From Nasdaq: 2025-05-06 13:55:00

In a podcast, analysts discuss the possibility of a U.S. recession, earnings from big tech companies, and the impact of four companies on the S&P 500 market cap. Twilio and Reddit are highlighted as stocks to watch. Another podcast discusses Universal Studio’s new park and the state of the travel industry.

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Amidst signs of a potential recession, stock investors must consider the impact on the market. Data points indicate consumer hesitation in making significant purchases, signaling potential economic challenges ahead. Despite market underperformance during recessions, investing in good businesses for the long term remains a sound strategy. Now, it seems they’re just kind of focusing on the basics, which is probably a good thing. When you look at the quarter itself, the numbers were fine. Revenue was up 21%, daily active users were up 8% to 2.8 billion, and their ad business is still really strong. But I think the big question here is, what is the future of this company? They’re talking about AI, they’re talking about these glasses. I mean, it seems like they’re trying to find the next big thing, but is it just going to be more of the same? That’s the big question for investors with Meta.

Asit Sharma: Yeah. This quarter, Ricky, it was really a transitional quarter for them. They’re shifting their focus from the Metaverse to AI and the glasses. They think the glasses are going to be the next thing for them. They’re really a glasses company now. They’re investing $10 billion in this concept. But overall, the quarter was fine, the numbers were fine. The company is strong, but the big question is, can they innovate in a way that brings people back to the platform? Can they make it more sticky, can they make people want to spend more time there? That’s the big question for Meta going forward. Meta (formerly Facebook) is shifting focus from Metaverse to AI investments, with Meta AI nearing one billion users. Revenue up 16% to $42.3 billion, earnings per share up 37%. Reality Labs revenue down, with $4.2 billion in operating losses. Increased CapEx spend on AI, including successful Ray-Ban Meta AI glasses sales.

Microsoft’s Cloud revenue up 20% to $42.4 billion, fueled by Azure business growth of 33% with 16% tied to AI initiatives. Total revenue up 13% to $70 billion, net income up 18% to $26 billion. Yellow flag: all operating cash flows invested in capital expenditure for AI-related projects.

Apple plans to invest $500 billion in the US and launch a $100 billion share repurchase plan. Revenue flat in some areas, uneventful quarter overall. Market reaction positive, with investors applauding strong Cloud revenue growth and AI initiatives. The company remains attractive to customers seeking AI tools for cost efficiency. Overall, Apple reported a 5% revenue growth and an 8% increase in earnings per share, slightly missing estimates. Concerns over potential tariffs could cost the company up to $900 million, but they have diversified their supply chain and are making investments in India to weather the storm. Meta, Apple, Amazon, and Microsoft make up 20% of the S&P 500 market cap, but are still profitable despite tariff uncertainties.

Universal Orlando’s Epic Universe, the first major theme park opening in the US in over 25 years, will feature five lands including Super Nintendo World and the Wizarding World of Harry Potter. Despite some issues with buggy rides, the park offers advanced animatronics and immersive experiences for visitors. The park is set to open fully on May 22nd. Universal’s new theme park, Epic Universe, offers an immersive experience with intense rides like The Werewolf. Analysts see huge revenue potential, with high ticket prices and no annual passes. Despite Comcast’s theme park segment being undervalued, the company is investing heavily in expanding its parks worldwide.

With the travel industry facing uncertainty, some companies like Hilton are thriving. However, overall, the outlook is cautious as airlines cut guidance and hotels struggle to increase revenue per available room. Economic uncertainty and international trade wars are causing concern for businesses reliant on travel. Hilton reported a revenue increase of over 13% compared to the previous year, raising its outlook for the full year. The company’s revenue per available room in the US is expected to rise between 0% and 2%, outperforming industry expectations. Earnings are growing faster than revenue, indicating market share gains and improved margins.

In the cruise industry, Royal Caribbean saw a 7% revenue increase and raised guidance, while Norwegian Cruise Line experienced revenue declines. Royal Caribbean’s stock is up 63% over the past year, reflecting its historical outperformance compared to NCL. Despite healthy bookings, each company’s performance varies based on revenue and guidance.

The cruise industry traditionally sees increased interest during economic turmoil, as cruise vacations offer value compared to land-based holidays. However, economic conditions can impact overall industry performance. Booking trends for future cruises are strong, but economic uncertainty may affect consumer behavior in the long run.

While cruises offer unique experiences and value, economic conditions can impact the industry’s performance. Booking trends for future cruises are strong, but economic uncertainty may affect consumer behavior. Despite the appeal of cruise vacations, economic challenges could impact the industry’s growth and profitability in the long run. Motley Fool discusses the recent NFT disappearance, emphasizing the risks of digital assets. Asit Sharma advises caution and attention to asset storage. Jason Moser shares insights on Twilio’s positive earnings report, highlighting revenue growth and customer relationship improvements. Asit Sharma praises Reddit’s revenue growth and free cash flow, emphasizing the platform’s open nature for sharing knowledge. The team engages in playful banter, showcasing their easy rapport. Dan Boyd is keeping an eye on Twilio for his watchlist, citing its stability as a good sign. The Motley Fool Money radio show wraps up with thanks to Asit and JMo. Notable board members include John Mackey and Randi Zuckerberg. Various positions in top companies are disclosed by the show’s contributors. The Motley Fool has positions in and recommends several major companies.



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