Chip-equipment giant Applied Materials has been a very tough moving target for the Street.

Over a month ago, analysts cut price targets on the stock to account for what they expected would be diminished business as a result of U.S. president Donald Trump’s global tariff regime.

The shares actually rallied subsequently, rising nineteen percent in the past month. But, it turns out, those cuts weren’t enough, as almost everyone is again cutting price targets on Friday morning, following Applied’s second-quarter fiscal earnings report Thursday evening.

The stock is down six percent today, at $163.73.

The report itself was fairly standard stuff from Applied, with revenue and profit that topped expectations as usual. But it was also the third quarter in a row that the revenue outlook for the current quarter came in below consensus.

Today’s drop of six percent in the stock is the fifth quarter in a row that Applied shares have sold off on its announcement — a consequence of just how complex it is at the moment to get comfortable with Applied’s prospects.

The first quarterly report of a newly public company typically reveals some stuff people didn’t expect when the company was pitching its stock.

You already knew spending was enormous on the part of CoreWeave of Livingston, New Jersey, which went public in March. But Wednesday night’s first-quarter report revealed even higher expenses that are diminishing its profit outlook this year.

The shares fell sharply in late trading Wednesday, and are down four percent today, at $65.27, but that’s after a very healthy seventy-percent return since the March 28th IPO,

CoreWeave is a competitor of sorts to the Big Three cloud computing operators, Alphabet’s Google, Amazon, and Microsoft. The company combines GPU chips to run massive AI projects that would be too expensive for customers to build on their own. That comes with big expenses.

• This is a two-week recap since the last podcast on April 28th.

• We’re now done with the two heaviest weeks of the earnings season, and it’s been overall a very positive one. We’ve had a flood of earnings reports in the past two weeks, over 150. 

• There have been very few disasters, and quite a few positive reports.

• More than earnings results, it’s really been the news of a thaw in the tariff and trade situation that had so scared investors. That has produced a “risk-on” behavior. 

• During these two weeks, the Nasdaq Composite Index and the Standard & Poor’s 500 Index have largely recouped their losses for the year. The TL20 group of stocks worth considering has done even better, driven by gains in Seagate Technology, Coherent, and Nvidia. 

Absci is a startup biotech company founded in 2011. I’ve been following the company since 2022, and visited their satellite research office on 57th Street in Manhattan in December of that year to profile founder and CEO Sean McClain. 

To date, there’s been little to report about Absci, a “development-stage” company, but Tuesday evening was a big deal.

For the first time in the history of the company, Absci is in clinical trials for a drug. On Monday, it began dosing participants in a Phase I clinical trial for ABS-101, the company’s proposed antibody against the autoimmune condition known as inflammatory bowel disease. 

Getting a drug into the clinic is a big deal, and something of a milestone when it’s a drug developed using “generative” artificial intelligence. In fact, every time an AI drug even makes it to trials, it could be considered a landmark. As Nature Magazine’s Melanie Senior reported in December, despite years of promises from AI startups, “No AI-enabled drug candidate has yet made it past regulators, despite several being in clinical trials.”

“Where we have real technology and platform advantage, we have, I think, the right to win.”

The surge of more than four percent in the Nasdaq Composite Index on Monday, prompted by the news that the White House and China and other nations are engaging in a “massive de-escalation” of tariff measures, was enjoyed by stocks of all different corners of tech.

Among double-digit gainers Monday afternoon were small-caps such as Applied Optoelectronics, up twenty-five percent; health IT provider Movano, up sixteen percent; and large-cap names such as Shopify, up almost fifteen percent.

Among names that may be directly boosted by the ninety-day pause, according to Citigroup’s Alicia Yap, is Pinduoduo, owner of online discount shopping operation Temu, along with other “cross-border sellers.” Yap raised her rating on the stock to Buy from Neutral, and raised her price target to $165 from $127.

And so we come to the end of a very packed earnings week, which has turned out to be fairly positive, on the whole. See the table at the bottom of the post for the full results.

This week had a bit of the underdogs turning into top dogs.

For example, quantum computing maker D-Wave Computing, which is the odd one in the quantum group, being that it uses an “analog” form of quantum, rather than gates (more here), rose more than fifty percent on Thursday after it said it booked its first system sale to a research house. That lead to revenue for the March quarter topping expectations by fifty percent, $15 million.

That will help D-Wave to close the gap with the revenue outperformance of competitor IonQ. IonQ’s own result, on Wednesday, was also nice, and shares rose nine percent the next day. 

I would note that D-Wave doesn’t forecast quarter to quarter, so you don’t know how much of this quarter’s success will carry through the rest of the year.

Sometimes the worst news is a little relief for investors. Shares of Advanced Micro Devices are up fractionally after the company Tuesday evening beat expectations, but also said that restrictions on sales of the most-advanced chips to China will hurt its sales the next two quarters by a combined $1.5 billion.

The stock has gotten one big vote of confidence today, from Merrill Lynch’s Vivek Arya raises his rating on the shares to a Buy from Neutral, and hikes his price target to $120 from $105, which is pretty good upside from today’s $99.19.

Arya writes that AMD’s $1.5-billion warning “addresses our pre-call concerns re China AI restriction headwinds and NVDA GPU competition.”

As long as nothing bad happens again with tariffs — and it could very well happen — some companies are seeing delightful business trends.

Fiber-optic vendor Lumentum, for example, is seeing no slowdown in its market for transceivers it sells to the cloud computing giants.

The stock is up six percent in early trading on Wednesday after the company not only beat expectations Tuesday night but also reaffirmed a plan it laid out last month to go from just under $500 million in revenue this past quarter to as much as $750 million per quarter by 2027.

The company’s sales to the cloud computing giants, the majority of its revenue, increased a very healthy sixteen percent in the quarter.

Palantir is “on fire,” according to founder and CEO Alex Karp, after the company beat revenue and profit expectations Monday evening, and raised its year outlook well above consensus, driven by a speed-up in most metrics, including its sales growth.

Said Karp, “We were the freak show,” recalling a time when the company found it hard to work with corporate America. Sales to U.S. firms rose seventy-one percent, year over year, a speed-up from the prior quarter. “We spent 20 years for this moment,” he said. 

Most analysts are having the same problem they had back in February: A very good report, an insane valuation. The stock is actually down in early trading by about eight percent. That is the same thing that happened a year ago in May. I suspect it is no big deal, merely a “sell-on-the-news” kind of trade.

Ever since tariff jitters emerged on April 2nd, with the White House’s announcement of “Liberation Day” tariffs on nations around the world, Netflix and other media names have been a safe haven. The stock was up twenty-four percent from that day through last Friday’s close.

But it may no longer be such a haven. The stock is down a little over a point today as the Street responds to the White House over the weekend announced it will direct the U.S. Department of Commerce to impose a one-hundred-percent tariff on overseas films, characterizing foreign films as a national security threat.

As The Wall Street Journal’s Ben Fritz relates, foreign production is something Netflix, and many other U.S. media producers and distributors, rely on.

Among the losers of earnings season Friday morning is Apple, which has gotten several price target cuts and two downgrades to the equivalent of Sell, after Tim Cook warned of much higher potential costs for the company, while saying that he can’t fully anticipate what will happen.

The stock is down five percent at $203.37.

The results of the March quarter that Apple reported Thursday evening were actually not bad, with iPhone revenue up two percent, Mac computer sales up seven percent, and iPad sales up fifteen percent, and overall revenue higher than expected.

The issue is really the tariff outlook Apple stopped forecasting its current quarter some years ago, so there’s no formal outlook on what things look like for the June quarter.

“If we go through a long period of uncertainty now, what will happen is AI will become the driver for maintaining headcount and increasing production.”

Some days, betting on the stock market is very simple: Just buy the biggest companies’ stocks. 

That’s a view that has lead to the dominance of the Mega Cap stocks, and, Wednesday evening, two of them delivered very reassuring news that drove their shares up sharply. Both Microsoft and Meta Platforms delivered revenue and profit for the March quarter that was ahead of consensus, and forecast this quarter higher as well. 

Microsoft stock is up about nine percent in pre-market trading and Meta shares are up about six percent.

Most interesting is that almost no one asked anything about tariffs and trade of these two companies. And management had very little to volunteer on the matter. 

This report was a big relief for Microsoft holders, after the company’s January report missed expectations for its “Intelligent Cloud” business. In particular, sales for the Azure cloud computing business rose thirty-five percent, which Stifel analyst Brad Reback deems “strong,” and a “return to form” for the business. The company maintained its outlook for its enormous capital spending this year — which will be a relief to vendors such as Arista Networks. 

Tuesday’s crop of earnings reports started to bring the first little bits of insight about the impact that The White House’s tariff initiative can have on tech businesses. The range of impact is quite striking, from solar-panel maker First Solar being hit hard to disk-drive maker Seagate confident in its ability to withstand the worst.

‘SIGNIFICANT’ RISK FOR FIRST SOLAR

Let’s start with the bad news. First Solar turned in a disappointing forecast for this quarter’s revenue, and also cut its outlook for the year by ten percent, warning that tariffs on India, Malaysia and Vietnam, where it makes solar modules, “creates a significant economic headwind for our manufacturing facilities,” said CEO Mark Widmar.

Even the lower ten-percent global tariff, said Widmar, unless passed along to the end customer, would “result in a meaningful adverse gross margin impact to sales into the United States.” Widmar said it’s possible nearly a fifth of the backlog of business the company has, as measured in gigawatts of capacity, may be canceled by First Solar or the company in order to avoid the extra costs.

• We've just gotten through the first big, big week of tech earnings, the week ending April 25th, and the reports were not bad, with Alphabet's Google, in particular, offering encouraging results for cloud and for advertising.

• As we enter the second big week, however, with Amazon, Apple and Microsoft all reporting this week, the headlines continue to be gloomy, with news about tariffs and trade now pointing to what economists warn are coming supply “shocks” — nothing on store shelves.

• For the week of the 25th, the Nasdaq Composite Index closed up 7%, the Standard & Poor’s 500 closed up 5%, and the TL20 group of stocks worth considering closed up 10%.

The Street thus far on Monday has had very little say about the report Sunday by The Wall Street Journal’s Liza Lin and Raffaele Huang that Chinese tech giant Huawei has been working on a new artificial intelligence chip that the company intends to rival Nvidia’s strongest parts.

Citing unnamed sources, Lin and Huang write, “Huawei has approached some Chinese tech companies about testing the technical feasibility of the new chip, called the Ascend 910D […] The company is slated to receive the first batch of samples of the processor as soon as late May.”

Huawei is a global telecommunications and smartphone maker that used to sell everywhere but that has been banned now in the U.S., and is in the process of being banned in Europe, for national security reasons.

Obviously, the article sounds a rather ominous note for Nvidia, if it suggests a whole industry could arise in China, given U.S. export restrictions, that begins to move the country away from Nvidia, perhaps ending Nvidia’s dominance of AI processing.   

It’s a tale of two giants Friday morning. Alphabet’s report Thursday evening was the pick-me-up the market needed, with Alphabet stock rising by almost four percent in pre-market trading.

Intel’s report, however, was not a pick-me-up, it was a wake-up call to just how much more work there is to be done for the company’s turnaround.

First the good news: the results at Alphabet, and the commentary, showed no slowdown in either the advertising business nor the cloud computing business, the latter of which continues to have to race to add capacity to meet demand, the company said.

The irony of the present moment is encapsulated in the earnings report Wednesday evening of Texas Instruments, the diversified chip maker that serves automotive, industrial, consumer and many other markets for chips.

TI’s diverse chip market has been dogged by inventories and sluggish demand for quite a while. Last night, the company turned in the best upside relative to expectations in years, and the best quarterly forecast in years. Management said areas such as industrial equipment are finally coming out from under that inventory pile-up.

The irony is that the uncertainty of the tariff and trade situation obscures or even negates what should be a triumphant moment for the company. On the call with analysts last night, CEO Haviv Ilan said that his company was reviewing the history of events such as the “Y2K” shock of 2000, and the COVID-19 lockdowns, looking for precedents.

Following better-than-expected results Wednesday morning, AT&T CEO John Stankey took analyst questions, including many about tariffs and trade. As I had alluded to in this week’s podcast, there wasn’t a lot that Stankey could say about the current macroeconomic situation because there is a lot that he and other executives can only guess at regarding where the tariff train is headed.

By way of background, the report was better than competitor Verizon’s report Tuesday morning. In a note to clients, Moffett-Nathanson’s longtime telecom observer, Craig Moffett, lays out the situation. It’s a “zero-sum game” in the U.S. telecom market, he notes, and AT&T has been playing its hand better than Verizon has, scooping up subscribers with more adept use of promotions. “On virtually every metric, AT&T outperformed Verizon,” notes Moffett. He expects that this year, Comcast will be particularly “aggressive” in trying to poach subscribers from AT&T, Verizon and T-Mobile.

Earnings season is ramping into high gear this week, and the first few reports out this week show little in the way of anxiety about tariff and trade uncertainty. Most of the business trends seem to be the same, good or bad, as we saw before tariffs and trade became the focus.

I noted yesterday that broadband equipment provider Calix had a good quarter on Monday evening. Here are a few others from overnight.

Shares of Vertiv, makers of special cooling systems for data center equipment racks, are up nineteen percent in early trading after the company’s revenue and sales beat expectations. More important, the company’s outlook for this quarter’s revenue came in four percent above expectations, the best showing since August of 2023.

CoreWeave of Livingston, New Jersey, the eight-year-old provider of AI hosting services for those who don’t own GPU chips from Nvidia and want someplace to rent them, went public last month, in the middle of a turbulent market.

Happily for the firm, the reviews out today as analysts initiate coverage are split down the middle between bulls and bears, which is probably a lot better than could be expected for a new issue in this kind of market. 

None of the analysts, that I can see, have anything like the deeply negative views that have circulated previously, such as one analyst likening the company to Enron. 

The stock, at a recent $37.60, is below its $40 offer price, which was also its closing price on the first day of trading, March 28th. Most of the price targets being offered today are in a range of $46 to $55, which offers upside of twenty to forty-five percent, not bad.

• The week that ended April 17th — an abbreviated week because of the U.S. Good Friday holiday — brought more pain, with the Nasdaq Composite Index down 3%, the Standard & Poor’s 500 down 2%. As I write this, both indices are still above where they were two weeks earlier, but not by much.

• The earnings season kicks off in earnest this week, amidst plenty of uncertainty about the U.S.’s tariff regime, with fears of recession running high. We could be already in one, but even if we don’t get a recession, there’s the prospect of a “pause,” companies simply holding off on spending because they don’t know what’s going to happen next.

We’re heading into the thick of earnings season this week, with a rising number of companies reporting, including Alphabet and Intel — see the table below.

Amidst continued uncertainty about tariffs and trade, all the Street can do is mostly lower its expectations, and plan to hear little or nothing of any real value from CEOs and CFOs, who probably are just as unsure as everyone else about their industries.

Things are getting downsized Monday across the board.

Enphase, which dominates the market for home solar panel “micro-inverters,” where it competes with Tesla, will report results tomorrow, April 22nd, after market close. Its stock is the subject of two price target cuts today, from Canaccord Genuity’s Austin Moeller, and from Daiwa Capital Markets’s Jonathan Kees.

The first-quarter reporting season for tech is just getting underway this coming week, but it’s been a bruising affair thus far. Oracle is always the first to report in any given earnings season, and their report on on March 10th was a dud. Ciena, Adobe, Micron Technology and ASML all followed, with mixed performances, and poor stock performance. 

Thursday of this week saw a little reprieve, two upbeat reports by Taiwan Semiconductor, the largest contract chip maker in the world, serving Nvidia and everyone else; and Netflix, both of which were well received. Taiwan Semi shares rose fractionally on Thursday, and Netflix rose in after-marketing trading Thursday following its report.

Taiwan Semi’s report showed no slowing down from any tariff and trade issues, as artificial intelligence continues to drive incredible results, with revenue rising thirty-five percent, year over year, to $26 billion (in New Taiwan Dollars). That’s fairly incredible growth at such scale.

In a world of continued uncertainty for tech — and everything else — there was little in the earnings report of chip-equipment maker ASML on Wednesday morning to decipher where things are going. The company has a monopoly on a very high-value piece of equipment, and it sells only a dozen or so units a year. Ergo, ASML can’t possibly reflect everything that’s happening with tariffs and trade. 

The stock sank eight percent Wednesday, but probably not over the report but rather what’s happening to the chip market. Nvidia shares fell ten percent after it said in a filing that increased restrictions on sales to China meant Nvidia will have to take a nearly six-billion-charge for the quarter ending this month. (Advanced Micro Devices also warned of the hit to its revenue.)

“I have a ton of PowerPoint qubits in 2035, as many as anybody, probably more. The difference is, I have real qubits. You can buy my machines, you can use them.”

Stocks are rising on Monday as they did Friday afternoon following The U.S. Customs and Border Protection office of the Department of Commerceissuing a notice that certain electronic products such as smartphones and laptops will be exempted from the current U.S. tariff regime — at least for the moment. 

Merrill Lynch chip analyst Vivek Arya writes that the announcement was a “net positive as it allows for debate/discussion on this critical end-market that contributes ~50% of all chip demand.”

But, gains by the Nasdaq and the S&P 500 have subsided as the day wore on amidst confusing signals.

Despite the fact that semiconductors were not included in The White House’s first round of tariffs, the negative views continue to pile up for chip makers. 

As I mentioned Wednesday, many observers have been expecting the upcoming earnings season, which gets underway in earnest the week of April 21st, will reflect uncertainty about the ultimate impact of tariffs and recession threat.

Some are not waiting for that confusion. Citigroup’s Chris Danely writes Friday morning that the issue isn’t the earnings season, it’s what happens after. The chip makers will start to cut their expectations later in the current quarter, he writes, and in subsequent quarters.

“While we expect slightly below-consensus 2Q25 guides, we believe more significant cuts will come later in the quarter and the year as companies digest tariff impact,” writes Danely.