By skyforbes 
- Broadcom reported a strong earnings report as it ramped up its AI chip capabilities to compete with Nvidia.
- PepsiCo reported a top and bottom-line beat and lifted its guidance despite margin contraction.
- Goldman Sachs reported a strong quarter, validating the stock’s run-up ahead of the earnings release.
- Northrop Grumman reported a mixed quarter, with revenue below expectations, and management revised its outlook downward.
- Intuitive Surgical reported a beat-and-raise quarter, sending the stock surging after the earnings release.
Broadcom Inc. (AVGO): Broadcom Inc. reported its fiscal third-quarter results for FY25 on September 4, 2025, covering the period ended August 3. The company posted revenue of $15.95 billion, representing a 22% year-over-year increase and surpassing consensus estimates of $15.82 billion. Adjusted earnings per share came in at $1.69, slightly ahead of the $1.66 expected. GAAP net income reached $4.14 billion, a notable turnaround from the prior-year loss of $1.88 billion. Adjusted EBITDA rose 30% to $10.7 billion, accounting for 67% of total revenue, while free cash flow stood at $7.0 billion, or 44% of revenue. Broadcom’s gross margin expanded to 78.4%, reflecting continued operational efficiency. We expected the EPS headline to be $1.74 per share, and the revenue beat our $15.9 billion expectation.
The company’s AI semiconductor segment delivered $5.2 billion in revenue, marking a 63% year-over-year increase, driven by strong demand for custom accelerators and networking components. The overall semiconductor segment posted revenue of $9.7 billion. Software revenue also contributed meaningfully, bolstered by ongoing VMware integration, as it posted 18.9% year-over-year growth. Broadcom posted operating margins of 36.9%, up from 29%, showing the fruits of M&A synergies and cost-cutting on top of strong growth. The R&D spend was up 29.6% as the company looks to improve its AI chip offerings and secure orders from the likes of Alphabet and Meta Platforms. The company improved from a net loss position resulting from an IP transfer charge to the United States as part of its supply chain realignment.
Broadcom generated $7.02 billion in free cash flow, up from $4.79 billion a year ago. The company received an additional $300 million from the sale of Velo Cloud to Arista Networks, resulting from the VMware acquisition. Looking ahead, Broadcom issued bullish guidance for Q4 FY25, forecasting revenue of $17.4 billion, up 24% year over year and ahead of Street estimates of $17.02 billion. AI-related revenue is expected to reach $6.2 billion next quarter, continuing its eleven-quarter growth streak. Strategically, Broadcom announced a $10 billion order from a new AI chip customer, expanding its XPU portfolio and intensifying competition with Nvidia. CEO Hock Tan confirmed that production shipments tied to this order will begin in 2026, reinforcing Broadcom’s long-term AI roadmap.
Grade: This was a strong quarter, and we give it an A-. It would have been an A or A+ if Broadcom’s headline EPS beat our fund estimate. The stock increased by more than 9% following the earnings release. The rally after the release reflects investor confidence in Broadcom’s AI strategy, margin growth, and strong future guidance.
PepsiCo Inc. (PEP): PepsiCo Inc. reported its FY25 Q3 earnings on October 9, 2025, delivering results that exceeded Wall Street expectations. The company posted net revenue of $23.94 billion, up 2.6% year over year and ahead of the consensus estimate of $23.83 billion. Adjusted earnings per share came in at $2.29, beating the forecast of $2.26. On a GAAP basis, EPS was $1.90, down from $2.13 in the prior-year quarter, reflecting restructuring and impairment charges. We expected the headline EPS to come in at $2.32 per share, but the revenue beat our $23.76 billion fund estimate. Organic revenue growth was 1.3%, with foreign exchange contributing a modest 0.5% tailwind.
PepsiCo’s performance was driven by resilient international demand and improving trends in its North America beverage segment. Trademark Pepsi, Pepsi Zero Sugar, and Mountain Dew posted strong volume and pricing gains, while the company’s modern soda brand Poppi continued to outperform. The international segment marked its 18th consecutive quarter of mid-single-digit organic growth, led by strength in Brazil, the U.K., Türkiye, and China. In North America, beverage margins improved despite elevated input costs, supported by cost optimization and innovation in permissible offerings. The Frito-Lay and Quaker divisions saw progress through portfolio transformation and renewed emphasis on affordable, functional snacks. The weak volume in Frito-Lay and Quaker is showing headwinds for consumers.
Gross margins contracted from 55.4% to 53.6%, showing input cost pressures alongside tariff pressure. The operating margin contracted from 16.6% to 14.9% due to a one-time impairment charge related to the Rockstar Energy brand. This margin contraction trickled down to the net income margin, which reduced by 1.69% to 10.87%. Year-to-date free cash flow decreased from $3.37 billion to $2.97 billion, which is not good given the company’s high debt levels (Debt-to-Equity ratio of 2.97). The company has returned $2.4 billion to shareholders over the nine months of the fiscal year through dividends and share repurchases. Management reaffirmed its full-year guidance for low-single-digit organic revenue growth and flat core constant-currency EPS. The company also noted an improved outlook for full-year core USD EPS, driven by favorable foreign exchange trends.
Strategic initiatives included refining price-pack architecture, implementing AI-driven productivity enhancements, and reshaping the portfolio through acquisitions such as Poppi and Siete. PepsiCo also announced the appointment of Steve Schmitt, formerly of Walmart, as its new CFO, succeeding Jamie Caulfield. Following the earnings release, PepsiCo’s stock rose 3.7%, closing at $151.55, up from $151.51 the previous day. The post-earnings rally reflects investor confidence in the company’s balanced growth across beverages, snacks, and international markets.
Grade: This was a B- quarter; PepsiCo is facing many headwinds and is trying to manage through them, and given the activist pressure from Elliot Management, we expect more cost cuts.
Goldman Sachs (GS): Goldman Sachs reported its FY25 Q3 earnings on October 14, 2025, delivering results that exceeded analyst expectations across key metrics. The firm posted net revenues of $15.18 billion, up 20% year over year and ahead of the consensus estimate of $14.25 billion. Net earnings for the quarter reached $4.10 billion, translating to diluted earnings per share of $12.25, which beat the consensus estimate of $11.09 by over 10%. The investment bank reported substantial headline numbers that handily beat our fund estimate of $11.15 per share in earnings and $14.24 billion in revenue. The headline numbers reflect vigorous activity across IPOs and M&A during the quarter.
The annualized return on average common equity stood at 14.2%, reflecting strong profitability in a volatile macro environment. Investment banking was the primary driver of the beat, with fees rising 42% year-over-year to $2.66 billion, fueled by a surge in completed M&A transactions and robust leveraged finance issuance. This came in ahead of our $2.2 billion fund estimate. The Global Banking & Markets division generated $10.12 billion in net revenue, up 18% from the prior year. Fixed income trading revenue rose 17% to $3.47 billion, while equities financing revenue increased 33% to $3.7 billion. However, equities intermediation underperformed, with cash product revenues declining 9% year over year. Goldman’s Asset & Wealth Management segment posted $4.40 billion in net revenue, up 17% year-over-year, supported by record assets under supervision of $3.5 trillion and $33 billion in alternative fundraising during the quarter.
The investment bank’s provision for credit losses fell 14.6% to $339 million, indicating strong credit health. Management is also managing its expenses well, as the efficiency ratio improved from 64.3% to 62.1%. Goldman Sachs returned $3.25 billion to shareholders via share buybacks and dividends. Strategic initiatives included the acquisition of Industry Ventures and a collaboration with T. Rowe Price to expand offerings in venture capital and retirement solutions. The firm also launched “One Goldman Sachs 3.0,” a centralized operating model that leverages AI to enhance the client experience, productivity, and risk management.
Grade: This was an A+quarter from Goldman Sachs. Despite the strong financial performance, Goldman Sachs shares declined 2% in premarket trading immediately following the release, reflecting cautious investor sentiment amid broader market volatility. It was also profit-taking, as the stock rose past $800 ahead of the earnings release.
Northrop Grumman (NOC): Northrop Grumman reported its FY25 Q3 results on October 21, 2025, delivering mixed performance relative to analyst expectations. The company posted revenue of $10.42 billion, a 4.3% year-over-year increase, but fell short of the consensus estimate of $10.71 billion. In contrast, earnings per share came in at $7.67, significantly exceeding the forecast of $6.46 and marking an 18.7% positive surprise. The defense contractor’s headline EPS came in ahead of the fund’s estimate of $6.50, but revenue fell short of our estimate of $10.8 billion. Given the geopolitical tension and increased military spending, we expected the revenue number to be strong.
Segment operating income rose 11% year over year, and the segment operating margin expanded by 80 basis points to 12.3%, underscoring disciplined cost management and operational efficiency. Performance across business segments was uneven. Mission Systems and Aeronautics Systems both posted high-single-digit revenue growth, while Space Systems declined 6% due to the wind-down of two large programs. Defense Systems was the standout segment with 14% year-over-year growth. Northrop had margin expansion during the quarter, with operating margin increasing from 11.2% to 11.9% and net income margin rising by 30 basis points to 10.6%. Free cash flow increased 72% year over year, and the company reaffirmed its full-year free cash flow guidance of $3.05–$3.35 billion. The strong free cash flow enabled the company to reduce its long-term debt by $502 million.
Northrop achieved a strong book-to-bill ratio of 1.17, reflecting robust demand and a healthy pipeline of future contracts. The company received $12.2 billion in new awarded contracts, increasing the backlog to $91.4 billion at the end of the quarter. Strategically, the company advanced its B-21 Raider program, with the second aircraft entering flight testing and multiple units undergoing ground tests. CEO Kathy Warden emphasized Northrop’s commitment to digital transformation and innovation, citing investments of over $2 billion in digital ecosystems and $2.1 billion in independent R&D during the quarter. However, management revised full-year revenue guidance downward due to delays in specific awards and the impact of the U.S. government shutdown on contract negotiations.
Grade: This was a B- quarter from the company; following the earnings release, Northrop Grumman’s stock declined 1.83% in pre-market trading, reflecting investor concerns about the revenue miss and broader defense-sector headwinds. During the trading session, the stock sold off as much as 5% but rebounded, ending down just over 1%.
Intuitive Surgical (ISRG): Intuitive Surgical reported its FY25 Q3 results on October 21, 2025, delivering a strong beat on both revenue and earnings. The company posted revenue of $2.51 billion, up 23% year over year and exceeding the consensus estimate of $2.41 billion. Adjusted earnings per share came in at $2.40, surpassing the forecast of $1.99 and marking a 20.6% earnings surprise. This performance was driven by robust global procedural growth of 20%, with da Vinci procedures rising 17% and Ion procedures increasing 52% year-over-year. The medical device’s headline numbers beat our fund estimates by $ 0.96 per share on earnings from a revenue base of $2.39 billion.
Intuitive has revenue growth across all its revenue segments. The services segment is growing rapidly, up over 20%, as the company diversifies its revenue base. During the quarter, Intuitive installed 427 new da Vinci systems, including 240 units of its latest da Vinci 5 model, compared to 379 total systems and 110 da Vinci 5 installations in the same period last year. Instrument and accessory sales reached $1.52 billion, up 20%, reflecting strong utilization and recurring revenue momentum. The company also placed 50 Ion systems, slightly below last year’s 58, though procedure volume growth offset the unit decline. The Da Vinci install base is up 13%, while the Ion system’s install base is up 30%. Gross margin outlook improved due to operational leverage and reduced tariff impact. The operating margin contracted by 20 basis points to 30.3% while the net income margin expanded by 10 basis points to 28.1%.
Intuitive generated $736 million in free cash flow, up from $601 million in the same period a year ago. The company repurchased $1.9 billion of its stock when the stock price was weak for most of Q3. Management raised full-year guidance, citing sustained demand across surgical specialties and expanding adoption in emerging markets such as India, Korea, Brazil, and Southeast Asia. Strategic highlights included FDA clearance of new AI-driven software for the Ion platform, reinforcing Intuitive’s leadership in innovation.
Grade: Intuitive reported an A+ quarter, and we are glad we have been adding to our position below $500 a share. Following the earnings release, Intuitive Surgical’s stock surged 17.2% in after-hours trading, reflecting investor enthusiasm for the beat-and-raise quarter and renewed confidence in the company’s growth trajectory.
Disclosure: Cresco Investments is long Broadcom Inc. (AVGO), Pepsico Inc. (PEP), Goldman Sachs (GS), Northrop Grumman (NOC), and Intuitive Surgical Inc. (ISRG).
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: This article is intended for information, engagement & entertainment purposes only and is not to be construed as investment advice or direction. Investors are strongly encouraged to perform due diligence and consult with their financial advisor(s).