If you’re wondering why tech companies like Meta, Reddit, and Apple reported strong earnings this week despite President Donald Trump’s tariffs, well, the tariffs may be the answer. No, the tariffs didn’t help these companies, but they did lower expectations. The lower the bar, the easier it is to clear.
Yahoo Finance noted that second-quarter earnings were largely trending positive and that “analysts tempered their expectations amid President Trump’s tariffs, stocks’ lofty valuations, and uncertainty about the health of the US economy.”
Meta, for instance, brought in Q2 revenues of $47.5 billion versus $44.8 billion expected. Still, the company had a good quarter regardless of lowered expectations. Its sales revenue was up 22 percent year over year, and ad revenues saw an upward bump, too.
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Reddit saw soaring revenues as well. It brought in $500 million, which far surpassed Wall Street’s expectations of $425 million. Apple’s revenue was up 10 percent year over year, coming in at $94 billion versus $89.5 billion expected. Reddit just barely beat expectations for daily active users, even as Google’s AI push has put a damper on web traffic for most sites. (Reddit has partnered with Google and increased its visibility in Google Search.) It also saw its revenue from licensing deals grow. Apple, meanwhile, beat expectations largely on the strength of iPhone sales, which grew 13 percent year over year.
In short, these tech companies saw strong sales despite significant headwinds and lowered expectations. Still, it’s not like the effects of Trump’s tariffs and a shaky economy are totally absent. Apple, for instance, estimated tariffs would cost the company $1.1. billion this quarter alone. In addition, a negative July jobs report is increasing economic unease, even among Trump loyalists.
