Microsoft Corp (NASDAQ:MSFT) CEO Satya Nadella criticized Anthropic's Fable 5 model in an internal meeting with Copilot engineers, saying the AI's refusal of certain requests feels "editorially controlled" and "doesn't make sense," CNBC reported.
"If you use Fable, when it refuses for any random thing, it just is like, when was the last time you had a creation tool that was so editorially controlled?" Nadella told the engineers. "It doesn't make sense."
Nadella also weighed in on the broader question of AI concentration, arguing against a market dominated by a small number of players. "It can't be that there are only two companies in the world with token capital, and everybody else is renting it," he said.
Anthropic restored access to Fable on July 1 after suspending the model to comply with a U.S. government export control directive. The company said at the time that the updated safeguards would flag a somewhat higher share of harmless requests than the previous version had. A support page indicates that queries touching on certain elements of large-scale model development, among other subjects, may be handled by an earlier version of Fable rather than the current one.
Microsoft has committed $5 billion to Anthropic, while Anthropic has pledged to direct $30 billion toward Microsoft's Azure cloud platform. Microsoft also launched Copilot Cowork this year, a workplace productivity offering built around Anthropic's technology.
Microsoft shares were down 2% in early Friday trading.
Rebecca Walser (@walserwealth) talks about why she believes markets are selling off tech as Friday's trading session continues that weakness in the sector. She discusses CapEx concerns surrounding hyperscalers like Alphabet (GOOGL) and Microsoft (MSFT), while highlighting sectors she sees having strong AI momentum.
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Microsoft (NASDAQ:MSFT | MSFT Price Prediction) has become one of the most closely watched stocks in the S&P 500 as it grinds sideways through a rough first half of 2026. With 54 analysts rating shares Buy or Strong Buy and only three at Hold, sell-side conviction is nearly unanimous. Our proprietary model agrees, but with a more conservative destination than Wall Street’s consensus.
Our 24/7 Wall St. price target for Microsoft is $503.02 over the next 12 months, implying 26.12% upside from the current price of $398.84. We rate MSFT a buy with high confidence at 90%.
24/7 Wall St. Price Target Summary Metric Value Current Price $398.84 24/7 Wall St. Price Target $503.02 Upside 26.12% Recommendation BUY Confidence Level 90% A Painful Year Meets a Fortress Business Microsoft has lagged in 2026. The stock is down 17.83% year to date and 21.16% over the past year, trading 2% below its 52-week high of $551.05 only because it recently bounced 3.21% in the past week off its $349.20 low.
Recent bearish coverage includes securities class action filings alleging misleading statements about Azure growth and Copilot functionality, which have weighed on sentiment ahead of the July 29, 2026 earnings report.
Fundamentals tell a different story. In Q3 FY2026, Microsoft delivered EPS of $4.27 against a $4.07 estimate on revenue of $82.89 billion, up 18.3% year over year.
Azure grew 40%, the AI business hit a $37 billion annualized run rate, up 123%, and commercial remaining performance obligations swelled to $627 billion. This is Microsoft’s fourth consecutive EPS beat.
Why Bulls See a Breakout Ahead The bull case rests on three pillars: contracted backlog, the restructured OpenAI partnership, and Azure’s competitive position. Commercial RPO of $627 billion nearly doubled year over year gives Microsoft the deepest forward revenue visibility in software.
Microsoft’s IP rights extend through 2032. Azure surpassed Citi Q2 2026 CIO survey identified Microsoft as the top vendor enterprises plan to increase AI spending with, Amazon and Google.
If Azure sustains 40% growth and margins normalize as capex intensity peaks, the bull scenario points to $600.73 within 12 months, a 50.62% total return, aligning with the high end of Street targets.
What Could Go Wrong Capex is the elephant. Q3 FY2026 capital expenditures reached $30.88 billion, up 84.4%, and full-year FY2025 free cash flow contracted. Bulls counter that this spending backs the $627 billion RPO and a Morgan Stanley projection of nearly 4x hyperscaler compute capacity by 2028.
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Two active securities class actions cite these concerns, and analyst target trims have been noted. The bear case lands at $446.40, an 11.92% return, if Azure decelerates and AI monetization slips.
How Microsoft Compares to Alphabet and Amazon Alphabet (NASDAQ:GOOGL) offers a sharper cloud comparison. Google Cloud has been growing faster than Azure’s 40%, and Alphabet trades at a similar forward multiple, making Microsoft’s premium narrower than it looks.
Amazon (NASDAQ:AMZN) provides counterpoint. AWS continues to trail Azure’s 40% growth but on a larger base. Amazon trades at a richer trailing P/E than Microsoft’s 23. On a growth-adjusted basis, MSFT looks reasonably priced.
Company Trailing P/E Cloud Growth (Latest Q) Microsoft 23 40% Alphabet ~28 63% Amazon 35 28% The peer group makes our $503 target look conservative. MSFT is the cheapest hyperscaler on trailing earnings while running the second-fastest cloud growth rate.
Our Take on Microsoft Here The 24/7 Wall St. price target of $503.02 and buy rating reflect our view that the current selloff has overshot fundamentals.
The setup strengthens if Q4 FY2026 earnings on July 29 confirm Azure guidance in the high 30s and show capex intensity beginning to plateau. The thesis weakens if securities litigation gains traction or Azure guides below 35%.
Microsoft Price Projection 2026-2030 Our model projects Microsoft could compound from here at a rate consistent with our five-year base case annualized return of 14.55%.
Year 24/7 Wall St. Price Target 2026 $503 2027 $576 2028 $660 2029 $756 2030 $866 These projections assume Microsoft continues executing on Azure and AI monetization. Significant upside could come from faster AI diffusion; downside would follow prolonged capex overhang or material AWS or Google Cloud share gain.
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Mario Lagana offers his insights into the violent sell-off see across Wall Street throughout July, pointing to high-volume selling days as a clear warning sign bearish action can continue. He tells investors to expect 30% to 40% corrections in key tech leaders, as companies like Micron (MU) have already experienced those steep downside trends.
The meteoric rise of Advanced Micro Devices (NASDAQ:AMD | AMD Price Prediction) has been a thing of beauty, even after the latest surge in turbulence, thanks in part to the fading of numerous names across the semiconductor industry. Even with the latest slide, shares of Lisa Su’s AI chip titan are up close to 125% year to date or about 480% since March 2025. Indeed, the vertical spike might scream unsustainable bubble to some.
And the higher price of admission (shares going for 165.8 times trailing price-to-earnings (P/E)) is doing the name no favors, especially as investors look for candidates to take profits off of as the technicals start looking nasty, while investors brace for more AI IPOs to land. Most notably, Anthropic, the AI lab behind Claude with Dario Amodei running the show, is a frontrunner, and it could move markets in a bigger way than Space Exploration Technologies (NASDAQ:SPCX).
Nvidia looks like a hands-down winner over AMD, or is it? When stacked side-by-side with Jensen Huang’s Nvidia (NASDAQ:NVDA), it seems just a bit illogical to see shares of Advanced Micro Devices post another stunning year while Nvidia shareholders patiently wait for that massive bid higher.
With Dr. Michael Burry saying things like this is “the beginning of the end” for the AI trade, it certainly feels like that big breakout for Nvidia stock isn’t coming, after all.
Burry, who views semis as a cyclical commodity, rather than subscribing to that “things are different this time” narrative that points to structural drivers behind semis, is short in all the right areas, and while he’s already made some wonderful, profitable trades in these earlier innings, it certainly seems like the man, who’s also short Nvidia, is getting the popcorn out as volatility intensifies for the summer.
Why Advanced Micro Devices might be the winner in a tougher climate for semis as well With the Magnificent Seven stocks rising without the semis leading the way, it certainly feels like a crash in semis doesn’t have to drag everything lower. In a prior piece, I noted that the Mag Seven actually stood to benefit as semis faded, as hopes for lower CapEx spend (less money for GPUs) meant more money in the pockets of the firms holding all the cards with the actual power to monetize the technology while forming wide economic moats in the process.
Of course, it’s too soon to say it’s “game over” for the semis, but, in my view, Advanced Micro Devices might be better positioned to outperform as the tides go out. Indeed, Nvidia is the king and Advanced Micro Devices is a runner-up — a distant runner-up.
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As the firm captures a greater slice of the market while doubling down on inference and higher-value chips (less cost per token) in a climate that’s rotating from “tokenmaxxing” to something more cost-conscious, it just feels like Advanced Micro Devices is poised to keep marching higher. And once Fed chairman Kevin Warsh raises the bar on interest rates?
I think the value-consciousness within the enterprise could get a big shot in the arm. Whether we reach a point where firms “trade down” to cheaper GPUs, though, remains the big question. Nvidia’s CUDA moat could make its ecosystem too sticky to leave, but who knows? Any way you look at it, the case for the cheaper alternative, I think, hasn’t been this loud throughout the entire AI boom.
How could Advanced Micro Devices keep winning and outpacing the best when it’s still in that distant second spot? The higher growth ceiling, combined with increased price sensitivity and being on the right side of a rotation, I think, makes Advanced Micro Devices a more compelling buy despite the far heftier price tag on the shares.
Despite recent volatility, analysts aren’t afraid to hike their targets, with KeyBanc recently raising the price target by close to $200 to $725 per share in the past week. That’s some serious conviction.
At the end of the day, AMD chips aren’t going to close the gap with Nvidia anytime soon, but the key thing here is that it was never expected to. As the firm does its best to pass its own bar, my guess is that shares can keep beating those of Nvidia.
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ToplineApple became the world’s largest company on Friday, briefly reclaiming the spot from Nvidia following a slide in shares for the AI bellwether and as the iPhone maker accelerates its plans for the growing technology.
The iPhone maker is once again the world’s largest company by market value.
dpa/picture alliance via Getty Images
Key FactsShares of Nvidia dropped by 3.9% shortly after trading opened Friday, lowering the company’s market valuation to about $4.82 trillion, before paring back losses to about 2.2% to $4.91 trillion.
That pushed Apple, whose shares decreased by less than one-tenth of a percentage point, ahead of Nvidia as the world’s largest firm by market capitalization at $4.88 trillion before falling behind later in the morning.
The stocks have had different trajectories so far this year: Apple has jumped nearly 23%, far outpacing the tech-heavy Nasdaq, while Nvidia has trailed with just 7.3% growth.
surprising factApple was the first company to reach the $1 trillion, $2 trillion and $3 trillion market capitalization milestones, while Nvidia was the first to cross the $4 trillion threshold in July 2025, extending a nearly 35,000% surge for the stock over the prior decade. At their market valuations as of Friday morning, both companies are valued more than the gross domestic product—a broad measure of the size of a country’s economy—of Japan ($4.3 trillion), the United Kingdom ($4.2 trillion) and India ($4.1 trillion), and would rank the fourth- and fifth-largest economies in the world behind the U.S. ($32 trillion), China ($20.8 trillion) and Germany ($5.4 trillion)
key backgroundNvidia has held the title of world’s most valuable company since June 2025, when the AI giant surpassed Microsoft. It became the first firm to hit a $5 trillion market cap in October, and its growth has since slowed amid swings in AI-related investor sentiment. Apple held the top spot for market capitalization for much of the previous decade, surpassing Exxon in 2011, before swapping ranks periodically with Microsoft. Nvdia overtook Apple to become the second-largest company by market value in June 2024, behind Microsoft, before surpassing both companies two weeks later to become the world’s largest company forthe first time.
further readingForbesApple Claims OpenAI Stole Trade Secrets In New LawsuitBy Madhulika Pathak
The stock market’s AI trade is entering a new phase. For much of the past two years, investors rewarded companies building the infrastructure behind artificial intelligence — chips, data centers, and networking equipment. That made Nvidia (NASDAQ:NVDA | NVDA Price Prediction) the undisputed market leader as demand for its processors exploded. But markets rarely move in straight lines.
As AI spending has expanded, investors have started looking beyond the companies writing the biggest checks and toward businesses with durable earnings, strong cash generation, and less dependence on massive capital investments.
That shift has helped Apple (NASDAQ:AAPL) once again become the world’s most valuable publicly traded company, with a market capitalization of roughly $4.9 trillion, edging past Nvidia at approximately $4.8 trillion.
The changing of the guard says less about Apple suddenly becoming an AI winner and more about investors reassessing what they want from AI exposure.
Nvidia’s AI Crown Is Slipping Nvidia’s rise was one of the defining market stories of the decade. In June 2024, the company became the world’s most valuable stock as demand for its high-end GPUs used to train and run AI models overwhelmed supply.
The company’s dominance was reflected in its financial results, and investors rewarded that growth so that Nvidia’s shares eventually surpassed a $5 trillion valuation. Momentum, though, has since faded. Its stock effectively stalled in August 2025 after its historic run, and while several rallies pushed shares higher, none held. Nvidia now trades about 15% below its all-time high.
The concern is not that AI demand disappeared. It is that expectations became almost impossible to exceed. Nvidia remains the essential supplier of AI computing power, but investors have started asking a different question: How much more upside is left after such a massive run?
While Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) have committed hundreds of billions of dollars toward AI infrastructure, Apple avoided matching that spending spree. According to company filings, Apple’s capital expenditures totaled $12.7 billion in fiscal 2025 — a fraction of the investment levels from major AI infrastructure players.
That restraint has preserved Apple’s financial flexibility. The company generated $98.8 billion in free cash flow that year, allowing it to continue buybacks, maintain its ecosystem, and invest selectively rather than chase every AI trend. Apple was able to avoid the AI infrastructure spending trap and has positioned itself for a major iPhone upgrade cycle.
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Surprisingly, Apple’s so-called “lazy” AI strategy has become a competitive advantage. Instead of selling AI infrastructure, Apple can focus on putting AI features directly into products used by more than 2 billion active devices.
The market has responded. Apple shares have gained nearly 59% over the past year, driven by expectations that AI-powered iPhone upgrades could unlock a new replacement cycle.
Why Apple May Keep The Lead Apple briefly surpassed Nvidia in April 2025, but this latest victory could prove more durable. This current lead reflects a broader rotation toward companies with predictable earnings and lower capital intensity. Granted, Nvidia remains a critical player in the AI revolution, as its GPUs power the world’s largest AI systems and demand remains strong.
Yet, markets reward future expectations. Investors are increasingly valuing companies that can benefit from AI without spending like AI infrastructure builders.
Key Takeaway In short, Nvidia created the AI boom, but Apple may be better positioned for the next stage of the cycle.
The market is shifting from rewarding companies that spend the most on AI toward companies that can turn AI into profits. Apple’s conservative approach has kept its balance sheet strong while leaving room for a potential iPhone-driven upgrade cycle.
Smart investors should not dismiss Nvidia’s long-term opportunity, but Apple’s combination of cash flow, ecosystem strength, and lower capital requirements gives it a compelling advantage.
The AI race is not only about who builds the biggest machines. Increasingly, it is about who makes the most money from them. Apple appears ready to prove that the winner does not always need the biggest shovel — sometimes it just needs the best business model.
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Apple overtook Nvidia on Friday to become the world’s most valuable company, reshuffling the top ranks of tech heavyweights as investors reassess the outlook for artificial intelligence.
Apple was last valued at $4.88 trillion as its shares held steady, while Nvidia was roughly at $4.86 trillion, following a 3.5% decline.
The shift in the pecking order illustrates that investors are broadening their focus beyond the most obvious beneficiaries of the AI boom, such as Nvidia, which had been at the helm for nearly a year.
The iPhone maker is reclaiming the top spot for the first time since April last year. REUTERS Apple is reclaiming the top spot for the first time since April last year.
“Apple was seen as a laggard in the AI race because it wasn’t spending to develop models, but now sentiment has changed,” said Toni Meadows, head of investment at BRI Wealth Management.
“Apple is less exposed to capex intensity and better positioned to monetize AI via services, ecosystem lock-in, and hardware upgrades. The re-rating reflects confidence in earnings durability rather than speculative AI upside.”
For a company that was often seen trailing in the AI race, the milestone reflects Apple’s efforts to establish itself more firmly among the sector’s leading players, and could shape how CEO Tim Cook’s final months at the helm are viewed.
Cook is preparing to cede his role to hardware veteran John Ternus in September.
Last month, the company rolled out a long-delayed overhaul of Siri, betting the upgraded assistant would help close the gap with Big Tech rivals and new-age startups in the crucial AI race.
Apple CEO Tim Cookt with his successor John Ternus earlier this month. Getty Images Some analysts say Apple is sitting on an AI gold mine in the form of the personal data that lives on every iPhone.
The data could make Siri’s answers more useful and the assistant more capable.
The challenge is that such data is locked away in operating systems in the name of privacy and the company would have to find a way to unlock its value.
AI spending lifts new winners Nvidia became the first company in the world to surpass a $5 trillion market valuation in October, a landmark that propelled it into a rarefied territory that was far beyond the reach of its rivals.
Being superseded by Apple does not necessarily signal a lasting change in the companies’ relative standing. The chipmaker remains a major beneficiary of AI-related spending, and its graphics processors are powering much of the generative AI frenzy.
Nvidia could also reclaim the top spot if sentiment shifts.
Nvidia became the first company in the world to surpass a $5 trillion market valuation in October. CEo Jensen Huang, above. Getty Images Besides, Apple is in a delicate position itself, having raised prices to offset rising costs — a strategy that could hurt demand.
“I don’t see any meaningful distinction. Nvidia likely to be a significant participant in whatever happens going forward,” said Benjamin Hall, vice president, alpha research at Segal Marco Advisors.
However, the AI enthusiasm has spread to other corners of the semiconductor industry. The bigger winners this year have been memory chipmakers such as Micron, which crossed $1 trillion in market value in May as investors embraced the significance of memory chips in AI infrastructure.
South Korea’s SK Hynix also listed on the Nasdaq earlier this month, adding another player to the race for investor attention.
South Korea’s SK Hynix also listed on the Nasdaq earlier this month, adding another player to the race for investor attention. REUTERS “The new entrants to the market could spread out the focus away from the pure Magnificent Seven names into a wider number of names,” Hall said.
The eye-watering chips rally ran into turbulence in July as investors reassessed the sustainability of the artificial intelligence trade, knocking the Philadelphia SE Semiconductor index down almost 19% from its all-time highs.
Despite the steep fall, the index has performed better than Nvidia so far this year.
Apple (AAPL) briefly surpassed Nvidia (NVDA) in market cap as the biggest company on Wall Street after HSBC upgraded the stock to buy from hold. Jenny Horne talks about the “operational turning point” the firm sees in the company, offering insight into the upgrade and price target hike.
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The pitch behind Capital Group Growth ETF (NYSEARCA:CGGR) is that a veteran team can beat the index by leaning into the same megacap winners it already owns, only more deliberately concentrated, and charge you almost nothing for it. CGGR has grown into one of the larger active growth ETFs on that pitch, anchoring its book with Meta, Tesla, Nvidia, and Broadcom. Whether CGGR is actually paying off depends on which benchmark you hold it against.
What CGGR Is Actually Buying Capital Group runs CGGR out of the same shop behind American Funds, which means fundamental research, low turnover in the mid-teens, and an expense ratio of 0.39%. That is roughly a fifth of what a typical actively managed fund charges and puts CGGR within striking distance of pure passive growth ETFs. The structural advantage matters: active ETFs historically struggle to justify their fees, but CGGR’s pricing removes the most common objection before the debate over stock selection even begins.
The holdings are doing their job. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) reported Q1 FY27 revenue of $82 billion, up 85% year over year, with Data Center revenue of $75 billion. CEO Jensen Huang framed the setup bluntly, calling the AI factory buildout “the largest infrastructure expansion in human history.” Meta Platforms (NASDAQ:META) delivered Q1 2026 revenue of $56 billion, up 33% year over year, though the $10.44 EPS beat consensus of $6.66 largely because of an $8 billion tax benefit.
Broadcom (NASDAQ:AVGO) is up roughly 29% over the trailing year, with AI semiconductor revenue tracking toward CEO Hock Tan’s stated $100B target by 2027. Even Tesla (NASDAQ:TSLA), the volatile one, is about 19% higher over the past 12 months, helped by an expansion in auto gross margin to 21.1% and FSD subscriptions crossing 1.28 million. So the underlying names are working. Holdings, though, are not the same as fund returns, and that gap is where the CGGR story gets complicated.
How The Fund Actually Performed CGGR returned roughly 11% over the trailing twelve months. The S&P 500 returned about 21% over the same window, and the Nasdaq-100 returned 25%. Vanguard’s passive growth ETF delivered about 17%, Schwab’s competing product returned about 18%, and the iShares Russell 1000 Growth vehicle came in at around 13%, essentially tied with CGGR. The dispersion is not enormous in absolute terms, but for an actively managed fund selling itself on stock-picking edge, trailing three of four passive peers is a meaningful result.
An investor who bought CGGR twelve months ago for its Magnificent Seven concentration got a fund that trailed the plain S&P 500 meaningfully and lagged every mainstream passive growth alternative except the Russell 1000 Growth tracker. Year to date, the pattern holds, with CGGR up under 4% against roughly 10% for SPY and nearly 15% for QQQ. The short-term scoreboard is not kind to the active thesis.
The multi-year picture is kinder. Since early 2022, CGGR has returned roughly 90%, competitive with VUG’s 84% and SCHG’s 91%, though still short of QQQ’s 97%. Over a full cycle that spans the 2022 drawdown and the subsequent AI-led recovery, the fund is roughly earning its keep. Over the past year, it has not been, and investors evaluating a purchase today have to decide which window matters more.
What The Concentration Costs Active management in a top-heavy market is a hard job. Any underweight in the largest names, even a small one, costs real return when those names lead, and a 0.39% fee is generous by active standards but still meaningfully more than what the leading passive growth funds charge for essentially the same top-five exposure. The math is unforgiving: when the index’s top holdings are also the year’s best performers, the active manager needs conviction bets outside those names to add value, and CGGR’s low turnover suggests those bets are not being made aggressively.
Concentration works both ways. If the megacap trade cracks, CGGR cracks with it, and turnover of around 16% suggests the manager will not rotate quickly. Nvidia alone, trading at a P/E of 42x on a $4.8 trillion market cap, represents both the fund’s biggest tailwind and its biggest single-stock risk. You are paying, modestly, for a portfolio that has just underperformed the passive alternative you skipped.
Where CGGR Fits And Where It Doesn’t CGGR is a credible active-growth vehicle at a near-index price, and its multi-year record holds up against the passive field. The case for buying it right now, on the strength of the same megacap names anyone can own through cheaper index products, is thinner.
The trailing-year cost has investors paying for real growth relative to passive ETFs that own the same top-five stocks with less discretion. Reserve CGGR for a satellite growth sleeve if you specifically want Capital Group’s research process on your side. If your only reason for owning it is Magnificent Seven exposure, the passive versions did the job better, cheaper, and more predictably.
Contact [email protected] for any questions or corrections.
I keep hitting the buy button on NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) because every time Main Street panics about Trainium, TPUs, or Meta’s Iris chip stealing Jensen Huang’s lunch, the receipts land and the panic looks smaller. Reddit sentiment on NVDA dropped to a bearish score of 32 on July 9 on the back of the DeepSeek and Meta $145B chip budget posts. I read those threads. Then I read the earnings report. Then I bought more.
What Actually Keeps Me Buying The custom silicon story sounds terrifying until you look at what hyperscalers are actually doing with their money. Amazon’s own $200 billion 2026 capex plan explicitly funds one million+ NVIDIA GPUs to be deployed starting in 2026 alongside Trainium. ASICs are narrow. NVIDIA sells the general-purpose fabric that every model, every framework, and every cloud already runs on. That is the flexibility bottleneck ASICs cannot break, the CUDA software fort I refuse to bet against, and the system-level engineering (NVLink, InfiniBand, Dynamo, Blackwell, Vera Rubin) that turns racks into what Jensen calls AI factories.
The numbers back the story. Q1 FY2027 revenue landed at $81.615 billion, up 85.23% year over year, with Data Center at $75.246 billion (+92%) and networking up 199%. Non-GAAP gross margin sat at 75.0%. Free cash flow hit $48.554 billion in a single quarter. That is a fourth consecutive EPS beat, at $1.87 versus $1.7738 consensus.
Then there is the demand signal. $119.0 billion in total supply-related commitments represents booked capacity. Management is confident enough to raise the dividend from $0.01 to $0.25 per share and add an $80 billion buyback authorization, with roughly $20 billion returned in Q1 alone.
Why Not Just Buy Amazon Instead Amazon (NASDAQ:AMZN) is the obvious counter. I own some. I am not adding here. Amazon’s P/FCF sits at 349.33 against NVIDIA’s 51.96, ROE is 22.3% versus 101.5%, and gross margin is 50.3% versus 71.1%. The kicker: Amazon’s TTM free cash flow declined 95% to $1.2 billion as capex ripped higher, while long-term debt jumped to $119.1 billion from $65.6 billion. NVIDIA collects the checks Amazon is writing.
The Risk I Will Not Wave Away China is real. Zero H20 shipments in Q1 versus $4.6 billion the prior year, and Q2 guidance assumes no China Data Center compute revenue. The $119 billion in supply commitments also creates real downside if AI capex cools. The company delivered 85% revenue growth with China at zero. The moat held while the largest customer market was subtracted.
Why I Keep Adding Analyst consensus target is $301.62 against a current price of $207.40, with 58 Buy ratings. FY2026 free cash flow of $96.58 billion funds the compounding I care about. Every hyperscaler that builds its own chip still buys more NVIDIA. That is the trade I keep making, and I am not done making it.
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of TMUS, VZ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Netflix is oversold after Q2, trading near a TTM PE of 20 and a PEG of 0.5. NFLX maintains double-digit revenue growth, robust margins, and aggressive buybacks despite slowing guidance and competitive pressures. Management highlights significant global runway, with under 45% household penetration and only 5% of total TV viewership captured.
John Blackledge, TD Cowen internet & media analyst, joins 'Squawk Box' to discuss Netflix's quarterly earnings results, the challenges ahead for the company, and more.
Netflix, Inc.'s decelerating growth profile, the missed M&A with WBD, and the increased streaming competition have pressured its share performance. This is, albeit, with the market leader still reporting robust engagement trends, growing revenues/margins, lower net debts, and higher ad monetization. The meltdown has triggered NFLX's cheap EV/EBITDA of 18.42x and 3Y PEG ratio of 0.94x, with an upward re-rating supporting a bull-case LTPT of $119.40.
Alongside the company’s financial results, Netflix shared details of its most-watched programs for the first half of 2026. The report could be bad news for the second half of the year.
Netflix First Half EngagementA new report from Netflix shows that some of its biggest hits in the first half of 2026 were animated movies, non-English titles and returning series such as "Bridgerton" and "Stranger Things."
The second half of the year could be missing some of this success for Netflix.
"Bridgerton" aired in January and a new season is not coming until 2027 and "Stranger Things" is done as a series.
"Stranger Things" could paint the biggest gap in Netflix’s content going forward. The release of the final season in multiple parts over the second half of 2025 and the final episode airing on Dec. 31, 2025, helped the show find success in the first half of 2026.
The fifth season ranked fourth overall for shows in the first half of 2026. Seasons 1, 2, 3 and 4 ranked 27th, 39th, 36th and 33rd, respectively, of the top shows in the first half of 2026.
While some may tune in to rewatch past seasons, it’s unlikely that all five seasons rank in the top 40 once again, leaving big gaps.
Another gap could come from animated films.
"Swapped" and "KPop Demon Hunters" ranked third and fourth overall for views for movies in the first half of 2026. "KPop Demon Hunters" has been a smash hit for the company with huge viewership since being released in June 2025.
The title will likely fall back, and while Netflix has a couple of animated films on the slate, including one that follows the familiar Cinderella storyline, the second half of the year may not see animated films rank so high.
In the earnings report, Netflix highlighted several shows and movies for the third-quarter slate, but they don’t have the same excitement level as some of the company’s long-standing franchise shows and movies. The company will be betting heavily on new content and live content in the second half of 2026.
Could Live Content Boost Subscribers & Share Price?Netflix is betting more and more on live content these days, which could be good news for shareholders.
The company has set records for NFL and MMA viewership with past live specials. Netflix hopes to carry this over into the second half of 2026.
This includes the Home Run Derby, which recently aired, and the Field of Dreams game for Major League Baseball and four NFL games spread across the third and fourth quarters of 2026 and the first quarter of 2027.
The company highlights live programming to make up around 5% of its content spend for 2026 and around 1% of view hours. Live events are said to account for six of the top 10 new member sign-up days over the past five years, with live events beginning only in 2023.
While live sports don’t get quite the same viewership as a hit franchise like "Stranger Things," a one-night event may bring in as many subscribers as the show did in the past. This could be the good news and trade-off.
Without releasing subscriber figures, Netflix is now putting more of an emphasis on its revenue, advertising revenue, and its viewership figures for hit shows, which may prove to be the wrong move.
Photo: DANIEL CONSTANTE/Shutterstock
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Nasdaq Struggles As Memory Names Plunge Further; Netflix Sells Off Late On Soft Outlook
Nasdaq Breaks Support As Chip Sell-Off Deepens; Knight-Swift, Canadian Pacific, AbbVie In Focus Internet television network Netflix (NFLX) disappointed investors with mixed second-quarter results, soft Q3 guidance and news that it will reduce how often it reports subscriber engagement numbers. Netflix stock tumbled on Friday. "A light Q3 guide plus another disclosure pullback is a tough combination for a stock trying to find a bottom," Jeremy Mullin, stock strategist at Zacks Investment Research,…
On the surface, Netflix's (NFLX 7.33%) second-quarter earnings report wasn't terrible. Revenue came in slightly below expectations, but grew 13% year-over-year, and earnings per share grew by 11% and came in ahead of what analysts had been looking for. Membership growth, pricing increases, and ad revenue growth all contributed to the double-digit growth.
Even when it comes to forward guidance, there's not much to complain about. It gave a full-year outlook in line with its previous forecast and narrowed (but did not lower) its 2026 revenue guidance.
However, there was one item that investors seemed to have fixated on-Netflix's user engagement. And the stock fell by about 10% shortly after the earnings release.
Image source: Getty Images.
A reporting shift is bothering investors The company's conference call featured several analyst questions about user engagement, a key focus for investors. And to put it mildly, it seems like the market didn't love the answers. For starters, Netflix called its user engagement "healthy" and said that there wasn't any significant change in viewership for the second season of some of its series versus the first.
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On the other hand, management said it would reduce the frequency of its engagement reports, changing the cadence of its "What We Watched" reports from semiannual to annual starting in 2027. So, investors will still see engagement figures, only less frequently.
Now, Netflix claims the shift is to keep the focus on metrics such as revenue and profit. But the reality is that Netflix has been under scrutiny in recent years over whether or not engagement is declining. Reducing how often investors get fresh engagement data at a time when many are questioning it isn't exactly a good look.
Is this a smart move by Netflix? There's a case to be made that this is a smart move. It isn't exactly unprecedented either. The company stopped reporting subscriber counts in 2025 to focus on revenue and profit, and there's a legitimate point that looking at engagement hours alone can be misleading -- for example, Netflix reported that live programming makes up 1% of viewing hours but pulls in the most advertising dollars.
Of course, this only works if the company can deliver on revenue growth, advertising growth, profit margins, and other metrics management wants investors to focus on. But with revenue guidance for the third quarter falling a bit short of expectations, there are some big questions surrounding whether that will be the case.
Key Takeaways Netflix reported Q2 revenues of $12.56B, with 13% y/y growth and 33.4% operating margin.NFLX targets about $3B in ad revenues in 2026, supported by AI tools and programmatic capabilities.Netflix is expanding live games and partnerships while prioritizing reinvestment and share repurchases. Netflix, Inc. (NFLX - Free Report) used its second-quarter earnings call to emphasize expanding entertainment value, improving monetization and using technology to support growth. Management highlighted progress in advertising, artificial intelligence (AI), live programming and broader content formats as key areas shaping the company’s next phase.
The discussion also focused on how Netflix measures engagement, with executives stressing quality and variety alongside viewing hours. During the Q&A session, analysts pressed management on content spending, pricing, ads and new business initiatives.
NFLX Expands Focus Beyond Traditional StreamingNetflix reported second-quarter revenues of $12.56 billion, up 13% year over year, while operating margin reached 33.4%. Earnings per share (EPS) came in at $0.80, surpassing the Zacks Consensus Estimate of $0.79. Revenues missed the Zacks Consensus Estimate of $12.57 billion.
Netflix, Inc. Price, Consensus and EPS SurpriseCo-CEO Greg Peters said the company is broadening its definition of entertainment value by improving quality, variety and quantity of engagement. He noted that viewing hours increased 2% in the first half of 2026, while live programming, podcasts, creators and games are being developed to serve different member needs.
During the Q&A, Peters told analysts that Netflix does not consider viewing hours the only measure of business health. He explained that live events can drive sign-ups, advertising and conversation despite accounting for a smaller share of total viewing hours.
Netflix Advances AI & Content InnovationNetflix highlighted AI as a major technology priority across product development, advertising and content creation. Management said AI tools are being used to improve personalization, search capabilities and production workflows.
Co-CEO Ted Sarandos said that GenAI workflows were used in roughly 300 titles in 2026, with applications across production processes, including post-production and complex visual sequences. He said that the technology is helping creators deliver higher-quality output more efficiently.
Sarandos added that AI is being viewed as a tool for creators rather than a replacement for creative talent. He said that efficiency gains from these tools are expected to support more content investment and improve returns from programming spending.
NFLX Builds Advertising Growth EngineAdvertising remained a central monetization priority, with management reaffirming plans to generate approximately $3 billion in ad revenues in 2026. Netflix said growth is being supported by its entertainment slate, AI-powered advertising tools and broader programmatic capabilities.
Peters said that the company is focused on improving total revenues from the ads business while increasing advertiser demand, measurement capabilities and product offerings. He noted that ad-supported plan monetization has room to improve as Netflix expands its advertising infrastructure.
The company also discussed expanding access for advertisers by automating more advertising workflows. Management said these investments are designed to improve inventory value and support future ad growth.
Netflix Maintains Pricing & Growth StrategyNetflix said recent price adjustments in markets, including the United States, Mexico and Spain, have performed in line with expectations. Management said pricing decisions remain tied to delivering more value for members before raising prices.
Peters told analysts that retention trends, plan selection and customer behavior help guide pricing decisions. He said that the company continues to evaluate ways to improve member acquisition and has tested approaches such as lower-cost introductory offers and free trials in certain markets.
Chief financial officer Spencer Neumann said third-quarter revenue growth is expected to be driven by membership growth, pricing and higher ad revenues. Netflix forecast third-quarter revenues of $12.86 billion and an operating margin of 33.2%.
NFLX Expands Live, Gaming & PartnershipsNetflix continued to invest in additional entertainment formats, including live programming, games and partnerships. Management said live events remain valuable for customer acquisition despite accounting for a smaller portion of overall viewing.
Peters said that cloud-based TV games are gaining traction, with FIFA World Cup: Launch Edition and Unhinged becoming the company’s two most successful cloud game debuts. He also highlighted growth in kids' gaming engagement following the launch of Netflix Playground.
Netflix discussed its TF1 partnership in France as an example of expanding its entertainment offering. Peters said that early results from integrating TF1 programming into Netflix were encouraging as the company evaluates additional partnership opportunities.
Netflix Keeps Long-Term Growth PrioritiesNetflix narrowed its 2026 revenue forecast to $51.0-$51.4 billion while maintaining an operating margin expectation of 31.5%. Management said the outlook reflects continued membership growth, pricing and a projected roughly doubling of ad revenues to approximately $3 billion.
The company also maintained its capital allocation approach, prioritizing business reinvestment, selective acquisitions and share repurchases. Netflix repurchased $4.7 billion of stock in the second quarter and ended the quarter with $9.1 billion in cash and cash equivalents.
Management’s overall message centered on expanding Netflix’s entertainment ecosystem while improving monetization efficiency. Executives emphasized disciplined investment across content, technology and new formats as the company targets continued growth.
Zacks Signals Point to Mixed Stock FactorsNetflix has a Zacks Rank #4 (Sell), while its Style Scores include Value Score D, Growth Score B, Momentum Score C and VGM Score of C. The Zacks Style Scores evaluate value, growth, momentum and combined VGM characteristics, with higher grades indicating stronger relative attributes within each category. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Style Scores are designed as a complement to the Zacks Rank, which is driven by earnings estimate revisions and helps indicate potential near-term stock performance trends. The Zacks Rank can change as analysts update earnings estimates following quarterly results.
Netflix NFLX shares tumbled on Friday after the streaming giant delivered mixed second-quarter results and announced plans to provide less frequent disclosure of viewer engagement data.
This has increased concerns among investors who were already worried about slowing growth and rising competition.
The stock fell 8% on Friday, extending its decline for 2026.
Shares had already dropped 25% for the year as Wall Street grappled with questions about viewer engagement trends, competition from short-form video platforms, and the sustainability of Netflix’s growth trajectory.
The latest selloff came after Netflix reported revenue of $12.56 billion for the second quarter, narrowly missing analysts’ expectations of $12.58 billion.
The company also issued third-quarter revenue guidance of $12.86 billion, below Wall Street forecasts of $12.99 billion.
Investor concerns were amplified by Netflix’s decision to further reduce the amount of operating data it shares with the market.
After discontinuing subscriber disclosures last year, the company announced that beginning in 2027 it will publish its "What We Watched" engagement report annually instead of twice a year.
Netflix said the move was intended to "keep the focus on our primary financial metrics - revenue and operating profit."
The decision comes at a time when engagement metrics have become increasingly important to investors seeking evidence that Netflix can maintain growth amid intensifying competition.
The company reported that viewing hours increased 2% year over year during the first half of 2026.
However, concerns remain over its share of the broader streaming market.
According to Nielson's data, Netflix's share of US streaming has declined to 17% from 21% in the 2 year period till March 2026.
Morningstar analyst Matthew Dolgin said the reduction in engagement reporting could reinforce investor fears.
"The prevailing narrative is that Netflix’s business is deteriorating. Management’s decision to pull back on its engagement report should only encourage this thinking. We believe this is the biggest reason for the high-single-digit stock decline after hours."
MoffettNathanson analyst Robert Fishman also highlighted concerns about the relationship between engagement and financial performance.
There’s a "negative narrative that if viewing hours are set to decline, then revenue and profits must quickly follow," Fishman said.
Competition and engagement trends remain under scrutinyNetflix continues to face growing competition from platforms such as TikTok, YouTube and Instagram, which have gained traction through short-form video content and mobile-first experiences.
Investors have increasingly focused on whether declining engagement could eventually weigh on revenue growth and profitability.
Executives sought to reassure investors during the earnings call, pointing to ongoing membership growth, positive responses to recent price increases, and strong performance from several series and films.
The company also emphasized its global growth opportunity, noting that it remains present in less than 45% of addressable households worldwide.
Co-Chief Executive Officer Greg Peters pushed back against the assumption that viewing hours directly determine financial performance.
"There is not a linear relationship between viewers and revenue and profit, because all hours are not created equal," he said.
Peters noted that live programming can generate advertising revenue and drive subscriber growth despite accounting for a relatively small share of viewing hours.
Despite investor concerns, Netflix highlighted several areas that could support future growth.
The company said advertising revenue is expected to roughly double this year to approximately $3 billion. It is also exploring new initiatives including live entertainment, games, podcasts and shorter-form video content.
Morningstar maintained its $80 fair value estimate on Netflix and argued that the market reaction may have been excessive.
"The stock is reasonably valued for the cash generation and growth it has. It is now trading below 20 times expected 2026 earnings, and we expect profits to continue growing at a faster pace than revenue each year."
Key Takeaways Visa launched VSP to let institutions mint, redeem, hold and transfer stablecoins on a managed platform.V combines blockchain tools with its payment network, Wallet-as-a-Service and security controls.Visa is testing VSP with select clients before a broader rollout to refine real-world use cases. Visa Inc. (V - Free Report) is expanding its stablecoin strategy with the launch of the Visa Stablecoin Platform (VSP), a new enterprise solution that simplifies how financial institutions, fintechs and payment providers access blockchain-based payment capabilities. Instead of developing their own infrastructure, clients can use Visa's managed platform to mint, redeem, hold and transfer stablecoins. The platform initially supports Open USD (OUSD), allowing institutions to integrate stablecoin operations into their existing payment, settlement and treasury workflows.
A key advantage of VSP is that it combines blockchain functionality with Visa's established payment network and security infrastructure. Through its new Wallet-as-a-Service offering, institutions can create or connect onchain wallets, link bank accounts and configure approval policies for stablecoin transactions. Features such as dual-control approvals, audit trails and secure transfer controls are designed to help institutions manage digital assets with the same operational standards they use for traditional payments.
It builds on Visa's growing presence in digital assets. The company already offers stablecoin settlement, stablecoin-linked cards and money movement solutions, and VSP brings these capabilities together under a single platform. This integrated approach could lower the operational barriers for banks and fintechs looking to introduce stablecoin-based products. As more institutions explore blockchain for treasury management, cross-border payments and liquidity optimization, V is positioning itself to capture a larger share.
The platform is currently being tested with select clients, giving V an opportunity to refine real-world use cases before a wider rollout. If adoption gains traction, VSP could strengthen client relationships, expand transaction volumes across Visa's network and create new revenue opportunities.
How Are Competitors Faring?Some of V’s competitors in the payments space include Mastercard Incorporated (MA - Free Report) and PayPal Holdings, Inc. (PYPL - Free Report) .
Mastercard continues to expand its stablecoin strategy by enabling stablecoin settlement, tokenized deposits and programmable payments. MA is also supporting Open USD as a founding participant, reinforcing its focus on connecting blockchain-based assets with traditional payment infrastructure and commercial use cases.
PayPal is broadening the use of its PYUSD stablecoin across payments, commerce and cross-border transfers. PYPL continues to add merchant and consumer use cases, aiming to integrate stablecoins more deeply into its digital wallet ecosystem and everyday payment experiences.
Visa’s Price Performance, Valuation & EstimatesOver the past year, shares of Visa have risen 4.6% against the industry’s 16.4% fall.
Image Source: Zacks Investment Research
From a valuation standpoint, V trades at a forward price-to-earnings ratio of 25.22, well above the industry average of 17.12. V carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Visa’s fiscal 2026 earnings implies a 14.2% jump from the year-ago period.
Image Source: Zacks Investment Research
Visa stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bank of America has announced senior appointments to drive AI adoption and implementation across its global markets group, according to an internal memo seen by Reuters on Friday.
A Walmart logo appears in this illustration taken August 18, 2025. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab
CompaniesJuly 17 (Reuters) - Kieran Shanahan, chief operating officer of Walmart's (WMT.O), opens new tab U.S. operations, is leaving the retailer and will be replaced by the company's international division COO, Kyle Kinnard, an internal memo showed on Friday, amid a major management rejig under CEO John Furner.
Here are some details:
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Kinnard has been with Walmart for more than 25 years handling multiple senior roles, including executive vice president of health & wellness for Walmart U.S., the company said in the memo seen by Reuters.
The change follows Tom Ward, COO of warehouse chain Sam's Club, and Cedric Clark, U.S. store operations chief, leaving the company in May, and David Guggina and Chris Nicholas being named CEOs of Walmart's domestic and international operations, respectively.
Walmart also said on Friday it promoted another executive, Juan Galarraga, to oversee the international businesses in Latin America.
Under Furner, Walmart has been pushing a technology-focused strategy aimed at expanding Walmart's marketplace and delivery businesses and attracting higher-income shoppers. It had also eliminated 1,000 roles in May.
The retailer in May had reiterated its conservative annual sales and profit targets amid softer consumer spending, and said earlier this month that it would cut prices on many summer barbecue favorites, including meat, chips, and soda.
Reporting by Neil J Kanatt in Bengaluru; Editing by Maju Samuel
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Procter & Gamble (PG 0.12%) raised its quarterly dividend 3% in April to $1.0885 per share, marking its 70th consecutive year of dividend increases. Only five other publicly traded companies have raised their payouts for that many years in a row.
The streak is even more remarkable when you zoom out. P&G has paid a dividend every year since its incorporation in 1890 -- 136 straight years. And the payments are enormous in absolute terms, too. The company behind Tide, Pampers, and Gillette expects to pay around $10 billion in dividends in fiscal 2026, plus roughly $5 billion in share repurchases on top of it.
A streak like this is only possible because of what P&G sells. Detergent, diapers, razors, and paper towels get bought in good economies and bad ones, and the company's latest results show that durability at work. In its fiscal 2026 third quarter (the period ended March 31), P&G's organic sales, which exclude currency moves, acquisitions, and divestitures, grew 3% year over year, and core earnings per share rose 3% to $1.59. Management also maintained its full-year outlook even while absorbing tariff-related costs.
Image source: Procter & Gamble
Is the stock a buy for income? With shares trading near $148, P&G stock yields about 2.9% as of this writing. The payout consumes about 63% of the company's earnings over the past 12 months, a level that leaves room for the increases to continue. And the valuation looks arguably reasonable, too. Shares trade at about 21 times earnings -- not a bargain, but hardly a demanding price for a business this durable.
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Income investors should like that trade-off. This is a slow-growth business, with organic sales rising at a low single-digit rate, so nobody should expect the stock to keep up with the market's fastest growers. But the dividend is well covered by earnings, the raises keep coming, and 70 years of history suggest the payout can survive whatever the economy does next.
For investors looking for dependable income, P&G remains one of the simplest options in the market: a nearly 3% yield, backed by one of the longest dividend-growth streaks any company has ever put together.
Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Key Takeaways JNJ shares fell after Q2 results despite earnings and sales beating estimates and a higher 2026 guidance.Johnson & Johnson's MedTech missed expectations as Cardiovascular and Abiomed weighed on growth.JNJ expects better second-half MedTech growth, led by Vision, Orthopedics and Surgery. Johnson & Johnson's (JNJ - Free Report) shares have declined 1.5% since it reported second-quarter 2026 results on July 15.
J&J beat estimates for both earnings and sales in the second quarter. While earnings rose 4.7%, sales rose 6.6% from the year-ago period. Backed by a strong second-quarter performance and uptake of new products, J&J raised its 2026 sales and earnings guidance for the year. However, its shares declined despite the beat-and-raise performance as its MedTech unit underperformed expectations. While sales in its Innovative Medicine segment remain strong and are the primary driver of top-line growth, its soft MedTech growth was the primary factor that led the shares to decline.
Let's discuss what went wrong at MedTech in the second quarter.
What Caused J&J’s MedTech Unit to Underperform in Q2?J&J’s MedTech sales increased 4.5% to $8.93 billion in the second quarter, including operational growth of 3.6%. However, MedTech segment sales slightly missed the Zacks Consensus Estimate of $8.96 billion. MedTech segment sales were mainly hurt by the soft performance of its Cardiovascular business.
Cardiovascular sales rose 3.1% on an operational basis. However, the growth was slower than prior trends due to competitive pressure in the electrophysiology business and a decline in Abiomed sales, partially offset by continued double-digit growth in Shockwave.
Electrophysiology sales increased 3.1% as procedure growth, commercial execution and contribution from new products were partially offset by competitive PFA pressures and negative impact from China inventory dynamics.
Abiomed sales declined 2% in the second quarter as procedure volumes slowed due to changes in Impella usage patterns. The slowdown followed a recent U.K. clinical trial that questioned the benefit of Impella devices in certain high-risk procedures, prompting physicians to reassess patient selection and adopt a more cautious approach to using the device. However, Abiomed sales in outside U.S. markets remained strong.
J&J believes this is a temporary issue and is working with physicians to ensure the device is used in the right patients based on its existing clinical evidence.
Reflecting these challenges, J&J tempered its outlook for Abiomed, now expecting only modest growth in the second half of 2026 rather than the stronger rebound it had previously anticipated. The impact of the U.K. study is expected to linger and impact Abiomed’s growth until the PROTECT IV data is presented in 2027. PROTECT IV is a large clinical trial of the company’s Impella device in high-risk percutaneous coronary intervention (PCI).
Will J&J’s MedTech Sales Recover From Here?On the conference call, J&J clarified that while its Cardiovascular sales slowed down in the second quarter, its other three businesses, Surgery, Vision and Orthopedics all accelerated in the quarter and performed above expectations. J&J claimed that overall procedure volumes were stable and there was no broad-based slowdown in medical procedure volumes across its MedTech business.
J&J clarified that although some large U.S. hospitals have reported weaker volumes for certain elective procedures, those trends are not reflected in its own business. J&J also said that the expiration of Affordable Care Act (ACA) subsidies has not had any meaningful impact on procedure volumes so far and is unlikely to materially affect MedTech demand.
J&J expects MedTech growth to improve in the second half, driven by strength in Vision, Orthopedics, Surgery and better performance in Cardiovascular.
Overall, J&J’s second -quarter results were strong. Although the MedTech business experienced temporary weakness, management remains confident that growth will improve in the second half. Meanwhile, the Innovative Medicine segment continues to exhibit robust underlying fundamentals, supported by sustained demand for its growth portfolio and a promising outlook.
J&J’s Key Competitors in the Medical Devices MarketJ&J’s MedTech unit faces strong competition from several major players in the medical device industry, like Medtronic (MDT - Free Report) , Abbott, Stryker (SYK - Free Report) and Boston Scientific (BSX - Free Report) .
While Medtronic has a strong presence in cardiovascular, neuroscience and surgical technologies, Stryker is a major player in orthopedics and surgical equipment. Boston Scientific markets products for cardiovascular, endoscopy, urology and neuromodulation. Abbott is known for its medical device products across cardiovascular, diagnostics and diabetes care.
JNJ’s Price Performance, Valuation and EstimatesJ&J’s shares have outperformed the industry so far this year. The stock has risen 22.1% this year compared with 10.2% appreciation of the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 20.58 forward earnings, higher than 18.46 for the industry. The stock is also trading above its five-year mean of 15.65.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings has risen from $11.59 per share to $11.61 per share over the past seven days, while that for 2027 earnings has gone up from $12.66 per share to $12.67 over the same time frame.
Image Source: Zacks Investment Research
J&J has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of CoreWeave (NASDAQ:CRWV) currently trade at $72.91, down 35% over the past month and well below the Wall Street consensus price target of $141.15, an implied gap of roughly 94%.
CoreWeave rents specialized NVIDIA GPU capacity to AI labs and hyperscalers. Its $99 billion contracted revenue backlog anchored by Meta and OpenAI made it one of the most-watched AI infrastructure names of the year. That backlog now collides with fear that its largest customer might build its own version of what CoreWeave sells.
The gap matters because the core bull thesis—that structural GPU scarcity gives CoreWeave durable pricing power—is exactly what the “Meta Compute” story is designed to undermine.
A Free Fall Sparked by One Word: Cannibalization CoreWeave shares collapsed 35% in the last month and 19% in the last week alone, triggered by Meta’s launch of a commercial cloud service built on its internal GPU fleet. Investors read it as the opening act of hyperscaler in-sourcing.
Other pressures amplified the pain. Meta Platforms (NASDAQ:META | META Price Prediction) raised 2026 capex guidance to $125 to $145 billion, reinforcing the “build, don’t rent” narrative. CoreWeave’s Q1 2026 print showed $740 million net loss, interest expense doubling, and capex vastly outrunning operating cash flow. CEO Michael Intrator sold tens of millions in stock under a 10b5-1 plan since early June, including $37.7 million on June 30, 2026, and a securities fraud class action remains outstanding. The result is a one-year decline of 49.03%, deeper than any AI cloud peer of comparable size.
Why Rosenblatt Is Still Standing on $250 The consensus upside to $141.15 is roughly 94%, well above the 40% threshold where analysts effectively bet the market has misread the story. Rosenblatt’s John McPeake reiterated the street-high $250 price target immediately after the Meta Compute announcement, implying about 243% upside from current levels.
McPeake’s defense rests on three structural points. First, a no-sublease firewall: the terms of Meta’s $35.2 billion contract reportedly prevent Meta from reselling or subleasing any of the GPU capacity it rents from CoreWeave, meaning Meta’s commercial cloud cannot cannibalize CoreWeave’s owned capacity. Second, persistent global GPU shortages mean demand continues to outpace the industry’s ability to build data centers, protecting CoreWeave’s pricing power despite a new entrant. Third, McPeake reads Meta Compute as a utility optimization play to monetize idle internal clusters and pacify shareholder concerns over return on capital, rather than predatory against specialized neoclouds.
The broader ratings breakdown reflects that conviction:
4 Strong Buy 20 Buy 11 Hold 1 Sell 1 Strong Sell Cantor Fitzgerald reiterated Buy with a $167 price target in June. Recent revisions skew toward reiterations rather than downgrades, with the bull camp focused on backlog conversion and CoreWeave’s ramp toward its 8+ GW long-term power target.
Every Neocloud Got Hit, But Not Equally The AI cloud group sold off together, so this is a sector event as much as a CoreWeave event.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and CoreWeave, Inc. Class A Common Stock didn't make the cut. Grab the names FREE today.
Nebius Group (NASDAQ:NBIS) trades at $171.77 against an average target of $244.21, roughly 42% upside. Shares are down 35.21% in the last month yet still up 105% year to date. Coverage skews Buy with recent revisions largely reiterations.
Applied Digital (NASDAQ:APLD) trades at $26.44 versus a $76.70 average target, roughly 190% upside, the largest in the group. Shares fell 42.86% in the last month, and all 11 covering analysts rate it Buy or Strong Buy.
IREN (NASDAQ:IREN) trades at $34.83 against an $80.93 target, roughly 132% upside. Shares dropped 41.15% over the past month, and coverage is majority Buy with one Strong Sell outlier.
Applied Digital commands the largest implied upside, with its bull case leaning heavily on CoreWeave as principal tenant. On absolute dollars, CoreWeave still commands the deepest customer roster and the sector’s largest dollar-value target gap.
What the Consensus Actually Says CoreWeave trades at $72.91 with a consensus target of $141.15 drawn from 37 covering analysts, implying about 94% upside. Rosenblatt’s $250 street-high implies roughly 243%.
The recent tape is ugly. CRWV is down 18.72% on the week and 49.03% over the past year, against an S&P 500 up roughly 10.05% year to date. CRWV sits at just 1.82% year to date, having erased essentially all its 2026 gains in the last month.
A Real Setup With Real Landmines Buy CoreWeave here if the no-sublease firewall in Meta’s contract holds, GPU scarcity persists into 2027, and management grows into its debt through backlog conversion. That path leads back to $141 and, in Rosenblatt’s view, well beyond.
Stay away if interest expense keeps outrunning operating cash flow, insider selling accelerates, or Meta and other hyperscalers stand up in-house capacity faster than CoreWeave can deliver contracted GPUs. Analyst targets are one data point, not a guarantee, and this balance sheet leaves little cushion if execution slips even one quarter.
The dislocation looks real, though position size should respect a stock that can move 15% in a week in either direction.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and CoreWeave, Inc. Class A Common Stock didn't make the cut. Grab the names FREE today.
Ford (NYSE:F | F Price Prediction) is trading at $14.20, and a $2,500 stake today buys into a legacy automaker in the middle of a transformation: leaner Model e losses, a Ford Pro software business scaling into the hundreds of thousands of subscribers, and management pushing toward an 8% adjusted EBIT margin by 2029. The question for a five-year holder is simple: what could that $2,500 actually be worth by 2031?
The Headline Answer Under the base case, a $2,500 investment in Ford could grow to about $3,557.75 by 2031, a total return of 42.31%. That maps to a modeled five-year price of $20.20 per share, or an annualized return of 7.31%. The model carries a confidence score of 0.9 (High), reflecting stable analyst coverage, positive year-over-year earnings growth, and Ford’s large-cap profile.
Scenario Table: Where the $2,500 Could Land by 2031 Scenario 2031 Share Price Total Return Value of $2,500 Bull $22.27 56.9% $3,922.50 Base $20.20 42.31% $3,557.75 Bear $15.17 6.84% $2,671.00 Sell-side analysts sit close to today’s price, with an average target of $14.95 and a rating breakdown of 2 Strong Buys, 3 Buys, 15 Holds, and 1 Sell. Sentiment leans 71% Neutral, so the bull thesis largely rests on Ford executing its own plan rather than on Wall Street chasing the stock higher.
The Why Behind the Target Three drivers underpin the base-case path to $20.20.
1. Ford Pro is the profit engine. The commercial arm posted $1.69 billion of Q1 2026 EBIT and expanded margins to 11.4%. Paid software subscriptions reached 879,000, up 30% year over year, a high-margin recurring-revenue layer that traditional automakers rarely get credit for. Management guides Ford Pro EBIT of $6.5 billion to $7.5 billion for the year.
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2. Earnings power is rebuilding. Ford raised full-year 2026 guidance to adjusted EBIT of $8.5 billion to $10.5 billion and adjusted free cash flow of $5.0 billion to $6.0 billion. Q1 2026 delivered EPS of $0.66 on revenue of $43.25 billion, up 6% year over year. Forward EPS of $1.69 against a stock near $14 translates to an implied P/E of about 9, cheap if the margin plan holds.
3. Cash returns cushion the ride. Ford pays a $0.15 quarterly dividend and has issued two elevated payments in the past two years ($0.33 in February 2024 and $0.30 in February 2025). A dividend yield near 5% compounds meaningfully over five years, especially if reinvested. Ford also repurchased $311 million of stock in Q1 2026. Readers looking at income-focused strategies may find our research on building a portfolio you never touch the principal on useful context for how a 5%-yielding cyclical fits alongside more defensive payers.
What Could Sink the Projection The bear case at $15.17 assumes execution slips. The biggest overhangs are concrete and near-term. Ford flagged roughly $2.0 billion in commodity headwinds (led by aluminum) and about $1.0 billion of tariff impact outside the one-time IEEPA benefit. The Model e segment is still bleeding, with a Q1 2026 loss of $777 million and full-year losses guided at $4.0 billion to $4.5 billion. FY2025 also carried a GAAP net loss of $8.16 billion after $10.7 billion of Model e impairments. Volatility is real too, with a beta of 1.83, meaning any recession or credit tightening would hit Ford harder than the market.
The Bottom Line A $2,500 stake in Ford maps to a five-year range of roughly $2,671 in the bear case, $3,557.75 in the base case, and $3,922.50 in the bull case, before counting dividends reinvested along the way. The math is only as good as Ford’s execution on Pro software, Model e loss reduction, and the 8% EBIT margin target. This is a projection, not investment advice, and analyst targets are not guarantees. But for investors weighing a cyclical name with a real dividend and a credible transformation plan, the risk-reward through 2031 skews constructive rather than punitive.
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Key Takeaways GM to report Q2 2026 results on July 21, with the consensus mark for EPS of $3.13 and revenues of $45.96B.GM's China restructuring and rising digital revenues are expected to support second-quarter results. GMNA revenues are projected to fall, while GMI and GM Financial sales are expected to increase. General Motors Company (GM - Free Report) is slated to release second-quarter 2026 results on July 21, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) and revenues is pegged at $3.13 and $45.96 billion, respectively.
For the second quarter, the consensus estimate for General Motors’ earnings has moved up 2 cents over the past seven days. Its bottom-line estimates imply growth of 2.37% from the year-ago reported numbers.
The Zacks Consensus Estimate for GM's quarterly revenues implies a year-over-year decline of 2.5%. The company's earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 20.25%. This is depicted in the graph below:
Q1 HighlightsIn the first quarter of 2026, General Motors reported adjusted earnings of $3.70 per share, which rose 33% from $2.78 a year ago. The figure topped the Zacks Consensus Estimate of $2.61 by 41.8%. Revenues of $43.62 billion slipped 0.9% year over year and missed the consensus mark of $43.94 billion by 0.7%.
Things to NoteGeneral Motors’ China restructuring continues to show traction, with first-quarter 2026 China equity income reported at $165 million (its sixth quarterly gain), reflecting restructuring benefits and disciplined production and inventory management. It expects China to remain profitable in 2026.
The automaker is building a larger recurring revenue base from OnStar and Super Cruise. In first-quarter 2026, recognized digital revenues exceeded $750 million, up more than 20% year over year, and deferred revenues reached $5.8 billion, up more than 50%. Management expects recognized digital revenues of about $3.1 billion in 2026 and deferred revenues approaching $7.5 billion by year-end as subscribers rise to roughly 13 million.
Restructuring benefits in China and strong revenues from the software and services business are likely to have enhanced the performance of GM in the second quarter.
In the second quarter of 2026, General Motors’ brands Cadillac, Buick, Chevrolet and GMC recorded a year-over-year decline of 19.2%, 7.5%, 3.9% and 0.3%, respectively.
Let’s have a look at our estimates for GM’s segmental performance.
We expect GM North America (GMNA) revenues to be $37.8 billion, suggesting a year-over-year decline of 4.3%. For GM International (GMI), we expect sales of $3.75 billion, indicating a 12.8% year-over-year increase. We project GM Financial sales to be $4.35 billion, suggesting a rise of 2.3% year over year.
Our estimate for the GMNA segment’s operating income is $3.03 billion, which suggests a rise of 35.7% year over year. We expect GMI's operating income to be $140.3 million, suggesting a decline of 31.2% year over year. Our estimate for the GM Financial operating income is $731.7 million, suggesting a rise of 3.9% year over year.
Earnings WhispersOur proven model predicts an earnings beat for General Motors for the quarter to be reported, as it has the right combination of the two key ingredients. A positive Earnings ESP, combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This is the case here.
Earnings ESP: GM has an Earnings ESP of +5.17%. This is because the Most Accurate Estimate is pegged higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3.
Other Stocks With the Favorable CombinationHere are a few other players from the auto space that, per our model, have the correct ingredients to post an earnings beat this time.
Gentex Corporation (GNTX - Free Report) is slated to release second-quarter 2026 results on July 24. The company has an Earnings ESP of +0.67% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GNTX’s to-be-reported quarter’s earnings and revenues is pegged at 50 cents per share and $669 million.
Cummins Inc. (CMI - Free Report) is slated to release second-quarter 2026 results on August 4. The company has an Earnings ESP of +0.43% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for CMI’s to-be-reported quarter’s earnings and revenues is pegged at $7.34 per share and $9.33 billion.
BorgWarner Inc. (BWA - Free Report) is slated to release second-quarter 2026 results on August 5. The company has an Earnings ESP of +0.62% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for BWA’s to-be-reported quarter’s earnings and revenues is pegged at $1.26 per share and $3.58 billion.
GE Aerospace NYSE: GE is telling investors a familiar story after its Q2 2026 earnings report on July 16. The stock dropped about 5% in early trading the day after the release, despite strong top and bottom-line beats. The company also raised its full-year guidance.
GE Aerospace Today
GE
GE Aerospace
$353.95 +8.22 (+2.38%)
As of 12:24 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$254.66▼
$382.97Dividend Yield0.53%
P/E Ratio43.75
Price Target$370.33
That pattern of a strong earnings report followed by a stock price decline has been the case for the last two earnings reports.
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The reason is a familiar one—valuation. GE trades at around 46x forward earnings, which is a premium to the S&P 500.
It’s also expensive compared to its historical average. But that needs some context, because GE Aerospace has only existed since 2024, when General Electric spun off its energy and healthcare businesses into GE Vernova NYSE: GEV and GE Healthcare Technologies NASDAQ: GEHC, respectively.
That means the “what have you done for me lately?” sentiment impatiently expressed by many investors may actually be an apt way of analyzing GE.
Aging Fleets Are Driving GrowthThe headline earnings numbers were impressive. Revenue of $12.63 billion beat estimates for $11.87 billion and was over 21% higher year over year (YOY). Earnings per share (EPS) of $2.02 beat the forecasted $1.86 and was also 21% higher YOY. Orders were up 17%, and free cash flow (FCF) was up a whopping 43%.
Those numbers looked even stronger over the first half of 2026. Orders grew 49% YOY to $39.5 billion. Adjusted revenue for the half rose 27%, and FCF climbed 31% to $4.7 billion.
As impressive as the headline numbers were, there’s a reason that GE Aerospace was willing to raise its full-year revenue and earnings outlook. The company is getting high demand from its airline customers who need to maintain aging fleets.
Management’s commentary provided more specifics. Commercial services revenue grew 32% in the first half, and total engine deliveries rose 31%. GE credited its internal "FLIGHT DECK" lean operating program for cutting shop turnaround times by roughly a week since the end of 2025. That helped drive record internal shop visit output during the quarter.
Defense demand added a second growth engine. GE's Defense & Propulsion Technologies segment posted a 1.55x book-to-bill ratio for the first half, meaning new orders outpaced revenue by 55%. Revenue in that segment grew 17% for the half, with strong contributions from Avio Aero.
Backlog Still the Real StoryMaking the results even stronger is the company’s reported backlog of over $210 billion. That backlog gives GE unusual visibility into future revenue, since engine orders typically convert into decades of service revenue once delivered. New wins in the quarter included Copa Airlines selecting up to 120 LEAP-1B engines and a U.S. Air Force contract for an autonomous collaborative platform design review.
The Guidance Raise Was SweepingThe expectation of continued strong demand was a catalyst for GE to raise its full-year 2026 guidance for revenue, earnings, operating profit, and FCF.
GE didn't just nudge its 2026 outlook higher. It raised guidance across every major line item. Adjusted EPS guidance moved to $7.65–$7.85, up from a prior $7.10–$7.40 range. At the low end, that's a 20% increase from the company's full-year adjusted EPS in 2025.
Operating profit guidance climbed to $10.55–$10.75 billion, versus a prior $9.85–$10.25 billion. Free cash flow guidance rose to $8.9–$9.2 billion, and revenue growth guidance moved from "low double digits" to "high-teens." Management credited robust services demand and equipment deliveries for the upgrade.
Is GE Overvalued?At around 46x forward earnings, GE is trading at a premium to the S&P 500 and its own historical average. However, the company’s free cash flow (FCF) grew by more than 40% year over year in the quarter.
That cash generation is showing up in shareholder returns, too. GE repurchased $2 billion of stock in the second quarter alone, and diluted share count fell by 24 million shares year over year. The company also ended the quarter with $9.3 billion in cash, or $10.3 billion including short-term investments.
Skeptics will note that kind of FCF growth may not be sustainable, but it’s important to remember that the current iteration of the company has only been in existence since 2024. That means the five-year valuation models, whether FCF or EPS, are factoring in business units that no longer exist for GE Aerospace.
It’s possible that GE falls back a little more, but there’s likely to be a floor above a rising 50-day simple moving average. That means any dip may be short-lived, which is supported by analyst sentiment. The consensus price target for GE is $365.61, and since July, several analysts have raised their targets, with Jefferies offering the highest at $455.
Free cash flow also indicates that the dividend is safe and will likely grow again. Right now, that dividend is more of an afterthought, but it’s not an insignificant reason to make the stock a core holding.
Should You Invest $1,000 in GE Aerospace Right Now?Before you consider GE Aerospace, you'll want to hear this.
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Key Takeaways GE Aerospace lifted 2026 targets after Q2 revenue and adjusted earnings topped consensus estimates.Commercial Engines & Services revenue rose 27% with services and equipment growth in the quarter.Defense & Propulsion Technologies reported higher orders, revenue and operating profit in Q2. General Electric Aerospace (GE - Free Report) used its second-quarter 2026 earnings call to reinforce a simple message: stronger commercial services demand and improving operating execution are giving management enough confidence to lift full-year targets again.
That mattered more than the headline beat alone. Adjusted earnings of $2.02 topped the Zacks Consensus Estimate of $1.86, while revenue of $12.63 billion exceeded the consensus view of $11.86 billion.
GE Raises the Bar for 2026
Chairman and CEO H. Lawrence Culp Jr. framed the quarter around commercial services strength, saying revenue and earnings both rose more than 20% as shop output and equipment deliveries improved. He also tied the performance to FLIGHT DECK, GE’s operating model, which management said is helping drive better throughput across services and equipment.
The bigger signal for investors was guidance. GE raised its 2026 outlook across the board, now expecting operating profit of $10.55 billion to $10.75 billion, adjusted EPS of $7.65 to $7.85 and free cash flow of $8.9 billion to $9.2 billion.
That upgrade came after a first half in which adjusted revenue rose 27% to $24.25 billion, adjusted EPS increased 24% to $3.88,and free cash flow climbed 31% to $4.69 billion. The call’s central takeaway was not just that the company beat the quarter, but that management now sees enough visibility to carry a higher base into the back half.
GE Aerospace Leans on Services Depth
Culp highlighted robust commercial services growth as the main engine of the quarter. In the first half, Commercial Engines & Services (CES) services revenue rose 32%, helped by a double-digit increase in material input from priority suppliers and record internal shop visit output in the second quarter.
That matters because the services mix remains GE Aerospace’s clearest earnings driver. In the quarter, CES revenue rose 27% to $9.73 billion, with services up 26%, internal shop visit revenue up 25%, and spare parts revenue up more than 25%.
Management also pointed to better equipment momentum. Total engine deliveries increased 31% in the first half, including LEAP deliveries up 41%, while CES equipment revenue rose 30% in the quarter on unit volume growth of 26%.
GE Sees Volume, But Margin Pressure Lingers
The quarter showed that faster growth is not translating into uniform margin expansion. Companywide operating profit margin slipped 130 basis points to 21.7%, while CES margin fell 160 basis points to 27.3%.
Management attributed the CES pressure to install engine growth, including GE9X, along with investments and inflation. That explanation is important because it suggests near-term mix and spending are still offsetting some of the benefits from stronger services demand.
Even so, profit growth stayed solid. CES operating profit rose 20% to $2.66 billion, and total company operating profit increased 18% to $2.75 billion, indicating that volume, pricing and services activity are still more than compensating for those headwinds.
GE Aerospace Finds Strength Beyond Commercial
Defense & Propulsion Technologies added another layer of support. Quarterly orders rose 12% to $4.14 billion, revenue increased 16% to $3.44 billion, and operating profit climbed 18% to $475 million.
Management said Defense & Systems revenue grew 12% on gains in both services and equipment, while Propulsion & Additive Technologies advanced 23%, driven by Avio Aero. DPT margin also improved 30 basis points to 13.8%, a contrast with the compression seen in commercial.
The strategic commentary extended beyond the quarter. GE Aerospace cited wins with Copa Airlines, Turkish Aerospace and Leonardo Helicopters, along with progress on the LEAP-1B durability kit, the XA102 engine program, the GE426 contract and NASA’s hybrid-electric demonstration work.
GE Sets a Higher Segment Outlook
The updated segment view sharpened the earnings call’s message. For CES, management now expects roughly 20% revenue growth in 2026, up from a prior outlook for mid-teens growth, with operating profit seen at $10.25 billion to $10.35 billion.
For DPT, GE raised its revenue outlook to low double-digit growth from a prior view of mid- to high-single-digit growth. Operating profit is now expected to be $1.6 billion to $1.7 billion.
The pattern across those targets is clear. Management is leaning on better services execution, stronger delivery trends and broader demand across commercial and defense rather than on a single one-quarter spike.
GE Aerospace Leaves a More Confident Tone
Coming out of the call, management’s posture was more assertive than merely satisfied. Culp emphasized delivery against a backlog above $210 billion while continuing to invest in current and next-generation technology aimed at time-on-wing and cost of ownership.
That leaves investors with a focused picture of the company’s priorities: lift shop capacity, improve equipment flow, support fleet durability and convert a large installed base into sustained services growth. The quarter did not remove margin and inflation pressures, but it did show that GE Aerospace is carrying more momentum into the rest of 2026.
Zacks Signals on GE Stock
GE carries a Zacks Rank #2 (Buy), which points to favorable earnings estimate revision trends and, under the Zacks framework, stronger near-term performance potential than lower-ranked stocks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Style Scores are less supportive. GE has a Value Score of D, Growth Score of C, Momentum Score of C and VGM Score of D, which indicates a mixed profile and weaker combined style characteristics than stocks with A or B scores. The Zacks framework also notes that ranks can change as analysts revise estimates after a company reports results.
In fact, despite one of the company’s strongest quarters in recent memory, Culp insisted there would be “no victory laps.”
The comment wasn’t about managing expectations. It reflected a broader shift in GE Aerospace’s investment story. For years, investors worried whether commercial aviation demand would fully recover after the pandemic. Now, management says the bigger challenge is keeping up with it.
Demand Isn’t The Problem AnymoreThe clearest evidence came during the question-and-answer session, when Culp described the company’s outlook beyond 2026.
“It’s much more a supply side challenge than it is demand,” Culp said, adding that “there are no victory laps here in Evendale today” as the company prepares for another year of growth.
That theme surfaced repeatedly throughout the call.
Culp said customer behavior has remained resilient despite macro uncertainty, pointing to robust service orders, declining parked aircraft and an oversubscribed maintenance network as signs that airlines continue investing in engine maintenance and fleet availability. He added that demand has been “far more resilient than maybe many of us would have expected.”
Mohamed Ali, president and CEO of Commercial Engines & Services, delivered perhaps the simplest summary of management’s view. “We do not have a demand problem,” Ali said.
Instead, executives repeatedly pointed to supply chain capacity, manufacturing throughput and maintenance output as the factors that will determine how much of that demand GE Aerospace can ultimately convert into revenue.
The Next Growth Story Is ExecutionThat helps explain why Culp spent as much time discussing Flight Deck, supplier collaboration and factory productivity as he did the quarter’s financial results.
The company highlighted AI-enabled process improvements that cut demand-signal processing time by nearly 90%, production initiatives that reduced lead times for critical engine components, and supplier Kaizens that improved inspection times by 90%.
Those efforts are aimed at solving what management increasingly sees as its primary bottleneck: delivering enough engines, spare parts and shop visits to satisfy an industry where demand continues to outpace available capacity.
The strategy appears to be working. GE Aerospace ended the quarter with a commercial services backlog of roughly $170 billion, while CFO Rahul Ghai said more than 95% of third-quarter spare-parts revenue is already backed by orders in hand and planned shop removals exceed the company’s full-year guidance by more than 40%.
Why Investors Should Pay AttentionMany industrial companies spend earnings calls convincing investors that demand is healthy. GE Aerospace largely skipped that conversation.
Instead, management argued that the long-term opportunity is already in place, supported by an installed engine base of roughly 80,000 engines, decades-long service contracts and a growing aftermarket business. The focus now is on expanding capacity fast enough to capitalize on it.
That’s why Culp’s “no victory laps” remark may have been the most revealing quote of the call. Even after raising guidance across the board, GE Aerospace’s leadership is signaling that future shareholder returns will depend less on whether airlines keep flying and more on whether the company can continue removing the operational bottlenecks standing between record demand and record results.
GE Stock Price Activity: GE Aerospace shares were up 2.54% at $354.50 at the time of publication on Friday, according to Benzinga Pro data.
Photo by Jonathan Weiss via Shutterstock
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PepsiCo (PEP - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this food and beverage company have returned -1.8%, compared to the Zacks S&P 500 composite's +0.5% change. During this period, the Zacks Beverages - Soft drinks industry, which PepsiCo falls in, has gained 0.9%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
PepsiCo is expected to post earnings of $2.32 per share for the current quarter, representing a year-over-year change of +1.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -4.4%.
For the current fiscal year, the consensus earnings estimate of $8.58 points to a change of +5.4% from the prior year. Over the last 30 days, this estimate has changed -0.6%.
For the next fiscal year, the consensus earnings estimate of $9.01 indicates a change of +5.1% from what PepsiCo is expected to report a year ago. Over the past month, the estimate has changed -1.3%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, PepsiCo is rated Zacks Rank #4 (Sell).
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of PepsiCo, the consensus sales estimate of $24.94 billion for the current quarter points to a year-over-year change of +4.2%. The $98.84 billion and $101.91 billion estimates for the current and next fiscal years indicate changes of +5.2% and +3.1%, respectively.
Last Reported Results and Surprise HistoryPepsiCo reported revenues of $24.18 billion in the last reported quarter, representing a year-over-year change of +6.4%. EPS of $2.2 for the same period compares with $2.12 a year ago.
Compared to the Zacks Consensus Estimate of $23.87 billion, the reported revenues represent a surprise of +1.32%. The EPS surprise was +0.46%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
PepsiCo is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about PepsiCo. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
Key Takeaways Moderna dosed the first U.S. participant in a phase I study of mRNA-4200 for advanced solid tumors.MRNA-4200 targets seven shared tumor antigens and is being studied with checkpoint inhibitor therapy.Moderna's Horizon 2 strategy includes mRNA-4200 and other early-stage oncology programs beyond vaccines. Moderna (MRNA - Free Report) announced that it has dosed the first U.S. patient in a phase I study evaluating mRNA-4200, an investigational off-the-shelf, tumor-targeted cancer antigen therapy.
The study will assess the safety and tolerability of the candidate administered in combination with checkpoint inhibitor therapy in adults with advanced solid tumors. mRNA-4200 is Moderna’s third off-the-shelf cancer antigen therapy candidate and reflects its efforts to broaden the application of mRNA-based immunotherapies in oncology.
mRNA-4200 was developed in collaboration with Immatics (IMTX - Free Report) using its proprietary platforms. The candidate encodes seven shared tumor antigens designed to induce and expand T-cell responses across multiple tumor types.
Year to date, MRNA's shares have skyrocketed 114.1%, compared with the industry’s 2.5% growth.
Image Source: Zacks Investment Research
mRNA-4200 Supports MRNA's Long-Term Diversification StrategyThe initiation of the phase I mRNA-4200 study is closely aligned with Moderna's recently announced long-term strategy to diversify beyond its traditional vaccine business. The company plans to leverage its messenger RNA (mRNA) platform across multiple therapeutic areas.
To execute this strategy, the company has organized its business into three development horizons. Horizon 1 comprises the company's commercial products and late-stage pipeline assets, including the Merck (MRK - Free Report) -partnered personalized cancer therapy and investigational rare disease programs.
Horizon 2 focuses on early-stage clinical programs that include cancer antigen therapies, T-cell engagers and cell therapy enhancers. The study initiation on mRNA-4200, which is part of this horizon, illustrates Moderna's strategy of extending its proven mRNA technology beyond infectious diseases into oncology, reinforcing the company's objective of building a diversified portfolio of innovative therapies.
Horizon 3 consists of earlier-stage research programs that have not yet entered clinical development. These include in vivo CAR-T and CAR-M cell therapies, which could become the company's next-generation growth platforms.
MRNA’s Zacks RankModerna currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
American Express (AXP - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this credit card issuer and global payments company have returned +7% over the past month versus the Zacks S&P 500 composite's +0.5% change. The Zacks Financial - Miscellaneous Services industry, to which American Express belongs, has lost 4% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, American Express is expected to post earnings of $4.40 per share, indicating a change of +7.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.2% over the last 30 days.
The consensus earnings estimate of $17.67 for the current fiscal year indicates a year-over-year change of +14.9%. This estimate has changed +0.1% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $20.23 indicates a change of +14.5% from what American Express is expected to report a year ago. Over the past month, the estimate has changed +0.4%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, American Express is rated Zacks Rank #3 (Hold).
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For American Express, the consensus sales estimate for the current quarter of $19.62 billion indicates a year-over-year change of +9.9%. For the current and next fiscal years, $79.28 billion and $85.94 billion estimates indicate +9.8% and +8.4% changes, respectively.
Last Reported Results and Surprise HistoryAmerican Express reported revenues of $18.91 billion in the last reported quarter, representing a year-over-year change of +11.4%. EPS of $4.28 for the same period compares with $3.64 a year ago.
Compared to the Zacks Consensus Estimate of $18.62 billion, the reported revenues represent a surprise of +1.55%. The EPS surprise was +6.2%.
Over the last four quarters, American Express surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
American Express is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about American Express. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Allstate’s Comeback Is Turning Into a Profit MachineTravelers Companies NYSE: TRV reported what executives described as an “excellent” second quarter of 2026, supported by strong underwriting results across all three business segments, higher investment income and favorable reserve development.
Chairman and Chief Executive Officer Alan Schnitzer said the insurer earned core income of $2.2 billion, or $10.04 per diluted share, and generated a core return on equity of 24.9% for the quarter. Over the trailing four quarters, Travelers produced a core return on equity of 24.2%.
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3 Insurance Stocks That Can Act as a New Inflation Hedge “We’re pleased to report an excellent second quarter and another in a sustained run of successful quarters, with very strong underwriting performance across all three segments and a terrific result from our investment portfolio,” Schnitzer said.
Pre-tax underwriting income totaled $1.7 billion, while the combined ratio improved to 83.6%. The underlying combined ratio improved to 84.1%, which management attributed to a lower underlying loss ratio. Chief Financial Officer Dan Frey said underlying underwriting income reached $1.3 billion after tax, marking the company’s eighth consecutive quarter above $1 billion.
Investment Income and Capital Returns Strengthen Results 3 Insurance Stocks Hitting 52-Week Highs With More Room to RunAfter-tax net investment income rose 14% from the prior-year quarter to $883 million. Frey said fixed income investment income benefited from higher yields and a higher level of invested assets, while alternative investment income also increased. He noted that new money yields at the end of the second quarter were about 90 basis points above the yield embedded in the portfolio.
Travelers expects fixed income net investment income, including earnings from short-term securities, of approximately $840 million in the third quarter and roughly $870 million in the fourth quarter, consistent with prior guidance, Frey said.
Operating cash flow was $1.9 billion for the quarter and surpassed $11 billion over the trailing 12 months. Adjusted book value per share, which excludes unrealized investment gains and losses, was $168.20 at quarter-end, up 16% from a year earlier.
The company returned more than $1.5 billion of capital to shareholders during the quarter, including $266 million of dividends and $1.3 billion of share repurchases. Frey said Travelers had about $3.9 billion remaining under prior board authorizations for buybacks.
Schnitzer emphasized that the company’s capital management priorities remain reinvestment in the business, organic or inorganic, where attractive returns are available, followed by returning excess capital to shareholders.
Business Insurance Posts Record Segment Income Business Insurance generated segment income of $1.2 billion, a second-quarter record, according to Greg Toczydlowski, president of Business Insurance. The segment’s underlying combined ratio was 88.2%, also a second-quarter record.
Net written premiums in Business Insurance reached $6 billion. Excluding the impact of the sale of the company’s Canadian business in the first quarter, net written premiums increased 5% from the prior-year quarter. Toczydlowski said growth was led by a 7% increase in Middle Market and a 4% increase in Select.
National property premiums declined as Travelers maintained disciplined underwriting standards, passing on business where pricing and terms did not align with the company’s view of risk. However, Schnitzer said property premiums were higher in both small commercial and middle market businesses.
Renewal premium change in the segment was 4.8%. Excluding property, renewal premium change was 7.8% and roughly flat sequentially. Retention remained strong at 86%, while new business reached a quarterly record of $805 million, up 8% from the prior-year quarter.
In response to an analyst question about whether Travelers might relax underwriting standards or pricing to accelerate growth given its elevated return on equity, Schnitzer rejected the idea.
“Competing on pricing in this business is a fool’s errand,” Schnitzer said. He added that Travelers’ objective is to compete on franchise value rather than lower prices.
Bond & Specialty Insurance Benefits From Surety Growth Bond & Specialty Insurance reported segment income of $234 million and a combined ratio of 82.8%. Net written premiums rose 14% to a record $1.2 billion.
Jeff Klenk, president of Bond & Specialty Insurance, said domestic management liability retention improved to 88%, while renewal premium change remained consistent. New business in that area increased 8%.
The company’s surety business posted 40% growth in net written premiums, also reaching a record level. Klenk said production was broad across the portfolio and included a small number of large projects as well as increased bonding for data center development.
Asked about the durability of surety growth, Klenk said surety production can vary because most production comes from new bonds rather than renewals. Still, he said Travelers is positioned to benefit from future infrastructure investment, including public spending and data center-related projects.
Personal Insurance Delivers Strong Profitability Personal Insurance generated segment income of $827 million. Michael Klein, president of Personal Insurance, said the result reflected strong underlying underwriting income, modest catastrophe losses and favorable prior-year reserve development.
The segment’s combined ratio was 79.5%, while the underlying combined ratio was 77.3%. Net written premiums totaled $4.3 billion, with solid retention in both automobile and homeowners and higher new business in homeowners.
In automobile, the combined ratio was 82.8%, including a 4.5-point benefit from favorable prior-year reserve development. The underlying combined ratio improved slightly more than three points from the prior-year quarter to 85.8%. Klein said favorable loss experience across coverages contributed to the improvement, including about a two-point benefit from re-estimating the prior quarter in the current year.
In homeowners and other, the combined ratio was 76.7%, reflecting modest catastrophe losses and very strong underlying underwriting income. The underlying combined ratio was 70.1%, comparable with a strong prior-year quarter.
Klein said Travelers continues to pursue profitable growth by adjusting rates to reflect profitability, enhancing product and pricing segmentation, refining eligibility restrictions and seeking new agent appointments and book consolidation opportunities.
Technology, AI and Reinsurance Remain Focus Areas Executives repeatedly pointed to technology and artificial intelligence initiatives as contributors to underwriting performance and efficiency. Schnitzer said Travelers continues to invest more than $1.5 billion annually, including in focused technology initiatives such as AI, to strengthen competitive advantages.
Toczydlowski highlighted AI advancements in Travis, the company’s digital platform for small commercial business, including submission uploads, data extraction, pre-filled submission information and underwriting rules that can generate quotes in seconds.
Frey also discussed reinsurance actions. Travelers replaced an expiring catastrophe bond in May with a new bond, increasing the size from $575 million to $750 million and slightly decreasing the retention. On July 1, the company renewed its Northeast property catastrophe excess-of-loss treaty, which continues to provide $1 billion of occurrence coverage above a $2.75 billion attachment point.
Frey said Travelers chose not to renew the personal lines catastrophe excess-of-loss treaty it had purchased in 2024 and 2025, citing the efficiency of its all-perils enterprise-wide general corporate catastrophe treaty renewed at Jan. 1.
Looking ahead, management said it remains confident in the durability of the company’s underwriting income, investment income and balance sheet strength. Schnitzer said Travelers’ earnings engine is “tuned to continue delivering industry-leading returns at industry-low volatility.”
About Travelers Companies (NYSE:TRV)The Travelers Companies, Inc NYSE: TRV is a leading provider of property and casualty insurance products and services. The company underwrites a broad range of commercial and personal insurance lines, offering coverage designed to protect individuals, small and midsize businesses, and large corporate clients against property loss, liability, and other operational risks. Travelers is known for combining underwriting, claims management and risk control services to help clients prevent losses and recover when incidents occur.
On the commercial side, Travelers writes primary and specialty coverages including property, general liability, commercial auto, workers' compensation, professional and management liability, surety and inland marine.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Travelers Companies Inc (NYSE:TRV) shares rose more than 8% on Friday after the insurer reported second-quarter earnings that significantly exceeded Wall Street expectations, helped by lower catastrophe losses, higher investment income and strong underwriting performance.
The company posted adjusted core earnings of $10.04 per diluted share for the quarter ended June 30, comfortably ahead of the consensus estimate of about $5.39.
Revenue came in at $12.15 billion, broadly in line with analyst expectations.
Net income increased to $2.21 billion, or $10.26 per diluted share, from $1.51 billion, or $6.53 per diluted share, a year earlier. Core income rose to $2.16 billion from $1.50 billion in the prior-year quarter.
Travelers reported a consolidated combined ratio of 83.6%, improving from 90.3% a year earlier and substantially better than analysts had anticipated. The result reflected lower catastrophe losses, which fell to $518 million pre-tax from $927 million a year ago, as well as higher favorable prior-year reserve development and stronger underlying underwriting results.
Net investment income increased 14% year over year to $883 million after tax.
Net written premiums were $11.53 billion, essentially unchanged from the prior-year period, while total revenue edged up to $12.15 billion from $12.12 billion.
During the quarter, Travelers returned $1.58 billion of capital to shareholders, including $1.31 billion through share repurchases.
Travelers CEO Alan Schnitzer said the company delivered strong underwriting and investment performance across its businesses.
"We are pleased to report excellent second quarter results with very strong underwriting performance across all three segments and a terrific result from our investment portfolio," Schnitzer said in a statement.
He added that the company's underwriting income benefited from continued strong underlying profitability and favorable reserve development, while its investment portfolio generated a 14% increase in after-tax net investment income.
For the quarter ended June 2026, Travelers (TRV - Free Report) reported revenue of $12.09 billion, down 0.1% over the same period last year. EPS came in at $10.04, compared to $6.51 in the year-ago quarter.
The reported revenue represents a surprise of -1.46% over the Zacks Consensus Estimate of $12.27 billion. With the consensus EPS estimate being $5.31, the EPS surprise was +89.08%.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Travelers performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Combined Ratio - Consolidated: 83.6% versus the eight-analyst average estimate of 96.1%.Underwriting Expense Ratio - Consolidated: 29% versus 28.8% estimated by eight analysts on average.Loss and loss adjustment expense ratio - Consolidated: 54.6% versus 67.2% estimated by eight analysts on average.Combined Ratio - Bond & Specialty Insurance: 82.8% compared to the 86.1% average estimate based on six analysts.Total Revenues- Net investment income: $1.07 billion versus $1.03 billion estimated by eight analysts on average. Compared to the year-ago quarter, this number represents a +13.6% change.Total Revenues- Fee income: $126 million versus $124.57 million estimated by eight analysts on average. Compared to the year-ago quarter, this number represents a +1.6% change.Total Revenues- Premiums: $10.75 billion versus the eight-analyst average estimate of $10.96 billion. The reported number represents a year-over-year change of -1.5%.Total Revenues- Other Revenues: $144 million versus the eight-analyst average estimate of $130.41 million. The reported number represents a year-over-year change of +17.1%.Revenues- Premiums- Business Insurance: $5.55 billion versus the six-analyst average estimate of $5.67 billion. The reported number represents a year-over-year change of +0.1%.Revenues- Premiums- Personal Insurance: $4.15 billion compared to the $4.18 billion average estimate based on six analysts. The reported number represents a change of -4.8% year over year.Revenues- Premiums- Bond & Specialty Insurance: $1.06 billion versus the six-analyst average estimate of $1.08 billion. The reported number represents a year-over-year change of +3.4%.Revenues- Other revenues- Personal Insurance: $25 million versus the five-analyst average estimate of $27.42 million. The reported number represents a year-over-year change of +8.7%.View all Key Company Metrics for Travelers here>>>
Shares of Travelers have returned +9.8% over the past month versus the Zacks S&P 500 composite's +0.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
IBM shares were falling nearly 25% after the Company reduced its near-term outlook tied in part to AI-related spending. Levi & Korsinsky is reviewing whether investors received adequate information about IBM’s AI growth assumptions before the decline July 17, 2026 10:07 ET | Source: Levi & Korsinsky, LLP
NEW YORK, July 17, 2026 (GLOBE NEWSWIRE) -- International Business Machines Corporation (NYSE: IBM) shares fell more than 24% after IBM released preliminary second-quarter 2026 results and reduced its near-term revenue and earnings outlook tied in part to a reduction in consumer spending as purchasing shifts toward constrained server, storage, and memory supply. IBM investors who saw losses today should act while trading records and account details remain close at hand. Shareholders who suffered losses are encouraged to submit their IBM loss details.
Levi & Korsinsky is investigating potential securities law violations involving IBM’s statements about AI demand, Gen AI business activity, and 2026 growth expectations, particularly in light of customer purchasing decisions. Notably, On April 23, 2026, IBM’s CEO, Arvind Krishna, claimed the Company was able to “somewhat mitigate” these infrastructure supply constraints as they are some of the “early users of their newest memory technologies.” Moreover, IBM’s CFO, James J. Kavanaugh, highlighted that the ongoing “supply chain dislocation, around commodity costs, in particular around memory, has a de minimis impact to us overall.”
The investigation concerns, in part, whether IBM’s acknowledgement of the ongoing issues in the supply chain positioned them to be well suited to “anticipate the magnitude of the capex reprioritization” among its client base that allegedly occurred during the second quarter.
If you lost money on IBM, send your loss details to Levi & Korsinsky or call (212) 363-7500.
ABOUT LEVI & KORSINSKY, LLP -- Over the past 20 years, Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders. The firm has extensive expertise in complex securities litigation and a team of over 70 employees. For seven consecutive years, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report.
Frequently Asked Questions About the IBM Investigation
Q: Who is conducting the IBM investigation? A: Levi & Korsinsky, LLP is investigating potential securities law violations on behalf of investors who purchased IBM securities and suffered losses.
Q: Who is eligible to participate in the IBM investigation? A: Investors who purchased IBM stock or securities and suffered financial losses may be eligible. Eligibility is based on purchase date and documented losses -- not on whether you still hold the shares.
Q: Which statements are being reviewed in the IBM investigation? A: The investigation concerns IBM statements regarding AI adoption, Gen AI business activity, and 2026 growth expectations. After IBM released preliminary second-quarter 2026 results and reduced its near-term outlook tied in part to AI-related spending, shares fell nearly 25%.
Q: What do IBM investors need to do right now? A: Investors should gather brokerage records showing purchase dates, share quantities, prices paid, and any sale information. These records help evaluate documented losses.
Q: What documents do I need to participate? A: Brokerage statements or trade confirmations showing purchase dates, share quantities, prices paid, and any subsequent sale dates and prices.
Q: What if I already sold my IBM shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased and whether you suffered losses, not whether you still hold the shares.
Q: What does it cost me to participate? A: There is no upfront cost to participate. Securities investigations and any resulting legal actions are generally handled on a contingency basis, with no upfront fees, no retainer, and no out-of-pocket costs.
IBM (IBM) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might not help the stock continue moving higher in the near term.
The company couldn’t stop saying one word: “restless.”
At first glance, it sounds like little more than executive jargon. Look closer, however, and the repeated use of the word reveals how CEO Stephen Hemsley wants Wall Street to think about UnitedHealth’s next phase—not as a company that’s finished fixing its problems, but one that’s committing itself to constant reinvention.
• UnitedHealth Group shares are trending higher. What’s driving UNH shares up?
“Restless” Wasn’t An AccidentHemsley introduced the idea before discussing financial performance, saying UnitedHealth’s progress was fueled by “a restless desire to drive mission-aligned change across the enterprise.”
The theme resurfaced later when an analyst asked whether the company had largely completed its turnaround and whether investors should now expect a return to UnitedHealth’s long-standing earnings growth algorithm.
Rather than declaring the turnaround complete, Hemsley suggested that mindset misses the point.
“We will probably never will remain restless. We are never going to not be in improvement and urgency mode. So I don’t see this kind of approach really changing,” he said.
He then made perhaps the clearest statement of the call’s broader message. “This is not just about returning to a growth rate… That broader mission is a restless one. It’s a journey and it’s not going to stop.”
That’s an important distinction for investors.
For much of the past year, the investment debate around UnitedHealth has centered on whether the insurer could recover from elevated Medicare costs, stabilize commercial medical trends and restore profitability. Hemsley instead framed the discussion around becoming a company that is always evolving — whether through AI, operational efficiency, consumer experience or care delivery.
More Than A CEO CatchphraseThe language wasn’t confined to Hemsley.
While discussing Medicare Star ratings, UnitedHealthcare Executive Vice President Tim Noel echoed the same philosophy.
“With Stars, we’re restless when it comes to seeking opportunities to differentiate, and we’re always focused on delivering the greatest quality experiences and outcomes for our members,” Noel said.
That repetition suggests “restless” isn’t simply Hemsley’s preferred word. It appears to be part of the broader message management wanted investors to leave the call with.
Hemsley reinforced that impression in his closing remarks. “…we appreciate your time and your trust in us as we continue to both improve our performance and modernize our company. And I can assure you we will stay restless and urgent as we go forward.”
Why It Matters For InvestorsCompanies often use earnings calls to convince investors that a difficult period is behind them. UnitedHealth took a different approach.
Instead of portraying the latest quarter as the end of a turnaround, management repeatedly emphasized continuous improvement. That message fits with the company’s broader push into AI-enabled operations, simplified prior authorization, digital consumer tools and modernized care delivery discussed throughout the call.
Whether those initiatives ultimately translate into faster earnings growth remains to be seen.
But if the repeated use of one word was intentional, UnitedHealth’s leadership was signaling something larger than a better quarter: it wants investors to view “restless” as a permanent operating philosophy rather than a temporary response to recent challenges.
Photo by Ken Wolter via Shutterstock
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Key Takeaways UNH raised 2026 adjusted EPS guidance to $19.50-$20.00 after stronger first-half results.Medicare actions improved performance, with 2026 margins now expected to finish above 3%.Commercial margin recovery is delayed as elevated medical costs and provider billing pressure persist. UnitedHealth Group Incorporated (UNH - Free Report) used the second-quarter 2026 earnings call to argue that its operational reset is gaining traction, with stronger Medicare performance and improving execution at Optum offsetting continued pressure in commercial insurance.
Management’s message was less about the quarter’s beat and more about building a steadier earnings base for 2027 and beyond, even as elevated medical costs and commercial margin recovery remain live issues.
UNH Raises the Baseline for 2026Adjusted earnings came in at $6.38 per share, beating the Zacks Consensus Estimate of $4.94. Revenues of $112.03 billion surpassed the Zacks Consensus Estimate of $110.12 billion.
Chief financial officer Wayne DeVeydt said that the company now expects full-year 2026 adjusted earnings per share of $19.50 to $20.00, compared with the prior view of more than $17.75. UnitedHealth also lifted its full-year operating earnings outlook to more than $25.45 billion and now expects about $24 billion in operating cash flow.
DeVeydt framed the new outlook as a reflection of first-half performance and a more mature read on membership mix and utilization. He also said UnitedHealthcare operating earnings are now expected to exceed $12 billion, with OptumHealth more than $2.2 billion.
UnitedHealth Says Medicare Actions Are WorkingChief executive officer of UnitedHealthcare Tim Noel said that Medicare results were ahead of expectations because pricing, benefit design, care management and network curation helped offset still elevated medical costs. Noel added that the 2026 Medicare medical cost trend should finish below the company’s initial estimate of around 10%.
Management still did not describe Medicare as normalized. In Q&A, Noel and Bobby Hunter, head of Medicare insurance, said cost trends remain high compared with historical levels, but are running below planning assumptions thanks to company actions, lighter respiratory seasonality and the absence so far of some previously contemplated unknown risks.
UnitedHealth now expects full-year Medicare Advantage enrollment to decline about 1.1 million and Medicare margins to finish 2026 above 3%. That helps explain why management sounded more confident on earnings durability even while remaining cautious on utilization.
UNH Still Faces Commercial Cost FrictionThe clearest pressure point on the call remained commercial insurance. Noel said medical costs in commercial plans are running modestly above the already elevated 11% level the company had discussed earlier.
Daniel Kueter, CEO of UnitedHealthcare Employer and Individual, told analysts that the No Surprises Act independent dispute resolution process and more aggressive provider billing behavior are key drivers. Kueter said the IDR process alone is contributing roughly 50 basis points of incremental trend in 2026 and now represents at least 100 basis points of total cost.
In one of the call’s more important takeaways, Kueter said commercial margin recovery is delayed, not derailed. Management no longer expects a full return to historical commercial margins by 2027, though it still described a multiyear path back toward 7%-plus performance.
Optum Momentum Supports the NarrativeOptum gave management another point of credibility. The segment generated $65.7 billion in revenues and $4 billion in operating earnings, with OptumHealth, Optum Insight and Optum Rx all described as on or ahead of plan through the first half.
Chief executive officer Patrick Conway pointed to operational and clinical progress at OptumHealth, including a roughly 10% reduction in hospitalizations in certain regions, more than 20% improvement in timely home-care delivery in pilots and a 5% year-over-year increase in patient experience.
The Q&A added nuance here. Management said value-based care margins were performing in line to slightly better than expected, while Optum Insight’s quarterly outperformance partly reflected contract timing that pulled some volume into the first half, leaving full-year guidance unchanged.
UnitedHealth Pushes AI and SimplificationStephen Hemsley, who returned as CEO, repeatedly tied the turnaround to affordability, transparency, modernization and simplicity. Hemsley described AI as a way to improve service, reduce administrative burden and help redesign how the enterprise operates.
That theme showed up in both the call and the press release. UnitedHealth said it plans to eliminate 30% of prior authorization volume by the end of 2026, remove nearly two-thirds of pediatric prior authorization requirements and publicly report prior authorization metrics.
Management also tied AI more directly to future efficiency. Noel said the company aims to process 80% of prior authorizations in real time by the end of 2027, while Conway highlighted gains in administrative productivity and clinician support tools across Optum.
UNH Leaves the Call in Execution ModeThe overall tone coming out of the call was more disciplined than celebratory. Hemsley said the company is making solid early progress but still has much more work ahead to build a more dependable operating model.
That posture fits the mix of signals in the quarter. Medicare and Optum trends improved, guidance moved higher and cash deployment increased, but commercial costs, Medicaid margin pressure and elevated systemwide trend remain active watchpoints.
Zacks Signals Point to Balanced SetupUNH carries a Zacks Rank #3 (Hold), along with a Value Score of B, Growth Score of A, Momentum Score of A and a VGM Score of A. Within the Zacks framework, the Style Scores indicate favorable value, growth and momentum characteristics, while the VGM score implies strong combined style appeal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Still, the Zacks framework places the most weight on earnings estimate revisions. A Zacks Rank #3 signals a more balanced near-term setup than a top-ranked stock, even with strong Style Scores and that rank can change as analysts revise estimates after the just-reported results.
REDWOOD CITY, Calif.--(BUSINESS WIRE)--Electronic Arts Inc. (NASDAQ: EA) and Battlefield Studios today revealed a first look at Battlefield 6™ and Battlefield REDSEC, delivering the franchise's largest seasonal update to date with Naval Warfare, new content, and a meticulously crafted knockout Top Gun crossover experience in partnership with Paramount Games Studio. The update will include the F-18/Super Hornet and iconic F-14 Tomcat, fan-favorite characters from Top Gun, as well as two new modes.
Key Takeaways Chevron's premium upstream assets and capital discipline support long-term cash flow growth.TTE offers lower valuation with diversified growth across LNG, renewables and global markets.CVX has shown more resilient earnings estimate revisions despite trading at a valuation premium. Chevron Corporation (CVX - Free Report) and TotalEnergies SE (TTE - Free Report) are among the world's largest integrated energy companies, but they offer investors different paths to long-term value creation. CVX has built its reputation on high-quality upstream assets, disciplined capital allocation and consistent shareholder returns. TotalEnergies, meanwhile, has transformed itself into a diversified energy company with one of the world's largest liquefied natural gas (“LNG”) businesses and a rapidly expanding renewable power portfolio.
With oil prices remaining volatile following the collapse of the U.S.-Iran ceasefire, LNG demand continuing to rise and the global energy transition reshaping the industry, investors are weighing which company offers the better investment opportunity. Both generate strong cash flows and return capital through attractive dividends and share repurchases, but their growth strategies, valuations and earnings outlooks differ.
CVX Relies on Premium Assets and Financial StrengthChevron's investment case is built around owning some of the industry's lowest-cost and longest-life assets. The company continues to expand production in the Permian Basin while benefiting from major projects such as the Tengiz expansion in Kazakhstan, supporting production growth and free cash flow generation for years.
Chevron's integrated portfolio also includes refining, chemicals and marketing businesses, providing a hedge during weaker oil-price environments and supporting resilient earnings across commodity cycles.
The company maintains one of the strongest balance sheets among global oil majors. Its financial flexibility enables management to invest in growth while consistently returning excess cash through dividends and share repurchases. Chevron has increased dividend for decades, reinforcing its reputation as one of the energy sector's premier income stocks.
These strengths have supported a valuation premium. CVX currently trades at roughly 12.65X forward price-to-earnings (P/E), compared with TTE's 8.01X forward P/E, reflecting investor confidence in its asset quality and disciplined execution.
Image Source: Zacks Investment Research
TotalEnergies Offers a More Diversified Growth StoryCompared with Chevron, TotalEnergies has placed greater strategic emphasis on LNG and renewable power alongside its traditional oil and gas operations. The company has become one of the world's leading LNG suppliers, with operations spanning production, liquefaction, shipping and global marketing. Rising LNG demand, particularly in Europe and Asia, remains a compelling long-term growth driver.
Geographic diversification is another advantage. TTE operates across Europe, Africa, the Middle East, North America and Asia-Pacific, reducing dependence on any single producing region.
The company has expanded its solar, wind, battery storage and integrated power portfolio while continuing to grow the conventional oil and gas business, creating a balanced energy portfolio positioned for both current demand and the long-term transition toward cleaner fuels.
This strategy has translated into stronger recent stock performance. Over the past 12 months, TTE’s shares have gained approximately 27.5%, compared with CVX's 22.6% return.
Image Source: Zacks Investment Research
Different Growth Drivers Set the Companies ApartAlthough both companies should benefit from resilient global energy demand, their primary growth drivers differ.
Chevron's growth is driven by its low-cost upstream assets, operational efficiency and disciplined capital allocation. If oil prices remain supportive, these strengths should continue driving free cash flow while supporting dividend growth and ongoing share repurchases.
TTE offers broader growth opportunities through its conventional oil business, expanding LNG operations and renewable power investments. This diversified model reduces dependence on crude oil prices and provides multiple long-term growth avenues. Investors seeking greater leverage to higher oil prices may prefer CVX, while those looking for broader exposure across multiple energy markets may find TTE more appealing.
Valuation and Analyst SentimentFrom a valuation standpoint, TTE appears considerably cheaper. The company trades at roughly 6.18X forward price-to-cash flow, compared with 11.54X for CVX. Combined with its lower forward earnings multiple, TTE offers investors exposure to a diversified global energy business at a noticeable discount.
Image Source: Zacks Investment Research
However, analyst sentiment has recently been relatively more favorable toward CVX despite its higher valuation. Over the past 60 days, the Zacks Consensus Estimate for CVX's fiscal 2026 earnings has declined 4.41%, while the fiscal 2027 estimate has increased 1.45%. In contrast, the consensus estimates for TTE have declined 4.6% for fiscal 2026 and 2.45% for fiscal 2027.
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Which Stock Is the Better Buy?TotalEnergies stands out for its lower valuation, stronger recent share price performance and diversified exposure to LNG, renewable power and international markets. Investors seeking a value-oriented energy stock with multiple long-term growth drivers may find its investment story compelling.
CVX, however, combines high-quality upstream assets, one of the industry's strongest balance sheets and disciplined capital allocation. Its integrated business generates resilient cash flows across commodity cycles, while the long history of dividend growth continues to appeal to income-focused investors. While earnings expectations have softened for both companies, Chevron's earnings estimate revisions have been more resilient, particularly with improving expectations for fiscal 2027. Both companies currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chevron's relatively better earnings estimate outlook, superior asset quality and proven capital discipline make it a more attractive investment for long-term investors willing to pay a modest valuation premium. While TotalEnergies remains an excellent choice for investors prioritizing value and diversification, Chevron's combination of financial strength, comparatively better earnings outlook and high-quality assets gives it a slight edge for long-term investors.
Key Takeaways CBSH beat Q2 earnings and revenue estimates, driven by higher net interest and non-interest income.Commerce Bancshares posted sequential loan growth, while deposits declined from the prior quarter.Higher expenses and credit loss provisions weighed on CBSH's results to some extent. Shares of Commerce Bancshares Inc. (CBSH - Free Report) gained 1.7% following the release of its second-quarter 2026 results. Second-quarter earnings of $1.10 per share surpassed the Zacks Consensus Estimate of $1.04. The bottom line reflected a rise of 1% from the prior-year quarter.
Results primarily benefited from higher net interest income (NII) and a rise in non-interest income. The sequential rise in loan balances acted as a tailwind. However, higher expenses and provisions hurt the results to some extent.
Net income attributable to Commerce Bancshares was $159.8 million, up 4.8% year over year. Our estimate for the metric was $145.2 million.
CBSH’s Revenues Improve, Expenses RiseTotal revenues were $498.9 million, up 11.9% year over year. The top line outpaced the Zacks Consensus Estimate of $488 million.
NII was $315.1 million, rising 12.5% from the year-ago quarter. Net yield on interest-earning assets was 3.77%, increasing 7 basis points (bps) year over year. Our estimates for NII and net yield on interest-earning assets were $302.8 million and 3.62%, respectively.
Non-interest income was $183.8 million, up 11% year over year. The rise was mainly driven by higher trust fees, deposit account charges and other fees, consumer brokerage services fees, and bank card transaction fees. Our estimate for non-interest income was $176.5 million.
Non-interest expenses increased 21.5% year over year to $297.1 million. The rise was due to an increase in all cost components. We had projected expenses of $287.9 million.
Investment securities gains were $12.8 million, significantly up from the prior-year quarter.
The efficiency ratio increased to 58.40% from 54.77% in the year-ago quarter. A rise in the efficiency ratio indicates a deterioration in profitability.
CBSH’s Loans Rise Sequentially But Deposits FallAs of June 30, 2026, net loans were $20.64 billion, up 1.9% from March 31, 2026. Total deposits were $27.88 billion, down 1.8% sequentially. Our estimates for net loans and total deposits were $20.51 billion and $28.74 billion, respectively.
Commerce Bancshares’ Asset Quality: A Mixed BagProvision for credit losses was $8.7 million, up 56% from the prior-year quarter. Our estimate for the metric was $12.4 million.
The allowance for credit losses on loans to total loans was 0.94% on June 30, 2026, unchanged year over year.
However, non-accrual loans to total loans were 0.06% at the quarter-end, down from 0.11% in the year-ago quarter. The ratio of annualized net loan charge-offs to average loans was 0.19%, down from 0.22% in the prior-year quarter.
CBSH’s Capital Ratios Improve, Profitability Ratios DeclineAs of June 30, 2026, the Tier I leverage ratio was 12.81%, up from 12.75% in the year-ago quarter. Tangible common equity to tangible assets ratio increased to 11.39% from 10.86% in the prior-year quarter.
In the reported quarter, return on total average assets was 1.84%, down from 1.95% in the year-ago quarter. Return on average equity was 14.70% compared with 17.40% in the prior-year quarter.
CBSH’s Share Repurchase UpdateIn the reported quarter, the company purchased 2.1 million shares of treasury stock at an average price of $53.03.
Our Take on Commerce BancsharesIn June, CBSH announced plans to acquire Nolan & Associates, which will expand its capital markets-related capabilities. Along with this, the FineMark buyout (which is expanding the wealth platform and lifting trust fees), solid growth in loans, a diversified fee mix and balance sheet repositioning will continue to aid the company’s top line. However, rising expenses and weak asset quality remain near-term headwinds.
Currently, Commerce Bancshares carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other BanksThe Bank of New York Mellon Corporation’s (BNY - Free Report) second-quarter 2026 adjusted earnings of $2.46 per share handily surpassed the Zacks Consensus Estimate of $2.20. The bottom line increased 26.8% from the year-ago quarter.
BNY’s results primarily benefited from a rise in fee revenues and NII. Also, the company recorded a provision benefit in the quarter, which was a tailwind.
Bank of America’s (BAC - Free Report) second-quarter 2026 earnings of $1.21 per share handily surpassed the Zacks Consensus Estimate of $1.13. The bottom line grew 34.4% year over year.
BAC recorded an improvement in trading numbers for the 17th straight quarter. The company’s investment banking performance was solid this time as well. These, along with higher NII, drove Bank of America’s total revenues. While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.
U.S. stocks traded lower this morning, with the Dow Jones index falling more than 500 points on Friday.
Following the market opening Friday, the Dow traded down 0.98% to 52,037.01 while the NASDAQ dipped 1.77% to 25,422.98 The S&P 500 also fell, dropping, 1.15% to 7,447.23.
Leading and Lagging Sectors
Energy shares jumped by 1.6% on Friday.
In trading on Friday, communication services stocks fell by 2.9%.
Top Headline
Netflix Inc. (NASDAQ:NFLX) shares dipped more than 10% on Friday after the company reported mixed second-quarter financial results and issued weak guidance for the third quarter.
Netflix reported second-quarter revenue of $12.56, up 13% year-over-year. The revenue total missed a Street estimate of $12.59 billion, according to data from Benzinga Pro. Second-quarter earnings of 80 cents per share beat a Street consensus estimate of 79 cents per share.
Equities Trading UP
Equities Trading DOWN
Commodities
In commodity news, oil traded up 3% to $81.35 while gold traded up 0.1% at $3,992.20.
Silver traded down 1.4% to $55.415 on Friday, while copper fell 2.2% to $6.2055.
Euro zone
European shares were lower today. The eurozone’s STOXX 600 declined 0.8%, while Spain’s IBEX 35 Index fell 0.9% London’s FTSE 100 slipped 0.4%, Germany’s DAX declined 0.7%, while France’s CAC 40 dipped 0.8%.
Asia Pacific Markets
Asian markets closed mostly lower on Friday, with Japan’s Nikkei 225 dipping 4.03%, Hong Kong’s Hang Seng index falling 1.78%, China’s Shanghai Composite dipping 3.05% and India’s BSE Sensex gaining 1.25%.
Economics
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