Despite relatively positive earnings reports this week, a looming partial government shutdown, among other things has the major indices down or flat coming into the close of trading on the week. We will dive into some of the notable prints from the week and discuss a few portfolios related topics. Whether you follow earnings on your own, or are reading here, I want to stress that in my opinion whether you invest on your own or through an advisor, these should be viewed as data points, not the whole story. Think of earnings as periodic health checks that provide context on a company’s trajectory rather than triggers for immediate action. While quarterly data points are useful, your primary focus should remain on the enduring competitive advantages and the structural growth story that initially justified your investment.
Tesla had a mixed print, with revenue falling short, and a modest earnings beat, but the story on Wednesday was in Elon’s comments. Unsurprisingly he remains steadfastly committed to investing in the future and transforming the firm regardless of short-term noise. Following an announcement that Full-Self-Driving software would move from a purchase to subscription model, Musk announced the “honorable discharge” of Tesla’s Models S and X vehicles. The production capacity that will be redirected to Optimus humanoid robot. Additionally, Musk noted that Tesla has made progress on its robotaxi initiative, as fully automated, paid rides have begun in Austin, Tx. Furthermore, Musk announced that Tesla would be building a chip foundry (where chips are made) in Texas to produce advanced chips. This is a massive undertaking but would, at least in part, protect Tesla from the geopolitical and supply chain risk posed by reliance on Taiwan based foundries. Key developments to watch will be progress on robotaxi approvals across the country, and Optimus production.
Despite beating earnings, and revenue estimates, Microsoft saw shares fall by 12%, extending a brutal three-months (down 22% over that period). The stark reaction is driven by soft-guidance in Azure, the firms cloud computing division, seen as a proxy for AI demand from the firm’s client-base. Management expects growth in the division to continue around the current 38% in the current quarter, which disappointed the street given extensive capital spending in the past few years. CEO Satya Nadela was candid in his comments, noting that power supply has been a constraint on Azure, stating that the firm has GPUs sitting in inventory that simply cannot plug in yet as they wait on regional power grid connections. As such, there may be upside in the current slump, look for additional cloud compute capacity and potential behind the meter partnerships as drivers for a potential turnaround in 2026.
Apple posted a phenomenal quarter, with record-breaking iPhone sales, revenue up 16% over last year, and more than 2.5 billion active devices worldwide. Contrary to analyst fears, Greater China revenue grew by 38% year-over-year, driven by a surge in consumers moving to iPhone 17. During his comments Tim Cook noted most users on AI-enabled devices are actively leveraging Apple Intelligence. Cook also noted that the company has acquired Israeli Firm Q.AI which specializes in “silent speech” technology that uses sensors to interpret words from tiny facial muscle movements rather than audible sound. This $2 billion deal—Apple’s second largest fever—aims to let users privately interact with Siri or communicate in loud environments by “reading” their thoughts and mouthing before they even speak. Key developments to watch moving forward will be continued AI strategy development and rising costs of memory as a potential headwind in the second half of 2026.
Meta surged this week, after a textbook beat and raise quarter. With this, Mark Zuckerberg significantly raised 2026 Capex guidance, expecting to spend $115B-135B on AI infrastructure (up from roughly $72B). Zuckerberg emphasized this year will be the year of “personal superintelligence” with smart glasses potentially becoming as ubiquitous as smartphones. While Meta’s massive spending on AI might seem daunting, for a long-term investor, it signifies management’s commitment to securing the next major computing platform. Similarly, Apple’s temporary supply bottlenecks are a byproduct of overwhelming demand, not a lack of interest in the brand.
Beyond Big Tech, this week’s earnings painted a picture of a market still grinding higher, but with clear sector-level divergences.
Industrials and defense delivered a largely constructive set of results. Northrop Grumman, Lockheed Martin, General Dynamics, L3Harris, and Honeywell all posted modest beats, underscoring steady demand for defense, aerospace, and mission-critical systems. Caterpillar also surprised to the upside, signaling resilience in heavy equipment demand despite macro uncertainty. Boeing was the clear outlier, with a far larger-than-expected loss, reinforcing that execution and cash flow recovery remain the central issues for the name rather than end-market demand.
Financials and payments were broadly solid. Visa and Mastercard both beat expectations, confirming continued strength in consumer spending and transaction volumes, even as growth normalizes. Progressive and Aon delivered clean beats, benefiting from disciplined pricing and favorable underwriting trends. Blackstone’s results reflected improving sentiment in private markets, while MSCI was one of the few disappointments in the group, with softer earnings suggesting some pressure on asset-linked fee growth.
Energy and utilities showed selective strength. Exxon and Chevron modestly beat expectations, while Valero stood out with a strong refining-driven upside surprise. NextEra Energy delivered a small beat, consistent with steady regulated utility performance. GE Vernova, however, missed by a wide margin, highlighting near-term execution and cost challenges despite longer-term enthusiasm around electrification and grid investment.
Consumer, travel, and housing were mixed. Starbucks beat expectations, suggesting stabilization after a choppy period, while Levi Strauss and M/I Homes delivered strong upside surprises, pointing to healthier discretionary demand and housing affordability at the margin. On the other hand, American Airlines and Las Vegas Sands highlighted ongoing volatility in travel-related margins, even as demand remains intact. Whirlpool’s massive earnings beat stood out, driven by cost controls and margin recovery rather than top-line acceleration.
Healthcare, telecom, and legacy tech leaned steady but unspectacular. Stryker delivered a modest beat, reinforcing its defensive growth profile. IBM’s upside surprise pointed to improving execution across software and services, while AT&T and Verizon posted small beats consistent with slow, predictable cash-flow stories. On the other side, Texas Instruments and Corning missed, underscoring that portions of the industrial and semiconductor supply chain are still working through inventory and demand normalization. ASML’s results fit that narrative as well—solid long-term positioning and order visibility, but near-term results reflecting customers’ continued caution on capital spending as the cycle grinds toward recovery rather than snaps back.
Overall, while headline reactions were dominated by Big Tech, the broader earnings picture suggests a market that is fundamentally stable, with institutions rotating toward companies showing execution discipline and margin recovery rather than pure growth acceleration. Watch for increased volatility over the next few weeks, as the market digests another partial Government shutdown, and the administrations nomination of Kevin Warsh, to replace Jerome Powell as Fed Chairman.
Portfolio Topics:
Tax-Loss Harvesting
We never enjoy seeing red next to any holding, but in a taxable account (outside of a 401(k), IRA, or Roth), periods like this can create an opportunity heading into the next tax season.
It’s worth reviewing your portfolio by position and by individual tax lot to identify unrealized losses, particularly in holdings that are easily replicable. In those cases, you can sell the position to realize the loss, use it to offset other gains, and then reallocate into a closely related investment to maintain market exposure.
When done thoughtfully, this kind of tax-aware positioning can be a meaningful tailwind for long-term returns. I’d encourage reviewing your portfolio with your advisor to ensure these strategies are being implemented appropriately and in a way that aligns with your broader financial situation.
The Individual 401(K)
An individual 401(k), often referred to as a solo 401(k), is one of the most underutilized planning tools available to self-employed professionals and business owners, and the real opportunity lies in how much flexibility and scale it can provide when structured correctly. Eligibility is relatively narrow—earned self-employment income and no full-time employees outside of a spouse—but for those who qualify, the planning advantages can be substantial.
What makes the individual 401(k) especially compelling is contribution potential. Participants contribute in two capacities, both as employee and employer, which allows for significantly higher annual savings than most retirement vehicles. In strong income years, this can translate into meaningful tax deferral while simultaneously accelerating long-term wealth accumulation. For many business owners, this is the first time they realize just how much more they could be saving compared to a SEP IRA or traditional IRA.
The plan’s flexibility further enhances its appeal. Contributions can be made on a pre-tax or Roth basis, or a combination of both, offering valuable control over future tax outcomes. Investment options are often broader than what’s available in off-the-shelf retirement accounts, and certain plans allow for loans if liquidity is ever needed. When coordinated with the rest of a household’s financial picture, the individual 401(k) can become a central pillar of a long-term strategy rather than just another retirement account.
For business owners, and professionals who know someone operating independently—or running a closely held business without employees—this is often a conversation worth having. The individual 401(k) isn’t right for everyone, but for those who qualify, the benefits can be significant. If this sounds like it may apply to someone you know, it’s worth reaching out to explore whether the structure and strategy make sense in their specific situation.
Disclosure
This material is provided for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security or investment strategy. The views expressed are those of the author as of the date of publication and are subject to change without notice.
The author is a financial professional and may hold positions in, or manage client accounts that hold positions in, the securities discussed. Such holdings are subject to change at any time without notice. While the author strives to present information in a fair and balanced manner, no representation is made that this commentary is free from bias, and readers should be aware of potential conflicts of interest.
The information presented is derived from publicly available sources believed to be reliable, but accuracy and completeness are not guaranteed. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.
This commentary does not take into account the investment objectives, financial situation, or particular needs of any specific person. No advisor-client relationship is created by the receipt or review of this material. Readers should consult with a qualified financial, legal, or tax professional before making any investment decisions.
The views expressed do not take into account the specific financial situation, risk tolerance, or investment objectives of any individual reader. Reading this material does not create an advisor-client relationship. Investors should conduct their own research or consult with a qualified financial professional before making investment decisions.
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