What happens when strong earnings collide with even stronger uncertainty? That’s the story of Q1 2025. On paper, corporate America and global markets posted impressive numbers, beating expectations by a wide margin. But under the surface, anxiety is building. With a surge in tariff threats and geopolitical risks, companies are no longer celebrating – they’re bracing. Forecasts are being pulled, guidance is sinking, and executives are sounding cautious even after solid results. It’s not about what happened last quarter but what might happen next.
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Across the U.S., Europe, and China, companies are slashing their 2025 forecasts or pulling them altogether. The reason is soaring costs, shaky consumer sentiment, and trade disruptions linked to President Trump’s latest round of tariffs. Many executives are now more focused on preparing for multiple economic scenarios than celebrating last quarter’s wins.
Cautioned Guidance Despite Solid Results
Despite this, the S&P 500 delivered double the expected earnings growth, and Europe’s Stoxx 600 beat forecasts with a 5% earnings increase. However, guidance momentum – a measure of how many companies are raising vs. lowering forecasts – has dropped to its lowest point since 2010. That’s a big warning sign for markets.
Mentions of “tariffs” during earnings calls surged to a record high this season. Companies like Walmart (WMT) and Deere & Co. (DE) flagged rising costs, with DE estimating a $500 million hit in 2025. Expedia (EXPE) warned of softer U.S. travel demand, while Alibaba (BABA) reported disappointing revenue. Even Mercedes-Benz and Daimler Truck (DTG) cut their guidance due to weak North American orders and pricier parts.
Some, like United Airlines (UAL), issued dual profit forecasts depending on whether we get a recession. Others, like Delta (DAL) and American Airlines (AAL), pulled their full-year outlooks completely.
And yet, not all is doom and gloom. The bright spot this season was tech, especially the AI heavyweights. So far, six of the “Magnificent Seven” have reported, and four delivered revenue guidance in line with or above expectations. Alphabet (GOOGL) kept quiet, but investors are watching closely as Nvidia (NVDA) prepares to report on May 28.
In Uncertain Times, Data-Driven Investors Stay Ahead
So, what does this mean for investors? Volatility is back, and forward guidance is now more influential than raw earnings. But in uncertain times, data-driven decisions matter more than ever. If you’re looking for stocks analysts still believe in, check out TipRanks’ Smart Score and Top Analyst Picks to stay one step ahead.
Using Tipranks’ Comparison Tool, we’ve collected all the publicly traded companies mentioned in the article, despite representing different sectors. This way, you can examine each stock and industry to form your own perspective.
