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| Lucas Jackson/Reuters |
The stock market has found support in a wave of strong second-quarter corporate earnings, with companies generally surpassing expectations and helping to sustain bullish momentum.
So far, 82% of reporting companies have exceeded analysts’ estimates, according to FactSet. If this pace holds, it would mark the highest percentage of earnings beats in any quarter since Q3 2021.
With major names like Nvidia still set to report later in August, here are the most important insights from recent high-profile earnings that investors should know:
1. AMD and Super Micro: Trade Tensions Are Weighing on Chipmakers
What happened:
Both Advanced Micro Devices (AMD) and Super Micro Computer posted mixed results this week.
AMD beat revenue forecasts but slightly missed on earnings, reporting adjusted EPS of $0.48, just under the expected $0.49. CEO Lisa Su attributed the year-over-year decline in AI revenue largely to U.S. export restrictions, which have blocked AMD from selling its MI308 AI chip to Chinese clients. The stock dropped as much as 8% on Wednesday.
Super Micro also came up short, reporting $5.76 billion in revenue versus the expected $5.89 billion, and EPS of $0.41 compared to the forecast of $0.44. CEO Charles Liang pointed to President Trump's tariffs as a contributing factor behind the shortfall. Shares fell 17% after the earnings release.
What it means:
AI chipmakers are now feeling the impact of escalating U.S.-China trade tensions. With the U.S. and China facing an August 12 deadline to strike a deal before higher tariffs take effect, semiconductor firms are in the crosshairs. That could add volatility to the entire sector.
“Industry-wide tariff impact is only now being felt and could result in headwinds for the entire semiconductor industry,” said Gadjo Sevilla, senior analyst at EMARKETER.
2. McDonald’s: Signs of Consumer Fatigue Are Emerging
What happened:
McDonald’s beat on both revenue and earnings, with $6.84 billion in quarterly revenue versus the expected $6.7 billion, and EPS of $3.19, above the $3.15 forecast.
Still, CEO Chris Kempczinski expressed concern about the health of low-income consumers, who he noted are the chain’s most frequent visitors. “Re-engaging the low-income consumer is critical,” he said, noting that rising costs and economic pressures are dividing American consumers into more distinct financial tiers.
What it means:
Consumer spending, particularly among lower-income groups, is becoming a major focal point for investors and retailers. With inflation and tariffs threatening to drive prices higher, there’s growing concern about a pullback in discretionary spending even if current demand still looks solid on paper.
3. Palantir: AI Momentum Remains Strong
What happened:
Palantir Technologies beat expectations and posted a milestone: its first-ever quarter exceeding $1 billion in revenue, a 55% year-over-year increase. The stock surged as much as 10% following the announcement, bringing its 2025 gains to 130%.
What it means:
Investor enthusiasm around AI shows no sign of slowing. Analysts at Wedbush Securities dubbed Palantir the "Messi of AI" and raised their price target to $200 a share, signaling confidence in the company’s role in AI adoption across government and commercial sectors.
“Palantir remains one of our top tech names to own in 2025,” Wedbush analysts wrote, highlighting the company’s expanding reach and growing traction in AI services.
4. Microsoft and Meta: Big Tech Still Sets the Pace
What happened:
Microsoft and Meta both delivered strong beats last week.
Microsoft reported $76.4 billion in revenue and EPS of $3.65, both topping expectations. The tech giant’s stellar quarter helped it join the $4 trillion market cap club for the first time. The stock is up 26% in 2025.
Meta posted $47.5 billion in revenue and EPS of $7.14, crushing estimates of $44.83 billion and $5.89, respectively. The stock is up 27% this year.
What it means:
Mega-cap tech is still driving market gains. The tech sector led the S&P 500 in July with a 5% gain, and the Nasdaq hit 14 new record highs during the month. That momentum has prompted Deutsche Bank to suggest that "tech-ceptionalism" is back.
Large-cap tech continues to outpace small caps, reinforcing the trend that has dominated much of the post-2020 rally.
“We continue to favor U.S. large-cap tech over small caps,” said Nicholas Colas, co-founder of DataTrek Research. “It takes a highly speculative market or Big Tech falling out of favor for that dynamic to reverse.”
Summary for Investors:
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AI chipmakers face regulatory and tariff headwinds, making the semiconductor sector more volatile.
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Consumer demand, especially among lower-income Americans, is beginning to weaken under inflation and trade pressures.
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AI software firms like Palantir continue to outperform, validating the long-term thesis around artificial intelligence.
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Mega-cap tech stocks are still the market’s primary growth engines with Microsoft, Meta, and others continuing to lead gains.
As earnings season continues, the resilience of consumer spending and the broader impact of tariffs and trade policy remain key themes to watch.
