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Happy Sunday.
We’ve officially erased the “Liberation Day” losses that began on April 2nd — with the S&P 500 now up +0.5%.
Despite this recent strength, the markets are still in the red for the year. We continue to believe the markets will experience choppiness over the coming months — being moved higher and lower by headlines and earnings reports.
Let’s dig into what took place this week!
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Portfolio Updates (YTD Performance):
The Dividend Growth Stock portfolio is down -1.05% YTD, outperforming the S&P 500 by about +2.5%. As you can see above, the lion share of this outperformance is coming from Berkshire Hathaway — thanks uncle Warren! Best of luck in your retirement later this year.
Additionally, the “Long Risky” section of the portfolio is decisively in the green — driven by names like Hims and Hers Health and Uber. On the flip side, my “Long Technology” subsection has seen better days. This “Magnificent Seven” clone is down double digits thanks to Tesla, Apple, and Salesforce.
Additionally, I sold another $15K of Bitcoin earlier this week at ~$97K. I still have 1.44 Bitcoin at an average cost of $38K that I plan to cash in on over the coming months. As a reminder, my goal is cash out 80-90% of my Bitcoin around $120-140K and redeploy those profits into NEOS Funds (SPYI, QQQI, BTCI, IYRI).
I plan to deploy ~$30K during May into the portfolio.
As a quick update, I’ve invested $65K year-to-date into the private markets. This is much more than I normally do, but I’ve seen some incredible deals as of late and wanted to take advantage of them. Looking to focus solely on the public markets throughout the rest of this year and deploy $150-200K toward this portfolio for you all.
Between my Bitcoin position, other crypto positions, and existing Dividend Growth Stock portfolio I hope to have ~$1M invested by the end of the year. This portfolio should generate thousands of dollars in monthly passive income.
Additionally, I want to begin reintroducing covered calls back into the portfolio. For example, you could sell a covered call option contract against 100 shares of HIMS right now at $50 / share that expires on 11/21/25 and receive $895 in premium. Assuming your contract is exercised, you’ll make $895 in premium + $885 in capital gains = $1,780. That’s a 43% return in six months.
If it’s not exercised, you have $895 in premium income and 100 shares at essentially $32.20 / share (good price in my opinion). More work to do on these, so stay tuned!
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Week in Review — TLDR:
Microsoft’s Azure is taking market share, Amazon is trading at a discount to Walmart, Meta continues to prove they’re an AI-first company, Apple is expected to pay $900M to tariffs next quarter, Warren Buffet announced his retirement at the Berkshire Hathaway Annual Shareholder Meeting, Meta’s monopoly lawsuit could be saved by TikTok, the US labor market continues rolling along, Q1’s first GDP reading was ugly, and the PCE Index remains in relatively healthy shape.
Key Earnings Announcements:
Microsoft’s Azure is taking market share, Amazon is trading at a discount to Walmart, Meta continues to prove they’re an AI-first company, and Apple is expected to pay $900M to tariffs next quarter.
Microsoft (MSFT)
Key Metrics
Revenue: $70.0 billion, an increase of +13% YoY
Operating Income: $32.0 billion, an increase of +16% YoY
Profits: $25.8 billion, an increase of +18% YoY
Earnings Release Callout
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth. We delivered a strong quarter with Microsoft Cloud revenue of $42.4 billion, up 20% year-over-year driven by continued demand for our differentiated offerings.”
My Takeaway
Microsoft just delivered the trifecta — double-digit revenue growth, even faster operating income growth, and even fast profit growth. Think about what has to be true for that to happen — not only does revenue need to grow, but you have to operate your business in such a way that you’re making more profit on your dollars than the number of dollars entering your bank account! Incredible.
Azure revenue grew by a robust +35% YoY, significantly exceeding management’s guidance of +31-32% growth — reflecting a strong reacceleration in growth. Management cited an acceleration in cloud migrations as part of the reason for the upside.
AI-specific services contributed +16% of the +35% growth in Azure revenue… Nearly HALF of all Azure revenue growth during the quarter is now coming from Artificial Intelligence! This figure was only 8% last year, a +100% increase in only 12 months. Non-AI revenue grew +27% YoY, reflecting a +2% acceleration.
Microsoft provided Q2 revenue guidance of $74B, well above Wall Street’s $71B expectations. While some of this is due to the recent depreciation in the US dollar (international business), management is also targeting to deliver +35% Azure growth next quarter (above Wall Street’s +31% expectations).
Wall Street analysts share a $600 price target for the stock citing core Azure growth reacceleration, Microsoft’s GenAI contribution to become much stronger, impressive operating margins, and plenty of free cash flow. Personally, I would agree with them!
Holding shares.
Amazon (AMZN):
Key Metrics
Revenue: $155.7 billion, an increase of +9% YoY
Operating Income: $18.4 billion, an increase of +20% YoY
Profits: $17.2 billion, an increase of +64% YoY
Earnings Release Callout
“We’re pleased with the start to 2025, especially our pace of innovation and progress in continuing to improve customer experiences.
From Alexa+ to another delivery speed record for our Prime members, to our new Trainium2 chips and Bedrock model expansion that make it easier for AWS customers to train models and run inference more flexibly and cost-effectively, to our first Project Kuiper satellites successfully launching into low earth orbit in our quest to provide broadband access to hundreds of millions of households in rural areas without it today — we’re continuing to find meaningful ways to make customers’ lives easier and better every day.”
My Takeaway
Revenue of $155.7B and profit of $18.4B were above Wall Street’s expectations ($155.1B and $17.5B) as their International business segment drove upside expansion on the bottom line. AWS growth was in-line with Wall Street’s +17% growth expectation, but may have missed higher expectations following Microsoft’s +35% Azure acceleration.
Management noted limited direct impact from tariffs in the Q2 profit guide, driven by pre-buying inventory and limited third-party seller price increases thus far. Amazon did not quantify their China exposure, but disclosed that low-price ‘everyday essentials’ grew 2X faster than the rest of the US units in Q1 — and now represent 1/3 of all units sold.
Amazon certainly has material third-party seller revenue exposure to China and other imports, and AWS lost some ground to Azure during Q1. However, the platform has continued to show nice stability throughout 2025 thus far, and Wall Street continues to believe the stock is trading at a discount (cheaper than Walmart). Cloud growth can also be lumpy, and while AWS is not seeing the benefit of ChatGPT usage like Azure is, corporate spend remains steady.
Holding shares.
Meta Platforms (META)
Key Metrics
Revenue: $42.3 billion, an increase of +16% YoY
Operating Income: $17.5 billion, an increase of +27% YoY
Profits: $16.7 billion, an increase of +35% YoY
Earnings Release Callout
“We've had a strong start to an important year, our community continues to grow and our business is performing very well. We're making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives."
My Takeaway
Meta reported strong Q1 results with revenue coming in ~2% and operating income ~$2.2B ahead of Wall Street’s expectations. Revenue reached $42.3B (+16% YoY) — modestly above the high end of management’s guidance. The online commercial vertical was once again the largest contributor to this growth. The total number of ad impressions delivered increased +5% YoY with the average price per ad increasing +10% YoY. Meta reported 3.43B Family Daily Active People, up +6% YoY.
WhatsApp now has over 100M MAUs in the US, Threads now has over 350M MAUs, Meta AI is approaching 1B MAUs, advertising growth was strongest in Rest of World (+19% YoY), Reality Labs losses reached -$4.2B, and total headcount reached 76,800 (+11% YoY).
Meta expects full year expenses in the range of $113-118B, slightly above Wall Street’s expectations — but below management’s prior outlook of $114-119B. Management guided 2025 CapEx in the range of $64 to $72B, rising modestly from the company’s prior expectations.
I think this quarter was very important for the company’s AI business.
Their AI recommendation engine seems to be improving — which is why they’re seeing so many monthly active users across their family of apps. I continue to believe there’s more upside to be had here as their LLM technology (Llama) continues to ingest data. During the quarter, 30% more advertisers used Advantage+ AI tools that now automate nearly all parts of a campaign setup process including selecting the audience, the ad creative, and where to place the ad to deliver the most efficient outcome.
Meta Platforms is an AI-first company, and I think they’re going to prove that during 2025. Holding shares.
Apple (AAPL):
Key Metrics
Revenue: $219.7 billion, an increase of +4% YoY
Operating Income: $72.4 billion, an increase of +6% YoY
Profits: $61.1 billion, an increase of +6% YoY
Earnings Release Callout
“Today Apple is reporting strong quarterly results, including double-digit growth in Services. Our March quarter business performance drove EPS growth of 8 percent and $24 billion in operating cash flow, allowing us to return $29 billion to shareholders.
And thanks to our high levels of customer loyalty and satisfaction, our installed base of active devices once again reached a new all-time high across all product categories and geographic segments.”
My Takeaway
Apple reported slightly better-than-expected earnings results — total sales were up +5% despite a 2.5% foreign currency headwind.
Greater China declined -2% YoY — suggesting the iPhone lost share, again, in China. Wall Street continues to worry Apple is going to see further loss due to US-China tariff-related friction. Additionally, management guided for a -$900M impact to gross margins due to tariff-related costs. Moreover, certain US Apple Care and accessories businesses are subject to 145% tariffs whereas the majority of hardware are not. Their Q2 results thus far have not exhibited any demand “pull forward” as customers would have tried to buy their products before tariffs hit.
Services grew +12% YoY. Paid accounts and paid subscriptions grew double-digits YoY. Gross margins improved over +0.7%, driven by portfolio mix. Apple’s installed base reached an all-time high across major hardware categories. Mac saw strong growth in upgrades and new users. Over half of iPad and Apple Watch customers are new to the products. Management saw iPhone 16 performing better YoY in markets that have access to Apple Intelligence.
Not only do I believe Apple is historically overvalued (currently 30X P/E vs. historical 25X P/E) but the company is in the tariff crosshairs. I’m not saying Apple is doomed, but it’s hard to be bullish at 30X P/E plus tariffs. I would love to buy more shares closer to 25X P/E ($175-180). Still holding my existing shares, but not buying more at the moment.
Holding shares.
Investor Events / Global Affairs:
Warren Buffet announced his retirement at the Berkshire Hathaway Annual Shareholder Meeting and Meta’s monopoly lawsuit could be saved by TikTok.
Warren Buffett to Retire After 2025
Source: CNBC
Warren Buffett announced at Berkshire Hathaway’s 2025 annual meeting that he will step down as CEO at the end of the year, recommending Vice Chairman Greg Abel as his successor beginning in 2026. Abel has been Buffett’s designated heir since 2021 but was unaware of the exact timing until the surprise announcement during the meeting’s closing moments. Buffett, who transformed Berkshire from a failing textile firm into a global conglomerate, will remain involved with the company but emphasized that Abel will have full decision-making authority. The news marked a significant turning point for Berkshire and its devoted community, with shareholders expressing both respect and uncertainty about the company’s future.
Buffett stated that only his children, Howard and Susan, were informed ahead of the public announcement. Abel, originally from Canada, joined Berkshire through its 1999 investment in MidAmerican Energy and rose steadily through the ranks. Buffett praised Abel’s leadership and predicted he would outperform even his own historic success. As Buffett concludes his 60-year run at the helm, his departure signals the end of an era in American capitalism.
Berkshire Hathaway (BRK.B) Stock Performance, 5-Year Chart, Seeking Alpha
“Tomorrow, we’re having a board meeting of Berkshire, and we have 11 directors. Two of the directors, who are my children, Howie and Susie, know of what I’m going to talk about there. The rest of them, this will come as news to, but I think the time has arrived where Greg should become the chief executive officer of the company at year end.”
Meta’s Monopoly Lawsuit Could Be Saved By… TikTok?
Sources: Alex Wheeler / FT Montage / Bloomberg / Dreamstime
Meta is defending itself in an antitrust trial by arguing that TikTok is a major competitor, countering the FTC’s claim that Meta holds an illegal monopoly through its acquisitions of Instagram and WhatsApp. The FTC asserts Meta bought those apps to eliminate potential rivals and dominate the market for personal social connections. Meta counters that the social media landscape has evolved into an entertainment-focused space, where TikTok competes directly through short-form video. TikTok executives have downplayed their app’s role as a social network, but internal documents show it views Instagram and YouTube as key competitors.
Meta CEO Mark Zuckerberg and others emphasized how Facebook and Instagram now resemble TikTok more than traditional social networks. However, the FTC has introduced internal Meta communications showing concern that Instagram and WhatsApp could threaten Facebook’s core business. Instagram co-founder Kevin Systrom supported parts of the FTC’s case but admitted Meta’s resources accelerated Instagram’s growth. U.S. District Judge James Boasberg will decide the case, and his questions suggest he’s considering whether the differences between these platforms are truly significant or just gradual shifts in usage.
Meta Platforms (META) Stock Performance, 5-Year Chart, Seeking Alpha
“The current horizon of the products is all about entertaining users with video content. Facebook certainly and TikTok certainly and Instagram certainly. And I’ll give you one more, which would be YouTube.”
Major Economic Events:
The US labor market continues rolling along, Q1’s first GDP reading was ugly, and the PCE Index remains in relatively healthy shape.
Jobs Report
In April 2025, U.S. employers added +177,000 jobs, and the unemployment rate held steady at 4.2% — despite economic uncertainty tied to President Trump’s trade policies. Payroll gains were broad, with strong growth in health care and transportation/warehousing — the latter seeing its biggest jump since December — while manufacturing lost jobs due to its sharpest output contraction since 2020.
The labor force participation rate rose to 62.6%, and the prime-age (25–54) participation rate hit a seven-month high. Average hourly earnings increased +0.2% in April and +3.8% year-over-year, showing a slowdown from March.
The underemployment rate dropped to 7.8%, but job openings in March fell to their lowest since September, signaling potential softening ahead. Federal government job cuts continued for a third straight month due to downsizing by the Elon Musk-led DOGE, contributing to 282,000 layoffs so far in 2025. Despite resilience in current data, economists warn of at least 500,000 jobs at risk as trade tariffs and federal cuts ripple through the broader economy.
“This is a good jobs report all around. The ‘R’ word that the labor market is demonstrating in this report is resilience, certainly not recession.”
Q1 GDP (First Reading)
The U.S. economy contracted by -0.3% in the first quarter of 2025, marking the first negative GDP reading since Q1 2022, largely due to a +41.3% surge in imports — including a +50.9% spike in goods — as businesses rushed to beat President Trump’s newly announced tariffs. This import-driven contraction, which subtracted over 5 percentage points from GDP, overshadowed otherwise resilient data such as a +21.9% jump in private investment and a +1.8% rise in consumer spending, albeit the latter slowed from +4% in the prior quarter.
Federal government spending fell -5.1%, driven by DOGE, further weighing on GDP. Inflation surged, with the Fed’s preferred PCE index up +3.6% and core PCE rising +3.5%, complicating the Fed’s decision ahead of its May meeting as it balances slowing growth with rising prices. Despite this, markets still expect a rate cut in June and potentially four cuts by year-end. President Trump downplayed the contraction, blaming “Biden’s overhang” and claiming that tariffs will eventually fuel a U.S. manufacturing boom. The report has raised recession fears and intensified scrutiny on Trump’s trade strategy, as businesses, consumers, and policymakers navigate the economic fallout.
"Trade was a huge influence… We saw companies bringing in a lot of imports to try to get ahead of tariffs. We saw a huge build in inventories. But when you look at underlying demand consumer spending growth, that was still pretty solid."
Consumer Spending / PCE Index Updates
Source: WSJ
U.S. consumer spending rose by +0.7% in March, the strongest gain since early 2023, driven by purchases of durable goods and services ahead of expected tariff-driven price hikes. At the same time, the Fed’s preferred inflation gauge — the PCE price index — was flat for the month, marking the first such pause in nearly a year, with core PCE also showing no monthly change. This combination of healthy spending and slowing inflation suggests the economy was in solid shape before President Trump’s tariffs began to take full effect.
However, the broader Q1 data still showed core inflation rising +3.5% annually and the economy shrinking, largely due to a surge in imports. Economists warn that tariffs could reignite inflation while cooling growth, complicating the Federal Reserve’s path on interest rates. Retailers like Shein and P&G are already raising prices, and companies such as GM and American Airlines are pulling guidance amid uncertainty. While wage growth and disposable income have supported spending, the saving rate dipped to 3.9%, and signs of labor market softening are raising concerns about future demand.
“There’s a good chance that tariffs could create conditions to fuel inflation while simultaneously slowing economic growth. This complicates the Fed dual mandate — where they’re left deciding what to prioritize: getting inflation down or minimizing the impact to the labor market.”
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