The Rundown - Google Delivers Earnings Beat, Meta Makes Cuts to Reality Labs Division

Episode Date: April 25, 2025

Stock market update for April 25, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Friday, April 25th. In today's episode, we break down Google's huge earnings and why the company's downfall might be greatly exaggerated. We also dive into issues at Intel and what they're doing to turn things around. Then stick around to the end of the show to find out the latest milestone from Waymo. We've got a great show for you today.

Let's go. Stocks were up big for the third day in a row. The S&P 500 jumped 2% on Thursday. The NASDAQ was up 2.7%. The Dow was back above 40,000. I mean, it's been a pretty good week. The S&P 500 is no longer in correction territory anymore. It's rallied 10% from its lows that it's set back on April 8th.

So it looks like investors have shaken off the anxiety from earlier this week about Trump, essentially firing Fed Chair Jerome Powell, and there continues to be more signals of possible trade deals with countries like Japan, India, and South Korea. President Trump even said that trade talks with China are underway as well, even though China denies it. So that's kind of confusing. But overall, vibes are kind of starting to turn around. Now, the S&P is still down 10% from its all-time highs that has set back in February. But if we keep getting positive news, the actual trade deals get announced, then who knows, maybe we'll get back to all-time highs later this year. I'm not quite ready to get my hopes up yet, but it's been a pretty great week.

And you know what's going to help the market rally over the next couple weeks is if we get some more solid earnings. We had a couple big-time earnings come out over the last day. So let's talk about it. Google reported earnings last night, the first big tech giant to do it, depending on how you see Tesla. And man, Google crushed it. The revenues in Q1 were up 12% from the same period last year with solid growth across the board. You know how everyone's been talking about how Google Search is dying and how it's going to be replaced by chat GPT and AI? Well, that's not what the numbers say. Google Search advertising revenues jumped 10% to over $50 billion. YouTube ads also brought in $8.9 billion, which actually misestimates by a little bit, which was kind of surprising

to me because I feel like so many people complain, but all the ads on YouTube these days. I mean, it was so bad for me a couple years ago that I got YouTube premium and never looked back. And then Google Cloud, it continues to crush. Their revenues were up 28% to $12 billion with profits of $2 billion last quarter. So watch out AWS and Microsoft Azure. Google's making some noise there, especially with all the advancements they're having an AI. Google CEO Sundar Pichai mentioned that their new Gemini 2.5 model and their AI overview search results are getting a ton of use. And anecdotally speaking, I use Gemini 2.5 and yeah, pretty awesome. Their AI search results though, I feel like that's still pretty hit or miss. Google's not slowing down on AI development. Their cap X is expected to hit $75 billion this year.

All in all, though, I think these earnings prove that Google isn't on the verge of decline. Their revenues continue to grow double digits. Their business is essentially a money printing machine. The company made over $34 billion in profits in Q1. That's much better than what Wall Street was expecting. And the cherry on top for investors is that Google is increasing their digital. dividend by one penny to 21 cents a share each quarter, and they're also doing a $70 billion share buyback. So investors were loving these results. Google stock is up around 4% this morning in reaction to these earnings. Now, I should point out, Google executives did mention they might be impacted slightly by a global economic slowdown, specifically ads from Chinese retailers like

Sheehan and Timu. They might start advertising less on Google because of tariffs on Chinese imports, which is expected to hurt their business. So that's, something to keep an eye on. So Google's looking pretty good right now. Same can't be said about Intel. They also reported earnings last night. And yeah, they're in some trouble right now. Intel's Q1 revenues came in at $12.7 billion, which was essentially flat compared to the same period last year. Not a great look, especially in the middle of an AI boom where their competitors are growing like crazy. And the bigger issue is the company doesn't expect things to get better anytime soon. They expect revenues in Q2 to be around $11.8 billion-ish, which is

a billion dollars less than what Wall Street analysts were expecting. And they basically expect to break even in Q2. Now, this was the first earnings call for Intel's new CEO, Lip Butan. And he doesn't seem to be playing around. He plans to cut costs and flatten the organization. Intel is planning to lay off more than 20% of their staff, according to Bloomberg. This turnaround might take some time, though. Their CEO said there is no quick fixes to the mess that Intel is in right now.

The one bright spot for Intel, though, was at their data center and AI growth. group actually grew by 8% year over year. So that's encouraging, but again, Intel is far behind in the AI chip race compared to the likes of Nvidia and AMD. Investors weren't able to look past some of the red flags from Intel's earnings and their stock is down more than 7% this morning. But this might surprise some people. Intel stock is still way outperforming Nvidia and AMD this year so far. Pull up the public app, you'll see that AMD and Nvidia are down more than 20% this year. Intel stock is about flat. I don't think many people expected that. this year. Let's talk about some stocks making moves today. Meta stock is up today after they

announced that they're laying off employees in their reality labs division. These cuts announced by meta affect the Oculus Studios team, which works on the Quest headsets. Meta says the layoffs will specifically impact supernatural, the VR fitness game and acquired for over $400 million. Spending $400 million for a VR fitness game seems kind of pricey though. You know, Quest sales haven't been so great. The unit lost nearly $5 billion in Q4 on just $1.1 billion in sales. Meta says the downsizing will help the studios team work more efficiently on mixed reality experiences, and they reiterated that it's still committed to investing in AR and VR content. These layoffs come after Meta in February cut 5% of its staff that it labeled as low performers.

Investors seem to like it, though. Meta stock was up more than 2% this morning in reaction to these layoffs. Now, on the flip side, shares of T-Mobile are getting crushed this morning, despite the company topping quarterly estimates for earnings and revenue in Q1. I think investors are more focused on the weaker-than-expected wireless phone subscribers, the company reported. T-Mobile reported 495,000 post-paid phone customers added in Q1. Wall Street was expecting 504,000. So they missed it by about 10%, and that's sending the stock down 9% this morning. That might be a bit of an overreact.

But this might come as surprising to some people. Their stock was up nearly 60% over the last 12 months heading into this earnings report. Let's wrap the show with a fun fact. Waymo is now doing 250,000 paid Robo taxi rides per week in the U.S. It was 200,000 in February. So those numbers keep going up. Waymo is the self-driving car company, which is owned by Alphabet, aka Google. And they're expanding their operations across the country.

They've been operating in San Francisco, L.A. and Phoenix for a while now. And earlier this year, they expanded operations to Austin. Waymo is planning to offer rides in Atlanta this summer through a partnership with Uber. So I know that Tesla gets all the love when it comes to self-driving, but, hey, man, Waymo quietly just keeps on expanding. Well, all right, guys, that's the rundown for today. That's the rundown for this week. Kind of a crazy week if you think about it. And I got a feeling it's going to get even crazier next week with all the earnings coming out.

Apple, Amazon, meta, Microsoft. I mean, there's a lot to look forward to. So make sure you guys are locked into the podcast to stay in the loop. And if you guys want to support the show and have like 12 extra seconds, consider giving us a five-star rating on Apple or Spotify. If you're listening on Spotify, don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really does help us out and it helps other people find the show.

By the way, we are going to have a deep dive episode this weekend. I think it's a topic that a lot of people have been. asking about, so keep an eye on your podcast feed for that should be a good one. Thank you guys again for listening. Shout out to Mike and Connor for all the help behind the scenes. We'll see you guys back here this weekend for the deep dive. This is the rundown, your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell or hold that security. Run-down guests are not financial advisors and are not affiliated with public

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