(Image credit: CFOTO / Contributor)
Stocks were mostly positive to start the new month, with the latest round of corporate earnings lifting the S&P 500 and Nasdaq Composite to new record highs. The Dow Jones Industrial Average, on the other hand, wasn’t so resilient, finishing Friday in the red as several high-priced components sold off.
At the close, the S&P 500 was up 0.3% at 7,230 and the Nasdaq had added 0.9% to 25,114 — fresh all-time closing highs. The Dow was down 0.3% at 49,499.
Earnings from Apple (AAPL) generated the most buzz, with the blue chip stock jumping 3.2% after its higher-than-expected fiscal second-quarter print.
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Apple saw year-over-year revenue growth across all its categories, including a nearly 22% jump in iPhone sales. It also saw increased revenue across all regions, with sales in China — where the company has struggled in recent quarters — up 28% from the year-ago period.
“We believe the strong iPhone 17 replacement cycle is supported by both higher average selling prices and units, with solid performance across all geographic segments,” says CFRA Research analyst Angelo Zino.
The company also hiked its quarterly dividend by 4% and said its board of directors approved a $100 billion stock buyback program.
“Although we are impressed by overall results, we think bigger catalysts will come at WWDC in June with AI Siri integration and September’s hardware event unveiling the first foldable phone,” Zino says.
Atlassian soars 30% after strong earnings
Atlassian (TEAM) was another post-earnings winner, with the tech stock soaring 29.6% after the software company reported a fiscal third-quarter beat.
Earnings were up 80.4% year over year to $1.75 per share, while revenue rose 32% to $1.79 billion. Cloud revenue was 29% higher, while data center revenue surged 44%.
The Jira parent also raised its full-year guidance for cloud and data center revenue, now expecting year-over-year growth of 26.5% and 21.5%, respectively.
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“Overall, the results are encouraging and reinforce our confidence in the company’s strategic vision, ability to monetize customer AI usage, and address AI displacement concerns,” says Oppenheimer analyst Ittai Kidron.
With the beaten-down stock still off 46% for the year to date, Kidron says that its “valuation looks compelling.” And while longer-term AI displacement concerns are likely to persist, “the bear case could be difficult to maintain near term.”
Amgen dives 5%, but Wall Street isn’t worried
At the other end of the spectrum was Amgen (AMGN), with the blue-chip biotech diving 4.8% after earnings, making it the worst Dow Jones stock of the day. At nearly $330 per share, AMGN has an outsized influence on the price-weighted Dow.
Amgen reported higher-than-anticipated earnings and revenue for its first quarter and raised its full-year guidance.
Still, investors appear to be concerned over the Food and Drug Administration’s (FDA) proposal to withdraw approval for Amgen’s blood vessel inflammation drug Tavneos after it was linked to several cases of serious liver injuries.
But Oppenheimer analyst Jay Olson does not believe this will have a material impact on the company’s top line. Rather, he believes Amgen’s obesity and Type 2 diabetes drug MariTide creates a compelling opportunity for the company to capitalize on the “largely unaddressed” maintenance angle.
Olson has an Outperform (Buy) rating on the healthcare stock and a $400 price target, representing implied upside of more than 21% to current levels.