Reflection No. 34

Happy Friday, ladies and gents!

After last week’s pivot, I’ve received some great feedback, so thank you! If you think someone in your network would enjoy Reasoned Reflections, feel free to forward Reflection No. 34 to them.

As always, thanks for being here and joining me for another week.

Three Quick Hits:

• Article: Play It Safe or Swing for the Fences?

  Value investing or growth investing? Both strategies can deliver massive returns, depending on your goals and risk tolerance. Value investing is about finding undervalued companies and waiting for the market to recognize their worth. Growth investing, on the other hand, is about chasing potential. It carries more risk, but also the potential for significant upside.  

• Tip: Invest in companies, ETFs, or index funds that align with your risk tolerance and personal interests. This will help you stay calm and on course during market turbulence. 

• Quote: “History provides a crucial insight regarding market crises: they are inevitable, painful, and ultimately surmountable.” - Shelby M.C. Davis

Two Questions:

• What’s the smallest money habit you’ve adopted that gave you the biggest long-term return?

• What financial decision do you regret the most, and what did you learn from it?

REFLECTION No. 34: BIG TECH EARNINGS

I - Issue: What did we learn from tech earnings last week?

R - Rule: Quarterly earnings show not just financial performance but also which strategies are driving growth and which external risks are cause for concern. 

A - Analysis: 4 companies from the Magnificent 7 reported earnings last week, and those companies performed well in the market following their report. 

Microsoft’s (MSFT) revenue was above expectations, driven by 33% growth in Azure, with AI accounting for half of that growth.

Meta (META) shared that it enjoyed 35% profit growth and strong engagement on Instagram. The company increased its projected capital expenditures to invest in AI infrastructure.

Amazon (AMZN) reported earnings that topped estimates. However, due to tariffs, trade policies, and recessionary fears, Amazon gave light guidance for the next quarter.

Apple (AAPL) earnings edged past expectations. Like Amazon, Apple added caution as it expects a $900 million tariff hit next quarter.

C - Conclusion: AI is still Big Tech’s biggest growth engine, but global headwinds—from tariffs to spending slowdowns—are forcing even the top players to proceed cautiously.

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