Nasdaq 100 futures lost 0.3%, and Dow Jones Industrial Average futures edged lower by 16 points, or less than 0.1%. The earnings season continues, with Walt Disney and Uber Technologies set to report their latest results before the market opens. Additionally, investors are closely watching key economic reports, including the ADP private payrolls data, international trade figures, and the ISM Services Index, which could provide further insight into the economic outlook.

Wahtclist: GOOGL, AMD, MDLZ, CMG, AMGN, DIS, UBER, NVO, SNAP

Bitcoin

• Bitcoin’s brief rally came to an abrupt end late in the U.S. trading session, tumbling 4.8% over the past 24 hours to $96,900 after reaching a high of $101,000 just two hours earlier. The broader crypto market also took a hit, with altcoins such as Solana (SOL), XRP, Cardano (ADA), and Chainlink (LINK) suffering losses of 6%-10%, while Ether (ETH) declined by 5.3%.
• The sharp downturn coincided with a press conference led by White House crypto and AI czar David Sacks, alongside key Senate and House committee heads. Many in the market had anticipated a discussion on the possibility of a U.S. strategic bitcoin reserve, but instead, the focus remained heavily on regulatory concerns. When questioned about the potential reserve, Sacks briefly acknowledged that a White House working group was exploring the feasibility but offered no concrete details. He also deferred questions about the newly announced sovereign wealth fund, directing them to Commerce Secretary nominee Howard Lutnick and Treasury Secretary Scott Bessent, who are leading the initiative.
  Watchlist: Bitcoin: 89 000-108 000, Ethereum: 2200-3000, Solana: 180-276

Forex

• EUR/USD remains range-bound near its weekly peak after rebounding from the 1.0200 level, its lowest since January 13. Spot prices hover around 1.0375-1.0380, showing little change as traders weigh conflicting fundamentals. The U.S. dollar struggles to attract buyers due to growing expectations of Federal Reserve rate cuts, offering support to the euro. However, concerns over Trump’s trade tariffs and the European Central Bank’s dovish stance limit further upside for the pair.
• The Japanese Yen (JPY) surged to its strongest level since December 13 against the U.S. dollar, driven by rising expectations of another Bank of Japan (BoJ) rate hike. A recent increase in Japan's real wages reinforced speculation that the central bank will continue tightening, in contrast to the Federal Reserve, which is expected to cut rates twice this year. The prospect of a narrowing Japan-U.S. rate differential further supports the yen, though a broadly positive risk sentiment and concerns over Trump’s trade tariffs may limit its safe-haven appeal. Despite strong intraday gains, the yen has pulled back slightly from its session high in early Asian trading.
  Watchlist: EUR/USD: 1.0200-1.0550, USD/JPY: 153.6-158.80

Basic Materials

• Gold prices (XAU/USD) climbed to a new all-time high of $2,858 per ounce in Asian trading Wednesday, driven by renewed U.S.-China trade war fears and expectations of continued Federal Reserve rate cuts. Concerns over a slowing U.S. labor market further boosted demand for the non-yielding metal, though an overbought RSI suggests caution for bullish traders.
• Meanwhile, crude oil prices remained under pressure, with West Texas Intermediate (WTI) hovering around $72.20 per barrel for a third consecutive losing session. While Trump’s renewed push to cut Iran’s oil exports to zero provided some support, fresh Chinese tariffs on U.S. coal, LNG, and crude oil weighed on sentiment. Adding to the bearish outlook, U.S. crude inventories surged by 5.025 million barrels last week, surpassing expectations and raising concerns over weakening demand.
  Watchlist: GOLD 2600-2822, US Oil: 70.00-79.00

Key Economic Events Today:

EST time:
04:00 am: EUR Final Services PMI
05:00 am: EUR PPI
08:15 am: USD ADP Non -Farm Employment Change
08:30 am: USD Trade Balance
09:00 am: USD FOMC MEmeber Barkin Speaks
09:45 am: USD Final Services PMI
10:00 am: USD ISM Services PMI
10:30 am: USD Crude Oil Inventories
 

Earnings

BMO (Before the US Market opens)
NVO     Novo Nordisk
DIS       Walt Disney Comp. 
BSX      Boston Scientific Corp.
UBER   Uber Technologies 

AMC (After the US Market closes): QCOM, ARM, MCK, MSTR

The TEFS Analyst team wishes you a successful day!