This week included lots of volatility, as earnings season continued and the overall stock market fell more than 2% before recovering by the end of the week. Though the S&P 500 was down over 2% during intraday trading on Thursday, the index climbed sharply on Friday, leaving stocks about where they started.
Amid this volatile week, three stories in tech stood out.
- Apple (AAPL 0.63%) stock soared to new highs after a solid second quarter and as Warren Buffett's Berkshire Hathaway revealed a larger stake in the company.
- Snap (SNAP 5.34%) stock plummeted as the company's recent redesign for Snapchat dragged on results.
- Financial technology company Square (SQ -1.40%) saw its revenue growth accelerate again.
Apple stock jumps
On Tuesday afternoon, Apple announced the results for its second quarter of fiscal 2018, or the period ending March 31. The results beat expectations, sending shares about 5% higher on Wednesday. Apple's second-quarter results highlighted strength across the company's business as iPhone revenue climbed 14% year over year, services revenue jumped 31%, and other products revenue soared 38%. These strong drivers helped Apple's total revenue and earnings per share rise 16% and 30%, respectively.
Apple stock gained even more steam later in the week when famed investor Warren Buffett said his company, Berkshire Hathaway, had increased its stake in Apple by 75 million shares during the first calendar quarter. Apple was already Berkshire's biggest equity stake, but now the stake is worth more than its second- and third-largest holdings combined.
Apple shares finished the week up about 13%.
Snap fell about 20% after it reported worse-than-expected revenue for its first quarter. Though revenue for the period increased 54%, to $231 million, the consensus analyst estimate was for $245 million. Revenue was down 19% sequentially. Management specifically cited its recent redesign for Snapchat as one of the reasons for the drop.
Just as worrisome as Snap's lower-than-expected revenue was its underwhelming growth in daily active users. Snap users increased just 2% sequentially, making for Snap's slowest-ever growth in the key metric. Snap finished the quarter with 191 million daily active users, well below a consensus analyst estimate for 194 million.
Snap stock finished the week down 25%.
Square has been on a roll recently, consistently posting accelerating year-over-year revenue growth rates. The financial technology company, which makes most of its money from its transaction-based revenue on merchants' gross payment volume, saw its momentum continue in its first quarter, as revenue growth accelerated yet again.
Square's first-quarter revenue, adjusted to exclude transaction-based costs and the expenses associated with processing bitcoin trading, was up 51% year over year -- a meaningful acceleration from 47% growth in the fourth quarter of 2017 and 45% growth in Q3.
Square's increasing appeal to larger sellers, or sellers generating more than $125,000 in annualized payment volume, played a key role in the company's growth during the quarter, management explained in its first-quarter shareholder letter: "As these sellers use more products, we deepen our relationship with them, and they drive meaningful growth for Square: In the first quarter, total net revenue from larger sellers grew 47% year over year, and Adjusted Revenue from larger sellers grew 60% year over year."
Square stock finished the week up 3%, outperforming the S&P 500's flat performance.