Wall Street expects a year-over-year decline in earnings on lower revenues when CNX Resources Corporation. (CNX - Free Report) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on July 30, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis company is expected to post quarterly earnings of $0.57 per share in its upcoming report, which represents a year-over-year change of -3.4%.
Revenues are expected to be $407.14 million, down 9.5% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 13.08% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for CNX Resources?For CNX Resources, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.75%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination makes it difficult to conclusively predict that CNX Resources will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that CNX Resources would post earnings of $0.93 per share when it actually produced earnings of $1.21, delivering a surprise of +30.11%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
CNX Resources doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
An Industry Player's Expected ResultsAnother stock from the Zacks Oil and Gas - Exploration and Production - United States industry, Antero Resources (AR - Free Report) , is soon expected to post earnings of $0.77 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +120%. Revenues for the quarter are expected to be $1.5 billion, up 15.9% from the year-ago quarter.
The consensus EPS estimate for Antero Resources has been revised 12.5% lower over the last 30 days to the current level. However, an equal Most Accurate Estimate has resulted in an Earnings ESP of 0.00%.
This Earnings ESP, combined with its Zacks Rank #3 (Hold), makes it difficult to conclusively predict that Antero Resources will beat the consensus EPS estimate. The company could not beat consensus EPS estimates in any of the last four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Wall Street expects a year-over-year increase in earnings on higher revenues when Apple (AAPL - Free Report) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on July 30, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis maker of iPhones, iPads and other products is expected to post quarterly earnings of $1.88 per share in its upcoming report, which represents a year-over-year change of +19.8%.
Revenues are expected to be $108.79 billion, up 15.7% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.49% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Apple?For Apple, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +2.46%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that Apple will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Apple would post earnings of $1.92 per share when it actually produced earnings of $2.01, delivering a surprise of +4.69%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Apple appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of AAPL 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.
Wall Street is cutting Tesla after a bruising earnings miss, while Apple’s analyst community quietly nudges targets higher on a surging iPhone 17 cycle. Our proprietary model reflects that divergence.
Apple (NASDAQ:AAPL | AAPL Price Prediction) closed at $325.89 on July 22, and the 24/7 Wall St. price target for Apple is $361.72, implying 11% upside over the next 12 months. Our recommendation is a buy at a 90% confidence level.
24/7 Wall St. Price Target Summary Metric Value Current Price $325.89 24/7 Wall St. Price Target $361.72 Upside 11.0% Recommendation BUY Confidence Level 90% An iPhone 17 Cycle That Keeps Surprising to the Upside Apple shares are up 20.1% year to date, 9.72% in the last month, and 52.61% over the trailing year.
Fiscal Q2 2026 revenue climbed 16.6% year over year to $111.18 billion, EPS came in at $2.01 versus $1.94 expected, and iPhone revenue surged to $56.99 billion on what Tim Cook called “extraordinary demand for iPhone 17 lineup.”
Services set an all-time record at $30.98 billion. Bloomberg reports Apple is preparing a major Mac refresh this fall including its first OLED touchscreen MacBook Pro, and prediction markets price a 96.6% probability that an iPhone 18 launches in 2026.
The Case for $380 and Higher Apple’s installed base of over 2.5 billion active devices becomes the launchpad for a Services business compounding at double-digit rates, a paid Apple Intelligence tier, and a rumored foldable iPhone (prediction markets assign 88.5% odds of a foldable arriving before 2027).
Layer on a fresh $100 billion buyback authorization and expanding operating margins, and our internal bull case lands at $378.01, a 16% one-year return. That aligns with the AI-driven Mac refresh narrative.
What Could Go Wrong Apple lost a $634 million Masimo patent verdict appeal, Greater China revenue remains lumpy, and tariff escalation would hit component supply. The consensus analyst target of $318.25 sits below the current price.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Apple didn't make the cut. Grab the names FREE today.
Our bear case pegs Apple at $307.39, a 5.68% pullback. Insider activity has been net selling. The P/E ratio of 43 looks stretched only if you ignore that quarterly earnings just grew 21.8%, which arguably justifies the multiple.
How Apple Stacks Up Against Tesla and Microsoft Tesla (NASDAQ:TSLA) just missed Q2 EPS at $0.33 versus $0.54 expected, printed negative $1.09 billion in free cash flow, and trades at a forward P/E of 161 versus Apple’s 34. Tesla is down 16.83% year to date while Apple is up 20%. That valuation gap makes our Apple target look conservative on a growth-adjusted basis.
Microsoft (NASDAQ:MSFT) is the truer valuation peer, a scaled valuation peer with a diversified AI-driven software portfolio. Apple carries the richer multiple, but its 46.9% gross margin and Services flywheel support the premium. Against this peer set, our $361.72 target reads as reasonable.
Company Forward P/E YTD Return Apple 34 20.1% Tesla 161 -16.83% The Bull Case Framework for Apple The 24/7 Wall St. price target for Apple is $361.72, a buy at 90% confidence. Earnings acceleration of 21.8% YoY growth into an installed base of 2.5 billion devices is rare at this market cap.
I would buy if iPhone 17 momentum carries into a strong holiday quarter and Services stays above $30 billion. I would stay on the sidelines if China revenue weakens materially or tariffs hit margins.
Year 24/7 Wall St. Price Target 2026 $361.72 These projections assume Apple executes on Services growth and the iPhone upgrade cycle. Significant upside or downside could result from a foldable iPhone launch, Apple Intelligence monetization, or a China revenue reset.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Apple didn't make the cut. Grab the names FREE today.
Instagram is now banning pickup artists and pranksters who use Meta glasses
You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Senior Correspondent covering technology and culture
Mark Zuckerberg is wearing Meta glasses, which have a problem with creepy pickup artists and pranksters using them. Bloomberg/Getty Images Instagram is cracking down on videos shot on Meta glasses that feature harassment of strangers in public places, such as the obnoxious prank videos that Business Insider reported on this spring.
In an Instagram story, Instagram head Adam Mosseri said that such video content would now be banned on the platform.
"If you're posting content that is taking advantage of people and harassing them, like a lot of these pickup line kind of videos that we've heard of and seen, then we're going to take the content down," Mosseri said in response to a question on his Instagram stories last week. "We don't want people to be surreptitiously taking videos of other people and harassing them and then posting them on our platform. So we're trying to fight that every way we can."
I wrote about the proliferation of videos on TikTok and Reels where people film themselves doing pranks on service workers, like cashiers or fast food workers, while wearing Meta glasses. Often, these pranks verge on harassment or are just plain obnoxious behavior, like putting fart spray into a candle at Walmart and then asking employees to smell it.
Another noxious genre is from pick-up artists who use the glasses to film themselves approaching women at gyms or on the street. While these interactions are sometimes positive, there's an awkward moment when the women don't realize they're being filmed at first.
A light glows on a pair of Meta Ray-Bans to signal that its video is active. Bloomberg/Getty Images It's unclear how many videos have been removed under this new policy. Business Insider found that two large accounts of pickup artists who filmed themselves approaching women in public while wearing the glasses had been deactivated. (Both previously had more than a million followers.) A Meta spokesperson confirmed to Business Insider that these accounts were booted for violating the policy about posting harassing content that had been filmed with the glasses.
Meta did not directly respond to questions about how this new policy is being enforced or what exactly constitutes a violation.
The glasses have an indicator light that turns on when you're recording. In older models, people could tamper with it or hide the light by drilling holes or covering it with tape or film. A new update will now disable the camera if someone tries to tamper with the light, Meta has said.
But even when working, a small light in the corner of glasses isn't necessarily a universally recognized sign that someone is recording you, and can be easily missed, especially outside in bright light. I recently had a conversation with someone wearing the glasses and didn't notice their indicator light was on at all until they brought it to my attention.
This new crackdown may be influenced by Meta's desire not to have its glasses referred to as "pervert glasses" — a nickname that's been gaining steam on social media lately.
Meta glasses may still be controversial, and people are rightfully wary of being recorded in public spaces. But removing videos from people who are profiting from posting content of nasty pranks or sleazy pickup tactics while using the videos is at least a step in the right direction.
Read next
Katie Notopoulos You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Katie Notopoulos is a senior correspondent at Business Insider who writes about technology, business, and culture. She covers topics such as internet culture, Big Tech, retail, AI, parenting in the digital age, and personal tech.Previously, Katie was a tech reporter at BuzzFeed News and has written for The Atlantic, The New York Times, Fast Company, and MIT Technology Review. Based in New York, you can reach her by email [email protected] or find her on Twitter. Bluesky, and Threads @katienotopoulos.Some of her stories include:
Google AI said to put glue in pizza — so I made a pizza with glue and ate itThe Zuckermoon is overGen Z doesn't want to say "hello" when answering the phone. I'm concerned. Wait, is Walmart cool now?Mark Zuckerberg has created the saddest place on the internet with Meta AI's public feedHow Instagram got its mojo backAm I the JD Vance of my group chat?We need to talk about whatever's happening with Starbucks' drinksThis chart shows a key reason why millennial parents are miserableIt's not just you. Eggshells really are chipping more. Meta Instagram
Meta’s newest advertisement begins with a black-and-white shot of an eye, showing us what someone sees as they read countless panicked headlines about how AI is going to take our jobs, isolate us, and spark a global crisis.
“Some people will have you believe AI is going to make us feel less connected. That it’s going to leave us behind,” a voiceover says. “We couldn’t disagree more.”
Suddenly, the video shifts to color, and shows a cycle of different people opening their eyes and smiling. Then, we see a couple dancing on a rooftop, pointing at a rainbow; a group of teens swimming in a lake; a child frolicking in a field; friends embracing after time apart.
“Call us optimists. Call us dreamers. Call us whatever the hell you want. But we’re betting on people, and we like those odds,” the voiceover says. “The future is for everyone.”
That’s a nice sentiment — pretty convenient for a company betting hundreds of billions of dollars that AI will revolutionize humanity. But the strangest part of the advertisement is not that we’re watching these happy moments play out via Instagram posts. It’s that the soundtrack to the ad is the David Bowie song “Five Years.”
If you are not familiar with this song, I urge you to give it a listen, read the lyrics, and think about what it is trying to say. It seems clear to me, but I studied poetry in college, so as a control for this experiment, I asked my brother — a blockchain analyst who loves Claude Code and does not read for fun — if he could tell me what the song is about.
“I thought climate change at first, then zombie apocalypse, then an asteroid hitting the earth,” he told me. He is correct. It is a song about the human race panicking after learning they will die in a mass extinction event in five years.
Image Credits:Texts from my brother, a consenting participant in this literary experiment If you’re not familiar with Bowie’s music, this track might sound happy and inspiring, matching the ad’s upbeat tone. The part of the song that is used for the advertisement was probably chosen because it uses the word “people” over and over again, and without the context of the song, it’s not clear what it’s about.
But if we look at the lines directly preceding this section:
News had just come over
We had five years left to cry in
News guy wept and told us
Earth was really dying
Cried so much his face was wet
Then I knew he was not lying
We “had five years left to cry in” and the “earth was really dying.” It’s pretty bleak.
It is not reassuring to convince people that AI is going to make the world better while playing a song about the end of the world, and yet, this contradictory musical choice seems to have sailed right past everyone at Meta, including CEO Mark Zuckerberg.
“Meta has always believed in giving people the power to share, connect, and shape your world in the ways you want,” he wrote alongside the video. “As we enter this next wave with AI, we continue to believe the future is for everyone. We’re focused on giving every person the tools to reach your full potential and making sure the benefits of technology are distributed to everyone.”
Then again, tech leaders are not known for their literary analysis skills. Meta’s Oculus used to give new hires copies of the science fiction novel “Ready Player One,” which is set in a dystopia in which a tech company making virtual reality products becomes overly powerful and evil. OpenAI CEO Sam Altman has directly cited inspiration from the movie “Her,” which warns us about what can go wrong when we use AI for emotional support. Palantir, a company that builds AI surveillance systems for the government, is named after Palantir, a seeing stone from the “Lord of the Rings” franchise that the Dark Lord uses to spy on his enemies. Elon Musk is currently throwing a fit about the “accuracy” of Christopher Nolan’s blockbuster adaptation of “The Odyssey,” a story with such realistic elements as sea monsters, magic, and divine intervention. These guys make a great argument for the value of studying the humanities.
Sci-Fi Author: In my book I invented the Torment Nexus as a cautionary tale
Tech Company: At long last, we have created the Torment Nexus from classic sci-fi novel Don't Create The Torment Nexus
— Alex Blechman (@AlexBlechman) November 8, 2021 Meta isn’t alone in its recent promotional foibles. Instead of racing to build AGI, the top AI companies seem to be fighting over who can make the creepiest advertisement. A few weeks ago, Anthropic released an eerie video of its own. As my colleague Lucas Ropek described it:
The ad begins with a video of a burning house (not exactly a heartwarming start) before pivoting to a series of still images. These images include a crowd of people being surveilled by facial recognition, a homeless person sleeping on the street, rows upon rows of tombstones in a cemetery, and what appears to be a group of laborers toiling in a mine where (presumably) raw materials for smartphones are being dug up.
Meanwhile, a voice-over track features different people asking questions like “Can AI be trusted?” and “Who’s gonna hit the brakes if we need to?”
Anthropic is trying to convince us that it understands the risks AI poses to society, and therefore, this is the company that people can trust to develop AI responsibly. The message it actually conveys feels closer to the mood of Bowie’s “Five Years.”
OpenAI CEO Sam Altman responded to the Anthropic ad, “I thought this was satire, kept looking for the handle to be spelled c1audeai or something.”
As these companies spar to control the public perception of AI, their efforts don’t seem to be making much progress. A recent Pew survey found that only 16% of Americans think that AI’s impact on society over the next twenty years will be positive, and 40% believe it will have a negative impact. Better luck next time, Meta.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
Amanda Silberling is a senior writer at TechCrunch covering the intersection of technology and culture. She has also written for publications like Polygon, MTV, the Kenyon Review, NPR, and Business Insider. She is the co-host of Wow If True, a podcast about internet culture, with science fiction author Isabel J. Kim. Prior to joining TechCrunch, she worked as a grassroots organizer, museum educator, and film festival coordinator. She holds a B.A. in English from the University of Pennsylvania and served as a Princeton in Asia Fellow in Laos.
You can contact or verify outreach from Amanda by emailing [email protected] or via encrypted message at @amanda.100 on Signal.
The market has spent the past two years rewarding companies tied to artificial intelligence, robotics, and next-generation infrastructure. Investors are increasingly looking beyond a company’s original business and looking more closely at which ecosystem is building it.
That shift is key because some of today’s biggest winners no longer fit neatly into a single industry. Tesla (NASDAQ:TSLA | TSLA Price Prediction) and SpaceX (NASDAQ::SPCX) are prime examples. Both are evolving into diversified technology platforms, and their future combination is looking more likely in the near future.
The Market Is Punishing Both Stocks, but for Different Reasons Tesla gave investors another reminder that high expectations can be difficult to satisfy. The electric vehicle maker reported second-quarter earnings yesterday that missed Wall Street’s expectations, and shares are down roughly 8% in premarket trading today following the earnings release.
The disappointing reaction reflects more than weaker vehicle sales. Investors increasingly view Tesla as a company whose future extends well beyond automobiles. Electric vehicles remain the foundation of the business, but management continues to devote enormous resources to energy storage, autonomous driving, humanoid robotics, artificial intelligence, and manufacturing automation. Those businesses could eventually represent a larger share of Tesla’s value than EVs themselves.
SpaceX has experienced a different kind of disappointment. After debuting at $135 per share last month, the stock opened at $150, climbed to $225 within days, and has since fallen to about $115. That’s a decline of roughly 49% from its post-IPO peak in just a few weeks.
Sharp drops after hot IPOs aren’t unusual. Early enthusiasm often gives way to more realistic valuations once investors separate excitement from fundamentals.
“I mean, as you can tell from the many collaborations on so many fronts with SpaceX and there’s a lot — there’s more and more overlap…but obviously, we can’t talk about combining companies and that kind of thing on an earnings call. It’s got to be done with the appropriate process.”
Even so, the strategic logic is becoming easier to see. Neither company is defined solely by its legacy business anymore.
Company Legacy Business New Growth Platforms Tesla Electric vehicles Energy storage, Optimus robotics, AI, autonomous driving, manufacturing software SpaceX Rocket launches and satellite deployment Starlink connectivity, AI infrastructure, government services, communications, defense technologies Tesla needs massive computing power, advanced communications, artificial intelligence, and manufacturing expertise. SpaceX continues expanding Starlink while building technologies that increasingly overlap with AI infrastructure and autonomous systems. They have the massive Terafab chipmaking joint venture underway, too.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.
That doesn’t guarantee a merger happens. Antitrust regulators would likely examine any transaction closely, while corporate governance questions would also need answers. The regulatory path could prove long and complicated.
Granted, a full merger isn’t the only possibility. Joint ventures, technology-sharing agreements, or cross-investments could deliver many of the same benefits while avoiding some regulatory hurdles.
Long-Term Investors Should Focus Beyond Today’s Headlines The biggest risk for investors is assuming either company can be valued only on today’s earnings or today’s business.
Tesla’s earnings disappointment overshadowed the fact that management continues investing aggressively in businesses that could reshape transportation, energy, and automation over the next decade. Likewise, SpaceX is becoming more than a launch provider as Starlink, AI infrastructure, and adjacent technologies mature.
Ironically, today’s market weakness may offer patient investors a better entry point than either stock provided just weeks ago. Tesla has pulled back following earnings, while SpaceX trades below its IPO price after one of the quickest post-offering reversals in recent memory.
Key Takeaway In short, betting on a Tesla-SpaceX merger today would be speculative. Regulators could object, shareholders would need to give approval, and management may ultimately pursue a different structure altogether.
Regardless, investors don’t necessarily need a merger for either investment to succeed. The larger story is that both companies are evolving into diversified technology platforms centered on AI, automation, communications, robotics, and energy. Those trends are likely to drive more value over the next decade than electric vehicles or rocket launches alone.
Buying today may not prove to be the absolute bottom. In the end, however, long-term investors willing to tolerate volatility have a compelling case for owning either company — and if some form of combination eventually emerges, it could become one of the most influential technology partnerships of the next decade.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.
U.S. stocks traded lower this morning, with the Nasdaq Composite falling more than 400 points on Thursday.
Following the market opening Thursday, the Dow traded down 0.95% to 51,720.30 while the NASDAQ declined 1.58% to 25,286.26. The S&P 500 also fell, dropping, 0.86% to 7,434.23.
Leading and Lagging Sectors
Industrials shares jumped by 2.2% on Thursday.
In trading on Thursday, communication services stocks fell by 4.4%.
Top Headline
Tesla Inc. (NASDAQ:TSLA) shares dipped more than 12% on Thursday after the company reported mixed second-quarter financial results.
Tesla reported second-quarter revenue of $28.24 billion. The total beat a Street consensus estimate of $25.71 billion, according to data from Benzinga Pro. Second-quarter earnings of 33 cents per share missed a Street consensus estimate of 50 cents per share.
Equities Trading UP
Equities Trading DOWN
Commodities
In commodity news, oil traded up 5.5% to $91.64 while gold traded down 2.3% at $4,056.00.
Silver traded down 3.5% to $58.170 on Thursday, while copper fell 1.5% to $6.3960.
Euro zone
European shares were lower today. The eurozone’s STOXX 600 fell 1.1%, while Spain’s IBEX 35 Index dipped 1.3% London’s FTSE 100 fell 0.7%, Germany’s DAX declined 1.2%, while France’s CAC 40 tumbled 1.6%.
Asia Pacific Markets
Asian markets closed mixed on Thursday, with Japan’s Nikkei 225 gaining 0.46%, Hong Kong’s Hang Seng index surging 1.28%, China’s Shanghai Composite rising 0.25% and India’s BSE Sensex falling 0.47%.
Economics
U.S. initial jobless claims US fell by 22,000 to 187,000 in the week ending July 18, compared to market estimates of 212,000. The Chicago Fed National Activity Index climbed to -0.02 in June from -0.19 in the previous month. Photo via Shutterstock
Market News and Data brought to you by Benzinga APIs
Tesla Inc. (NASDAQ:TSLA) spent much of its second-quarter update talking about Cybercab production, Robotaxi expansion and artificial intelligence. But the company's fastest-growing business wasn't any of those.
Tesla stock TSLA plunged 13% on Thursday after the electric vehicle maker reaffirmed plans to sharply increase spending on artificial intelligence infrastructure.
The move overshadowed stronger-than-expected revenue and reinforced investor concerns over rising capital expenditure and weakening cash generation.
The stock extended losses after closing 1.3% lower on Wednesday. The stock's market cap is now near the $1 trillion mark.
Tesla reported adjusted earnings of 33 cents per share, below analysts' expectations of 51 cents, while revenue rose to $28.24 billion from $22.5 billion a year earlier, exceeding consensus estimates of $25.71 billion.
The company also reported negative free cash flow for the quarter as capital expenditure surged 142% year over year to $5.79 billion.
Tesla reaffirmed plans to spend more than $25 billion this year as it expands investments in artificial intelligence infrastructure, autonomous driving, robotics, and computing capacity.
Alphabet shares also fell more than 6% after the Google parent reported negative free cash flow and raised its 2026 capital expenditure forecast to between $195 billion and $205 billion, while warning spending would increase further in 2027.
The declines highlighted growing investor concerns that spending on artificial intelligence is rising faster than cash generation across the technology sector.
Tesla said net income declined 5% year over year to $1.11 billion, or 32 cents per share, from $1.17 billion, or 33 cents per share, a year earlier.
Automotive revenue increased 23% to $20.52 billion, while revenue from the company's energy business, including solar and battery storage systems, rose 13% to $3.14 billion.
Revenue from services and other businesses, including vehicle repairs outside warranty, climbed 50% to $4.58 billion.
Despite stronger automotive revenue, Tesla's gross margin fell to 16.8% from 17.2% a year earlier, missing analysts' expectations of 19.4%, according to StreetAccount.
The company attributed the pressure in part to lower average selling prices after introducing lower-cost versions of its Model 3 and Model Y vehicles following the retirement of the higher-priced Model S and Model X.
AI investment remains priorityTesla said it continues to expand infrastructure supporting its long-term artificial intelligence strategy.
“Capacity build out and ramp related to our multi-year infrastructure initiatives, including AI compute, solar, battery material, and semiconductor manufacturing are underway,” the company said in its shareholder presentation.
Chief Executive Elon Musk defended the company's elevated spending during Wednesday's earnings call.
“This is a massive capex year. I’m confident that all the things that we’re investing in will yield incredible returns. Really, maybe the best capex returns that we’ve ever seen,” Musk said.
Tesla also said it is installing first-generation production lines for Optimus, its humanoid robot, and expects production to begin soon.
Executives told investors that the company's fleet of autonomous Cybercab vehicles has now completed 380,000 unsupervised miles, pointing to continued progress in its autonomous driving program.
Analysts remain positive on long-term outlookDespite the market's negative reaction, several Wall Street firms maintained constructive long-term views while lowering their price targets.
JPMorgan analyst Rajat Gupta lowered his price target on Tesla to $445 from $475 while maintaining a Neutral rating.
Gupta said Tesla shares are "likely to remain range-bound near-term" as forward earnings estimates continue to fall amid rising investment spending.
Mizuho analyst Vijay Rakesh also cut his price target to $450 from $480 while reiterating an Outperform rating.
Rakesh said Tesla remains "well-positioned leading physical AI" through its Cybercab platform, with humanoid robotics offering a longer-term growth opportunity.
He added that favorable regulatory tailwinds should help offset near-term headwinds from European tariffs and the repeal of US EV tax credits, with Tesla likely to face less pressure than its peers.
Piper Sandler maintained its Overweight rating and $500 price target.
Analyst Alexander Potter said the post-earnings selloff was not surprising despite improving long-term indicators.
However, he said Tesla will need to "disprove doubts re: Optimus and Cybercab" before the stock can break out of its current trading range, adding that while he remains optimistic, "catalyst timing is difficult to predict."
Tesla shares had fallen about 11% this month and 17% for the year through Wednesday's close before Thursday's selloff.
The decline has coincided with weakness in SpaceX shares, which have fallen more than 40% from their post-listing peak following the company's June market debut.
Tesla (TSLA) shares plummeted Thursday morning after the electric vehicle maker's quarterly earnings missed estimates as infrastructure spending ballooned.
SummaryTesla, Inc. remains fundamentally a two-model car company, with Model 3 and Model Y accounting for over 97% of Q2 deliveries.Despite record energy storage growth, TSLA's margins face pressure from rising input costs and intensifying competition, especially from Chinese suppliers.TSLA's robotaxi and robotics ambitions continue to miss milestones, leaving little tangible progress to justify its ultra-premium valuation.TSLA is valued as a high-growth tech disruptor, but its core automotive business and nascent ventures do not support its current market capitalization. Getty Images
Investor expectations heading into Tesla, Inc.’s (TSLA) Q2 earnings announcement were rather more subdued than usual. Indeed, some of the company’s normally enthusiastic shareholders entered the quarter sounding downright impatient.
Questions submitted for the earnings call focused
6.68K Followers
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.
Key Takeaways Tesla's Q2 revenues beat estimates, but EPS missed as management prioritized expansion over margins.Deliveries rose 25% to 480,126, while active FSD subscriptions climbed 56% to 1.48 million.Tesla expects 2026 CapEx above $25 billion as it scales robotaxi, Optimus, AI and manufacturing. Tesla, Inc. (TSLA - Free Report) used its second-quarter 2026 earnings call to stress expansion, not near-term margin protection. Management pointed to record deliveries, rising FSD adoption and broader robotaxi activity, while also making clear that 2026 is a heavy investment year.
That framing mattered because the quarter mixed a revenue beat with an earnings miss. TSLA reported EPS of $0.33 compared with the Zacks Consensus Estimate of $0.50, a 34.00% miss, while revenues of $28.23 billion topped the consensus estimate of $25.80 billion by 9.40%.
TSLA Leans Into a Bigger Build-OutChief executive officer Elon Musk described Tesla’s current phase as one of unusually large capital deployment, tied to autonomy, robotics, semiconductors, batteries and solar manufacturing. He said the company is making what it views as some of its most important long-term infrastructure bets.
That posture was reinforced in the shareholder update, where Tesla said it is in its “largest and most exciting period of investment” and remains focused on long-term value creation even as scaling stays nonlinear.
The company’s outlook slide also kept the emphasis on capacity expansion, vertical integration and future AI, software and fleet-based profits rather than near-term earnings optimization. Tesla said Semi and Megapack 3 remain on schedule for production starting in 2026, while first-generation Optimus lines are being installed ahead of 2026 production.
Tesla Balances Delivery Strength With Cost PressureChief financial officer Vaibhav Taneja said vehicle demand continued to recover through the quarter, helping Tesla post record Q2 deliveries and its largest order backlog since 2023. The update deck showed total deliveries rose 25% year over year to 480,126, while active FSD subscriptions increased 56% to 1.48 million.
The financial picture was less clean. Revenues rose 26% year over year to $28.24 billion, but operating margin fell to 1.4% from 4.1% a year ago as operating expenses climbed 47% and free cash flow turned negative $1.09 billion.
Taneja said automotive margins were pressured by the absence of prior-quarter warranty and tariff benefits, while higher interest rate subvention costs also hurt results. He added that energy gross margin fell sharply because of a vendor cell warranty true-up, the loss of prior tariff benefits and lower industrial storage pricing.
TSLA Sees FSD and Robotaxi as Demand DriversMusk and Taneja both framed FSD as a growing sales catalyst rather than just a software attachment. Taneja said about 55% of North American deliveries included an FSD subscription at delivery, and he expects future monetization to lean more heavily toward subscriptions as Tesla removes the purchase option in most markets.
Tesla also widened the robotaxi story beyond Austin. The shareholder deck said robotaxi operations are now live in seven major metros, while the call detailed unsupervised service in Austin, Dallas, Houston, Miami, Orlando and Tampa, with Bay Area operations running with a safety driver.
Executive officer Ashok Elluswamy said Tesla had driven more than 380,000 unsupervised robotaxi miles across six cities with no notable incidents and was still compounding weekly miles at a double-digit rate. That was one of the clearest signs on the call that management sees autonomy scaling as an operating reality, not just a product roadmap.
Tesla’s Q&A Added Detail on Supply and PartnersAnalyst questions focused on whether Tesla can scale its newer bets without bottlenecks. In response to a Morgan Stanley question, Musk said suppliers including Samsung, TSMC, Panasonic and Micron are making major investments to support AI compute, batteries and other needs tied to Optimus and robotaxi.
Management also used Q&A to address regulation. Asked by a BofA analyst about evolving state rules, vice president of Vehicle Engineering Lars Moravy said Tesla wants regulations centered on performance outcomes rather than prescribed technical solutions.
A Wells Fargo analyst asked about Tesla’s expanding work with SpaceX. Musk and general counsel Brandon Ehrhart pointed to broader collaboration around Terafab, Digital Optimus and connectivity, including plans to integrate Starlink into Cybercab and other vehicles in markets where the network is active.
TSLA’s Spending Plans Stay AggressiveTaneja said CapEx more than doubled sequentially in Q2 and will increase further in the second half. Tesla still expects capital spending to exceed $25 billion in 2026 as it expands robotaxi, Optimus, AI compute, semiconductor and solar manufacturing capacity.
He also said Tesla is arranging debt facilities that could provide up to $30 billion of borrowing capacity to accelerate those investments. That marked one of the call’s most important capital allocation messages because it showed management is willing to use the balance sheet more actively to fund this build cycle.
The shareholder update paired that spending with a liquidity message. Tesla ended the quarter with $43.52 billion in cash, cash equivalents and short-term investments, down from $44.74 billion in Q1.
Tesla’s Tone Stayed Firmly Long TermThe broad tone from Musk and his team was confident, but not especially defensive about near-term profitability. Management repeatedly returned to factory utilization, software adoption, fleet expansion and infrastructure build-out as the priorities that matter most from here.
That left the quarter looking less like a margin story than a transition period. Tesla is asking investors to measure its progress through demand, deployment and capacity creation while it absorbs the costs of a much larger operating ambition.
TSLA’s Zacks SignalsTSLA currently carries a Zacks Rank #3 (Hold), along with a Value Score of F, Growth Score of A, Momentum Score of A and VGM Score of B, based on the provided Zacks data. Under the Zacks framework, a Hold-rated stock can still be owned, but the best return profile generally comes from Zacks Rank #1 (Strong Buy) or #2 (Buy) stocks paired with Style Scores of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesla’s A grades for Growth and Momentum and VGM Score of B point to stronger characteristics in those styles than in value. Still, Zacks says earnings estimate revisions remain the most important driver in the system, and the Zacks Rank can change after a results report as analyst estimates are updated.
Buried in Tesla’s earnings report’s cash flow statement is a $1.005 billion pretax unrealized gain on its SpaceX investment, equal to $763 million after tax.
While Tesla didn’t receive any cash or sell any shares, the after-tax gain accounted for roughly 68.5% of the company’s $1.114 billion GAAP net income. The revaluation of Tesla’s SpaceX investment is one of the quarter’s biggest contributors to the EV maker’s bottom line.
Even though Tesla didn’t sell a single SpaceX share or receive any cash from the investment.
SpaceX Bounty: Paper Gain, Not Cash ProfitThe gain resulted from an increase in the estimated value of its SpaceX investment, which it purchased earlier this year for $2.002 billion. The company owns less than 1% of SpaceX and does not control the aerospace company.
Tesla recorded a pre-tax $1.005 billion gain on the investment. Because the gain was non-cash, the company removed it when reconciling net income to operating cash flow and also excluded it from its non-GAAP earnings presentation.
The numbers put the investment into perspective. The pre-tax paper gain alone was more than two-and-a-half times Tesla’s operating profit (which was $398 million).
Tesla’s automotive, energy storage and services businesses collectively produced just $398 million of operating profit, while the accounting gain on its SpaceX investment added more than $1 billion before taxes.
So, nearly 70% of Tesla’s GAAP earnings came from a non-cash increase in the estimated value of its SpaceX stake—not from manufacturing or selling products.
Why Tesla’s GAAP And Adjusted Earnings Tell Different StoriesThe SpaceX gain was included in Tesla’s official GAAP earnings under accounting rules governing equity investments, even though the company did not monetize its stake.
The SpaceX gain also helps explain why Tesla reported different GAAP and adjusted earnings.
Tesla reported GAAP net income of $1.114 billion, which included the after-tax SpaceX gain. It also reported non-GAAP net income of $1.153 billion, excluding the $763 million after-tax SpaceX gain along with several other items, including $989 million of stock-based compensation expense, an $87 million digital-asset loss and certain tax adjustments.
Although Tesla removed the $763 million after-tax SpaceX gain, it added back an even larger $989 million stock-based compensation expense, along with other adjustments, resulting in slightly higher adjusted earnings.
Why Investors Should Watch ItThe disclosure doesn’t mean Tesla’s automotive business suddenly became less important, nor does it suggest the company generated an extra $763 million in cash.
Instead, it underscores how investments outside Tesla’s core operations can materially influence reported earnings under GAAP accounting. If SpaceX’s valuation continues to rise—or falls in future quarters—that stake could create meaningful swings in Tesla’s reported profit even if vehicle deliveries, energy storage deployments and operating performance remain largely unchanged.
For investors, the quarter served as a reminder that one of the biggest drivers of Tesla’s headline earnings wasn’t what happened inside its factories. It was the changing value of a minority stake in another Elon Musk company.
Photo courtesy: Rokas Tenys on Shutterstock.com
Market News and Data brought to you by Benzinga APIs
HomeIndustriesAutomobilesEarnings ResultsEarnings ResultsTesla’s stock heads for its worst drop in a year after the company’s earnings call leaves Wall Street with more questions than answersJuly 23, 2026, 11:24 a.m. ET
Tesla’s earnings commentary wasn’t enough to justify the company’s big-spending ways, and its shares are sliding on Thursday.
“Commentary on key growth drivers, Optimus and Robotaxi, was muted given the magnitude of technology challenges even as [electric-vehicle] sales appear robust,” Oppenheimer analyst Colin Rusch said in a note to clients.
Business has been a little bumpy for Tesla (TSLA -13.23%) over the past couple of years. In fact, after delivering a record 1.8 million vehicles in 2023, its deliveries promptly dropped for two consecutive years. Last year was filled with speed bumps that extended beyond vehicle deliveries.
Then something intriguing happened: Tesla's second-quarter deliveries soared far above Wall Street's average estimates. Investors might be overlooking the most impressive part of the data -- that Tesla held its own in a brutal Chinese market while a number of domestic automakers did not.
Numbers jump unexpectedly On paper, the Q2 numbers were exactly the blowout delivery numbers Tesla needed after many months of bad news. Tesla delivered just over 480,000 vehicles globally during the second quarter. This was a solid 25% year-over-year gain and easily topped Wall Street analysts' estimates of about 406,000 vehicles. That result was the best Q2 of deliveries in Tesla's history.
Most investors keyed in on Tesla's results in Europe, and it's true that the region played a big role in the blowout Q2. While Tesla doesn't break out its delivery numbers by region, we can get a solid sense of the growth trend from the European Automobile Manufacturers' Association, which tracks registration data. That data from January through May this year showed a 77% year-over-year growth in Tesla registrations.
Today's Change
(
-13.23
%) $
-49.48
Current Price
$
324.53
Don't overlook the China result Despite Europe likely driving much of the Q2 surprise result, Tesla's decline of only 2% in China amid a softening economy, reduced electric vehicle (EV) incentives, and a brutal price war might actually be the more impressive feat.
Even BYD, China's juggernaut EV maker that's expanding rapidly around the globe, posted a 40% decline in domestic Chinese deliveries through the first half of the year, though this figure includes battery-electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). BYD has turned its focus to exports to offset this weakness.
For Tesla, despite the slight Q2 decline, it was still a nearly 12% gain over the first quarter. If you consider Tesla's wholesale deliveries in China (which includes exports), that figure was up nearly 33% compared to the prior year.
Image source: Tesla.
Here's just one example of how competitive China's automotive market is right now. Competitors in China have been forced to churn out new vehicles and/or refreshes more rapidly to lure in consumers on factors other than price. Simply put, new vehicles sell faster and with fewer incentives, and in a price war, refreshing the lineup is important. Because of that push, Chinese automakers have released around 650 new models since January. That's staggering.
To be fair, that 650 figure includes facelifts, refreshes, and all-new models. If we narrow it down to only all-new models, which are vehicles that don't have a previous version in China, automakers are still pushing out 30 all-new models each month since January. In contrast, the U.S. does roughly 30 all-new models annually.
What it all means BYD's Executive Vice President, He Zhiqi, called the 650 figure "completely insane" on social media, before continuing to say that the Chinese auto market is "not just fierce, but brutal."
Tesla holding its own in China while some large domestic competitors such as BYD spiral, along with months of growing momentum in Europe, were exactly what Tesla needed during the second quarter. The question remains, however: Is this rebound sustainable?
There's a sound argument that the Iran conflict, which has affected oil prices in Europe, has given a boost to EV sales in the region, and it's uncertain how that trend will change in the near term. It's also fair to wonder if Tesla's thin and aging vehicle lineup can sustain this type of rebound through even the second half of 2026.
Either way, after two years of mostly bad delivery news, this might be the first Tesla delivery data that could inspire confidence -- and holding its own in China was more impressive than it's getting credit for.
Tesla (TSLA) shares sold off more than 13% in the first hours of Thursday's trading session on mixed earnings and a note that CapEx will tap $25 billion. Marley Kayden breaks down why investors are moving away from Tesla's stock as it trades as the worst performing name in the S&P 500 (SPX).
SummaryTesla, Inc. reported Q2 revenue growth but missed EPS, with operating margin collapsing to 1.4% and negative free cash flow.TSLA's ambitious projects—Optimus, Cybercab, and Megapod—are capital-intensive, with no clear path to profitability or detailed execution plans.FSD attach rates now exceed 55%, providing a competitive advantage, yet margin compression and rising capex overshadow these positives.I remain bearish on TSLA stock, as its valuation demands sustained execution while the company burns cash in a highly competitive, capital-intensive landscape.This idea was discussed in more depth with members of my private investing community, The Pragmatic Investor. Learn More » ankarb/iStock via Getty Images
Thesis Summary Tesla, Inc.'s (TSLA) beat revenues in Q2 but missed on EPS, and the stock is down over 4%, which I don’t find surprising.
Operating margin has collapsed to 1.4%, free cash flow was negative, and
29.13K Followers
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.
Tesla’s budding “Robotaxi” network drove fewer miles for paying customers in the second quarter than it did in the first, according to a chart the company released on Wednesday.
The quarter-over-quarter decline runs counter to Tesla’s rhetoric and actions in the past year. Tesla has staked much of its future on the idea of a massive, low-cost, cash-generating Robotaxi fleet — or going “balls to the wall for autonomy,” as CEO Elon Musk framed it in 2024. The quarterly step-down in Robotaxi miles also comes amid weakening profits in Tesla’s core businesses, which underperformed Wall Street’s expectations, according to figures released Wednesday. Tesla’s stock plunged more than 13% in early trading on Thursday.
At a passing glance, the chart appears to show steady growth in paid Robotaxi rides between August 2025 and June 2026. But the numbers displayed are cumulative, and when broken down by quarter, they show that Tesla’s Robotaxi fleet of Model Y SUVs carrying paying passengers covered around 1.1 million miles in the first quarter. That fell to roughly 700,000 miles in the second quarter, a decline of about 36%.
That’s despite the fact that the company has expanded its nascent operation to six cities across Texas and Florida, with a mix of unsupervised and supervised vehicles.
Image Credits:Tesla It’s likely Tesla is counting the paid miles driven in the San Francisco Bay Area, too, even though these branded Robotaxis don’t have the state-required permits to operate autonomously and also have a safety driver behind the wheel. Tesla has referred to that operation as part of its “Robotaxi coverage.”
The decline in miles driven also comes as Tesla made a striking admission on a conference call Wednesday about its second-quarter results. In response to a question about how slowly Tesla is scaling the Robotaxi service, Musk said the company needs to “accumulate driving data that is specific to the Cybercab” — the company’s gold, purpose-built, two-seater sedan that is expected to make up the bulk of its autonomous vehicle fleet — “before we can put a lot of them on the road.”
“Unlike, say, Model 3, Model Y, and our other vehicles where we’ve got a lot of vehicles on the road, millions of vehicles on the road, we don’t have that for Cybercab. So we actually have to accumulate miles with Cybercabs that are retrofitted with steering wheels and acceleration and braking pedals, that kind of thing, to calibrate to the Cybercab chassis,” he said. “As we are confident about that, the number of Cybercabs in cities will increase dramatically.”
This represents something of a break from claims the company has made for years about how its fleet of nearly 10 million customer cars has been silently collecting data in the background to train future robotaxis (in addition to training the driver assistance software for consumers, which Tesla calls Full Self-Driving).
On the call, Tesla executives framed the slow progress as a matter of being cautious about safety.
“Our goals are very ambitious for Robotaxi, but we do need to be cautious about causing any accidents or causing any harm to anyone,” Musk said.
He then said he doesn’t want Tesla Robotaxis causing accidents because he thinks bad media coverage could lead to a regulatory crackdown.
“Although there are, I think, 30 to 40,000 automotive deaths per year in the United States alone, most of those do not generate any press, you don’t really read about almost any of those. But if we injure even one person, it will be worldwide headline news, and regulators will immediately clamp down on our activities,” he said.
Ashok Elluswamy, Tesla’s VP of AI, boasted that Tesla’s Robotaxis have had “zero notable incidents” while driving “more than 380,000 miles” without a safety operator onboard. He did not define what the company considers “notable incidents,” though he claimed that “any reports have been of other actors impacting us when we were stationary.”
Tesla has reported 22 crashes to the National Highway Safety Administration in the year since it started trialing its Robotaxi service. While most of them involve other cars crashing into Tesla’s Robotaxis, the company has reported three crashes caused by its teleoperators moving the vehicles remotely, and multiple instances of the cars hitting objects at low speeds including curbs, utility poles, and a tow truck’s bed.
This represents another narrative change for the company. Tesla spent years claiming that the largest hurdle to full-scale Robotaxi deployment was regulatory in nature — though the company never really specified what those prohibitive regulations were.
Now the company says proving safety is all that’s holding Robotaxis back. And although it is still in the very early stages, Tesla still chose this moment to take a victory lap about its decision to build an autonomy stack that doesn’t use radar or lidar sensors, like industry leader Waymo.
“Historically, the so-called experts have always claimed that you need lidars, radars, HD maps, and the entire kitchen sink to drive safely. Here, we show that such is not true. You can have safe, comfortable, and affordable autonomy with just cameras,” Elluswamy said.
Both Musk and Elluswamy also promised growth is coming. They noted that the number of unsupervised miles traveled has grown roughly 10% every week since Tesla started offering them at the end of last year.
“We’ll continue to scale, I think, very, very rapidly,” Musk said.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
The upcoming report from Coca-Cola (KO - Free Report) is expected to reveal quarterly earnings of $0.92 per share, indicating an increase of 5.8% compared to the year-ago period. Analysts forecast revenues of $13.05 billion, representing an increase of 4.1% year over year.
The consensus EPS estimate for the quarter has undergone a downward revision of 0.2% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.
Prior to a company's earnings announcement, it is crucial to consider revisions to earnings estimates. This serves as a significant indicator for predicting potential investor actions regarding the stock. Empirical research has consistently demonstrated a robust correlation between trends in earnings estimate revision and the short-term price performance of a stock.
While it's common for investors to rely on consensus earnings and revenue estimates for assessing how the business may have performed during the quarter, exploring analysts' forecasts for key metrics can yield valuable insights.
Given this perspective, it's time to examine the average forecasts of specific Coca-Cola metrics that are routinely monitored and predicted by Wall Street analysts.
According to the collective judgment of analysts, 'Net Operating Revenues- North America' should come in at $5.21 billion. The estimate suggests a change of +3.6% year over year.
Analysts' assessment points toward 'Net Operating Revenues- Latin America' reaching $1.73 billion. The estimate indicates a change of +8.9% from the prior-year quarter.
The average prediction of analysts places 'Net Operating Revenues- Asia Pacific' at $1.55 billion. The estimate indicates a change of -1.1% from the prior-year quarter.
The consensus estimate for 'Net Operating Revenues- Bottling investments' stands at $1.49 billion. The estimate indicates a year-over-year change of +5.8%.
It is projected by analysts that the 'Net Operating Revenues- Europe, Middle East & Africa' will reach $3.31 billion. The estimate points to a change of +4.3% from the year-ago quarter.
The collective assessment of analysts points to an estimated 'Net Operating Revenues- Corporate' of $37.32 million. The estimate points to a change of -4.3% from the year-ago quarter.
Analysts predict that the 'Operating Income- Europe, Middle East & Africa- Non-GAAP' will reach $1.41 billion. Compared to the current estimate, the company reported $1.36 billion in the same quarter of the previous year.
The consensus among analysts is that 'Operating Income- Bottling Investments- Non-GAAP' will reach $88.56 million. Compared to the present estimate, the company reported $60.00 million in the same quarter last year.
Analysts forecast 'Operating income- North America- Non-GAAP' to reach $1.64 billion. Compared to the current estimate, the company reported $1.58 billion in the same quarter of the previous year.
The combined assessment of analysts suggests that 'Operating Income- Asia Pacific- Non-GAAP' will likely reach $652.45 million. The estimate is in contrast to the year-ago figure of $664.00 million.
Analysts expect 'Operating Income- Latin America- Non-GAAP' to come in at $1.07 billion. Compared to the present estimate, the company reported $1.01 billion in the same quarter last year.
View all Key Company Metrics for Coca-Cola here>>>
Shares of Coca-Cola have experienced a change of +2% in the past month compared to the +0.4% move of the Zacks S&P 500 composite. With a Zacks Rank #3 (Hold), KO is expected to mirror the overall market performance in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
By You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Uber is laying off 10% of its community operations team, citing AI. Bloomberg/Getty Images Uber is cutting customer service roles — and it says artificial intelligence is the reason.
The ride-hailing company is laying off about 10% of its community operations team and asking remote employees to relocate to a city with an Uber office and work there three days a week, it said in a statement on Thursday. Bloomberg earlier reported the news.
AI presents "a massive opportunity for us to accelerate output, improve quality, and scale customer solutions at pace," Megha Yethadka, Uber's vice president of global community operations, wrote in a memo to the team on Wednesday.
"We've made some strides, but to unlock this potential, we need an effective organization to layer AI on," Yethadka wrote. "We cannot scale frontier technology on top of fragmented processes."
An Uber spokesperson said the company informed the team on Wednesday about the "structural changes we are making to simplify operations, strengthen in-person collaboration, and continue to embrace AI."
The layoffs add Uber to the list of companies that have cut jobs in the name of AI. Others this year include Block, IBM, and Snap.
Last month, Uber laid off a quarter of its human resources and recruitment staff. The cuts affected less than 1% of the company's 34,000-person global workforce and weren't connected to AI, Uber said at the time.
CEO Dara Khosrowshahi has said that Uber is slowing down hiring as it invests more in AI.
Have a tip? Contact this reporter at [email protected] or via encrypted messaging app Signal at 808-854-4501. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.
Read next
Alex Bitter You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Alex Bitter is a senior retail reporter covering the gig economy, food, and retail. His work focuses major gig delivery and ride-hailing apps, including Uber, Lyft, DoorDash, Instacart, and Walmart's Spark. He is interested in everything from what it's like to work on the apps to the companies' business strategies.Some of his recent stories feature gig workers who have been deactivated on the apps, DoorDash hiring traditional employees to make deliveries, gig workers' use of bots, and gig work expanding into new professions, such as nursing.Alex has also written about Aldi's US expansion, Starbucks' turnaround efforts, and the fallout from Kraft-Heinz's budget cutting. Convenience store chain Sheetz ended its "smile policy" after his reporting.Before joining Insider in September 2020, he wrote about consumer and retail companies for S&P Global Market Intelligence. He's a graduate of the University of Hawai'i at Mānoa and grew up on the Big Island.Alex lives in the Washington, DC, area, where you can find him studying ancient coins or searching for Civil War artifacts with his metal detector in his free time.Got a tip? Reach out at [email protected] or via encrypted messaging app Signal at +1 (808) 854-4501.
Uber ride-hailing Layoffs More Artificial Intelligence AI Artifical Intelligence Careers
CNBC’s MacKenzie Sigalos framed the tension bluntly, noting that “Alphabet shares are now in correction territory down 13% from their May all-time highs. Investors questioned the returns on its enormous AI build-out.” The math behind that skepticism is the story. Alphabet (NASDAQ: GOOGL | GOOGL Price Prediction) is spending at a pace that would have looked implausible a year ago, and the market is asking whether returns can keep up.
The Capex Curve Is Bending Upward Sigalos flagged the pace: “Alphabet is already on pace to spend nearly $200 billion this year, with Q2 capex expected to double from a year ago. Bank of America sees spending approaching $300 billion in 2027.” Alphabet’s numbers back that up. Q2 capex hit $44.924 billion, up 100.14% year over year, following $35.67 billion in Q1. Full-year 2026 guidance sits in the $175 billion to $185 billion range, roughly double FY2025’s $91.45 billion.
Sigalos added the uncomfortable wrinkle on efficiency: “As rising component costs absorb more of that increase, each additional dollar buys less capacity.” That is the argument reshaping how the Street looks at hyperscaler ROI. Nominal capex is climbing faster than the compute it actually buys.
Funding the Build The financing side is where the correction gets its teeth. Sigalos noted, “Alphabet has raised more than $140 billion in debt and equity since October. With some analysts now modeling free cash flow to turn negative next year.” Alphabet has already crossed that line. Q2 free cash flow came in at -$5.9 billion, and long-term debt nearly doubled from $46.5 billion to $98.2 billion.
The company raised roughly $70 billion in combined equity and debt in Q2 alone, established an at-the-market program for up to $40 billion of Class A and Class C stock, and suspended its share repurchase program. Interest expense rose nearly 5× year over year. That combination—suspending buybacks, issuing dilutive equity, and taking on sharply higher interest expense—represents a structural change from the Alphabet investors owned two years ago. Details are available in the company’s Q2 2026 SEC filing.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Google didn't make the cut. Grab the names FREE today.
What the Cash Is Buying The bull case rests on whether the spend converts to durable revenue. Q2 gave Sundar Pichai plenty to work with. Google Cloud revenue reached $24.77 billion, up 82% year over year. Total revenue climbed to $119.8 billion, up 24.23%, the 12th consecutive quarter of double-digit growth. Operating income rose 30.38% to $40.77 billion with a 34% operating margin.
Pichai told investors, “Q2 was an amazing quarter, with Alphabet revenues growing 24% year-over-year and Google Cloud revenues accelerating to 82% growth, driven by demand for AI infrastructure and AI solutions. It’s great to see wide adoption of Gemini Enterprise, with nearly 90% of the Fortune 100 using it.” Gemini models are processing 22 billion API tokens per minute, up from 7 billion in Q3 2025, and the Gemini App reached 950 million monthly active users.
Sigalos added: “Alphabet still has advantages that few others can match. One of tech’s strongest balance sheets, stakes in both space and Anthropic, and a highly profitable search franchise that continues to fund the build-out with no clear signs of AI cannibalization.” Search & other revenue rose 17% to $63.27 billion, evidence that the legacy cash engine is still expanding while the capex bill compounds.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Google didn't make the cut. Grab the names FREE today.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of GOOG, AMZN, MSFT, ORCL 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.
ToplineGoogle on Thursday introduced a new way to sign in or recover locked Google Accounts, putting biometric identity verification directly in the hands of its users by allowing them to record directed via selfie videos and submit them in lieu of a traditional password or security question.
Sign with logos for Google and YouTube.
Getty Images
Key FactsGoogle’s new selfie video sign-in feature lets users record a short clip of themselves with head movement guidelines to verify their identity and, next time they need access to their account, they can take another selfie to get back in.
The new software compares the new selfie to the original video—requiring users to perform simple movements to prove it's a live video—to confirm the user’s identity.
The recorded video is stored in encrypted form with the option to delete it at any time, Google says, promising advanced checks are built in to block deepfake videos and impersonation attempts.
Key backgroundThe feature arrives amid a broader account-security push from Google that has so far included fake-call detection against AI scams in June and the suing of a Chinese cybercrime operation that used AI to defraud hundreds of thousands of victims, according to TechCrunch. It’s also a major expansion of biometric account recovery, which has been a contested space: Apple has offered Face ID-based authentication since 2017, while Microsoft expanded Windows Hello facial recognition to account recovery workflows years ago. While it can be used as a regular sign-in, Google is largely positioning the selfie as a backup option specifically for lockout scenarios—the gap where users lose their phone or can't access their usual device.
TANGENTThe timing of the new feature is notable: Google’s parent company Alphabet just reported second-quarter Google Cloud revenue of $24.77 billion, up 82% year-over-year, with CEO Sundar Pichai noting that nearly 90% of the Fortune 100 now use Gemini Enterprise, Google’s AI suites for businesses. The company on Wednesday said its Gemini app now has 950 million monthly active users.
further readingForbes950 Million People Now Use Gemini Each Month As Alphabet Posts Earnings BeatBy Ty Roush
ForbesAlphabet Rally Boosts Google Cofounder Fortunes By $15 Billion—Here’s Why Shares Are UpBy Ty Roush
SummaryAlphabet Inc. reported a massive EPS beat driven by mark-to-market gains, not core business growth.Q2 net income surged 298%, primarily from $99B in "other income" tied to SpaceX and Anthropic valuation gains.Core operations grew 30% YoY, but true cloud growth is obscured by related-party deals and artificial valuation uplifts.I find GOOGL stock uninvestable due to opaque financial engineering and heightened risk of a sharp correction in hyperscaler stocks. Getty Images
Introduction The whole market is focused on Alphabet Inc.'s (GOOG, GOOGL) Q2 earnings, with the enormous beat on profitability, which exceeded analysts' expectations threefold. EPS came in at $9.11, while the predictions were south of $3, giving this company
6.97K Followers
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.
Google's cloud chief Thomas Kurian said the company's existing customers are shelling out "roughly 50% more" than they've already committed to spend on its products, which helped drive its red-hot cloud growth during the second quarter.
"Our existing customers have increased their spend when they make a commitment to us," Kurian told CNBC's Jim Cramer on Thursday. "They're spending roughly 50% more than the commitment, and so it comes down to the differentiation in our product portfolio, the strength we have in our go-to-market execution, and you see that in both top line and operating income growth."
Kurian's comments come after Google parent Alphabet posted better-than-expected revenue for the second quarter on Wednesday, helped by growth of 82% year-on-year in its cloud business.
Demand for its cloud services is strong enough that the company plans to call on third-party providers to fill in extra capacity. That drove shares of neocloud providers CoreWeave and Nebius higher.
Read more CNBC tech newsMoonshot AI accessed Nvidia's chips despite Chinese export ban, White House official saysAlphabet and Tesla test Wall Street's patience as AI spending overshadows growthAlphabet earnings takeaways: Q2 revenue beats, GOOGL stock sinks on 2026 capex hikeTesla misses on earnings, as free cash flow turns negative and margins slideKurian said the move is necessary, even though it will hurt margins, because it allows Google to capture that demand and those customers tend to spend more on its other services.
"So for us, when we look at the short term, we're going to rent some capacity for you know a few quarters," Kurian said. "It allows us to bring customers in, bridge them over to when we have sufficient capacity available, and then that will compound over time, and the return on investment makes sense for us."
Alphabet shares plunged more than 7% on Thursday after the company boosted its capital spending forecast to as much as $205 billion this year, worrying investors who are jittery about ballooning artificial intelligence budgets.
The company said it now expects to spend between $195 billion and $205 billion in 2026, up from the $180 billion to $190 billion forecast provided last quarter. Its capex reached $44.9 billion during the second quarter, with most of the spending going toward AI infrastructure.
Tech companies are burning through cash to bankroll spending on AI infrastructure, while trying to reassure Wall Street that those investments will yield returns.
Before Alphabet's second-quarter report, tech's megacaps were expected to spend roughly $725 billion this year on AI initiatives. That total will likely rise as more of Alphabet's peers post quarterly earnings in the coming days. Amazon, Microsoft and Meta will all report results next week.
Kurian defended the company's "very, very disciplined" capex spending and said companies are seeing real returns on utilizing Google's AI solutions.
"Macy's, for example, has found as they deployed our AI system, it's improved the size of the shopping basket that they see," he said. "We've seen Macquarie Bank save a lot of processing time by automating many of the workflows in their organization."
Key Takeaways Alphabet says AI demand exceeds supply, lifting 2026 CapEx guidance to $195B-$205B.Cloud revenues surged 82% to $24.8B, as backlog hit $514B, and margin reached 35.6%.AI features boosted Search usage, while Gemini expanded monetization across ads and advertiser tools. Alphabet Inc. (GOOGL - Free Report) used its second-quarter call to make one point clear: demand is not the problem. Capacity is. Management framed the quarter as proof that its full-stack AI strategy is driving growth across Search, Cloud and YouTube.
The bigger investor question was how far Alphabet will lean into that opportunity. Executives answered with a higher capital spending outlook and a firmer defense of Gemini and TPUs.
GOOGL Search Keeps AI at the CenterCEO Sundar Pichai said Alphabet’s momentum still starts with Search. He said AI Overviews and AI Mode are being combined into one experience.
Pichai added that AI Mode has topped 1 billion monthly active users and is driving incremental query growth. He also said Google is now sending billions of clicks to websites each week through AI features in Search.
That backdrop helped Google Search and other revenues rise 17% year over year to $63.3 billion. Philipp Schindler, senior vice president and chief business officer, said retail and finance led the gains.
Alphabet Cloud Shows the Biggest ShiftCloud remained the clearest expression of Alphabet’s AI demand story. Revenues rose 82% to $24.8 billion, while operating income jumped to $8.8 billion, and margin reached 35.6%.
Pichai pointed to uptake across chips, models, data, security and agent platforms. He said nearly 90% of Fortune 100 companies now use Gemini Enterprise.
Chief financial officer Anat Ashkenazi said Cloud backlog climbed to $514 billion, up by more than $50 billion sequentially. She said just more than 50% should convert to revenues over the next 24 months.
GOOGL Raises the AI Spending BarAshkenazi raised full-year 2026 capital spending guidance to $195-$205 billion from $180-$190 billion. She tied the increase to faster capacity delivery as AI demand continues to outpace supply.
That spending is already showing up in the numbers. Second-quarter CapEx was $44.9 billion, free cash flow was negative $5.9 billion, and management said higher depreciation and data center operating costs will keep pressuring results.
Alphabet still reported revenues of $103.62 billion and adjusted EPS of $9.11 for the second quarter of 2026. EPS beat the Zacks Consensus Estimate of $2.88, while revenues topped the consensus mark of $101.28 billion.
Alphabet Defends Gemini and TPUsThe analyst Q&A focused on whether Alphabet can stay at the model frontier while scaling fast enough to meet demand. Pichai said the company wants strong models across the full price-performance curve, from Flash-Lite to larger frontier systems.
He was also more explicit on execution. Pichai said coding remains an area that needs improvement, but added that Gemini 3.6 Flash improved by more than 10 points on DeepSWE versus 3.5 Flash.
On infrastructure, Pichai said TPUs are first allocated to frontier model development, then to core products such as Search, YouTube and Cloud. Ashkenazi said TPU system sales are now part of Cloud revenues and should ramp up further into 2027.
GOOGL Sees More Ways to Monetize AISchindler argued that Gemini is strengthening monetization rather than diluting it. He said Google is using the models across ad quality, advertiser tools and new AI experiences.
That mattered because Search and YouTube still fund the company’s AI buildout. YouTube ads rose 13% to $11.1 billion, and Google Services revenues increased 15% to $94.5 billion.
Asked about the next leg of YouTube growth, Schindler pointed to connected TV, Demand Gen, Shorts and more shoppable formats. He also highlighted Buy with Google Pay on TVs and affiliate tools as new commerce levers.
Alphabet’s Tone Turns More AssertiveWhat stood out on the call was not caution about demand, but confidence in return profiles. Pichai repeatedly described AI adoption as still early across consumer and enterprise markets.
Ashkenazi said Alphabet will keep investing as long as returns remain attractive. She also said third-party capacity can bridge near-term shortages, even if it creates modest margin pressure.
Together, those comments left a clear message. Alphabet is willing to accept near-term cost pressure to secure multiyear AI and Cloud opportunities.
GOOGL Zacks Rank and Style Score ViewGOOGL sports a Zacks Rank #1 (Strong Buy). Under the Zacks framework, that points to favorable earnings estimate revision trends and remains the first signal investors are meant to evaluate. You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock’s Style Scores are mixed, with a Momentum Score of A, Growth Score of B, Value Score of D and VGM Score of C. Zacks says the strongest setups usually pair a Rank #1 or #2 (Buy) with A or B Style Scores, while the rank itself can change as estimate revisions adjust after results.
Alphabet's second-quarter free cash flow turned negative for the first time as the Google parent ramps AI spending, leaving Wall Street divided over whether the investment will pay off.
Shares of Alphabet (GOOG -6.04%) (GOOGL -6.22%) fell 7% as of 10:50 a.m. ET on Wednesday, pushing the price back to mid-April levels. The reaction seems disconnected from the actual Q2 results the Google parent reported last night: revenue grew 24% to $119.8 billion, Google Cloud surged 82%, and the company beat estimates across the board.
Image source: Alphabet.
The results were excellent Alphabet's Q2 success was broad. Google Cloud revenue jumped 82% to $24.8 billion, with operating margins nearly doubling to 35.6%. Nearly 500 Gemini AI enterprise customers each processed over a trillion tokens in the past year. The backlog stands at $514 billion. And the "legacy" business is still thriving, too. Search revenue rose by 17%, defying bearish predictions that AI chatbots would eat Google's search-and-ads lunch.
I see why some shareholders are backing away from Alphabet's massive AI investments. Management raised the full-year capex guidance to $195-$205 billion, $15 billion above the previous range. 2027's data center construction bill will be even higher. The company is tapping into cash reserves and taking on new debt, as free cash flow turned negative in the second quarter.
The market is pricing in execution risk on those infrastructure investments. That's not unreasonable; $200 billion is a lot of concrete and silicon, even for a tech titan of Alphabet's stature.
Today's Change
(
-6.22
%) $
-21.28
Current Price
$
320.81
The opportunity Here's the thing: the spending isn't speculative. Customers are lining up faster than Alphabet can build data centers. Management is renting third-party compute capacity from Space Exploration Technologies (SPCX +0.82%) just to keep up with immediate capacity shortages. That's not a company guessing about future returns; it's a business pulling every available lever to fulfill existing orders.
Trailing P/E is distorted right now by $99 billion in paper gains from Alphabet's SpaceX stake, which began in 2015. But forward P/E sits at 21.3 times, modest for a Magnificent 7 company growing revenue at 24% with a half-trillion-dollar backlog.
For investors willing to look past near-term capex anxiety, this sell-off may represent an opportunity to buy a dominant AI infrastructure franchise at a reasonable valuation. The spending is chasing confirmed demand, not speculative bets.
Anders Bylund has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.
Tesla (NASDAQ: TSLA | TSLA Price Prediction) and Alphabet (NASDAQ: GOOGL) both reported Q2 2026 results on July 22, 2026, and both printed negative free cash flow in the same window. One is spending from a position of strength. The other is spending while its core business bleeds margin.
One Cash Drain Is a Choice. The Other Is a Squeeze. Alphabet posted revenue of $119.796 billion, up 24.23%, with EPS of $9.11 against a $3.0427 estimate. Google Cloud grew 82% to $24.768 billion, and Sundar Pichai told investors that “nearly 90% of the Fortune 100” now use Gemini Enterprise. Operating margin expanded to 34%. This is a company being paid to spend.
Tesla’s story reads differently. Revenue came in at $28.236 billion, a 7.10% beat, but EPS of $0.33 missed by 38.51%. Operating margin cratered to 1.4% as operating expenses jumped 47% on AI compute, R&D, and stock-based comp tied to the 2025 CEO Performance Award. Regulatory credits collapsed to $146 million from $739 million a year ago.
Vertical Bet vs. Horizontal Bet Lens Tesla Alphabet Q2 FCF -$1.092 billion -$5.855 billion CapEx YoY +141.81% +100.14% Op Margin Direction Compressing Expanding Core Bet Robotaxi, Optimus, chips Cloud, Gemini, tokens Tesla is building vertically. Cybercab production started at Gigafactory Texas, the Semi factory in Nevada is commissioning, and an Austin semiconductor fab is progressing with SpaceX. Alphabet is building horizontally, funding data centers that rent AI back to enterprises. Pichai framed it plainly: “Our AI investments are redefining what’s possible across every part of our business.”
The balance sheets tell you how confident each management team feels. Tesla is self-funding with $43.524 billion in cash. Alphabet raised roughly $70 billion in combined equity and debt, pushed long-term debt from $46.5 billion to $98.2 billion, and suspended buybacks. That is aggression.
What Decides Who Wins This Cycle I will be watching whether Tesla’s 1.48 million active FSD subscriptions and the seven-metro Robotaxi footprint start feeding real software margin fast enough to offset the automotive ASP slide. For Alphabet, the tell is Cloud’s operating leverage. If 22 billion tokens per minute keeps compounding, the capex pays for itself.
Why I Lean Alphabet Today, With One Caveat Personally, Alphabet’s quarter looks like the safer version of the same bet. Margins are expanding while it spends, Cloud is accelerating, and the debt raise gives it optionality. The stock still fell 7.77% on the week, which tells me the market wants proof the capex will convert. Tesla is the higher-variance trade. If Optimus or Robotaxi hits in 2026, that 1.4% margin becomes a footnote. If they slip, the 16.83% year-to-date decline is not the bottom. The setup to watch is whether Tesla can deliver one clean quarter of margin recovery, and whether Alphabet’s Cloud growth stays above 50%.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Google didn't make the cut. Grab the names FREE today.
Image Credits:Jonathan Johnson/Bloomberg / Getty Images 9:01 AM PDT · July 23, 2026
Google is adding a selfie video option as a new way for users to log in to their accounts, the company announced on Thursday, joining a growing wave of tech companies betting that biometrics and not passwords are the future of identity verification online. The tech giant says selfie videos give users more options to sign in if they’re ever locked out or don’t have access to their usual phone or computer.
Users set up a selfie video by looking at their device’s camera and completing a few guided head movements — think turning right or left or nodding — to capture multiple angles of their face. If a user is having trouble signing in later, they can take another selfie video to get back into their account, and Google will then compare the new video to the one used at setup to confirm it’s the correct person.
The bigger challenge Google is trying to solve is proving a real human, not a bot or a doctored video, is on the other side of the camera. “When you use a selfie to sign in, we use multiple layers of security to help prevent impersonation attempts like fake photos and videos (i.e., deep fakes),” Google wrote in the blog post. “For example, we match your video against your saved selfie and require you to perform simple movements to prove it’s a live video. We also use our standard security practices to detect and help prevent suspicious sign-in attempts.”
This isn’t just about individual accounts, though. As AI-generated video gets more convincing, “liveness” checks are becoming a baseline requirement for any company handling logins, payments, or sensitive data.
Although the new option could help protect accounts against fraud and help users recover locked accounts, it also raises concerns around user privacy and biometric data collection, an area regulators have increasingly scrutinized as more companies build products around facial and voice data.
Google says selfie videos are stored securely using encryption and remain protected even when they’re not being used, and that users can choose to delete the videos from their Google account at any time.
Topics
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
Aisha is a consumer news reporter at TechCrunch. Prior to joining the publication in 2021, she was a telecom reporter at MobileSyrup. Aisha holds an honours bachelor’s degree from University of Toronto and a master’s degree in journalism from Western University.
You can contact or verify outreach from Aisha by emailing [email protected] or via encrypted message at aisha_malik.01 on Signal.
He also acknowledged that the company remains “supply constrained” as AI demand continues to outstrip available computing capacity.
Enter Frozen v2Those comments help explain reports that Alphabet is developing Frozen v2, a next-generation AI chip designed to run Gemini models more efficiently.
According to The Information, Frozen v2 integrates parts of Gemini’s architecture directly into the hardware. Engineers reportedly believe the chip could process six to 10 times more AI tokens per unit of power than Google’s latest custom AI chips, potentially allowing the company to serve far more AI requests without a proportional increase in infrastructure.
The broader takeaway is that Google’s AI hardware strategy is increasingly being driven by demand rather than technological ambition alone. As Gemini adoption accelerates across Search, Cloud and enterprise products, the company is racing to build infrastructure that can keep up.
For investors, Frozen v2 represents more than another AI chip. It is Google’s attempt to solve a problem created by its own success: processing tens of billions of AI tokens every minute while easing growing compute constraints.
Image via Shutterstock
Market News and Data brought to you by Benzinga APIs
Alphabet Inc GOOGL is in focus on Thursday morning after Thomas Kurian, the chief executive of Google Cloud, said existing customer are pumping in about 50% more than their initial spending commitments.
Kurian’s remarks in an interview with the Mad Money host Jim Cramer follow GOOGL’s blowout second-quarter (Q2) earnings, featuring a whopping 82% year-over-year increase in cloud revenue.
To keep pace with overwhelming enterprise demand, the hyperscaler plans to temporarily rent third-party infrastructure from neocloud providers CoreWeave and Nebius, he confirmed.
Despite Kurian’s bullish comments and the firm’s solid Q2 print, Google shares are slipping at the time of writing, now down more than 20% versus their May high.
Kurian’s remarks on July 23rd reinforce that the company’s “aggressive” artificial intelligence (AI) investments are yielding immediate commercial returns rather than unnecessarily increasing costs.
“It comes down to differentiation in our product portfolio, strength of our go-to-market execution, and you see that in both top line and operating income growth,” he added.
Although renting third-party compute may temporarily hurt gross margin, Kurian emphasized that onboarding high-value enterprise clients now will create compounding long-term returns.
All in all, for investors concerned that hyperscalers are building speculative infrastructure without guaranteed buyers, Kurian’s transparency delivers tangible proof of real, unfulfilled commercial demand directly validating Google’s growth trajectory.
GOOGL stock is seeing pressure on Thursday primarily because management raised its full-year capex guidance to $195 billion at least, after deploying nearly $45 billion in Q2 alone.
However, viewing this capital allocation through Kurian’s operational commentary transforms a perceived spending risk into a bullish indicator.
Rather than overbuilding in a vacuum, something that would have resembled the dot-com bubble, Alphabet’s aggressive infrastructure spending is addressing customers' “over-consumption” and an expanding cloud backlog.
With cloud sales expanding to $24.8 billion in the second quarter – every dollar funneled into data centers and specialized silicon is generating top-line conversion.
As these AI investments mature and internal capacity replaces external rentals, operating leverage should expand, reinforcing Google’s competitive position in enterprise artificial intelligence.
Part of the weakness in GOOGL shares this morning reflects broader macroeconomic jitters amidst an escalating US-Iran conflict as well.
However, Alphabet’s core Search operations remain super cash-generative, and its cloud business is expanding margins and capturing market share.
For long-term investors, that warrants buying on the dip today. Note that Wall Street analysts also remain uber bullish on Google for the remainder of 2026.
Consensus rating on the multinational tech behemoth sits at Strong Buy currently – with the mean price target of nearly $435 indicating potential for another 35% upside from here.
This is a fair market value price provided by Massive. Learn more.
52-Week Range$187.82▼
$408.61Dividend Yield0.27%
P/E Ratio24.41
Price Target$415.65
Alphabet NASDAQ: GOOGL delivered its Q2 2026 results after the close on Wednesday, and by almost any measure, it was an exceptional quarter.
Revenue hit a record. Google Cloud growth accelerated to a pace nobody expected. Earnings per share nearly quadrupled.
Get Alphabet alerts:
And yet the stock fell in after-hours trading and extended those losses before the next session, even as the report showed strength.
The disconnect between the headline numbers and the market's reaction is the story worth understanding here.
A Quarter of RecordsTotal revenue came in at $119.8 billion, up 24% year over year from $96.4 billion, comfortably ahead of the $116.93 billion consensus. That marked Alphabet's 12th consecutive quarter of double-digit revenue growth. Operating income reached $40.77 billion with an operating margin of 34%.
The standout was Google Cloud. Revenue surged 82% year over year to $24.8 billion, blowing past the roughly $22.3 billion analysts had modeled by about 11%. That is a dramatic acceleration from the 63% growth posted in Q1, and it extends Google Cloud's lead over both Microsoft's NASDAQ: MSFT Azure and Amazon's NASDAQ: AMZN AWS in growth terms for a second straight quarter. Cloud operating income more than tripled to $8.8 billion from $2.83 billion a year ago, a sign that scale is finally translating into serious profitability. The cloud backlog swelled to $514 billion, up from $462 billion last quarter.
Google Services held up well, too, growing 15% to $94.5 billion. Search and other revenue rose 17% to $63.3 billion, essentially in line with expectations and further evidence that AI is expanding rather than cannibalizing the core franchise. YouTube advertising grew 13% to $11.1 billion, and subscriptions, platforms, and devices climbed 15% to $12.9 billion. CEO Sundar Pichai noted that nearly 90% of the Fortune 100 are now using Gemini Enterprise.
The $99 Billion AsteriskThen there is the headline that requires context. Alphabet reported net income of $112.1 billion, up 298% year over year, and diluted earnings per share (EPS) of $9.11, up 294% and far above the roughly $2.89 analysts expected. Those numbers are real, but they are not operational. They were driven overwhelmingly by a $99 billion gain on equity securities, largely reflecting the mark-to-market revaluation of Alphabet's stake in SpaceX NASDAQ: SPCX and Anthropic as both valuations soared. Accounting rules require Alphabet to run those unrealized gains straight through the income statement, so the profit appears without a dollar changing hands. Strip it out, and operational EPS lands closer to the $2.87 analysts were actually looking for.
What Spooked the MarketThe selling pressure traces back to two words: capital expenditures. Alphabet spent $44.9 billion on capital expenditure in the quarter, up 100% year over year and up 26% sequentially. Free cash flow swung to negative $5.86 billion as a result. Management also signaled further spending increases ahead, and investors, already jumpy about how much capital the mega-caps are committing to AI, chose to focus there rather than on the cloud acceleration.
The Technical PictureFrom a technical perspective, the bulls might quietly be cheering this sell-off. Following such a stellar report, the pullback and broader market jitters could ultimately create an opportunity to own the stock at a far more reasonable valuation. On a higher timeframe, GOOGL remains in a clear uptrend. But zooming in, the stock has fallen almost 20% from its record high and is now approaching its 200-day Simple Moving Average, a key long-term trend indicator and one the bulls will want to see hold firm. If shares retrace toward that structural level and find support, with the forward price-to-earnings (P/E) compressing closer to 20 in the process, the setup could become increasingly attractive for long-term buyers.
Alphabet Inc. (GOOGL) Price Chart for Thursday, July, 23, 2026
Patience Is the VariableNothing in these numbers undercuts the long-term case. If anything, an 82% cloud growth rate, a $514 billion backlog, and tripling cloud operating income strengthen it considerably. What changed is the market's willingness to fund the buildout without complaint. Alphabet is telling investors it needs to spend aggressively because it cannot build capacity fast enough to serve the demand in front of it, a message consistent with the $80 billion capital raise in June and the reported development of its Frozen v2 inference chip.
The consensus among 55 analysts remains Moderate Buy with a price target of $415.98, implying roughly 22% upside from recent trading levels. At a forward P/E of 23.86, Alphabet still trades at one of the more reasonable multiples in mega-cap tech.
The question for the second half is simple: how long can the market remain patient as the spending curve steepens? For long-term investors, the underlying business just posted one of its strongest quarters ever, but the near-term tape may need more convincing.
Should You Invest $1,000 in Alphabet Right Now?Before you consider Alphabet, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Alphabet wasn't on the list.
While Alphabet currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Tesla, Nvidia, and Google helped shape the last era of market growth, but the next wave could come from a new group of companies. Inside this report, you’ll find 7 stocks that could play a major role in the next tech-driven market boom.
You don't need a lot of money to get invested in the market. I'm probably not the first person to tell you that. I won't be the last. Widespread access to commission-free trading platforms, decades of moving away from round-lot purchases, and the growing reach of brokers that allow buying fractional shares make it easy to put even $500 to work in a meaningful way.
Where should you go with the next $500 you have to invest? I have a couple of ideas. Amazon (AMZN -4.17%) and Celsius Holdings (CELH -3.76%) could be the best stocks to buy right now. Let's take a closer look at these two very different market opportunities.
Image source: Getty Images.
1. Amazon Amazon stock reports fresh financials a week from today. Circle your calendar, but this gives you five trading days to decide if you want to get into the country's largest company -- by trailing revenue -- ahead of its second-quarter numbers.
Amazon doesn't need much of an introduction. There are just four companies with larger market caps. There's a good chance that you're a current customer of the e-commerce and digital services provider. Growth has slowed at Amazon as its business matures, but it has started to pick up the pace lately. Its 17% top-line increase for its previous quarter was its strongest increase in net sales in four years.
You would think that Amazon would be rocking with momentum on its side, but the stock is up less than 8% over the past year. That is less than half of the market's return in that time. Amazon? A laggard? That's not likely to last long.
Today's Change
(
-4.17
%) $
-10.21
Current Price
$
234.64
A big reason for Amazon's acceleration is that Amazon Web Services (AWS) -- a top dog among cloud hosting services -- is consistently becoming a larger slice of the overall pie. The segment's net sales rose 28% in the first quarter, now accounting for 21% of Amazon's top line. More importantly, AWS delivered 59% of Amazon's operating profit for the quarter.
Great things happen when your biggest-growing business also happens to be pushing margins higher, current stock chart notwithstanding. Analysts see another quarter of 17% top-line growth when it reports after the market close next Thursday. They see earnings per share rising at half that clip -- up a mere 8% -- as Amazon ramps up its capital expenditures like the rest of the consumer tech giants.
A nine-figure budget this year to boost its AI profile may seem daunting, but Amazon's AWS is also a major beneficiary of the revolution. Even the online store that started it all is getting better and more productive as a result of its AI-first mindset. With double-digit percentage earnings beats in three of its last four quarters, another positive surprise next week could be the start of turning this recent laggard into a leader again.
2. Celsius Holdings Growth investors have a love-hate relationship with Celsius Holdings. They loved the sparkling beverage maker when sales more than doubled for three consecutive years through the end of 2023, as its namesake functional energy drink became a workout, retail, and social staple. They hated Celsius when growth slowed dramatically in the first half of 2024, going on to post year-over-year declines for three consecutive quarters until it acquired Alani Nu in early 2025.
Alani Nu gave Celsius a non-organic boost, but investors initially bid the shares higher because organic growth also started to turn positive. The combined company was gaining market share in the energy drink space on a pro forma basis, but that initial attraction faded quickly. Celsius has lost more than a third of its value over the past year, even as the introduction of Alani Nu has delivered triple-digit revenue growth in the last three quarters (and an 84% jump in the period before that).
How great was that game-changing acquisition? Celsius paid a net price of $1.65 billion in cash and stock for Alani Nu last year, compared to the acquirer's market cap of roughly $6 billion at the time. In the first quarter of this year, the Alani Nu brand contributed $368 million of the $783 million in revenue it posted. All of Celsius a year earlier -- before Alani Nu -- generated just $329 million in revenue. Can you believe Celsius scored this deal for a little more than a quarter of its market cap at the time?
Today's Change
(
-3.76
%) $
-1.07
Current Price
$
27.40
This is where the value investors have a chance to tap in. With the Alani Nu deal closing on April 1 of last year, Celsius has now lapped the transaction. Celsius did acquire the much smaller Rockstar Energy from its distributor last summer, but it's not really moving the needle. When the beverage stock reports second-quarter results in early August, it will be the first period since the first quarter of last year to be driven largely by organic growth. The market might like what it sees.
Growth will naturally slow now that we're on an apples-to-apples -- or carbonated orange water-to-carbonated orange water -- basis. Analysts see revenue growing 18% on a dip in earnings when it reports, but the bottom-line retreat should prove temporary. Those same Wall Street pros see revenue slowing to 9% next year, but on a 17% jump in net income.
Here is why I really like Celsius heading into its next financial update in two weeks: Celsius has routinely trounced market earnings expectations over the past year. In the last four quarters, the energy drink powerhouse has landed 93%, 52%, 37%, and 40% above Wall Street's profit targets. If it can land another beat, even just below the lowest of its past four performances, it would surprise the market with earnings growth as it works through the recovery in its operations. With Celsius now trading for just 14 times next year's earnings forecast, it could be too cheap to ignore. Put another way, this sparkling beverage company might be anything but flat in August.
Amazon announced on Thursday that it’s bringing games to Prime Video by integrating its Luna cloud gaming service into the streaming platform. Games including “Hogwarts Legacy,” “EA Sports FC 26,” “Indiana Jones and the Great Circle,” “Clue,” and “Taboo” will be available starting today on Fire TVs in the U.S. and U.K.
With this move, Amazon is hoping games can turn Prime Video into a one-stop entertainment destination, borrowing a strategy from Netflix, which has increasingly embraced party games over the past several years. Since Amazon already operates a gaming service, it makes sense for the tech giant to integrate it into its streaming platform.
Alongside third-party titles and cult classics like “Taboo,” the games library will also feature titles developed by Amazon’s own gaming division, including its “Courtroom Chaos” games and the co-op card battler “Masters of the Universe: Legends Unite.”
Until now, games on Luna were only accessible through the cloud gaming platform’s standalone app available to Prime members. Now, they’ll be available alongside Prime Video’s movies and TV shows.
Image Credits:Amazon Amazon says its vision is to remove the barriers to gaming and make it accessible to anyone regardless of their experience or budget. The tech giant says Luna is designed to bring gaming to a much broader audience by removing the need for expensive consoles or gaming PCs and making games as easy to access as movies or TV shows.
Prime members can now access the new “Games” tab on Prime Video and start playing on their TV using a controller or their phone.
“For a lot of people, games have been harder to find than they should be,” Jeff Gattis, general manager of gaming at Amazon, said in a press release. “Bringing Luna inside Prime Video allows Prime members to discover games more naturally, and if they see one they like, they click it and they’re in. That’s less time searching and more time playing great games included with their Prime membership.”
Amazon says it will add new games every month. The tech giant also plans to bring games to additional devices and countries in the coming months.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
Aisha is a consumer news reporter at TechCrunch. Prior to joining the publication in 2021, she was a telecom reporter at MobileSyrup. Aisha holds an honours bachelor’s degree from University of Toronto and a master’s degree in journalism from Western University.
You can contact or verify outreach from Aisha by emailing [email protected] or via encrypted message at aisha_malik.01 on Signal.
Wall Street expects a year-over-year increase in earnings on higher revenues when Amazon (AMZN - Free Report) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 30. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis online retailer is expected to post quarterly earnings of $1.82 per share in its upcoming report, which represents a year-over-year change of +8.3%.
Revenues are expected to be $196.85 billion, up 17.4% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.92% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Amazon?For Amazon, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +0.16%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that Amazon will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Amazon would post earnings of $1.6 per share when it actually produced earnings of $1.56, delivering a surprise of -2.50%.
Over the last four quarters, the company has beaten consensus EPS estimates two times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Amazon appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Expected Results of an Industry PlayerCarvana (CVNA - Free Report) , another stock in the Zacks Internet - Commerce industry, is expected to report earnings per share of $0.42 for the quarter ended June 2026. This estimate points to a year-over-year change of +61.5%. Revenues for the quarter are expected to be $6.96 billion, up 43.8% from the year-ago quarter.
The consensus EPS estimate for Carvana has been revised 0.1% higher over the last 30 days to the current level. However, a lower Most Accurate Estimate has resulted in an Earnings ESP of -0.17%.
When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Carvana will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Amazon’s founder reportedly sees Prime Video as the place to tout the company’s AI efforts.
Jeff Bezos has urged Prime Video boss Mike Hopkins to revamp the streaming service to make artificial intelligence (AI) a starring role, Reuters reported Thursday (July 23), citing four sources with direct knowledge of the matter.
That led to an in-house project called Lighthouse, which would give the more than 200 million people who use Prime Video a better glimpse at Amazon’s AI capabilities, which the company has spent hundreds of billions of dollars developing.
PYMNTS has contacted Amazon for comment but has not yet gotten a reply.
Reuters sources said Lighthouse is seen as a key part of Amazon’s efforts to boost its standing in the AI space amid competition from the likes of OpenAI and Anthropic. Other projects, like the long-running upgrade of Amazon’s Alexa voice assistant to offer more conversational responses, have produced mixed results, with that division still losing money, sources have told Reuters.
According to Reuters’ sources, the Prime Video project came after a presentation the streaming service’s executives made to Bezos last fall turned “contentious,” with Bezos unhappy that plans for an updated Prime Video did not effectively spotlight the service’s AI/personalization capabilities. This led the company to jettison its original plans and launch Lighthouse.
In other Amazon news, PYMNTS wrote last week about new PYMNTS Intelligence research showing that while Walmart continues to dominate when it comes to routine shopping trips — especially for groceries — Amazon is gaining in purchases consumers research, plan and have delivered.
“The findings point to a broader change in consumer behavior: Shoppers are more often choosing the retailer that best fits each purchase rather than just making purchases where it is most convenient,” the report said.
“That creates fresh opportunities for merchants that can connect physical stores, digital experiences and flexible payment options into one seamless journey.”
The research also found an “inversion of traditional retail logic,” PYMNTS wrote. Retailers have long seen the weekly shopping trip as the foundation for bigger purchases, though new data indicates that relationship has softened. Customers still turn to Walmart for day-to-day essentials, but are increasingly relying on Amazon for more deliberate, higher-value purchases.
“In other words, frequent store traffic no longer guarantees a larger share of discretionary spending,” the report added. “As shoppers become more comfortable moving between physical stores and digital channels, retailers have an opportunity to rethink how they connect in-store visits with online engagement, personalized offers and payment experiences that encourage customers to complete more of their shopping in one ecosystem.”
by Thomas Wilde on Jul 23, 2026 at 8:46 amJuly 23, 2026 at 8:46 am
Amazon will begin to fold its Luna cloud platform directly into the Prime Video app via the new Games tab, in an effort to get word about Luna to Prime members. (Amazon Luna promotional image) Amazon announced today that it has updated some versions of its Prime Video app to include direct access to its cloud-based Luna gaming platform.
The business goal is to solve Luna’s awareness problem and bring new users to the platform. Many Prime members don’t know the gaming service is included with their membership.
Consumers in the US and UK who have both a Prime subscription and a Fire TV can now launch Luna directly from the Prime Video app, where it can be found in its own dedicated tab in the UI. Prime subscribers who launch Luna in the app will get direct access to a library of both casual and mainstream “AAA” video games for no additional cost and without having to exit the app.
“Effectively, we relaunched last October, taking a bunch of the value of Luna that had been behind a paywall… We pushed it into the Prime membership, as a way of providing great value and trying to grow our business,” Jeff Gattis, GM of gaming at Amazon, told GeekWire.
Players on Luna can stream an assortment of games to their TV or browser via Amazon’s cloud servers, using a smartphone as a controller if they don’t have a compatible gamepad. Luna’s current library ranges from established mainstream hits like Indiana Jones and the Great Circle, Dispatch, and Fallout 4 to an assortment of casual-friendly exclusive titles like Amazon’s own Courtroom Chaos.
(Amazon Luna press image) Since that relaunch, Gattis said, the company has “basically 5x’d” its player base.
“The question for us is, how do you build upon that?” he said. “How do we let 200 million-plus Prime members worldwide know that they have this great benefit where you can play $70 games inside your Prime membership at no additional cost? One of our biggest challenges today remains that people don’t know the [Luna] benefit exists.”
While Luna was previously available to Prime subscribers via web browser and a couple of other types of smart TVs, it was a standalone service that required users to seek it out on its own. By shifting it into its own tab on the Prime Video app, Amazon’s hope is to drive up awareness that, well, Luna is there at all.
“It’ll start on Fire TV, but obviously our end state is to roll out to more countries and more devices, both first-party and third-party,” Gattis said. “Eventually we’ll be everywhere that Prime Video is.”
Dispatch, a viral indie hit from 2025 about office romance at a superhero agency, has been a big hit on Amazon Luna. (AdHoc Studio image) The integration of Luna with Prime could also potentially bring back the largely-abandoned practice of video game movie tie-ins. Fans of this summer’s Masters of the Universe reboot can watch the film on Prime Video, then switch to Luna to play Masters of the Universe: Legends Unite, a strategic deckbuilding game that’s currently exclusive to Luna. This kind of transmedia synergy used to be a part of every big summer action movie, but it’s largely fallen by the wayside since the 2010s.
Luna originally debuted in 2020 as a subscription-based cloud service. Subscribers could pay a monthly fee for access to over 100 video games, which they could play through their browser by streaming them from Amazon’s servers.
Back then, Luna was Amazon’s entry into what was shaping up to be a publisher-driven “battle for the cloud,” with companies like Google and Nvidia all launching their own game streaming services. Over time, however, the cloud’s impact on gaming hasn’t matched its early hype.
More recently, the component crunch has driven up the price of consoles and graphics cards, and that plays into Amazon’s bet on Luna.
Gattis said the cloud has been “technology ahead of its time,” in part because the industry aimed it at the wrong people, pitching it as a direct replacement for consoles and gaming PCs.
“That’s a heavy lift to ask somebody like myself,” he said. “I’ve invested both emotionally and financially in my Series X console and my 5090 graphics card. I’m happy.”
Amazon is catering to everyone else: players unlikely to buy a gaming PC or a current-generation console, let alone the next generation of gaming hardware at even higher prices. For the first time, Gattis said, there are “a lot more people who are going to think about the cloud as a viable alternative to $1,500 hardware.”
I keep hitting the buy button on Amazon (NASDAQ:AMZN | AMZN Price Prediction), and Alphabet (NASDAQ:GOOGL) just handed me another reason to keep going. When a Mag 7 peer posts Google Cloud growth of 82% with nearly 90% of the Fortune 100 running Gemini Enterprise, that lights up the entire cloud category. The market leader in cloud is still AWS, and AWS reports next Thursday.
The Three Engines I Cannot Stop Buying My thesis is plain. Amazon is three compounding businesses stapled together: a retail and logistics rail that would take a decade to rebuild, a cloud franchise that just posted its fastest growth in 15 quarters, and an advertising business now clearing more than $70 billion in trailing revenue. Any one of them would earn a top-quartile slot in my portfolio.
Start with AWS. Last quarter it grew 28% year over year to $37.59 billion at a 37.7% operating margin, and Andy Jassy called it “our fastest growth in 15 quarters.” The customer sheet is filling up: OpenAI committed roughly 2 GW of Trainium capacity from 2027, and Anthropic committed up to 5 GW. Amazon’s disclosed AI and cloud backlog now sits at $364 billion, which is contracted revenue standing behind the capex bill everyone loves to worry about.
Second, custom silicon. The Trainium, Graviton, and Nitro chip business is at a $20 billion annual run rate, growing triple digits year over year. Every workload Amazon runs on its own silicon instead of buying merchant GPUs is a permanent boost to that 37.7% AWS operating margin. Alphabet is racing to match with TPU. Amazon is already there.
Third, Bedrock and ads monetize the same customer base twice. Advertising grew 24% year over year on top of a $70 billion run rate, while Bedrock lets Amazon charge enterprises for AI inference on the AWS bill they already pay. That is compounding revenue with almost no incremental sales cost.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
Why My Next Dollar Skips Alphabet I own some Alphabet, and Sundar Pichai’s EPS of $9.11 against a $3.0427 estimate was real. Here is what pushes my next dollar to Amazon anyway: Google’s buyback program was suspended in Q2 2026, its long-term debt jumped from $46.5 billion to $98.2 billion, and Search still carries the revenue mix. Amazon has three engines, no paused buyback conversation, and Google Cloud remains the #3 vendor chasing AWS.
The Risk I Own With Eyes Open Trailing free cash flow collapsed 95% to $1.2 billion because capex more than doubled, and long-term debt climbed from $65.6 billion to $119.1 billion with 2026 capex heading toward $200 billion. If AI monetization stalls, returns compress. Two facts keep my finger on the button: interest coverage of 35.17 and debt-to-equity of 0.37 mean this balance sheet can carry the bet, and the $364 billion backlog is already contracted against the spend.
The people running the company agree. On May 21, Andy Jassy bought 50,000 shares, AWS CEO Matt Garman added 18,196, and CFO Brian Olsavsky added 15,450. Polymarket now prices a 95% probability that Amazon beats Q2 earnings on July 30, with analyst consensus at $312.87 against a $244.85 close.
My money is going to the one company that owns the retail rail, the cloud rail, the ad rail, and now the silicon rail. My buy button stays warm through July 30 and long after.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
Amazon (NASDAQ:AMZN | AMZN Price Prediction) stock is down 4% to $234.81 Thursday afternoon, cutting through what had been a relatively steady July trading range for the e-commerce and cloud giant. The move lands inside a broader tech pullback, with the NASDAQ 100 down nearly 2% on the day. Amazon shares now sit well below their 50-day moving average of $251.16.
The drop comes a week ahead of the company’s Q2 2026 earnings release on July 30, sharpening focus on AI infrastructure spending, AWS growth, and any hint of regulatory drag. Today’s slide reflects a confluence of catalysts.
AI Capex Jitters and a Senate Overhang The dominant driver is a sector-wide rotation out of mega-cap AI names after Alphabet‘s (NASDAQ:GOOGL) capex guidance hike this week. Alphabet stock is down 6%, and Meta Platforms (NASDAQ:META) shares are down 4%, as investors question whether AI returns will outpace ballooning infrastructure costs.
Layered on top are two Amazon-specific overhangs. Per a Bloomberg report roughly 17 hours old, the U.S. Senate Small Business Committee is investigating allegations Amazon allowed Chinese influence on its online marketplace. Republican committee staff said they found “compelling evidence” of Amazon “negligence related to Chinese influence,” though the cited committee email “didn’t cite any specific evidence.”
The probe stems from an earlier Bloomberg story about an alleged bribery market involving Amazon employees in China selling favors to merchants. Amazon declined to comment, and these remain allegations under investigation, not established facts. Separately, CNBC reported layoffs in Amazon’s artificial general intelligence (AGI) unit, framed by the company as a strategic realignment toward higher-impact projects.
Peers and Valuation Context The e-commerce peer group is trading softer but not dramatically so. eBay (NASDAQ:EBAY) stock is down 3%, and Etsy shares are down 2%, suggesting today’s Amazon move is more tech-and-regulatory driven than a broad consumer discretionary problem.
The valuation picture keeps Amazon roughly in line with its e-commerce peers. Amazon stock trades at a trailing-twelve-month P/E ratio of 28x, sitting between eBay stock at 25x and Etsy stock at 30x. For diversified exposure to Amazon, some traders use the State Street Consumer Discretionary Select Sector SPDR Fund (NYSE ARCA:XLY), though the fund is top-heavy. Amazon and Tesla (NASDAQ:TSLA) sit as outsized weights, so the ETF doesn’t provide extremely broad diversification.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
Bull Case Still Intact Into Earnings Despite the pullback, Wall Street remains constructive on Amazon stock into next Thursday’s earnings release. Bank of America reiterated a Buy rating on AMZN stock with a $310 price target, citing AI-driven AWS acceleration and expected Q2 revenue of $198.8 billion. The consensus analyst target sits near $313, with a Moderate Buy rating overall.
Amazon’s Q1 2026 setup supports that view. AWS grew 28% to $37.6 billion, the fastest pace in 15 quarters, and advertising crossed $70 billion in trailing revenue. Prediction markets currently price a 95% probability Amazon beats Q2 estimates.
Still, the bearish overlay shouldn’t be overlooked. Amazon’s Q1 2026 capital expenditures hit $44.2 billion, and the company’s TTM free cash flow fell to $1.2 billion, a reminder of how much cash the AI buildout is consuming. Regulatory noise from the Senate probe adds another wild card.
What to Watch Investors can watch for whether Amazon stock holds the 200-day moving average of $234.35 into the close, and whether AWS growth, operating income guidance, and any capex commentary on the July 30 call reset the narrative. Maintaining modest position sizing into the earnings release may be the reasonable path here, given the regulatory tail risk sitting alongside a fundamentally strong quarter.
The key tension is straightforward: a strong fundamental setup (accelerating AWS, expanding advertising, and a Q1 beat) is running headlong into an AI-capex debate that just claimed Alphabet and Meta Platforms as collateral damage. Whether Amazon’s Q2 print reframes the spending narrative or reinforces it will likely dictate direction into August.
The takeaway for investors: today’s AMZN stock pullback looks more like sentiment and headline risk than a fundamental break. Traders comfortable with volatility may find the setup attractive, while longer-term holders should focus on AWS growth, operating margin trajectory, and management’s tone on the roughly $200 billion 2026 capex plan when Amazon reports next week.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
Hayete Gallot, now executive vice president of Microsoft Security, speaks at a Microsoft event in France in 2024. (Microsoft Photo) GeekWire is profiling over the next few weeks some of the people and teams that are shaping the evolution of Microsoft in what we’re calling its “Microsoft 2.5” era.
AI has had an impact on just about every tech-product category, but especially security. Attackers are using AI; customers are looking to defend with AI. The goalposts keep shifting. “Agentic security” is now the holy grail, and Hayete Gallot, the newly minted executive vice president of Microsoft Security, is leading the charge toward it.
Gallot, a 16-plus-year Microsoft veteran who rejoined the company in February after a 1.5-year Google detour, replaced Charlie Bell, who came to Microsoft from AWS in 2021 and continues at the company as an individual contributor focused on engineering quality.
“Customers care about two things: solving for security and being able to afford it,” Gallot said when I asked during our interview this week why she came back to Microsoft.
“I am a problem solver. And an engineer at heart (and by training). Security is the most important problem right now — and Microsoft is the only place with all of the puzzle pieces to help our customers.”
Since her return, Gallot hasn’t been shy about shaking things up. As noted recently by The Information, at least nine corporate vice presidents who previously reported to Bell have left the company this year.
“We’re making changes to ensure we’re in the best formation to go after this opportunity,” she acknowledged.
“I’m motivated by doing the right thing for our customers, my teams, and tech outcomes,” she said. “I like to move quickly: days and weeks, not months and years, learning through execution, iterating rapidly, and adjusting based on real customer signals.”
The company isn’t starting from scratch. As of 2021, Microsoft claimed security was a $10 billion business for the company. By 2023, security had reached a $20 billion annual revenue rate, officials said.
Those claims haven’t been without controversy. Microsoft has built a huge business in finding and fixing security problems which some customers felt were of the company’s own making.
Microsoft has a wide-ranging and rather unwieldy security portfolio, encompassing identity management (Entra), endpoint protection (Defender), endpoint management (Intune), security information and event management (Sentinel), and compliance (Purview), among others.
In 2023, Microsoft introduced its Security Copilot set of AI analysis services that integrated with some of its existing security offerings. But a portal-based solution like Security Copilot doesn’t offer the kind of end-to-end coverage that an agentic security platform can, Gallot said.
The problem is that attackers are using agents, too. Customers need real-time insight into what’s happening in their environment, and the ability to act just as quickly, Gallot said.
Agentic security is about “taking the signals and turning them into a graph that is useful,” Gallot said. “If you’re trying to reason about 100 trillion signals, it’s not really effective.” The graph, she said, lets agents pick the right model for each threat and close the loop.
In practice, that means the system can quarantine a device or revoke access on its own, for example, rather than waiting for a human.
Microsoft’s core existing security products will continue to play a role as the landscape evolves, both spotting the problems and acting on them. Security Copilot isn’t going away in the process: “You’ll have Copilot and you’ll have agentic security,” she said.
The company’s new Agent 365 “control plane” — a central console for tracking every AI agent a company runs — fits in by letting customers see the “blast radius” of an agent, meaning everything a hijacked agent could reach, Gallot said. It’s similar in concept to Zero Trust, the “never trust, always verify” security model that limited how far an attacker could get with a stolen employee login, but applied now to agents rather than people.
So what exactly is this ‘agentic security’ thing? Microsoft has a whole website dedicated to the very topic.
Traditional AI security and agentic AI security are fundamentally different, Microsoft says. Agentic security doesn’t just protect models and training data; it also can protect tools, workflows, memory, connected systems and more. Because agents can take action, the potential positive and negative stakes are higher.
While AI has helped businesses make strides in finding and fixing vulnerabilities, it hasn’t gone much beyond that. Microsoft introduced its multi-model agentic scanning harness (MDASH) as its first step into the agentic security space, Gallot said.
The company used MDASH internally to boost finding and fixing Windows security issues, and it is now making it available to select customers in an expanded preview. MDASH will allow customers to use the best model for the right task to secure all different types of code bases, she said.
Microsoft is rumored to be readying a more comprehensive agentic security offering, of which MDASH is likely just one piece.
Microsoft is far from the only one doing this. AWS, Anthropic, and OpenAI are offering security tools on their platforms, and dedicated security vendors are building their own agentic platforms.
Microsoft has the advantage of scale in the enterprise. The question is whether Gallot and her new leadership team can turn that scale and emerging AI tools into both a bigger business for the company and better protection for its customers.
The Databricks logo in this illustration taken June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
July 23 (Reuters) - Databricks said on Thursday it would expand its partnership with Microsoft (MSFT.O), opens new tab through the 2030s, a deal under which it will increase its use of the Azure platform and Microsoft's custom chips.
Databricks offers a platform that helps users ingest, analyze and build AI applications using complex data from various sources.
The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here.
One of the most valuable private companies, the San Francisco-based firm's move marks a sizeable win for Microsoft's Azure cloud business and comes as enterprise AI adoption accelerates.
Databricks said it would increase Azure usage to run its own core business operations and analytics, and also boost its usage of Azure Cobalt, Microsoft's Arm-based (O9Ty.F), opens new tab custom processors, for data-intensive and agentic AI workloads.
Under the partnership, Microsoft will also continue integrating Databricks' AI capabilities across its products, including Databricks' conversational analytics tool Genie, to strengthen enterprise AI offerings.
"With Databricks deepening its investment in Azure Databricks and Azure Cobalt-powered infrastructure, customers will benefit from greater performance, efficiency, and scale for their most demanding workloads," said Judson Althoff, CEO of Microsoft's Commercial Business.
Databricks said last week it had signed off on a funding round that values the firm at $188 billion, with the round expected to close later this summer. The company's platform is used by over 20,000 organizations globally, including 70% of the Fortune 500 companies.
Reporting by Deborah Sophia in Bengaluru; Editing by Tasim Zahid
Our Standards: The Thomson Reuters Trust Principles., opens new tab
SAN FRANCISCO--(BUSINESS WIRE)--F9Analytics, in Partnership with Microsoft, introduces RealAccretive, the advanced Multifamily Profit Management solution now available on Microsoft Marketplace and Microsoft Azure. As a US Certified Enterprise Profit Management solution, RealAccretive is engineered to help the multifamily sector increase Net Operating Income (NOI) and Net Cash Flow (NCF) from operations through automated profit management at scale. “As companies learn that the cost and performan.
I keep buying Microsoft because it is the only hyperscaler I trust to own both ends of the AI supply chain: the software everyone already pays for, and the electrons that will decide who actually gets to run the models. That combination is why my finger keeps hitting the buy button, and it is why the recent drawdown feels like a gift rather than a warning.
Here is the setup. Microsoft (NASDAQ:MSFT | MSFT Price Prediction) is down 17.39% year to date and 21.39% over the past year, yet the business underneath it just posted its fourth consecutive EPS beat with $4.27 against a $4.07 estimate. Revenue climbed 18.3% year over year to $82.89 billion. The market is punishing capex. I am accumulating.
The Three Data Points That Keep Me Buying First, the demand signal. Commercial remaining performance obligations reached $627 billion, up 99%. That is contracted, signed, non-cancellable future revenue that nearly doubled in a year. Azure grew 40%, and the AI business alone crossed a $37 billion annual run rate, up 123% year over year. Satya Nadella framed it plainly on the call: “Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.”
Second, the quality of the compounding. Return on equity sits at 33.28%, operating margin at 45.62%, gross margin at 68.82%. Debt to equity is 0.176 and interest coverage runs 53.89x. This is a fortress funding a build-out. Shareholders got $12.7 billion returned in a single quarter, up 32% year over year.
Third, and this is the part that turns a good business into a moat: energy. By aggressively funding nuclear restarts, SMRs, and grid-permitting AI, Microsoft turns energy from an external existential risk into a proprietary moat, ensuring its data centers stay powered while turning the energy transition into a software-driven profit center. The LBNL projection has data centers consuming between 6.7% and 12% of U.S. electricity by 2028. Power is the bottleneck now. Microsoft is buying its way to the front of that line.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
Why Not Amazon, Alphabet, or NVIDIA Amazon and Alphabet run capable clouds. Neither owns a roughly 27% stake in OpenAI worth about $135 billion, with IP rights extended through 2032 and a $250 billion incremental Azure services commitment from the counterparty. That is a structural revenue lock the other hyperscalers cannot replicate by writing a check. NVIDIA is the pick-and-shovel play, and I own picks and shovels elsewhere. I would rather own the landlord collecting the rent under a contracted backlog than the supplier selling into a replacement cycle.
The Real Risk Capex is the real concern. It hit $30.88 billion in a single quarter, up 84.39% year over year. A widely shared r/investing post argues AI infrastructure depreciates faster than railroads or fiber, with chips obsolete in about two years, and it landed hard because it is partly true. My answer: the $627 billion RPO is contracted revenue against those assets. If the backlog stops growing, I will reassess. It is still doubling.
Why I Keep Buying From Here Over ten years, Microsoft returned 695.26%. Long-term compounders tend to reward holders who look past single-quarter noise. I keep buying Microsoft because it is quietly building the one thing the AI era cannot manufacture on demand: guaranteed power under a signed contract.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
Amazon and Microsoft have devised new ways to get people playing video games in the cloud.
Microsoft's Xbox division said Thursday that it will test an advertising-supported way of letting people stream video games.
Amazon, meanwhile, announced plans to add the Luna cloud gaming service to its Prime Video streaming platform. Amazon includes Prime Video in Prime subscriptions, which cost $14.99 per month. Amazon's adjustment will give Luna more front-and-center promotion on its website. Previously, Luna was only accessible through a dedicated website.
The two companies have succeeded in cloud computing but have stumbled as they have tried to get people hooked on games over sometimes unreliable internet connections, which can result in latency.
"Our goal is simple. Give more people more affordable ways to play," Xbox wrote in a blog post.
Microsoft started selling its inaugural Xbox console in 2001. Today, Xbox trails Nintendo and Sony in console sales. The subsidiary is trying to return to growth and widen margins after spending $75.4 billion on Call of Duty publisher Activision Blizzard in 2023.
Since Meta executive Asha Sharma replaced Phil Spencer in February as Xbox CEO, she has appointed new leaders, touted a forthcoming console, pushed for exclusive games and dropped subscription prices. This month, she announced a 20% reduction in force and said Xbox will spin out four development studios.
Xbox has pursued advertising in the past, and customers haven't always been fans. In 2024, one person complained about a McDonald's ad appearing on a screen for selecting games. Publishers Electronic Arts and Take-Two Interactive have experimented with ads and quickly backpedaled in response to criticism.
"Advertising has existed in gaming for decades, from in-game placements to free-to-play models," Xbox said in the post. "But it hasn't always been built with the player in mind. When done well, advertising can help lower the cost of access."
Read more CNBC tech newsMoonshot AI accessed Nvidia's chips despite Chinese export ban, White House official saysAlphabet and Tesla test Wall Street's patience as AI spending overshadows growthAlphabet earnings takeaways: Q2 revenue beats, GOOGL stock sinks on 2026 capex hikeTesla misses on earnings, as free cash flow turns negative and margins slideGamers participating in the Xbox Insider Program can join the test with a one-hour session limit. It applies to games that are already in a user's library.
Xbox has not created a tier of its Game Pass subscription service that contains advertising, but consumers have shown interest in such offerings. Netflix's ad-supported service tier has picked up tens of millions of users, CNBC reported in 2024.
Amazon entered the cloud gaming market during the Covid pandemic, as gaming was gaining popularity, with people spending more time at home. The digital commerce company debuted Luna in 2020, three years after Microsoft had introduced Game Pass, and one year after cloud challenger Google revealed its own cloud streaming option, Stadia.
Google discontinued Stadia in 2023. With Luna, users can play on smartphones and standard computers without purchasing consoles or dedicated gaming PCs.
By integrating Luna into Prime Video, the digital commerce company is doubling down on its push to attract casual players with party games and recognizable intellectual property like "Harry Potter" and "Tomb Raider." Amazon's gaming head, Jeff Gattis, told CNBC in an interview that the company doesn't aim to lure hardcore gamers or compete with console makers.
The unit, which Amazon recently reorganized to unify Luna and its game studios, has struggled to produce big hits, faced executive turnover and undergone several rounds of layoffs. Amazon has recently shut down or offloaded several of its titles, including its massively multiplayer online games "New World" and a planned "Lord of the Rings" project.
Luna has "millions" of users across the U.S. and 13 other countries, with the goal of reaching 10 million to 20 million "as quickly as we can," Gattis said.
In a market where PlayStation, Xbox, Epic Games and Steam are "fighting it out with each other," Gattis said gamers are "well-served, if not overserved." He said there's a robust segment of consumers who want to play games but don't want to invest in increasingly expensive hardware and software.
Amazon is working to fix an awareness gap among consumers who may not know about or understand its gaming strategy, Gattis said.
"I always say people don't have to like our strategy or agree with it, but it is important," he said. "Hopefully, they understand it."
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Let's take a look at what these Wall Street heavyweights have to say about Advanced Micro Devices (AMD - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Advanced Micro currently has an average brokerage recommendation (ABR) of 1.43, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 46 brokerage firms. An ABR of 1.43 approximates between Strong Buy and Buy.
Of the 46 recommendations that derive the current ABR, 35 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 76.1% and 4.4% of all recommendations.
Brokerage Recommendation Trends for AMD
Check price target & stock forecast for Advanced Micro here>>>
While the ABR calls for buying Advanced Micro, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is AMD a Good Investment?In terms of earnings estimate revisions for Advanced Micro, the Zacks Consensus Estimate for the current year has increased 0.8% over the past month to $7.28.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Advanced Micro. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Advanced Micro may serve as a useful guide for investors.
