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- 👉 Netflix Repurchased $3.5B of Stock
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👉 Week in Review — Too Long; Didn’t Read:
Key Earnings Announcements:
ASML delivered 67 new lithography systems and 12 used systems during the quarter.
PepsiCo plans to deliver $8.9 billion to shareholders over the course of the year.
Netflix repurchased $3.5 billion of its own stock.
Investor Events / Global Affairs:
The Iran War faces some renewed complications.
Meta could surpass Google in digital ad revenue.
The funny story of the week was Allbirds pivoting to AI.
Economic Updates:
Inflation for Producers came in cooler than expected.
The Small Business Optimism Index continued to sink.
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👉 Best and Worst ETF Performers of the Week
👉 Key Earnings Announcements:
ASML delivered 67 new lithography systems and 12 used systems during the quarter, PepsiCo plans to deliver $8.9 billion to shareholders over the course of the year, and Netflix repurchased $3.5 billion of its own stock.
ASML Holdings (ASML)
Key Metrics
Revenue: €8.8 million, an increase of +13% YoY
Operating Income: €3.2 billion, an increase of +15% YoY
Profits: €2.8 billion, an increase of +17% YoY
Earnings Release Callout
“Our first-quarter total net sales were €8.8 billion, within our guidance, and gross margin came in at 53.0%, at the high end of our guidance. The semiconductor industry's growth outlook continues to solidify, driven by ongoing AI-related infrastructure investments. Demand for chips is outpacing supply. In response, our customers are accelerating their capacity expansion plans for 2026 and beyond, supported by long-term agreements with their customers.”
My Takeaway
ASML delivered strong earnings results driven by continued growth around the globe. The company delivered 67 new lithography systems and 12 used systems during the quarter. Management emphasized the demand environment is currently driven by chip demand outpacing global supply — leading their customers to order more machines further in advance than normal sales cycles.
Their CEO highlighted that the semiconductor industry’s growth is firmly supported by ongoing AI investments. They’re working closely with their customers to fulfill demand through a combination of delivering new systems and upgrading the performance of the existing installed base.
Looking ahead, management guided to €9.0 billion in revenue for next quarter.
No position.
PepsiCo (PEP)
Key Metrics
Revenue: $19.4 billion, an increase of +9% YoY
Operating Income: $3.2 billion, an increase of +24% YoY
Profits: $2.3 billion, an increase of +27% YoY
Earnings Release Callout
"We feel good about where we are at this point in the journey. Still, in the process of all the shelf resets and launching the innovation — I would say by the end of Q2, we'd probably be almost completed in that process. But the early reads are quite exciting."
My Takeaway
PepsiCo exceeded Wall Street’s expectations on both the top and bottom lines. These profitability metrics illustrate that despite implementing targeted price cuts, the company successfully leveraged productivity savings and supply chain efficiencies to expand both gross and operating margins.
The performance of their North America segment was the focal point of the quarter. The unit reported a 2% increase in volume, its first positive reading in multiple quarters, proving that the discounting program for brands like Lay's and Doritos successfully attracted value-conscious consumers. Internationally, the company maintained strong momentum with accelerated growth across multiple markets.
Operating cash flow swung to a positive $41 million from a nearly $1 billion outflow in the prior year, driven by working capital optimizations and stronger operating profit. Management reiterated their commitment to capital returns, outlining plans to distribute $8.9 billion to shareholders over the course of the year.
Their CEO expressed optimism regarding the recovery in the domestic snacking business — he also emphasized his focus on structural cost transformations, utilizing hedging programs to manage inflation and maintain clear visibility into near-term input costs.
Looking ahead, the company expects organic revenue growth of +2-4%.
Long PepsiCo.
Netflix (NFLX)
Key Metrics
Revenue: $12.3 billion, an increase of +16% YoY
Operating Income: $4.0 billion, an increase of +18% YoY
Profits: $5.3 billion, an increase of +82% YoY
Earnings Release Callout
“Q1 revenue grew 16% year over year (+14% on a FX-neutral basis) and operating income grew 18%. Both were ahead of our guidance due to slightly higher-than-planned subscription revenue. We continue to project 2026 revenue of $50.7-$51.7B and an operating margin of 31.5%.”
My Takeaway
Netflix exceeded Wall Street’s expectations, but investors weren’t excited about their unchanged full-year guidance. The ad-supported tier is developing into a central revenue pillar. Management noted the advertising business is on track to double its revenue to $3.0 billion in 2026.
The company also demonstrated progress in live programming, airing over 70 live events in Q1, including a highly viewed World Baseball Classic broadcast in Japan.
Netflix expanded its technology and product portfolio by acquiring an AI content firm, Interpositive, and launching a standalone gaming app for kids. A notable organizational shift was the announcement that co-founder Reed Hastings will not seek reelection to the board of directors.
The company reported $5.1 billion in free cash flow for the quarter — Netflix repurchasing $3.5 billion of its own stock. Price increases and the growth of the ad tier are consistently boosting their free cash flow, allowing the company to separate revenue growth from pure subscriber additions.
Looking ahead, Netflix’s guidance remains unchanged as management continues to focus on scaling their advertising business while maintaining disciplined content spending. to meet their targets for 2026.
Long Netflix.
👉 Investor Events / Global Affairs:
The Iran War faces some renewed complications, Meta could surpass Google in digital ad revenue, and the funny story of the week was Allbirds pivoting to AI.
Iran Conflict Not Quite Resolved
Source: Reuters
The U.S.-Iran conflict remains on edge as Donald Trump announced that American negotiators will head to Pakistan for renewed peace talks, while simultaneously warning Iran to accept a deal or face major infrastructure strikes. Trump accused Iran of violating the current ceasefire by engaging in attacks in the Strait of Hormuz, raising tensions just days before the truce is set to expire.
Iran signaled openness to negotiations but made clear that a final agreement is still far off, with officials warning they are prepared to resume fighting if talks collapse. A major sticking point remains control of the Strait of Hormuz, with Iran threatening to shut it down again and target ships if U.S. restrictions on its ports continue.
Meanwhile, the U.S. is preparing to escalate economically and militarily by potentially seizing Iran-linked oil tankers in international waters, a move that could further disrupt global energy markets. The situation is becoming increasingly complex, with regional actors like Hezbollah also contributing to instability, underscoring how quickly this conflict could broaden.
After a week of positive news regarding the Iran War, diplomacy is back on the table. Both sides are negotiating from a position of escalation — leaving markets and geopolitics highly sensitive to any breakdown in talks.
“Iran decided to fire bullets yesterday in the Strait of Hormuz — A Total Violation of our Ceasefire Agreement! Many of them were aimed at a French Ship, and a Freighter from the United Kingdom. That wasn’t nice, was it? My Representatives are going to Islamabad, Pakistan — They will be there tomorrow evening, for Negotiations. Iran recently announced that they were closing the Strait, which is strange, because our BLOCKADE has already closed it. They’re helping us without knowing, and they are the ones that lose with the closed passage, $500 Million Dollars a day! The United States loses nothing. In fact, many Ships are headed, right now, to the U.S., Texas, Louisiana, and Alaska, to load up, compliments of the IRGC, always wanting to be “the tough guy!” We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran. NO MORE MR. NICE GUY! They’ll come down fast, they’ll come down easy and, if they don’t take the DEAL, it will be my Honor to do what has to be done, which should have been done to Iran, by other Presidents, for the last 47 years. IT’S TIME FOR THE IRAN KILLING MACHINE TO END!”
Meta (META) Expected to Surpass Google (GOOG) in Digital Ad Revenue for First Time
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