Palantir Surges, Alphabet Stumbles, and Disney’s Streaming Gamble

Money Masters' Market Pulse Week 6

February 07, 2025

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Dear Money Master,

This week, the global economy is making major moves! 🌍💰 Central banks from India to the UK are slashing interest rates, while inflation in the Eurozone proves more stubborn than expected. Meanwhile, tech giants like Alphabet and Amazon are doubling down on AI with massive capital investments.

In this issue, we break down the latest earnings from Disney, Uber, and Palantir, showing which companies are thriving and which are struggling in the face of economic shifts. 💹 In our Deep Dive, we explore Pricing Power—the secret weapon that lets companies control their own fate, even in volatile markets.

📰 Your Daily Financial Digest - February 7th, 2025

🌍 Economics:

  1. Euro Zone Inflation Jumps to 2.5% in January 📈
    Higher-than-expected inflation was driven by rising energy costs, with core inflation holding steady at 2.7%. The European Central Bank still expects inflation to hit its 2% target this year. Read More

  2. India Cuts Interest Rates for First Time in Five Years 📉
    The Reserve Bank of India reduced its key rate by 25 basis points to 6.25%, shifting its focus from inflation control to economic growth support. Further rate cuts are expected in 2025. Read More

  3. Bank of England Begins Rate Cuts as Growth Slows 🏦
    The BOE lowered rates by 25 basis points to 4.5% and halved its 2025 growth forecast to 0.75%. Governor Andrew Bailey hinted at more rate cuts if disinflation continues. Read More

💻 Technology:

  1. Huawei’s Revenue Soars 22% Despite U.S. Sanctions 🚀
    The Chinese tech giant hit $118 billion in revenue in 2024, its fastest growth since 2016. Huawei’s smartphone sales surged 37%, overtaking Apple in China’s market share. Read More

  2. GoCardless Halves Losses, Eyes Profitability by 2026 💳
    The fintech firm cut its net loss by 55% to £35.1 million in 2024, boosted by revenue growth and cost-cutting measures. It aims for its first full-year profit within two years. Read More

💹Earnings:

  1. Palantir Beats Expectations with Strong AI-Driven Growth 🤖
    The software firm reported Q4 revenue of $828 million, surpassing estimates of $776 million. Full-year revenue grew 29%, with U.S. commercial sales jumping 64%. 2025 guidance also exceeded expectations. Read More

  2. Alphabet Misses Revenue Estimates, Plans $75B AI Investment 💡
    Q4 revenue reached $96.47 billion, slightly below forecasts. The company announced $75 billion in capital expenditures to expand its AI capabilities, far exceeding the expected $58.84 billion. Read More

  3. Uber Reports Higher Revenue but Misses on EPS 🚖
    Revenue grew 20% year-over-year to $11.96 billion, beating expectations. Net income surged to $6.9 billion, bolstered by a tax benefit, but adjusted EPS of $0.23 fell short of forecasts. Read More

  4. Disney Reports Strong Earnings Amid Streaming Subscriber Decline 🎬
    Q1 revenue increased 4.8% to $24.69 billion, with EPS at $1.76, exceeding estimates. Disney+ saw a 1% subscriber decline, though streaming profitability remained intact. Box office hits boosted content revenue. Read More

  5. AWS Revenue Growth Slows Slightly, Profit Surges 📊
    Amazon Web Services generated $28.79 billion in Q4 revenue, missing estimates slightly. Operating income jumped 48% to $10.63 billion, supported by rising AI-driven cloud demand. Read More

🔍 Deep Dive: Understanding Pricing Power and Its Impact on Businesses🌍💰

What Is Pricing Power?
Pricing power refers to a company's ability to raise prices without significantly reducing demand for its products or services. It is closely tied to price elasticity—if demand stays strong despite price hikes, the company has high pricing power.

How Pricing Power Works
Companies with unique or essential products tend to have strong pricing power. Apple, for example, had high pricing power when it first introduced the iPhone, as there were no direct competitors. Over time, as alternatives emerged, its pricing power weakened. On the other hand, industries with scarce resources, like oil, maintain pricing power because demand remains strong regardless of price changes.

Why It Matters for Investors
Firms with strong pricing power can protect profits during inflation or economic downturns. Investors often favor such companies, as they can sustain revenue growth even when costs rise. Businesses in monopolistic or niche markets often demonstrate this advantage, making pricing power a key factor in assessing long-term profitability.

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*Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
*The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
*Please read the offering circular and related risks at invest.modemobile.com.

To your financial empowerment, The Money Masters Team

P.S. Stay connected! Don't forget to follow us on social media! 📱🌐

Disclaimer: This information is for educational purposes only and should not be construed as financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.