💰 5 Fact Friday: Tech’s Tale Of Two Business Models

STOCKS
1. Tech’s Tale Of Two Business Models 🚀

More than a third of the S&P 500 reported this week in the busiest stretch of earnings season so far. Out of 180+ companies, here’s the highlight reel—starting with the tech titans.

Meta $META ( ▲ 0.17% ) crushed it. Revenue jumped 16% to $42.3B as ad impressions rose 5% and ad prices climbed 10%. Despite jacking up its 2025 AI capex forecast to a staggering $68B and burning $4.2B in Reality Labs, earnings per share (EPS) still surged 37%.

Microsoft $MSFT ( ▲ 0.51% ) impressed across all major segments. Revenue climbed 13%, and EPS beat by over 22%. Cloud grew 20%, and Azure soared 33% as AI adoption continues to provide a tailwind. Capex came in hot at $16.7B, but margins are still trending up. Oh, and tariffs? Only mentioned once.

Apple $AAPL ( ▼ 0.36% ) beat expectations on both the top and bottom line, delivering $1.65 EPS on $95.4 billion in revenue. The company sold more iPhones, Macs, and iPads than analysts anticipated. Services revenue rose 12% to $26.7B, though it came in slightly under forecasts.

Tim Cook noted Apple is already sourcing over half of U.S. iPhones from India and most other products from Vietnam, helping manage tariff risk. The board also approved a massive $100B buyback and a 4% dividend increase to 26 cents per share.

Amazon $AMZN ( ▲ 0.98% ) also delivered strong headline numbers, reporting 9% revenue growth and EPS of $1.59, a 16% beat over estimates. However, Q2 sales guidance was muted due to tariff uncertainty. After all, about 70% of its goods are sourced from China.

The company also made headlines for considering a checkout feature that itemized tariff costs, before reversing course under pressure from the White House.

Qualcomm $QCOM ( ▼ 2.6% ) reported 15% revenue growth, topping expectations across the board. But soft forward guidance and 46% China revenue exposure spooked investors, sending shares lower.

Bottom Line: Services-focused companies like Meta and Microsoft outperformed as investors cheered margin strength and AI momentum. But product-reliant peers—Apple, Amazon, and Qualcomm—faced a cooler reception as tariff risks and weaker guidance clouded the outlook.

OUR PARTNER: PERCENT
Wall Street’s Worst-Kept Secret To Beating Volatility

Market chop in 2025 has even the pros bracing for turbulence. Where’s the smart money hiding? Private credit—a $2T market that barely flinches when the S&P wobbles.

Percent lets accredited investors run the same play with as little as $500 (2024 investors netted 14.9%):

• 📅 Monthly income potential

• ⏲️ ≈ 9-month average terms

• 🔗 Low correlation to stocks

Ready to swap red-ink stress for predictable cash flow?

Claim up to $500 on your first investment »

STOCKS
2. Earnings Season Offers Glimpse Of What’s Ahead 🔮

Outside the tech giants, the rest of the market delivered a little bit of everything—earnings beats, guidance pulls, and some good old-fashioned tariff tension.

Visa $V ( ▼ 0.09% ) narrowly beat expectations on strong cross-border spending and steady consumer demand. They left guidance unchanged and announced a shiny new $30B buyback.

Spotify $SPOT ( ▼ 0.97% ) missed profit estimates badly—reporting EPS of €1.07 vs. expectations of €2.13. However, monthly active users (MAUs) rose 10% to 678M and premium subscribers hit 268M, both in line with guidance.

Robinhood $HOOD ( ▲ 1.43% ) surged on rising trading volumes and expanded its buyback program by $500M. Plus, earnings more than doubled.

Coca-Cola $KO ( ▼ 0.99% ) beat earnings and largely reaffirmed its full-year guidance, calling tariffs “manageable.”

Snap $SNAP ( ▲ 1.81% ) beat revenue expectations but declined to offer guidance. Shares tanked after the company warned of softening ad spend, especially as a result of eliminating the de minimis import exemption.

Starbucks $SBUX ( ▲ 1.19% ) missed on both revenue and earnings, with same-store sales falling for the fifth straight quarter. CEO Brian Niccol called the results “disappointing,” but insisted that the brand is gaining “momentum” in its turnaround.

Yum Brands $YUM ( ▼ 0.64% ) was a mixed bag: Taco Bell posted 9% same-store sales growth, KFC was up 2%, and Pizza Hut declined 2%.

Royal Caribbean $RCL ( ▲ 0.27% ) raised guidance on record bookings and lower fuel costs. Norwegian $NCLH ( ▲ 1.28% ) held firm despite “softening” demand.

ECONOMY
3. GDP Falls, Markets Rise Anyway 🧐

On the surface, the U.S. economy shrank in Q1.

GDP declined 0.3%, marking the first contraction since early 2022. That’s a steep drop from last quarter’s 2.4% gain and a far cry from the 0.8% growth economists were expecting.

But hang on.

This “bad” GDP print was almost entirely driven by a 41% spike in imports, as businesses scrambled to stockpile goods ahead of Trump-era tariffs set to resume this summer.

Since imports subtract from GDP, that surge erased more than five full percentage points from the headline number.

Under the hood? The economy actually held up surprisingly well.

Consumer spending rose 1.8%—the slowest pace since mid-2023, but still solid given all the doom and gloom in consumer sentiment surveys. Business investment in equipment soared 23%, likely another byproduct of the tariff pull-forward.

Meanwhile, the Fed’s preferred inflation gauge—core PCE—was flat month-over-month and up just 2.6% year-over-year. That keeps the door open for rate cuts in what looks like a healthy but cooling economy.

After a sharp drop at the open from the shock of a negative GDP headline, Wall Street caught on. Markets digested the details, recognized the short-term distortions, and ultimately finished the day in the green.

Remember, GDP is backward-looking and the stock market is forward-looking. So this is the kind of x-ray vision we need to get a real-time read on economic strength.

Still, you can’t have it both ways.

If you normalize this quarter’s GDP to adjust for early import activity, you’ll need to do the same next quarter—when those purchases won’t happen again.

A drop in imports could boost Q2’s GDP and give the opposite illusion of an economy heating up, when it’s really just feeding off last quarter’s inventory binge.

Bottom Line: The economy isn’t stalling, yet. But thanks to the tariff pull-forward, Q2’s GDP report just got a lot more consequential.

OUR PARTNER: MONEY PICKLE
Ever Wondered What A Financial Advisor Could Do For You? Find Out (For Free)

Overwhelmed by financial decisions? Let Money Pickle connect you with a vetted advisor who understands your needs—no strings attached.

Just answer a few questions and pick a time for a relaxed video chat. Talk about retirement, taxes, estate planning, Social Security—whatever's on your mind. Walk away with insights to change your financial future 

Start your free financial match today →

OPTIONS
4. How To Make Your Stocks Work Overtime 💼

Covered calls are one of the most popular (and practical) income strategies for long-term investors.

If you’re sitting on 100+ shares of a stock you wouldn’t mind selling at the right price, this move lets you squeeze some extra cash out of your holdings—without selling yet.

Here’s how it works:

1. You own stock XYZ, trading at $50.
2. You sell a call option with a $55 strike price.
3. You collect the premium—say, $2 × 100 shares = $200.
4. If XYZ stays below $55 until expiration, the option expires worthless. You keep both the shares and the $200.
5. If XYZ rises above $55, your shares get “called away” (sold at $55), and you still keep the premium.

📈 Why It Works

• Extra Income: You get paid the premium regardless of what happens.

• Softens Small Losses: The premium lowers your breakeven. In this example, if XYZ falls to $48, your net loss is $0 ($50 cost - $2 premium = $48 breakeven).

• Built-In Exit Plan: If you’re open to selling at a higher price anyway, this gives you a bonus on the way out.

⚠️ What to Watch Out For

• Capped Gains: If the stock surges, you’re stuck selling at the strike price.

• No Downside Protection: The premium helps, but you still lose if the stock drops significantly.

🧾 Tax Implications

• Option expires worthless: The premium is taxed as a short-term capital gain (at ordinary income rates).

• Option is exercised: The premium is added to your stock’s sale proceeds and taxed based on how long you held the stock.

• Option is closed early: The difference in premiums is treated as a short-term gain or loss.

✅ Best For

• Sideways markets: If your stock trades in a tight range, you keep earning income without losing your shares.

• Mild bull markets: You can sell calls a bit above market price, capture steady gains and premiums.

• Volatile markets: When market volatility (VIX) is high, option premiums get juicier—even if your stock doesn’t move much.

• Income-focused investors: Especially retirees who want to boost yield from a stock they’re comfortable selling.

Bottom Line: Covered calls let you earn income from stocks you already own—especially when the market’s not doing much. Just remember: you're trading potential upside for steady cash flow.

STOCKS
5. Guess That Stock 🕵️‍♂️

This company started as a textile mill before pivoting to insurance, buying cash-rich businesses, and quietly transforming into a $1.1 trillion investment powerhouse.

Can you name the stock?

1. This global holding company owns more than 65 businesses outright, including a freight railroad, a utility powering millions of homes, and good ol’ See’s Candies.

2. It has delivered nearly 20% average annual returns for six decades, driven by a strategy of avoiding fads and betting on time-tested, cash-rich businesses.

3. The firm’s latest move? Raising its stake in five of Japan’s largest trading houses to nearly 10% apiece.

4. The 94-year-old CEO is hosting the company’s annual shareholder meeting, jokingly called “Woodstock for Capitalists,” in Omaha, Nebraska, on May 3rd.

5. Retail investors flock to the company’s quarterly 13F filings, hoping to mimic the trades of arguably the greatest investor alive.

Got a guess? Tap here to reveal the answer → 

Thanks For Reading!

Spread The Wealth 💸

Like what you read? Do me a favor and don’t keep it a secret! Send this newsletter to a friend and help them level up their financial game—one fact at a time.

Click the button above -or- copy and paste this link: https://read.themoneymaniac.com/subscribe?ref=PLACEHOLDER