Stocks began the new month on a mostly positive note, bolstered by a fresh round of corporate earnings that propelled the S&P 500 and Nasdaq Composite to record highs. In contrast, the Dow Jones Industrial Average struggled, closing slightly down as some of its expensive components faced sell-offs.
At market close, the S&P 500 rose by 0.3% to reach 7,230, while the Nasdaq climbed 0.9% to settle at 25,114, marking new all-time closing highs. The Dow, however, dipped by 0.3%, finishing at 49,499.
The spotlight was on Apple (AAPL), which experienced a notable surge of 3.2% after announcing better-than-expected fiscal second-quarter results. The tech giant reported year-over-year revenue growth across all its product categories, highlighted by a nearly 22% increase in iPhone sales. Apple also saw sales gains in all regions, notably a 28% rise in China—a market where the company has faced challenges recently.
CFRA Research analyst Angelo Zino commented, “We believe the strong iPhone 17 replacement cycle is supported by both higher average selling prices and units, with solid performance across all geographic segments.” In addition, Apple’s board of directors approved a 4% increase to its quarterly dividend and a $100 billion stock buyback program. Zino indicated that further significant catalysts might emerge at the Worldwide Developers Conference (WWDC) in June with potential AI developments and at a hardware event in September that could unveil a foldable phone.
Another tech company, Atlassian (TEAM), also had a remarkable performance, with its stock soaring 29.6% following strong fiscal third-quarter results. The enterprise software company reported an 80.4% year-over-year increase in earnings, reaching $1.75 per share, and a 32% rise in revenue to $1.79 billion. Cloud revenue climbed by 29%, while data center revenue jumped 44%. The company raised its full-year guidance for both cloud and data center revenue, anticipating year-over-year growth of 26.5% and 21.5%, respectively.
Oppenheimer analyst Ittai Kidron noted the results were encouraging and bolstered confidence in the company’s strategic direction, particularly its ability to monetize customer AI usage amidst growing concerns about AI displacement. Despite the stock being down 46% year-to-date, Kidron remarked on its compelling valuation, suggesting that though long-term concerns may linger, maintaining a bearish outlook in the near term could be challenging.
Conversely, biotech giant Amgen (AMGN) saw a 4.8% drop post-earnings, making it the worst performer on the Dow. Although the company reported earnings and revenue that surpassed expectations and raised its full-year guidance, the market reacted negatively to the FDA’s proposal to withdraw approval for Amgen’s Tavneos, a blood vessel inflammation drug associated with severe liver injury cases. Yet, Oppenheimer’s Jay Olson expressed that he did not foresee a significant impact on Amgen’s overall revenue. Olson highlighted the potential of Amgen’s weight-loss and Type 2 diabetes drug, MariTide, as a promising opportunity in an underserved market segment, maintaining an Outperform (Buy) rating with a price target of $400—suggesting a potential upside of over 21%.
