The tech sector saw a flurry of activity last week, with significant sell-offs in AI-related stocks. Market sentiment may stabilize in the coming days. Amid this, the focus shifts to the ongoing earnings season, which will highlight several mid-cap companies, including key players from the gig economy. This week's earnings reports from Spotify, Lyft, Shopify, Coinbase, Pinterest, Instacart, and Airbnb each present notable aspects for investors.
For Spotify, advertising revenue declined in the second and third quarters of last year, slowing overall revenue growth. This contrasts with management's April statement forecasting accelerated advertising growth for 2025. Mid-year, the departure of Spotify's advertising head signaled a need for faster progress. By the Q3 report in early November, executives indicated that adjustments in the ad division would yield significant benefits over several years, yet results have been disappointing. Data from S&P Global Market Intelligence suggests analysts expect a slight deceleration in Q4 revenue growth for Spotify, potentially indicating another drop in ad revenue. However, a recent price increase for its service in the U.S. and other countries is expected to provide a revenue boost this year.
Lyft is another key focus. Shares of the second-largest U.S. ride-hailing platform rose notably last year, gaining 50% for 2025, outpacing Uber's 35% increase. Investor optimism stemmed from CEO David Risher successfully steering Lyft to consistent profitability, despite its revenue growth lagging behind Uber's. This year, however, Lyft's stock has fallen 15%, nearly double Uber's decline. The impact of autonomous taxis on the ride-hailing industry remains a concern for both companies, though Uber executives have emphasized that the opportunities from self-driving vehicles outweigh the risks. Analysts project Lyft's Q4 revenue to grow 13% year-over-year, significantly lower than Uber's estimated 20% growth but within Lyft's recent range.
Pinterest also warrants attention. The company maintained revenue growth between 16% and 17% throughout last year, substantially higher than its closest social media peer, Snap, which has stalled around 10% growth. CEO Bill Ready has revitalized Pinterest's advertising business by leveraging its platform as a natural destination for consumer product research, making it a preferred choice for many advertisers. However, some Wall Street investors are growing concerned that the rise of AI chatbots could pose competitive challenges. Given the strong Q4 advertising performances from giants like Meta and Google, Pinterest's upcoming results will be a crucial indicator of its business health.
Below are the analyst expectations for the December quarter (Q4) from S&P Global Market Intelligence:
Spotify (Reporting Tuesday) Revenue: €45.22 billion, up 6.6% year-over-year Earnings Per Share: €2.77, up 57% year-over-year
Lyft (Reporting Tuesday) Revenue: $17.54 billion, up 13% year-over-year Earnings Per Share: $0.12, down 25% year-over-year
Instacart (Reporting Thursday) Revenue: $9.6995 billion, up 9.7% year-over-year Earnings Per Share: $0.51, down 3.7% year-over-year
Airbnb (Reporting Thursday) Revenue: $27.1 billion, up 9.3% year-over-year Earnings Per Share: $0.66, down 9.6% year-over-year
Pinterest (Reporting Thursday) Revenue: $13.3 billion, up 15% year-over-year Earnings Per Share: $0.43, down 84% year-over-year
Other notable news:
The European Commission stated on Friday that preliminary investigations found TikTok violated the Digital Markets Act by employing "addictive product design," including features like infinite scroll, autoplay, and push notifications.
Chinese e-commerce giant Alibaba Group announced it will distribute billions of dollars in shopping vouchers and other benefits to users of its Tongyi Qianwen AI chatbot app during the Spring Festival holiday.
The Trump administration officially approved a bank charter application for Erebor Bank, a lender focused on startups founded last year by Palmer Luckey, co-founder of Anduril, and Joe Lonsdale, co-founder of Palantir.
South Korea's second-largest cryptocurrency exchange, Bithumb, reported mistakenly distributing 620,000 Bitcoins, worth approximately $440 billion, to users due to an operational error, with 99.7% of the assets already recovered.
Washington Post CEO Will Lewis stepped down abruptly, with CFO Jeff Donofrio appointed interim CEO. Donofrio joined from digital media company Raptive in June last year. Lewis's departure comes just days after the newspaper cut one-third of its newsroom staff.