Good morning investors! Today’s earnings heavy issue focuses on Google, Tesla, and more.
Today we cover:
Home sales fall
Google and Tesla report
More earnings
📊 Economy and News
U.S. Housing Market Update: Sales Plummet in June
U.S. existing home sales declined more than anticipated in June, falling 2.7% to a seasonally adjusted annual rate of 3.93 million units. Economists had predicted a slight drop to 4.00 million units. Sales remained flat compared to last year.
Recent government data revealed single-family homebuilding hit an 11-month low in June, with permits for future construction at their lowest in over two years.
Residential investment likely weighed on GDP in Q2, despite housing’s small 5% share of the economy. Its broader impact through related purchases, like furniture and appliances, raises concerns about economic spillover from a prolonged downturn.
This has slowed home price growth, with the median existing home price rising 2% year-over-year to a record $435,300. Inventory grew 15.9% to 1.53 million units, with a 4.7-month supply at current sales pace—up from 4.0 months last year—indicating a balanced but sluggish market.
Homes stayed on the market for 27 days, compared to 22 days a year ago. First-time buyers made up 30% of sales (up from 29%), though a 40% share is needed for a healthy market. All-cash sales rose to 29% from 28%, and distressed sales, including foreclosures, edged up to 3% from 2%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.84% from 6.82%
Applications to refinance a home loan fell 3% for the week.
Applications for a mortgage to purchase a home rose 3% for the week.
Global hits:
Official India jobless data is not accurate, say top independent economists.
EU to advance retaliation on US goods as tariff hike looms.
China issues ethical guidelines for autonomous driving technology.
NHS strike impact on U.K. growth: Barclays lowers Q3 forecast.
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📈 Stocks
S&P 500 6,358.91 (+0.78%)
DJIA 45,010.29 (+1.14%)
NASDAQ 21,020.02 (+0.61%)
BRENT CRUDE 68.51 (-0.12%)
* Prices as of Jul 24th, 12:20 AM UTC
Big companies report earnings
Alphabet: Alphabet reported Q2 revenue of $96.43 billion, surpassing the $94 billion estimate, with earnings per share at $2.31 versus $2.18 expected.
The company raised its 2025 capital expenditure forecast to $85 billion from $75 billion, driven by strong demand for its Cloud products.
YouTube ad revenue reached $9.8 billion, and Google Cloud revenue hit $13.62 billion, both exceeding forecasts. Search and advertising units grew, with search at $54.19 billion and total ad revenue at $71.34 billion, up 10.4% year-over-year.
Net income rose 20% to $28.20 billion. AI Overviews now has over 2 billion monthly users, and the Gemini app has 450 million. Shares rose over 1.5% after hours.
Moreover, Google is planning to allocate more resources to Waymo without specifics. Waymo earned $373M in Q2, below the $429.1M estimate but above Tesla’s unreported Austin test revenue.
Tesla: Tesla’s Q2 auto revenue fell 16% to $16.7 billion, missing the $22.74 billion estimate, with earnings per share at 40 cents versus 43 cents expected. Vehicle deliveries dropped 14% to 384,000, marking a second consecutive quarter of sales declines. Net income fell to $1.17 billion from $1.4 billion last year.
Tesla shares are down 18% in 2025, underperforming tech megacaps. The company began building a more affordable model in June, with volume production planned for H2 2025.
Tesla’s robotaxi service is being tested in Austin, and its Supercharger network grew 18% to 7,377 stations.
Musk claimed Tesla surpasses Google in self-driving and AI, aiming to deploy robotaxis to half the U.S. population this year, but Bloomberg notes Tesla hasn’t applied for California DMV automated driving clearance, excluding many users. Musk emphasized batteries, energy, and robotics as Tesla’s future, downplaying new EV models.
CFO Vaibhav Taneja highlighted $300M in tariff costs and reduced tax credits, signaling tough quarters ahead. Taneja added that Tesla plans to test in San Francisco with a driver monitoring, pending permits.Digital assets are now worth $1.24 billion but the firm did not update on forward guidance.. Shares fell 5% after the bell.
Chipotle Mexican Grill: Chipotle cut its 2025 same-store sales growth forecast to flat from a low-single-digit increase after a 4% decline in Q2 same-store sales, worse than the 2.9% drop expected.
Q2 revenue was $3.06 billion, below the $3.11 billion estimate, though adjusted earnings per share of 33 cents met expectations. Traffic fell 4.9%, partially offset by a 1% rise in average check. Net income dropped to $436.1 million from $455.7 million last year.
Sales improved in June with summer promotions and the Adobo Ranch dip launch, with positive trends continuing into July. Chipotle plans to open 315–345 new restaurants in 2025. Shares fell 10% after hours due to the revised forecast and weaker-than-expected sales.
IBM: IBM’s Q2 revenue rose 8% to $16.98 billion, beating the $16.59 billion estimate, with adjusted earnings per share at $2.80 versus $2.64 expected.
Software revenue grew 10% to $7.39 billion, driven by hybrid cloud sales, though the software gross margin was slightly below expectations at 83.9%. Consulting revenue increased 3% to $5.31 billion, and infrastructure revenue rose 14% to $4.14 billion. Net income was $2.19 billion, up from $1.83 billion last year.
IBM raised its 2025 free cash flow forecast to over $13.5 billion. Shares fell 5% after hours due to cautious client spending amid geopolitical tensions.
Southwest Airlines: Southwest’s Q2 revenue was $7.24 billion, below the $7.3 billion estimate, with adjusted earnings per share at 43 cents versus 51 cents expected.
Net income dropped 42% to $213 million, and passenger revenue per seat mile was $14.10, below the $14.19 forecast. The airline announced a $2 billion share buyback and noted stabilized travel demand.
Southwest is shifting to assigned seating and new boarding orders, with basic economy sales impacting unit revenue. Third-quarter unit revenue is expected to range between a 2% drop and a 2% rise. Shares fell 0.77% after hours.
ServiceNow: ServiceNow’s Q2 revenue reached $3.22 billion, exceeding the $3.12 billion estimate, with adjusted earnings per share at $4.09 versus $3.57 expected. Subscription revenue hit $3.11 billion, topping the $3.03 billion forecast. Net income grew 47% to $385 million. The company raised its full-year subscription revenue guidance to $12.775–$12.795 billion, driven by AI adoption. CEO Bill McDermott highlighted AI-driven business process refactoring. Budget changes at U.S. government agencies may impact results, with one federal customer accounting for 11% of 2024 revenue. Shares rose 7% after hours.
Good to know: UK pushes Apple and Google for mobile changes to curb market power. Elsewhere, Europe’s most valuable firm SAP flags U.S. trade slowdown but says Japan deal gives ‘hope’ as it maintains guidance.
💵 Personal Finance
EV Loophole: $7,500 Tax Credit Without Restrictions
Leasing an electric vehicle (EV) lets you claim a $7,500 tax rebate without income or manufacturing restrictions, thanks to a rule in Biden’s Inflation Reduction Act treating leased EVs as commercial vehicles. This loophole allows dealers to apply the credit to most EVs, boosting lease rates from 15% in 2022 to 67% by March 2025, per Cox Automotive. The rebate ends Sept. 30, 2025, under Trump’s tax plan, so act fast.
Leasing vs. Buying EVs
Leasing Benefits:
Lower monthly payments
Smaller or no down payment
Warranty coverage
Access to new models
Flexibility to upgrade
Leasing Drawbacks:
No ownership or equity
Mileage limits (10,000–15,000 miles/year)
Wear-and-tear fees
Early termination fees
Leasing suits those wanting lower costs and flexibility, but consider your budget and driving habits.
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👩🏽⚖️ Legal Stuff
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