US Earnings Season Continues

29/07/25

With nearly one-third of the S&P 500 set to report earnings this week, markets are bracing for updates that could significantly reshape expectations across the index. The focus now turns to the remaining members of the “Magnificent Seven,” following last week’s mixed performances from Tesla and Alphabet and disappointing results from Lockheed Martin and Intel. Alongside Big Tech, attention will also be on a slate of disruptive and fast-growing companies—including PayPal, Spotify, Robinhood, MicroStrategy, and Reddit—as well as embattled sector leaders Boeing and UnitedHealth Group, both of which face heightened scrutiny heading into a pivotal round of earnings. 

Last Week’s Recap 

Tesla and Alphabet were the first of the major tech firms to report, setting a complicated tone. Alphabet surpassed expectations, posting strong double-digit quarterly revenue growth of 10% supported by a rebound in digital advertising and improving performance in its Google Cloud unit. Its results reassured markets that demand for AI-enabling infrastructure and services remained intact. Tesla, on the other hand, delivered a less encouraging update – with the stock falling by 9% in a single trading session. The electric vehicle manufacturer reported a decline in vehicle deliveries and tightening margins, reinforcing concerns about persistent pricing pressure and uncertain consumer demand. Although CEO Elon Musk offered optimism on future autonomous driving initiatives and energy storage, the financials underscored the challenge of scaling profitability in a more competitive global EV market. 

Elsewhere, Lockheed Martin fell by more than 10% after disappointing investors hoping for more robust defence-sector outperformance. Earnings per share (EPS) came in well below analysts’ forecasts at $1.46, significantly underperforming the expected $6.54. The miss was primarily due to $1.6 billion in pre-tax charges tied to multiple programs, including a $950 million expense related to a classified Aeronautics project and a $570 million loss from the Canadian Maritime Helicopter Program. Intel stock also suffered a greater than 10% fall last week after revealing a $2.9 billion quarterly loss and announcing it would slash 15% of its workforce to streamline its core operations and divest from anything that does not fit CEO Lip-Bu Tan’s new AI-first strategy.

The Week Ahead 

Attention now turns to the remainder of Big Tech, with Microsoft and Meta reporting on Wednesday, followed by Apple and Amazon on Thursday. Together, these four firms account for nearly one-fifth of the S&P 500’s market capitalisation, and their results could have outsized influence on market direction. 

For Microsoft, expectations are high for continued growth in its Azure cloud division and early monetisation of its AI integrations across Microsoft 365 and GitHub Copilot. Meta will need to demonstrate resilience in advertising demand while also accounting for ongoing investment in Reality Labs, its metaverse and AI hardware division, which remains a persistent drag on earnings. Amazon is likely to face questions over AWS growth deceleration and consumer spending trends in its core e-commerce business. Apple, which has yet to unveil a significant AI roadmap, may focus more on services revenue and regional sales trends, particularly in Greater China and Europe, where currency effects and tariffs may impact performance. 

Collectively, these reports will be critical in determining whether the stock market’s recent strength is underpinned by solid fundamentals. 

Beyond the giants, a wide array of growth and platform-based companies are set to report in the coming days. PayPal and Spotify will be watched closely for updates on user engagement, monetisation, and margin dynamics. Both companies are operating in increasingly competitive environments, with analysts debating whether their recent share price recoveries are justified by underlying revenue expansion. Spotify, in particular, trades at elevated valuation multiples, putting pressure on management to deliver meaningful gains in average revenue per user and continued progress on podcast and advertising monetisation. 

Robinhood and MicroStrategy represent another cohort of companies benefiting from cyclical interest in retail trading and digital assets. Robinhood’s recent growth in net new accounts and trading volumes will be examined alongside any revisions to its earnings outlook. MicroStrategy remains tightly linked to the performance of Bitcoin, given the firm’s substantial cryptocurrency holdings and leveraged strategy. Both companies are sometimes viewed as barometers for broader retail sentiment and speculative asset appetite. 

UnitedHealth Group will provide a different perspective altogether. Its share price has fallen by nearly 50% since mid-May, putting the stock on track for its weakest annual performance in over ten years. The sharp decline followed a steep drop in earnings from its core Medicare Advantage operations and its Optum Health physician network. The fallout triggered the sudden departure of CEO Andrew Witty, prompting the board to bring back former chief executive Stephen Hemsley and withdraw the company’s forward earnings guidance. Compounding investor concerns, UnitedHealth is now the subject of both civil and criminal investigations by the U.S. Department of Justice related to its Medicare billing practices. 

Boeing is also set to report second-quarter earnings this week, with analysts forecasting a narrowed loss of around $1.38 per share on revenue of approximately $21.9 billion, up 30% year-over-year. While improved delivery volumes and commercial aircraft demand have lifted expectations, the company remains under pressure from ongoing manufacturing quality issues and FAA-imposed production limits. Labour unrest in St. Louis also adds near-term risk. Despite these challenges, shares are up over 30% in recent months as markets look for signs of operational stability, clearer delivery schedules, and progress toward break-even performance. 

Rounding out the week is Reddit, which is set to report its second-quarter financial results on Thursday, analysts expect revenue to reach around $425 million, up roughly 51% year-over-year, driven by robust digital advertising demand and expanding data licensing partnerships. Attention is also focused on daily active user (DAU) growth, which has slowed from 37% in early 2024 to about 31% in early 2025, following changes in Google’s search algorithms such as AI Overviews that reduce click-through rates to sites like Reddit. The company recently introduced a tool called “Reddit Community Intelligence,” designed to convert its sprawling 22+ billion post database into structured marketing insights – an effort that signals its ambition to grow beyond traditional in-thread advertising.

This confluence of established tech giants, high-growth disruptors, and sector bellwethers makes this week’s earnings slate one of the most consequential of the season. Expectations are high: as of last week, roughly 20% of the S&P 500 had reported, with more than 80% exceeding profit estimates – a trend that if sustained, could lift full-quarter growth toward the upper bound of current forecasts. According to FactSet, aggregate Q2 earnings for the index are now expected to rise between 4% and 5% year-on-year, driven largely by tech and communications firms. 

Yet with equity valuations stretched and macroeconomic headwinds still unresolved – the margin for disappointment is thin. As Microsoft, Meta, Apple, and Amazon take centre stage, alongside a cohort of agile growth names, the coming days may prove decisive in determining whether the second-quarter earnings season extends the market rally or triggers a reassessment of recent gains. 

This article is for informational purposes only and does not constitute investment advice, a personal recommendation, or an offer or solicitation to engage in any investment activity. The mention of any security, commodity, or issuer should not be interpreted as a recommendation to buy or sell. Any views expressed are based on public information believed to be reliable at the time of writing, but no representation or warranty is given as to its accuracy or completeness. 

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