The Q2 2025 earnings season begins this week, with analysts forecasting modest S&P 500 EPS growth of 4.8%, the lowest rate since Q4 2023.
Early reports have already painted a mixed picture, showing strong AI and travel demand ( $MU, $DAL ) but softness in consumer goods and shipping ( $NKE, $FDX). The spotlight is now on the big banks, with $JPM, $C, $WFC, and others reporting Tuesday and Wednesday. In their reports, we'll be watching for commentary on three key themes: credit quality, a potential recovery in investment banking, and the expected plateau in net interest income. Source: Wall Street Horizon
Q2 earnings season is starting this week with the banks as usual!
Source: Earnings Whispers
About 85% of SP500 companies are now in buyback blackout, taking away some of the important supportive flows ahead of Q2 earnings season.
Source: Markets & Mayhem, GS
So far very few US earnings downgrades...
Source: GS, Ronnie Stoeferle @RonStoeferle
The latest earnings reports offer some reassurance that capital spending (capex) remains strong, says Melius’s Reitzes.
Hyperscalers haven’t cut back on their investments, which is good news for AI-related stocks like Nvidia, Broadcom, and Arista Networks. Source: HolgerZ, Melius Research
Microsoft ($MSFT) announced its third quarter earnings after the bell on Wednesday, beating expectations on the top and bottom lines on the strength of its cloud performance.
hares of Microsoft rose more than 6% on the news. $MSFT Microsoft Q3 FY25 (ending March): ☁️ Azure +35% Y/Y fx neutral (31% in Q2). 🤖 16% of Azure revenue attributed to AI. • Revenue +13% Y/Y to $70.1B ($1.6B beat). • Operating margin 46% (+1pp Y/Y). • EPS $3.46 ($0.24 beat). Source: App Economy Insights, www.zerohedge.com
Social media giant Meta (META) reported its first quarter results after the bell on Wednesday, beating on the top and bottom lines.
But the company also raised its full-year capital expenditure estimates to between $64 billion to $72 billion, up from $60 billion to $65 billion. Despite fears of an advertising slowdown amid tariff uncertainty, Meta says it anticipates Q2 revenue of between $42.5 billion and $45.5 billion, ahead of Wall Street's expectations of $44 billion. $META Meta Q1 FY25: 👨👩👧👦 Daily active people +6% Y/Y to 3.43B. 👀 Ad impressions +5% Y/Y. • Revenue +16% Y/Y to $42.3B ($1.0B beat). • Operating margin 41% (+4pp Y/Y). • EPS $6.43 ($1.21 beat). • FY25 Capex: $64-$72B (prev. $60-$65B).
US earnings expectations versus US economic growth surprises dichotomy
▶️ While macro growth expectations continue to fade, EPS expectations are down only modestly (and actually starting to inflect modestly higher in the last couple of days)... Source: Bloomberg, www.zerohedge.com
