LT Weekly: Jul 25, 2025
The connectivity sector had a lot to say this week, with Verizon, AT&T, T-Mobile, and Charter all reporting. There was a tremendous amount to unpack (some positives, some negatives) but one thing is clear…the sector stands to benefit significantly from the new tax legislation, which was a consistent topic of conversation across the board. Alphabet posted a solid quarter as well, though it came against a high bar following the +30% rebound from the April 8th lows. The AI arms race remains in full swing, with capital spending ramping up once again.
Meanwhile, the market continued its upward trajectory, with the S&P 500 rallying +1.5% and the Nasdaq rising +1%, both closing at fresh all-time highs. Progress on the trade front continues to dominate the news flow.
Our focus themes in this edition are below:
- Earnings Scorecard – Week 1 & 2
- Big Tech’s AI Investment Cycle Remains In Full Swing…Alphabet Makes The Next Move
- The Telcos Came Out On Top This Week W/ Solid Headline Financials & Tax Reform Benefits, Though There Were Some KPIs To Pick On
- Charter’s Still Playing The Long Game Despite Q2 Headwinds
- IPG’s Q2 Closed Ad Agency Hold Cos’ Earnings Season On A Higher Note
- Grab Bag: Trump Administration’s AI Action Plan/ FCC Approves Skydance Acq Of Paramount / NBCU Cable And NFL-ESPN Sports Speculations
Also, on the home front, I wanted to mention that LionTree served as financial advisor to Adevinta on its sale of Adevinta Spain to EQT.
Let me know if you have any questions or would like to chat on any of these updates.
I hope you have a nice weekend.
Best,
Leslie
Earnings Scorecard – Week 1 & 2
It’s that time of year again…we’ve officially entered earnings season! In the last two weeks, 27 companies in our LionTree Universe reported their Q2 numbers, with stock reactions skewing positive, though by a small margin.14 companies (52%) traded up post their prints, while 13 (48%) traded down. The best performer was Coursera, which jumped +36.2% in reaction, and the worst performer was Iridium Communication, which fell -22.1%.
Netflix and ad agencies Omnicom and Publicis kicked off earnings last week, and IPG’s report this week rounded out the ad agency reports, with the stock having the best post-earnings reaction out of three, up +7.0% (see Theme #5).
The other big 3 group of companies to report was in the telco space, with AT&T, Verizon and T-Mobile all posting their results and all trading up +1.2%, +4.0%, and +5.8%, respectively (see Theme #3). On the cable side, Charter’s stock went in the other direction and fell -18.5% after posting its numbers (see Theme #4).
Finally, starting off the digital advertising earnings reports was Alphabet, which was up +0.9% after its print (see Theme #2).