If you’re interested in understanding why tech firms such as Meta, Reddit, and Apple presented impressive earnings this week despite President Donald Trump’s tariffs, those tariffs might actually play a part in the story. Though the tariffs didn’t provide an advantage to these companies, they did set lower expectations. A reduced threshold is simpler to exceed.
Yahoo Finance pointed out that earnings for the second quarter were largely favorable, mentioning that “analysts adjusted their expectations downwards in light of President Trump’s tariffs, the high valuations of stocks, and the uncertainty surrounding the US economy.”
For instance, Meta reported Q2 revenues of $47.5 billion, surpassing the anticipated $44.8 billion. The company enjoyed a robust quarter in spite of the adjusted expectations, with sales revenue rising 22 percent compared to the previous year and an increase in advertising revenues.
Reddit also saw noteworthy revenue growth, generating $500 million, significantly above Wall Street’s forecast of $425 million. Apple’s revenue rose by 10 percent year over year, hitting $94 billion compared to the projected $89.5 billion. Reddit slightly exceeded its expectations for daily active users, even as Google’s AI initiatives have impacted web traffic for various sites. (Reddit has teamed up with Google to enhance its presence in Google Search.) The platform also experienced revenue growth from licensing agreements. Meanwhile, Apple beat expectations mainly due to strong iPhone sales, which grew 13 percent year over year.
In conclusion, these tech firms realized impressive sales in spite of notable challenges and lowered expectations. Nonetheless, the repercussions of Trump’s tariffs and an unstable economy are not completely absent. Apple, for example, projected that tariffs would cost the company $1.1 billion in this quarter alone. Furthermore, a disappointing July jobs report is heightening economic anxiety, even among Trump supporters.