Weekly Roundup: Apple Tariff Fears, CVS Snubs Lily, Spotify Tumbles
May 2, 2025
Apple faces mounting tariff costs and disappointing sales in China, alarming investors. Meanwhile, CVS's decision to favor Novo Nordisk's Wegovy over Eli Lilly’s Zepbound escalates competition in the growing obesity market. The landscape of drug pricing wars is heating up as companies vie for insurance coverage. Lastly, Spotify's stock experiences a bumpy ride with subscriber growth and a profit miss, although recent app updates assured a potential recovery. Tensions rise as these major players navigate market challenges.
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insights INSIGHT
Apple Faces Tariff Impact
Apple shares fell due to escalating tariff costs and a slowdown in China impacting sales.
The company expects $900 million in extra tariff costs this quarter, signaling growing geopolitical challenges.
insights INSIGHT
CVS Boosts Novo Over Lilly
CVS dropped Eli Lilly's Zepbound in favor of Novo Nordisk's more expensive Wegovy.
Despite higher costs, Wegovy gains pricing edge due to better negotiation power with insurers.
insights INSIGHT
Spotify's Mixed Quarter
Spotify saw subscriber growth but missed profit expectations, causing a stock drop.
Approval for external app payments by Apple later boosted Spotify shares significantly.
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- Apple (APPL) shares fell this week after its quarterly earnings report failed to soothe investor concerns about its biggest challenges, including escalating tariff costs and a slowdown in China. The company’s shares declined 3.7% in New York on Friday after second-quarter results included worse-than-expected sales in China. The iPhone maker also warned that tariffs will increase costs this quarter, a sign that geopolitical tensions are taking a growing toll on the business. Apple expects $900 million in higher costs from tariffs in the current period, Chief Executive Officer Tim Cook said Thursday during a conference call. Revenue will increase by a percentage in the low- to mid-single digits in the quarter, compared with a 5% average analyst estimate. The company didn’t offer any guidance on the impact of tariffs beyond the current period.
- Eli Lilly (LLY) shares took a hit on word that CVS choose to make rival Novo Nordisk's popular weight-loss drug Wegovy more widely available to its customers. Eli Lilly's Zepbound was moved off of CVS' list of preferred drugs. Novo and Lilly have been locked in a fierce competition to dominate the obesity market, which is expected to reach $130 billion by the end of the decade. CVS Caremark’s decision to place Wegovy over Zepbound could give Novo an edge as the companies fight to convince insurance companies to pay for their treatments, which cost more than $1,000 a month before rebates.
- Spotify (SPOT) shares tumbled on Tuesday after the streaming company gave a muted outlook for profit and subscriber growth in the current quarter. The Stockholm-based company forecast gross profit margins of 31.5% in the second quarter, missing analysts’ average estimate for 31.6% according to data compiled by Bloomberg. Spotify sees monthly active users rising to 689 million, less than the 694.4 million analysts expected. The US-traded stock slipped as much as 9.6% in New York to $540.10. It had risen 22% this year through the end of March and had more than doubled in the last 12 months. Chief Executive Officer Daniel Ek tried to reassure investors that Spotify’s business is strong, despite economic turbulence roiling other industries.
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