This week’s blog post covers earning updates from AbbVie, Amgen, and Cognizant. Before diving into this week’s earning reports, I want to address the current market mood and share a quick update on my trading activity. With all the political noise, it’s easy to get caught up in the headlines or second-guess your strategy. But as always, I believe in sticking to fundamentals and not letting short-term chaos dictate long-term decisions.
You need American equities in your portfolio
Trump’s 2025 tariff blitz blindsided markets, few expected him to go so big, so fast. The chaos was real: U.S. stocks tanked, pundits called America “uninvestable,” and panic selling erased trillions in value. But here’s the thing: making drastic portfolio moves just because you hate a politician or certain policies is a rookie mistake. Politics are noisy, but market fundamentals endure. Trump’s tariffs, though historic, are already being tweaked and partially rolled back. Time and again, even the wildest policy swings fade, and markets recover.
Meanwhile, the U.S. remains home to the world’s most profitable, innovative companies that excel at adapting to chaos. The initial sell-off has already been pared back as investors realize this isn’t the world's end. If you want to win long-term, keep your cool, and don’t let short-lived political storms blow your portfolio off course.
22% of my portfolio is in American equities, and I have no intention of reducing that share. In fact, if 80% of your portfolio is in U.S. assets, you’re still on solid ground. The S&P 500 isn’t just a U.S. story, many of its companies are global powerhouses, with much of their revenues generated overseas, giving you built-in international exposure. This global reach means the index offers a diversified income stream that tracks global trends. Of course, international diversification is always smart, however, if your U.S. allocation is similar to or even higher than mine, there’s no reason to rush and cut back your American holdings.
What I do in the market these days
Last week, I aimed to add to my Salesforce position at $266 per share, but the stock price moved away from me, and I couldn’t get the shares at that price. Sometimes the market doesn’t cooperate, so we’ll look for a better opportunity next time.
AbbVie
The market reacted positively to ABBV’s Q1 earnings report, with the stock price rising sharply on strong results, upgraded guidance, and optimism about the company’s growth trajectory.
ABBV showed significant growth in its immunology portfolio, particularly Skyrizi and Rinvoq, which offset the expected decline in Humira sales. Neuroscience and oncology portfolios also posted solid gains, for example, the launch of Elahere has been highly successful. Elahere achieved $179 million in global net revenues in Q1 2025.
The most important Phase III readouts for AbbVie this year are the MIRASOL trial for Elahere in ovarian cancer, the SELECT-GCA trial for Rinvoq in giant cell arteritis, and the trio of Phase III trials for Tavapadon in early Parkinson’s disease. Each represents advances in ABBV’s oncology, immunology, and neuroscience portfolio.
In a recent update, the MIRASOL trial was concluded successfully. The readout showed Elahere improved progression-free and overall survival versus chemotherapy, with a 32% reduction in risk of death and a 37% reduction in risk of tumor progression or death. This gives ABBV the potential to pursue label expansion and establish Elahere as a transformative therapy and a new standard of care for this hard-to-treat disease.
ABBV has ensconced itself as a serial acquirer, strategically using acquisitions and partnerships to expand and diversify its portfolio. Elahere is for instance a result of the ImmunoGen acquisition. In January, ABBV acquired Nimble Therapeutics, a developer of novel oral peptide therapies targeting autoimmune diseases such as psoriasis and inflammatory bowel disease. Recently, ABBV entered a major licensing partnership with Gubra, gaining global rights to develop and commercialize a long-acting amylin analog for obesity treatment. This deal marks an entry into the highly competitive obesity market, positioning the company as a challenger to incumbents Eli Lilly and Novo Nordisk.
In the first quarter of 2025, ABBV’s revenues grew 8.4% year-over-year (YoY) on a reported basis and 9.8% on an operational basis, significantly exceeding my expectations. If ABBV can sustain this level of growth, I will need to revise my fair value estimate of $215 per share upward.
Amgen
AMGN’s stock declined immediately following the Q1 earnings report. This reaction is unlikely to reflect a disappointment with the performance since AMGN beat expectations both on the top and the bottom line. Analysts are also positive about long-term growth prospects. Sometimes, market reactions are mysteries. AMGN is seldom strong on earning days, so there is often a lag between good results and positive price action.
AMGN delivers strong performance across its portfolio, with 14 products achieving double-digit YOY sales growth and a presence spanning multiple therapeutic categories. In the first quarter of 2025, total revenue increased 9% year-over-year, adjusted (non-GAAP) earnings per share rose 24%, and the non-GAAP EBIT margin reached 45.7%.
AMGN will lose exclusivity of Prolia soon, a strong Osteoporosis seller, but many new candidates are in the pipeline to replace this and other legacy products. The top three Phase III therapies in Amgen’s pipeline with strong sales prospects are:
MariTide: An anti-obesity therapy with blockbuster potential, positioned to compete in the rapidly expanding obesity and metabolic disease market.
Imdelltra: A bispecific T-cell engager being developed for small-cell lung cancer and other neuroendocrine tumors. It has demonstrated superior overall survival in clinical trials and could address significant unmet needs in oncology.
Rocatinlimab: An anti-OX40 monoclonal antibody for moderate-to-severe atopic dermatitis, which has shown positive Phase III results and targets a large dermatology market.
AMGN’s Q1 results superseded what I had penciled in on the top line. Still, AMGN kept its 2025 guidance as is. I do the same, my fair value estimate remains at $335 per share.
Cognizant
CTSH*s price action was positive after the release of the Q1 report.
The IT consultant reported Q1 2025 revenue of $5.12 billion, representing a 7.5% YOY increase. This marks a significant acceleration compared to the flat growth rates seen in early 2024 and is the company’s strongest growth rate in several years. The last time CTSH posted comparable or better revenue growth was before the pandemic, as the company has struggled with low single-digit or negative growth in recent years, making this quarter’s performance a notable turnaround.
During the earnings call, the management highlighted its AI-led productivity strategy. When CTSH refers to "AI-led productivity", it means leveraging artificial intelligence to significantly enhance efficiency, reduce costs, and improve output across its operations and client services. Specifically, Cognizant highlighted that AI technologies are being deployed to automate code generation, streamline processes, and address technical debt, which allows the company to deliver more for clients with fewer resources.
AI is driving big contracts. CTSH has secured and expanded several major client engagements by leveraging its advanced AI capabilities, including generative AI, enterprise AI agents, and multi-agent systems.
CTSH has steadily invested in AI, and now it's paying off big time. A cornerstone of its strategy is the Neuro® AI platform, which integrates advanced machine learning, multi-agent orchestration, and large language models (LLMs). This platform is designed to accelerate the entire AI lifecycle, from discovery and prototyping to deployment, enabling clients to build and scale AI solutions tailored to their needs.
The company also focuses on generative AI, partnering with leaders like NVIDIA, Microsoft, and Google to develop industry-specific LLMs and AI agents. These technologies support applications such as digital twins for smart manufacturing, AI-powered software engineering, and intelligent automation. CTSHt’s innovation is backed by a strong patent portfolio, including advances in LLM uncertainty estimation to improve AI reliability and safety.
In conclusion, CTSH is executing a focused growth strategy centered on AI, leveraging investments in advanced platforms and strategic partnerships to drive productivity and innovation. Despite this promising direction, I maintain my fair value estimate at $100 per share. The company faces potential headwinds from a possible reduction in government contracts and ongoing tariff uncertainty. These risks temper my outlook. CTSH’s management is also cautious due to these causes and doesn’t want to overpromise.
Disclaimer: Important Information for Retail Investors
The information in this blog is for educational purposes only, not financial advice. Investing in stocks carries risks; past performance doesn't guarantee future results. Conduct thorough research and seek advice from financial professionals before investing.
The author is a retail investor, not a licensed advisor. Due to changing market conditions, content accuracy isn't guaranteed. All investments have risks, including the potential loss of principal. Assess your risk tolerance and goals before investing; diversification is key to managing risk.
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