LT Weekly: Apr 25, 2025
This week whizzed by as earnings gathered steam and it was a BIG week for the connectivity sector with Verizon, AT&T, T-Mobile, Comcast and Charter all reporting. One of the consistent messages out of a critical mass was that consumers will be the ones baring the costs of higher h-set costs due to tariffs. We had many, many more interesting takeaways as well in Theme #3.
The huge Nasdaq rally of almost 7% was its second-best weekly rally YTD. The S&P 500’s +4.6% move was respectable as well. Sentiment on the trade war situation continues to be the primary driver of the market moves and there was some optimism regarding trade agreements, in addition to more comfort about Fed independence which was earlier put into question.
In this edition, we focused on the below updates, developments and themes:
- Earnings Scorecard - Week 1& 2
- The Macro Remains A Wildcard To Google's Ad Biz But AI Integrations Are Bearing Fruit & Cloud Capacity Constraints Are Still Set To East Towards YE
- While Telcos Are In A Good Position To Weather Macro Storms In 2025, There Were Several Puts & Takes With Q1 Results
- Cable's Broadband Losses Continue To Surprise On The Downside But Is FWA Growth Set To Ease?? Charter Thinks So
- Comcast's Media Assets Outperform & Have Yet To See Economic Effects...Thus Far
Enjoy the read and the weekend.
Best,
Leslie
Earnings Scorecard - Week 1& 2
No sooner had the dust settled from last quarter’s earnings season that a new one kicked into full swing. Over the past two weeks, 21 companies in our LionTree Universe reported Q1 results, with stock reactions skewing positive. 13 names (62%) traded up following their reports, while 8 (38%) traded down. ServiceNow led the pack, jumping +15.5%, while T-Mobile saw the sharpest decline, falling -11.2%.
While Netflix and ad agencies Omnicom and IPG kicked off earnings last week, this week was dominated by the cable and connectivity players. All three major telcos reported, and while Verizon and AT&T posted modest gains, up +0.6% and +0.9%, respectively, T-Mobile’s print drew a far less favorable response from the mkt (see Theme #3 for details).
Cable names also saw mixed reactions, as Charter surged +11.4% after reporting, while Comcast slipped -3.7% (see Theme #4 for what happened in the Co’s respective cable bizs, and Theme #5 for highlights from Comcast’s Content & Experiences segment).
Finally, Alphabet gave us a first glimpse into the digital advertising cohort, starting things off on a positive note with a +1.7% move post-earnings (see Theme #2).