The Zacks Internet - Content has been suffering from challenging macroeconomic conditions globally, which is having a detrimental effect on advertising spending, the primary revenue source for industry participants. Rising AI infrastructure and hosting costs, as well as continuous pressure to improve monetization, have been concerns for industry players. However, industry participants like Opera Limited (OPRA - Free Report) and Similarweb (SMWB - Free Report) are expanding their presence across multiple channels, driving top-line growth. These companies are benefiting from solid demand for digital offerings, as well as the increasing importance of video content and cloud-based applications. The rapid deployment of AI, Generative AI and Large Language Models (LLMs) is aiding industry players in enhancing the recommendation and search functions of their platforms, thereby improving user experience.
Industry Description The Zacks Internet - Content industry comprises providers of video encoding platforms, personal services, Internet content and information, staffing and outsourcing services, publishing, capital markets, media-based, home service, digital insights and measurement, stock photo, video and music licensing, and online travel companies. The industry is witnessing a rapid change in consumer behavior and ongoing digitalization. Advertising is a major revenue source for industry participants. Therefore, these companies are trying to expand their digital presence to win customers. They are also expanding their presence across social media, display, connected TV and search. Apart from the United States, a number of companies in this industry are located in Israel, the U.K., Germany, Russia and China.
4 Trends Shaping the Future of the Internet - Content Industry Demand for Digital Offerings Growing: The shift from traditional search to AI assistants, conversational interfaces, and agentic AI is reshaping how users discover content and interact online. The companies in the Zacks Internet Content industry are continually adapting their products, monetization strategies and distribution models to remain relevant as user behavior evolves and AI platforms become new gateways to digital content.
Industry Prospects Driven by Ad Spending Rate: Industry participants are focusing on marketing efforts to boost traffic to websites. Advertising and subscriptions are major revenue sources for these companies. The industry is dependent on consumer spending trends, making holiday spending a major deciding factor. However, macroeconomic challenges are expected to hurt ad spending.
Rising Competition for Users, Content and AI Leadership: The industry is facing intense competition for user engagement, premium content creators and enterprise customers. User engagement alone is no longer enough. Companies must consistently improve advertising ROI, increase customer retention, expand cross-selling and introduce new monetization models such as AI licensing and consumption-based pricing.
Increasing Regulations Mar Prospects: Industry participants involved in online search and other social networking activities are increasingly facing regulatory pressure, particularly in China and the European Union (“EU”). The China government has a number of regulations related to direct advertising, which is a prime revenue source for these companies. The implementation of the General Data Protection Regulation in the EU adds to the concerns. Enactment of the Digital Markets Act (DMA) in the EU aims to prevent large online platforms that connect users with content, goods, information and services from abusing their market power. The DMA adds to the headwinds faced by Internet content providers in the EU.
Zacks Industry Rank Indicates Dim Prospects The Zacks Internet - Content industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #187, which places it in the bottom 24% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dim near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. Since Jan. 31, 2026, the Zacks Consensus Estimate for the industry’s 2026 earnings has moved down 7%.
Given the bearish industry outlook, there are only a few stocks worth buying. But before we present the stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock market performance and valuation.
Industry Lags S&P and Sector The Zacks Internet - Content industry has underperformed the broader Zacks Computer and Technology sector, as well as the S&P 500 composite, over the past year.
The industry has declined 36.1% over this period compared with the S&P 500 sector’s appreciation of 21.1% and the 27.4% increase of the broader sector.
One-Year Price Performance
Industry's Current Valuation On the basis of the trailing 12-month price-to-sales ratio (P/S), which is a commonly used multiple for valuing Internet – Content stocks, we see that the industry is currently trading at 2.72X compared with the S&P 500’s 4.95X and the sector’s 8.67X.
Over the last five years, the industry has traded as high as 6.37X and as low as 3.25X, the median being 5.34X, as the charts below show.
Trailing 12-Month Price-to-Sales (P/S) Ratio
2 Internet Stocks to Watch Similarweb: This Zacks Rank #2 (Buy) company is benefiting from rising demand for digital intelligence from Large Language Model (LLM) developers and enterprises. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company signed one large LLM licensing contract in the first quarter of 2026, continues to pursue additional AI data deals, launched ChatGPT MCP integration, and is seeing strong adoption of AI Studio, which introduces a higher-value, consumption-based revenue model. Similarweb believes AI is expanding its addressable market across data licensing, AI products and ecosystem partnerships. Similarweb expects net revenue retention (NRR) to improve through customer expansion and cross-selling while maintaining positive free cash flow.
The Zacks Consensus Estimate for SMWB’s 2026 earnings has been steady at 15 cents per share over the past 30 days. Similarweb shares have dropped 20.8% on a year-to-date basis.
Price & Consensus: SMWB
Opera: This Zacks Rank #3 (Hold) stock continues to deliver robust revenue growth, expanding AI-powered browser capabilities and raising 2026 guidance. Opera’s Browser Connector, AI integrations and growing user engagement support its long-term outlook, but many AI initiatives remain in the early stages. The company is still working to convert higher AI engagement into durable revenue streams while navigating upcoming search partnership renewals and execution risks associated with scaling new AI-driven monetization models.
However, Opera expects higher hosting costs and AI infrastructure expenses due to increased AI usage and supply constraints, which could limit margin expansion despite healthy top-line growth. The Zacks Consensus Estimate for Opera’s 2026 earnings has been steady at $1.40 per share over the past 30 days. OPRA shares have surged 9.1% YTD.
Iren (IREN) shares surged about 15% on Monday after the AI cloud infrastructure provider signed $2.8 billion in new cloud services contracts and raised its 2026
–Tradr 2X Long IREN Daily ETF (BATS:IREX) — up about 40%
–Defiance Daily Target 2X Long IREN ETF (NYSE:IRE) — up nearly 40%
–Leverage Shares 2X Long IREN Daily ETF (NASDAQ:IREG) — also gaining close to 40%
The move illustrates how single-stock leveraged ETFs can magnify upside when a high-beta AI infrastructure stock experiences a sharp re-rating.
Why These ETFs Are OutperformingAll three ETFs seek to deliver 200% of IREN’s daily return through derivatives rather than direct stock ownership.
When IREN jumped roughly 20%, the ETFs responded with gains approaching 40%, consistent with their daily leverage objective.
However, these funds are designed for short-term tactical trading, not long-term investing. Because leverage resets every day, returns can drift significantly from two times the stock’s cumulative performance over weeks or months, particularly during volatile trading.
That makes them attractive for traders with a high-conviction, short-term view but considerably riskier than owning the underlying shares.
AI Infrastructure Is Fueling the TradeMonday’s surge was triggered after IREN boosted its 2026 annualized AI Cloud revenue target to more than $4 billion, from $3.7 billion previously.
The company also disclosed $2.8 billion of signed multi-year AI cloud contracts, with roughly 85% of the new revenue target already backed by agreements.
The announcement reinforced investor confidence that demand for AI compute infrastructure remains exceptionally strong.
The Fundamentals Behind the Bullish ETF MoveFor leveraged ETF traders, the announcement wasn’t simply about higher revenue guidance.
Several fundamentals strengthened the investment case:
These developments suggest that the stock’s rally was driven by improving business fundamentals rather than speculative momentum alone — a key consideration for leveraged ETF traders.
What ETF Investors Should WatchThe three bullish IREN ETFs remain among the most aggressive ways to express a view on AI infrastructure.
If enthusiasm around AI cloud build-outs continues, these products could continue to outperform the underlying stock on strong up days. Conversely, any pullback in IREN would also be amplified roughly twofold, making risk management especially important.
With IREN’s next earnings update expected on Aug. 27, traders will be watching whether the company can translate its expanding AI contract backlog into accelerating revenue growth. This outcome could determine whether the current rally in leveraged IREN ETFs has further room to run.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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A year ago, shares of Sandisk (SNDK +3.81%) traded below $50. As of this writing, they sit above $1,400 -- a gain of more than 3,000% in 12 months, and one of the biggest runs anywhere in the market.
That figure actually understates how hot the stock has been. Shares hit a record high of $2,354.39 earlier this summer before pulling back sharply.
A move like that usually means a mania or an earnings explosion. For Sandisk, it has mostly been the second one. But this is still the memory business, and the stock's second year looks much harder to handicap than its first.
Image source: The Motley Fool.
The earnings behind the moonshot Sandisk makes NAND flash memory, the storage chips inside everything from phones to the solid-state drives that data centers run on. For years, that was a brutal boom-and-bust business. Then the artificial intelligence (AI) build-out collided with tight supply, and storage prices took off.
The company's results tell the story in three acts. In the fiscal third quarter of 2025, Sandisk generated $1.7 billion of revenue with a 22.5% gross margin. By the fiscal second quarter of 2026 (the period ended Jan. 2, 2026), revenue had grown to $3.0 billion and gross margin had climbed to 50.9%. Then, in the fiscal third quarter of 2026, revenue nearly doubled sequentially to $5.95 billion (up 251% year over year) while gross margin expanded to 78.4%.
The mix is shifting toward the best customers, too. Sandisk's data center revenue went from $197 million in the year-ago quarter to $1.5 billion in the fiscal third quarter, a more than sevenfold jump powered by demand for enterprise solid-state drives. Its bigger edge business, which supplies chips for devices like smartphones and PCs, nearly quadrupled year over year to $3.7 billion. Consumer revenue, the one soft spot, slipped 10% sequentially to $820 million.
Profits followed. The company posted fiscal third-quarter non-GAAP (adjusted) earnings per share of $23.41, compared to a small loss in the year-ago period. Through nine months of fiscal 2026, revenue has more than doubled year over year to $11.3 billion.
Even more, management guided for fiscal fourth-quarter revenue of $7.75 billion to $8.25 billion with adjusted earnings per share of $30 to $33 -- yet another step up, and a forecast the company's next report will put to the test within weeks.
"This quarter marks a fundamental inflection point for Sandisk," said CEO David Goeckeler in the company's fiscal third-quarter earnings release.
Key to that claim is what the company calls its new business model: multi-year customer agreements backed by firm financial commitments. Sandisk ended the fiscal third quarter with three such agreements signed and has added two more since.
Today's Change
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51.61
Current Price
$
1,406.43
Priced as if the party ends After all that, the growth stock trades at only about 8 times consensus earnings-per-share estimates for the next 12 months.
A multiple that low, on growth that fast, is the market saying it doesn't believe the earnings will stick. After all, memory has always been cyclical. Prices that triple on scarcity can fall just as fast when new supply arrives or demand pauses. And the same operating leverage that turned Sandisk's margin explosion into $23 of quarterly earnings per share would work in reverse.
Investors have already had a preview. Shares are down about 40% from their record high, and memory stocks broadly sold off again last week as investors questioned how long the AI spending boom can run.
With that said, there are real differences between this cycle and past ones. Those multi-year purchase commitments are designed to smooth the boom-and-bust pattern. The company also carries essentially no debt and ended the fiscal third quarter with $3.7 billion in cash.
If the new contracts hold pricing anywhere near current levels through 2027, today's valuation would prove far too low.
So, can the run continue? Not the way it happened. The 3,000% phase came from a once-in-a-cycle collision of scarce supply and desperate demand, and the stock's 40% pullback suggests the market knows it. From here, this is a bet on whether NAND pricing and those new commitments hold up. For investors convinced they will, a small position sized for serious volatility could make sense. Personally, I'd want to see the new business model prove itself (and the market demand hold up) for another quarter or two first -- even if that means paying a higher price later for more certainty.
Three straight days of selling came to a happy end for Sandisk (SNDK +3.81%) investors Monday, as the stock turned around and gained 5.6% through 1:45 p.m. ET.
You can thank Morgan Stanley for that.
Image source: Getty Images.
Morgan Stanley still loves memory stocks It's not entirely clear why investors have been selling memory stocks lately -- maybe because Taiwan Semiconductor (TSM +1.04%) said it was expanding semiconductor chip production (although that's probably actually good news for Sandisk) or maybe because investors are worried that demand for artificial intelligence chips is going to decline (although that's the exact opposite of what TSMC told us last week).
Either way, Morgan Stanley analyst Joseph Moore is thanking his lucky stars for the sell-off, and thinks it has created a buying opportunity in semiconductor stocks like Sandisk.
As reported on StreetInsider.com today, Moore admits that "data center strength is the only cause" for this year's incredible demand for memory chips -- but he's not worried that this strength will ebb anytime soon. Shortages of memory chips continue to get worse, not better, and Q3 memory prices are going to be up 25% from Q2, says the analyst.
Today's Change
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51.61
Current Price
$
1,406.43
What this means for Sandisk Semiconductor stocks are notoriously cyclical, booming when demand and prices are high, only to crash as production increases, supply catches up with demand, and prices fall. That's the way this industry has always worked in the past. It's probably the way it will work in the long-term future.
That said, Moore sees little chance of supply catching up with demand this year, next year, or the year after that. For the time being, Sandisk's profits look safe, and this bodes well for the stock rebounding in the near term.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
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.
LOS ANGELES, July 20, 2026 (GLOBE NEWSWIRE) -- Glancy Prongay Wolke & Rotter LLP reminds investors of the upcoming August 25, 2026 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased or otherwise acquired Futu Holdings Limited (“Futu” or the “Company”) (NASDAQ: FUTU) securities between May 24, 2023 and May 27, 2026, inclusive (the “Class Period”).
IF YOU SUFFERED A LOSS ON YOUR FUTU INVESTMENTS, CLICK HERE TO INQUIRE ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS UNDER THE FEDERAL SECURITIES LAWS.
What Happened?
On December 30, 2022, the China Securities Regulatory Commission (“CSRC”) issued a statement that Futu has conducted cross-border securities businesses with domestic investors in mainland China without regulatory consent. As a result, Futu was banned from opening new accounts from mainland Chinese investors and soliciting new business from mainland investors.
Then, on May 22, 2026, before the market opened, Reuters published an article reporting that the CSRC, along with seven other government agencies including the central bank, had launched a crackdown aimed at “brokers it accused of illegally moving money to foreign markets” including “overseas firms and their local partners operating without approval.” The article reported “online brokers Tiger, Futu and Longbridge would be penalised for soliciting business in China without an onshore licence, the securities regulator said.”
On the same date, pre-market, Futu issued a press release disclosing that it had received a Notification Letter from the CSRC. The Company reported the letter states “certain Futu entities in mainland China and Hong Kong … without obtaining the requisite licenses or approval, conducted securities business, public fund sales business and futures business in mainland China.” The letter further states the CSRC “proposes to order the Related Companies to rectify or cease such activities, confiscate illegal gains, and impose fines, with the total proposed penalty amounting to approximately RMB1.85 billion (approximately USD271 million).” Further, the regulatory authority “proposes to impose a personal fine of RMB1.25 million (approximately USD 183,575) on Mr. LI Hua, the founder and CEO of the Company.”
On this news, Futu’s stock price fell $34.10, or 27.5%, to close at $89.76 per share on May 22, 2026, on unusually heavy trading volume.
Then, on May 28, 2026, before the market opened, Futu issued a press release reporting financial results for the first quarter 2026, including net income of HK$831.0 million (US$106.0 million) after giving effect to the proposed penalties comprised of: “(i) confiscation of illegal gains of approximately RMB470 million [approximately $69.21 million USD], and (ii) imposition of fines of approximately RMB1.38 billion, [approximately $20 billion USD] in an aggregate amount of approximately RMB1.85 billion.” The press release reported this adjustment under the Company’s financial statements as “Others, net” in its statements of comprehensive income for the applicable period.
On this news, Futu’s stock price fell $5.31, or 4.8%, to close at $104.91 on May 28, 2026, on unusually heavy trading volume.
What Is The Lawsuit About?
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Futu was not in compliance with the requirements of the CSRC, including because the Company continued to conduct securities business, public fund sales business and futures business in mainland China without obtaining the requisite licenses or approval; (2) as a result, Futu was reasonably likely to face regulatory penalties, including the disgorgement of ill-gotten gains and other penalties; (3) as a result of the foregoing, Futu’s financial results were overstated; and (4) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased or otherwise acquired Futu securities during the Class Period, you may move the Court no later than August 25, 2026 to request appointment as lead plaintiff in this putative class action lawsuit.
Contact Us To Participate or Learn More:
If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us:
Charles Linehan, Esq.,
Glancy Prongay Wolke & Rotter LLP,
1925 Century Park East, Suite 2100,
Los Angeles California 90067
Email: [email protected]
Telephone: 310-201-9150,
Toll-Free: 888-773-9224
Visit our website at www.glancylaw.com.
Follow us for updates on LinkedIn, Twitter, or Facebook.
If you inquire by email, please include your mailing address, telephone number and number of shares purchased.
To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contact Us:
Glancy Prongay Wolke & Rotter LLP,
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Charles Linehan
Email: [email protected]
Telephone: 310-201-9150
Toll-Free: 888-773-9224
Visit our website at: www.glancylaw.com.
Astronics Corporation (ATRO - Free Report) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.
The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.
Since a changing earnings picture is a powerful factor influencing near-term stock price movements, the Zacks rating system is very useful for individual investors. They may find it difficult to make decisions based on rating upgrades by Wall Street analysts, as these are mostly driven by subjective factors that are hard to see and measure in real time.
Therefore, the Zacks rating upgrade for Astronics basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.
Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.
For Astronics, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business. And investors' appreciation of this improving business trend should push the stock higher.
Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for AstronicsFor the fiscal year ending December 2026, this company is expected to earn $2.62 per share, which is unchanged compared with the year-ago reported number.
Analysts have been steadily raising their estimates for Astronics. Over the past three months, the Zacks Consensus Estimate for the company has increased 20.2%.
Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of Astronics to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
Space Exploration Technologies Corp. (SPCX), the rocket, satellite communications, and artificial intelligence company known as SpaceX, saw its shares fall shar
SpaceX (SPCX) is experiencing a decline in stock value, even with the announcement of July 23 as the target date for the second attempt at Starship's thirteent
Less than a week after the Space Exploration Technologies Corp. (NASDAQ: SPCX) initial public offering (IPO), Representative William Timmons, a Republican from South Carolina, purchased SpaceX stock.
Timmons invested between $50,001 and $100,000 in SpaceX on June 15 and disclosed the transaction on June 17, according to a Periodic Transaction Report he signed on July 19. As such, Timmons is the fifth member of Congress to buy SpaceX stock, according to an analysis from Nancy Pelosi stock tracker on July 20.
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Notably, Timmons’ SpaceX stock purchase was his first stock disclosure in six years, thus making it his high-conviction trade. Furthermore, he sits on two key committees, including the House Committee on Financial Services, with subcommittees on Digital Assets, Financial Technology and AI, Housing and Insurance, and Financial Institutions.
Timmons is also a member of the House Committee on Oversight and Government Reform, where he chairs the Subcommittee on Military and Foreign Affairs and serves on the Delivering on Government Efficiency (DOGE) Subcommittee.
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Stay up-to-date on the trading activity of US Congress members. The signal triggers based on updates from the House disclosure reports, notifying you of their latest stock transactions.
This committee leadership gives him unique visibility into SpaceX’s expanding role as a critical U.S. military contractor, delivering essential launch services, Starshield satellite capabilities, and resilient communications systems that bolster national defense priorities.
SpaceX stock falls despite Congress supports Despite the notable support for SPCX stock by several members of Congress, the shares recently dropped below the IPO price. At press time, SpaceX shares traded at about $124.56, down approximately 7.7% from its IPO level, with a market capitalization of nearly $1.6 trillion.
SpaceX stock price chart. Source: Finbold
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In the near term, SPCX stock could drop further before following Wall Street analysts’ bullish forecast, as Finbold reported. Furthermore, the conviction from several Congress members, which comes with informed decision-making, could bolster investors’ confidence in SpaceX stock in the long term.
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While the broader space economy experiences unprecedented structural growth and expanding total addressable markets, its largest publicly traded company faces a profound identity crisis following a $1 trillion valuation contraction.
SpaceX NASDAQ: SPCX went public on June 12 at $135 per share. Just over a month later, shares slid below that initial offering price, closing Friday, July 17 at $123.99.
SpaceX (SPCX) Price Chart for Monday, July, 20, 2026
Market participants fundamentally mispriced SpaceX by anchoring institutional valuation models to capital-intensive launch logistics rather than scalable artificial intelligence (AI) cloud infrastructure.
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Now, reported talks over a multi-billion-dollar Pentagon AI infrastructure contract could help determine whether the company can validate its premium valuation multiple or whether the reset continues.
Gravity Takes Hold of Launch LogisticsSpaceX Today
$121.90 -2.09 (-1.69%)
As of 02:55 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$120.10▼
$225.64Price Target$234.78
To understand the scale of the recent sell-off, investors can examine the mathematical friction between SpaceX's core business model and its stock price.
At its post-IPO peak, market capitalization metrics implied a valuation of nearly $2.95 trillion under high-end pricing dynamics. Today, that number sits at $1.62 trillion. Evaporating over $1 trillion in market value in a few short weeks forces a recalibration of how Wall Street models aerospace sector growth.
Much of this contraction stems from a fundamental mismatch in valuation multiples. SpaceX currently trades at a price-to-sales ratio of roughly 83x. A price-to-sales ratio indicates how much the market is willing to pay for every dollar of top-line revenue a business generates. Multiples exceeding 80x are traditionally reserved for high-margin software businesses boasting gross margins of 70% to 80%. SpaceX’s launch business is exceptionally capital-intensive. Building, testing, and launching reusable rockets requires substantial upfront capital expenditures, which naturally compress profit margins.
Recent quarterly financial results highlight this friction. SpaceX reported a negative earnings per share of negative $1.27 against $4.69 billion in revenue. When legacy hardware execution stalls, seen recently with the highly publicized delays surrounding the Starship Flight 13 abort, algorithmic and institutional trading models aggressively de-risk. The sell-off suggests that physical rocket launches alone cannot sustain software-level premium multiples in the current macroeconomic environment.
Finding a Defense Cloud LifelineIf launch operations alone cannot support a $1.62 trillion valuation, SpaceX must make a structural pivot to high-margin revenue streams. Reported talks over a multibillion-dollar cloud-computing agreement with the Department of Defense offer a potential catalyst.
This proposed integration of sovereign AI computing capabilities positions SpaceX as a neocloud infrastructure provider. Sovereign AI refers to a nation producing artificial intelligence using its own localized infrastructure, data, and workforce, ensuring absolute national security. By expanding its existing aerospace, connectivity, and AI platform into defense computing, SpaceX could move further toward the high-margin profile Wall Street demands.
Looking at the broader market demonstrates the institutional appetite for this type of digital infrastructure. Nebius Group NASDAQ: NBIS recently secured a substantial compute deal, pushing its contracted backlog to roughly $50 billion. This demonstrates a highly profitable revenue floor available for functional AI data processing.
A formalized Pentagon contract could bridge the gap between hardware and software by providing the high-margin, recurring revenue stream SpaceX requires to justify the current premium valuation multiple. Without this transition, sustaining a price-to-sales multiple of more than 80x becomes very difficult.
Floating in Space: Short Sellers Face a Binary OrbitThis potential shift to a neocloud model creates an incredibly volatile dynamic for short sellers. Institutional funds have capitalized aggressively on post-IPO hardware execution failures, accumulating an estimated $8.7 billion in unrealized gains by betting heavily against SpaceX. Those short positions currently face severe asymmetric risk due to post-IPO float constraints.
Following the initial public offering, standard 180-day lock-up agreements restrict insiders and early investors from selling their shares until December. This creates a temporary limited-float environment, meaning fewer shares are actively available for open-market trading.
When the supply is restricted, borrowing costs can rise, increasing the expense of maintaining bearish positions. If a formal Department of Defense contract triggers a sudden upside re-rating, short sellers could be forced to buy back shares at a premium to cover their positions, potentially igniting a violent price reversal.
However, institutional skepticism remains entirely justified. Executing a highly complex military AI compute contract requires strong software and infrastructure execution, a competency SpaceX has yet to prove fully. The company recently stumbled with its internal AI initiatives, as its Grok platform failed to capture meaningful market share and ceded ground to legacy tech competitors.
Wall Street is currently weighing the mechanical threat of a catalyst-driven short squeeze against legitimate, fundamental concerns regarding internal software capabilities. Options chain data shows elevated implied volatility skew toward August, indicating market makers could be pricing in extreme directional moves as the market digests this binary execution risk.
Orbital Infrastructure Keeps Gaining AltitudeWhile SpaceX attempts to reconcile its valuation crisis, the broader commercial space sector continues to capture significant institutional liquidity. The space economy macro thesis remains heavily bullish, completely independent of single-stock volatility. International state-backed reusable rocket programs in China and Japan are accelerating, rapidly expanding the total addressable market for orbital infrastructure.
While the recent SpaceX drawdown temporarily rattled smaller peers like AST SpaceMobile NASDAQ: ASTS, dragging its shares down 18% in sympathy, this event could actually point toward a healthy sector decoupling.
Current Price$124.62High Forecast$800.00Average Forecast$234.78Low Forecast$115.00SpaceX Stock Forecast Details
Capital exiting the crowded IPO trade is systematically rotating into secondary satellite architecture and orbital infrastructure equities, establishing more sustainable valuation floors across the broader commercial space economy.
The long-term demand drivers for sovereign space defense and commercial satellite broadband remain intact, providing a fertile environment for businesses with clear paths to profitability.
Investors evaluating the aerospace sector may want to monitor the progress of these Department of Defense negotiations, which could serve as a primary catalyst for SpaceX stock.
Those with a higher risk tolerance might consider SpaceX if management demonstrates a clear path to AI margin improvement, while cautious investors may prefer to wait for official contract filings before taking a position, given the elevated binary risk tied to share supply constraints and AI execution.
Should You Invest $1,000 in SpaceX Right Now?Before you consider SpaceX, you'll want to hear this.
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Pity Elon Musk and Space Exploration Technologies (SPCX 1.70%). They just can't seem to catch a break.
Last week, SpaceX stock tumbled below its IPO price, making the space stock officially a broken IPO, after SpaceX announced that it needed to scrub a planned Starship test flight after multiple engines refused to ignite at launch. SpaceX shares closed the week below $124 a share, and continued to fall on Monday -- down 3% in the morning, and still down about 1% as of 1:10 p.m. ET.
Image source: The Motley Fool.
Go for launch later Not to worry, though. No sooner had SpaceX scrubbed its Thursday launch than Elon Musk promised to try again in a few days after switching out the glitchy engines for new ones.
To be confident of a good flight, 2 Raptors will be removed & replaced. Most probable launch timing is early next week.
-- Elon Musk (@elonmusk) July 17, 2026 This morning, SpaceX confirmed its intent to launch on Thursday, with a 90-minute launch window opening at 6:45 p.m. ET. That didn't prevent investors from taking the one-week delay as an excuse to cash out of SpaceX stock, however, which has ceased to be a momentum stock but isn't yet (anywhere near) a value stock.
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Is SpaceX stock cheap? When will SpaceX become a value stock?
Not anytime soon, I fear. Even trading below $123 today -- $12 below its IPO price -- SpaceX shares cost a staggering 84 times trailing revenue, and infinity times the profits it's not yet earning. Analysts do predict SpaceX will turn profitable next year -- but there's no guarantee they're right.
Investors may have been willing to forgive this lack of a defensible valuation when SpaceX stock was going nowhere but up. Now that gravity has reasserted its hold on SpaceX stock, however, there's really no reason to buy SpaceX until the math adds up.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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The largest initial public offering (IPO) is in the books with Space Exploration Technologies Corp (SPCX 1.70%), also known as SpaceX, officially beginning trading last month. There are, however, a couple of highly anticipated IPOs still expected to come this year, including OpenAI and Anthropic, two big players in artificial intelligence (AI).
Both companies are expected to go public in the near future, and while there's no word on when OpenAI's stock might begin trading, Anthropic's IPO could be coming soon, potentially by October. Could it be a great buying opportunity, and will it do better than SpaceX?
Image source: Getty Images.
Anthropic is meeting with investors, suggesting the company is moving closer to its IPO According to a CNBC report, Anthropic has been scheduling meetings with investors, a sign it is getting closer to its highly anticipated stock offering. However, the IPO may still be a few months away, with Bloomberg projecting it may not be available until October. But a date hasn't been formally announced, nor is the S-1 filing available yet, which details the company's financial results and growth opportunities.
Anthropic is known for its Claude AI models, which are highly popular with coders. It was most recently valued at $965 billion, all but ensuring it'll hit the market at a much lower valuation than SpaceX, which reached a $2 trillion market cap on its first day of trading.
SpaceX has been able to drive a high value despite incurring losses totaling nearly $5 billion last year. The big question mark around Anthropic is whether its losses will be as big or if the company is much closer to profitability. Those details, however, won't be available until the S-1 filing is released, which should be closer to the IPO.
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SpaceX's stock did well on its first day, but it has been falling in recent weeks, under the weight of its massive valuation. Anthropic is likely to be more modestly valued, but its growth prospects will also not be nearly as massive or promising as those of SpaceX, which is pursuing opportunities not only in space but also in AI and the telecom sector. Thus, the AI stock may still look expensive in relation to its overall size.
Anthropic may encounter similar challenges to SpaceX, given that its valuation is likely to be rich out of the gate, which could impact its early returns, and that's why I don't think it'll do a whole lot better than SpaceX, if at all.
BofA Securities analyst Wamsi Mohan reiterated a Buy rating on Apple stock with a price target of $380.
The Analyst TakeawaysApple should report a strong June quarter, Mohan writes in a new investor note.
"Overall builds are likely strong, but we are taking a conservative approach; iPhone launch cadence can change some seasonality, which we are reflecting," Mohan said.
The analyst said investor focus for the quarterly results will be on gross margins, cost inflation and the end of Cook’s run as CEO for Apple.
Mohan sees Services strength offsetting App Store weakness for the quarter.
"We model Services gross margins at 76.5% for the June quarter and then holding steady at 76% for the September and December quarters. Over time, we see the potential for Services gross margins to grow to 80% and overall company gross margins to grow to 50%."
For Apple’s iPhone segment, Mohan is conservative on future quarters and could see revenue growth declining "given the cadence of iPhone launches this year."
"Investor questions focus on sustainability on strong iPhone demand and whether the ‘supercycle’ thesis can really play out."
Mohan says AI features and an aging installed base are expected to drive iPhone demand, but investors worry about whether demand has already peaked.
Apple Stock Price ActionApple stock is down 2.5% to $325.54 on Monday versus a 52-week trading range of $201.50 to $334.98. Shares hit all-time highs last week and are up over 50% in the past 52 weeks.
Photo: Tim Cook, Shutterstock; Apple iPhone 16e, courtesy Apple
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Meta Platforms Inc. (NASDAQ:META) stock rose nearly 1% on Monday as investors continued buying mega-cap technology stocks in a broader risk-on session. The Nasdaq is up almost 1% while the S&P 500 has gained 0.37%.
Attention is also shifting to the company’s July 29 earnings report after Bank of America said healthy advertising demand and expanding AI monetization could support upside.
Bank of America reiterated its Buy rating on Meta and maintained its $835 price forecast. The firm said improving ad demand, disciplined hiring and the potential to generate revenue from AI infrastructure could drive further upside.
Strong Advertising Trends Seen Driving BeatBank of America raised its second-quarter estimates and now expects revenue of $60.6 billion and earnings of $7.50 per share, above Wall Street expectations of $60.2 billion in revenue and $7.18 in earnings per share.
The analysts said advertising demand remained healthy during the quarter despite macroeconomic uncertainty. They also cited favorable foreign exchange trends and lower headcount following Meta’s workforce reductions as additional earnings tailwinds.
For the third quarter, the firm expects Meta to guide for revenue of $60.5 billion to $63.5 billion. It also believes the company could narrow the upper end of its full-year expense outlook because of recent layoffs, although higher memory costs could push full-year capital expenditure guidance to between $135 billion and $150 billion from the current $125 billion to $145 billion range.
AI Monetization Remains The Biggest CatalystBank of America said investor attention during the earnings call will likely center on Meta’s ability to generate returns from its massive AI investments.
The analysts highlighted several potential catalysts, including licensing Meta’s AI models, expanding Business Agent products, subscription offerings and the possibility of leasing excess AI computing capacity to third parties.
Following reports that Meta could lease computing capacity to Anthropic, the firm added $5 billion of estimated AI compute revenue for 2027 and $11 billion for 2028. Those changes increased its 2027 revenue forecast to about $316 billion and raised its 2027 earnings estimate to $35 per share.
Bank of America also expects investors to seek updates on Meta’s custom AI chips, infrastructure efficiency, AI coding tools and the roadmap for advanced large language models, saying greater visibility into AI monetization could support a higher valuation.
Valuation Still Attractive, Says BofAThe brokerage argued Meta continues to trade at an attractive valuation despite its strong performance. It estimates the stock trades at about 19 times expected 2027 GAAP earnings, below its roughly 10-year average multiple of 21 times.
Bank of America said the market still underappreciates the long-term earnings potential from AI-powered advertising improvements, new AI-driven businesses and future cost savings from Meta’s custom silicon strategy.
Earnings And Analyst OutlookMeta is scheduled to report second-quarter results on July 29.
Wall Street expects earnings of $7.18 per share, up from $7.14 a year earlier, on revenue of $60.22 billion, compared with $47.52 billion last year.
The stock carries a consensus Buy rating with an average analyst price forecast of $809.76. Recent analyst actions include:
Wedbush maintained Neutral with a $671 price forecast on July 16. UBS maintained Buy and lowered its price forecast to $766 on July 13. Citizens maintained Market Outperform and lowered its price forecast to $800 on July 10. META Stock Price Activity: Meta Platforms shares were up 0.92% at $651.98 at the time of publication on Monday, according to Benzinga Pro data.
Image via Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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As Tesla (TSLA) prepares to report second-quarter earnings on Wednesday, the backdrop for the EV giant looks increasingly challenging.
Despite a seemingly strong macro footprint, a mix of fundamental headwinds, competitive pressure and lofty valuation expectations suggests that risks are skewed to the downside heading into the release. Tesla recently released second-quarter sales and delivery figures that easily beat consensus expectations. Yet, instead of rallying, the stock retreated.
This price action is a classic tell: market expectations are extremely high, and a beat is now viewed merely as the baseline. If exceeding delivery targets fails to spark a rally, meeting or slightly beating bottom-line earnings will likely be greeted glumly by Wall Street.
The broader enthusiasm for pure-play EVs has cooled significantly over the past two years, but competitive pressure in key segments remains fierce. Rivian's rollout of the R2 targets the core mass-market SUV segment ($45,000–$60,000)—the exact price band where Tesla's Model 3 and Model Y have traditionally buttered their bread (>96% of 2025 sales were those two models) As competitors like Rivian with their newly released R2 hone in on this volume sweet spot with improved economics and fresh design appeal, Tesla faces mounting margin pressure in its core automotive business. Admittedly, Rivian does not have the production capacity to supplant Tesla's most popular models, but strong demand will help it raise the capital and capacity needed to do so.
Unsubstantiated valuations and AI distractionsTesla's elevated valuation relies heavily on non-automotive catalysts like robotics and autonomy. Wall Street continues to price in long-term optionality for humanoid robotics (Optimus) and full self-driving.
However, overall market enthusiasm for the AI narrative has shifted. Investors now favor hardware providers with tangible near-term financial returns over downstream software promises. Another possible area of support is speculation about potential corporate actions or synergies with SpaceX, which continues to circulate.
TSLA year to date
Yet, a merger or restructuring makes little strategic sense for the core operations of either firm. Furthermore, with SpaceX shares trading below their initial public valuation, speculative enthusiasm around cross-entity corporate financial engineering has lost momentum.
Technically, TSLA looks vulnerable. Moving envelope indicators and Bollinger Bands show long positions struggling, while the MACD, RSI, and major long-term moving averages display explicitly bearish momentum profiles.
In recent quarters, Tesla's post-earnings stock moves have been more muted than its multi-year historical average. The options market reflects this compression:
Implied volatility: The at-the-money straddle expiring July 24 (e.g., the $380 straddle) is priced at roughly 7% of the underlying stock price.Historical move: This sits visibly below Tesla's long-term average post-earnings swing of ~9% over comparable two-day periods.The strategy: Short-term bear put spreadWhile options premiums are pricing in a lower move than the historical average, implied volatility is slightly higher than last quarter, and put skew remains elevated. Buying options outright can expose traders to an expensive "volatility crush" immediately after the announcement.
For equity holders seeking downside protection or traders looking for a risk-defined alternative to shorting the stock, a short-term Bear Put Spread offers a reasonable risk/reward.
Specifically:
Buy August 21st (regular expiration) $360 for $15Sell August 21st (regular expiration) for $330 Put $6Max Loss: $900Max Gain $2100Skill Level: Intermediate This trade:
It captures the elevated put skew.It defends against "IV" or "vol crush". The short put reduces net Vega and Theta drag following the earnings announcement.Attractive risk reward: At $9.00 this $30 wide put spread pays more than 2:1 if Tesla falls to $330 by August Expiration. While that's a lot lower than the current stock price, the average move over the month following earnings is just over 15% higher or lower.
Tesla, Inc. is valued as an option on its Optimus humanoid robot project, not as a traditional automaker. Optimus could disrupt global labor economics, offering sub-$2/hour automation and driving large-scale industrial reshoring. A Proof of Concept with third-party deployment is the key catalyst; market focus will shift from current TSLA earnings to robotics TAM.
HomeIndustriesAutomobiles‘What is keeping Tesla back from accomplishing these short-term goals that they’ve set for themselves?’ asks one investorJuly 20, 2026, 1:54 p.m. ET
Tesla’s robotaxi plans have been of major interest to investors, but some are getting fed up with the company’s slower-than-expected rollout.
Retail investors specifically want to know why it’s taking so long for Tesla TSLA to even come close to meeting CEO Elon Musk’s forecasts. The company lets individual investors submit questions and vote on which ones deserve airtime on Tesla’s earnings call, and robotaxi delays are among the top areas of interest.
On CNBC’s Fast Money segment titled “A Big Tech Pullback… And Time to Sell Tesla? 7/17/26,” the panel spent much of the block picking apart why the Elon Musk premium built into Tesla’s (NASDAQ: TSLA | TSLA Price Prediction) stock is thinning out just days before the company reports Q2 results on July 22.
The Panel’s Case: Fundamentals Unclear, Technicals Weakening The host framed the setup by saying “the fundamental marginal catalyst is still very unknown” and that “the technicals are frankly the more interesting way to look at the stock right here.”
One trader argued Tesla had been trading as a cheaper listed proxy for SpaceX, a trade that is now unwinding: “people are thinking maybe I just buy SpaceX… they’re not buying a proxy.” Another panelist added that “the magic of Elon too is starting to dissipate” as robotaxi and humanoid robot milestones keep slipping.
The financials give that view something to lean on.
Tesla’s full-year 2025 net income fell nearly 47% to $3.79 billion, while vehicle deliveries declined 9% year over year. Fourth-quarter deliveries dropped 16% from a year earlier to 418,227 units.
Jim Cramer highlighted the deteriorating earnings trend, noting that Tesla’s EPS peaked at $4.07 in 2022 before declining 23% in 2023, 22% in 2024, and another 31% in 2025. The first quarter of 2026 provided some relief, with revenue rising 15.8% year over year to $22.39 billion and automotive gross margin recovering to 21.1%, helped in part by one-time warranty and tariff benefits disclosed in the company’s 8-K.
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Options Desks Are Bearish CNBC options analyst Mike Khouw estimated that the day’s options activity translated into roughly $550 million of net short delta exposure in Tesla shares. The options market was pricing in an implied move of about 7% in either direction through earnings, with call and put positioning roughly balanced overall—a setup Khouw described as “slightly more bearish than usual.”
One notable trade was the September 400/300 put spread, which traded roughly 6,000 contracts at about $35 per spread. The options chain also reflected a defensive tilt. For the September 18 expiry, put volume totaled 61,128 versus 19,591calls, producing a 3.12 put/call volume ratio.
Enter Rivian’s R2 as a Direct Model Y Rival The panel also flagged a competitive wrinkle Tesla has largely avoided: a credible mass-market EV competitor. Rivian (NASDAQ: RIVN) is beginning external R2 deliveries of a mid-size SUV positioned squarely against the Model 3 and Model Y.
Q1 revenue rose to $1.381 billion, up 11% YoY, with deliveries of 10,365 vehicles, up 20%. Rivian reaffirmed 2026 delivery guidance of 62,000–67,000 vehicles and ended the quarter with $4.83 billion in cash, cash equivalents, and short-term investments. The company also has access to a DOE loan of up to $4.5 billion for its Georgia plant and an Uber partnership that includes up to $1.25 billion of investment through 2031, supporting deployment of up to 50,000 autonomous R2 robotaxis.
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Investors are watching Alphabet (NASDAQ:GOOG | GOOG Price Prediction) ahead of its Q2 2026 results due Wednesday, July 22, after the bell. With shares near $355 and Anthropic’s valuation exploding, this report could scramble how investors read the numbers.
An Anthropic Windfall Waiting to Land Last quarter set a high bar. Alphabet posted an EPS beat of 94.1%, with $5.11 versus $2.63 expected, while revenue climbed 21.79% YoY to $109.9 billion. Google Cloud grew 63% to $20 billion, and backlog nearly doubled to $462 billion.
Since then, the story has taken an even bigger turn. Alphabet holds roughly 14% of Anthropic, a stake worth approximately $135 billion at Anthropic’s latest $965 billion valuation. At the end of Q1, Anthropic was marked at $380 billion. Bank of America estimates the markup will drive roughly $80 billion in unrealized gains this quarter, prompting the firm to forecast EPS of $8.38, well above the Street.
Consensus Estimates Metric Consensus Growth (YoY) Q2 2026 Revenue ~21% Q2 2026 EPS ~32% Q2 2025 Revenue (baseline) $96.43B Q2 2025 EPS (baseline) $2.31 BofA Q2 2026 EPS (Anthropic-boosted) $8.38 Look Past the Anthropic Mark to the Real Business I’ll be reading right past the headline EPS. A markup this large is a one-off accounting event, and investors still need to treat it that way, since it otherwise won’t give a clear picture of how the underlying business is performing. The real signal sits in Google Cloud, where Anthropic is a major TPU customer.
You should watch three things. First, cloud growth. Last quarter’s 63% YoY print came with CFO Anat Ashkenazi admitting “our cloud revenue would have been higher if we were able to meet the demand”. Any acceleration off the $20 billion base tells you TPU capacity is catching up.
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Second, backlog. The $462 billion cloud backlog nearly doubled QoQ, and management expects just over 50% to convert to revenue within 24 months. Another leap would confirm the AI infrastructure thesis.
Third, capex discipline. Alphabet already raised 2026 capex to $180 to $190 billion and flagged 2027 will “significantly increase”. Free cash flow fell 46.63% YoY in Q1. Another downdraft could pressure the stock even with a blowout headline.
Search matters too. AI Overviews drove 19% Search growth last quarter, and any deceleration would revive competitive fears.
A Print That Needs a Translator This quarter will hand Alphabet a spectacular headline number thanks to Anthropic, and a possible October Anthropic IPO could push the valuation higher still. But the market has already seen this movie. Prediction markets assign a 97.4% probability of a beat. What will actually move the stock is whether cloud growth reaccelerates and capex stays productive. That is the report inside the report.
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Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. However, it isn't easy to find a great growth stock.
In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.
However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Alphabet (GOOGL - Free Report) is one such stock that our proprietary system currently recommends. The company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Research shows that stocks carrying the best growth features consistently beat the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.
Here are three of the most important factors that make the stock of this internet search leader a great growth pick right now.
Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Alphabet is 21.5%, investors should actually focus on the projected growth. The company's EPS is expected to grow 32.5% this year, crushing the industry average, which calls for EPS growth of 13.5%.
Cash Flow GrowthWhile cash is the lifeblood of any business, higher-than-average cash flow growth is more important and beneficial for growth-oriented companies than for mature companies. That's because, growth in cash flow enables these companies to expand their businesses without depending on expensive outside funds.
Right now, year-over-year cash flow growth for Alphabet is 32.8%, which is higher than many of its peers. In fact, the rate compares to the industry average of -5.5%.
While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 23.2% over the past 3-5 years versus the industry average of 10.7%.
Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The current-year earnings estimates for Alphabet have been revising upward. The Zacks Consensus Estimate for the current year has surged 0.2% over the past month.
Bottom LineWhile the overall earnings estimate revisions have made Alphabet a Zacks Rank #1 stock, it has earned itself a Growth Score of B based on a number of factors, including the ones discussed above.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination indicates that Alphabet is a potential outperformer and a solid choice for growth investors.
Key Takeaways Alphabet's Q2 growth is expected to be led by Search advertising and Google Cloud momentum.AI Overviews, AI Mode and Gemini are boosting search activity, ad relevance and paid-click growth.Cloud demand, a $460B-plus backlog and roughly 350M paid subscriptions support revenue visibility. Alphabet’s (GOOGL - Free Report) second-quarter 2026 results, scheduled to be released on July 22, are expected to have benefited from solid momentum in Search and Cloud businesses. The momentum in Search is expected to have driven advertising revenues in the to-be-reported quarter. The Cloud business is riding on strong demand for AI infrastructure and an expanding clientele.
The Zacks Consensus Estimate for Google’s advertising revenues is currently pegged at $81.68 billion, suggesting 14.5% growth from the figure reported in the year-ago quarter. The consensus mark for Google Cloud revenues is currently pegged at $22.79 billion, indicating 67.3% growth from the figure reported in the year-ago quarter.
Alphabet has an impressive earnings surprise history. GOOGL’s earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 34.43%.
Click here to know how Alphabet’s overall second-quarter 2026 results are likely to be.
GOOGL’s AI Push Aids Search & Cloud BusinessesGOOGL’s Search business is benefiting from AI infusion. Alphabet is leading the search domain with 91.27% market share, followed by Microsoft’s (MSFT - Free Report) Bing, with 4.68% share, Yahoo!’s 1.28%, Yandex’s 0.79%, DuckDuckGo’s 0.65% and Baidu’s 0.43%, per the latest data from StatCounter.
Alphabet’s Search business is expected to remain the biggest contributor to second-quarter growth. GOOGL highlighted that AI Overviews and AI Mode are increasing user engagement, with users searching more frequently and queries reaching all-time highs. Gemini’s improved understanding of longer and more complex queries is also enabling Google to serve more relevant advertisements, improving advertiser ROI and supporting paid-click growth. The Zacks Consensus Estimate for Search and other revenues is currently pegged at $63.54 billion, suggesting 17.3% growth over the figure reported in the year-ago quarter.
Meanwhile, Google Cloud is expected to have remained a major growth engine in the to-be-reported quarter. Google Cloud has solidified its position as the third-largest provider in the highly competitive cloud infrastructure market against the likes of Microsoft Azure and Amazon’s (AMZN - Free Report) Amazon Web Services. According to Synergy Research Group data, Google Cloud, along with Microsoft, is gaining market share, while Amazon continues to lead with a 28% market share in the first quarter of 2026. Alphabet and Microsoft had 21% and 14% market share, respectively.
Alphabet’s management has noted that enterprise AI solutions have become Cloud's largest growth driver, supported by strong demand for Gemini models, AI infrastructure and security offerings. In the first quarter of 2026, customer acquisition doubled year over year, large enterprise deals accelerated, and the Cloud backlog expanded to more than $460 billion, providing strong revenue visibility into coming quarters.
GOOGL Benefits from Subscription GrowthAlphabet’s subscription business is expected to have contributed meaningfully to the second quarter of 2026. The company reported its strongest-ever quarter for consumer AI plans, driven primarily by Gemini app adoption in the first quarter of 2026. Total paid subscriptions reached roughly 350 million, with Google One and YouTube remaining key contributors, providing a growing stream of recurring revenue.
YouTube is expected to have remained a solid contributor through continued strength in direct-response advertising, Shorts engagement, Connected TV viewing and subscription growth. AI-powered recommendation systems, creator matching and advertising tools are expected to have improved monetization in the to-be-reported quarter.
Google parent Alphabet is set to report earnings after the closing bell on Wednesday, with traders anticipating a sizable move from the tech giant's stock.
At $254.96, Amazon (NASDAQ:AMZN | AMZN Price Prediction) screens as undervalued. The stock has recovered 10.46% year to date while Wall Street debates whether $200 billion in annual capex is genius or lunacy. The fundamentals say genius.
Amazon runs the largest cloud infrastructure business on the planet, the largest online marketplace in the West, a $70 billion advertising engine, and a custom silicon operation that management says would generate a $50 billion run rate if sold standalone. AWS delivered 28% year-over-year growth in Q1 2026, the fastest pace in 15 quarters, on a $150 billion annualized base. The market prices this like a mature retailer, while the underlying business mix is a growth compounder.
Why Amazon Looks Cheap for What It Actually Is Custom silicon arbitrage: Trainium delivers about 30% better price performance than comparable GPUs, Trainium3 is nearly fully subscribed, and Amazon holds over $225 billion in Trainium revenue commitments. Jassy said at scale the program will deliver “tens of billions of dollars of CapEx” in savings each year plus several hundred basis points of margin advantage. Amazon is renting NVIDIA capacity to customers while stacking its own zero-marginal-cost silicon underneath.
Capex land grab: Prediction markets assign a 96.7% probability that 2026 capex clears $190 billion. That spend locks in multi-gigawatt commitments from OpenAI (2 GW of Trainium), Anthropic (up to 5 GW), and Meta. AWS backlog stands at $364 billion, excluding Anthropic’s $100 billion deal.
Bedrock as enterprise nervous system: It serves over 125,000 customers, nearly 80% of the Fortune 100, and processed more tokens in Q1 than all prior years combined. Customer spend grew 170% quarter over quarter.
The Bear Case: Cash Flow Is Cratering Trailing free cash flow collapsed 95% to $1.2 billion. Long-term debt jumped to $119.1 billion from $65.6 billion, and Amazon is tapping the bond market for at least $25 billion more. AWS operating margin compressed to 37.7% from 39.5%. Q1 net income was flattered by $16.8 billion in non-recurring Anthropic gains.
The Hold Case: Wait for the Capex Curve to Bend Amazon’s capex will not peak in 2026. Data-center leases take six to 24 months to monetize, and depreciation is front-loaded against ramping revenue. A patient investor could wait for the free cash flow inflection in 2027. The stock trades at a forward P/E of 29, not screamingly cheap, and one-year performance of 12.64% lags the S&P 500’s 21.32%.
What the Numbers Actually Say Amazon trades at $254.96 against an analyst consensus target of $314.27, implying roughly 23% upside. Coverage is deep with 66 analysts: 15 Strong Buy, 47 Buy, 4 Hold, and zero Sell ratings. Year to date AMZN is up 10.46% against the S&P 500’s 10.69%, matching the index despite the heaviest capex load in the sector.
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The trailing P/E of 29 sits near a decade low. Jefferies named Amazon its top hyperscaler pick with a $320 target.
The Setup: A Rare Configuration at a Reasonable Multiple At $254.96, Amazon looks mispriced relative to its growth profile.
The path to appreciation is mechanical. AWS is compounding 28% on a $150 billion base, Trainium demand is contractually locked through Trainium4 in 2027, and Bedrock is the default AI stack for 80% of the Fortune 100. That combination usually commands a premium multiple. Amazon currently trades at a discount to peers with slower growth profiles.
A P/E of 29 on a business growing operating income 29.6% with a $364 billion visible backlog is asymmetric. Downside is bounded by prediction-market conviction that shares hold the $240 to $245 range with better than 90% probability, while the consensus target implies 23% upside.
What invalidates the thesis: an AWS deceleration below 20%, margin compression through 35%, or evidence that Trainium bookings are slipping. None of that is currently visible.
Amazon is spending like a monopolist because it is building one, and the market is still pricing it like a retailer.
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I keep buying Amazon (NASDAQ:AMZN | AMZN Price Prediction) because the loudest bear case against it, that $200 billion in 2026 capex will torch shareholder returns, was already answered by the company’s own contract book. I have been adding on every wobble because the receipts explain why this spending cycle is closer to a pre-sold order book than a moonshot.
The Backlog Is the Whole Argument AWS has pre-sold much of this capacity before pouring concrete. On the Q1 call, Andy Jassy said the AWS backlog stood at $364 billion, excluding the recently announced $100 billion+ Anthropic deal. Amazon has disclosed $225 billion in revenue commitments for Trainium alone. When I hear “$200 billion of capex,” I read it against a contracted demand pile that dwarfs it. Jassy said it plainly: “We have high confidence this will be monetized well, as we already have customer commitments for a substantial portion of it.”
Revenue Is Already Moving The velocity convinces me this is a near-term story. AWS grew 28% year over year in Q1 2026, its fastest pace in 15 quarters, on a $150 billion annualized run rate. The AI slice inside AWS is already at a $15 billion+ run rate, and Bedrock saw 170% growth in customer spend quarter over quarter. Consolidated operating margin hit 13.1%, the highest ever, and full-year 2025 operating cash flow reached $139.5 billion. That is the cash engine funding the buildout.
The Silicon Moat Nobody Prices In Custom chips crossed a $20 billion annual run rate and grew nearly 40% quarter over quarter. Jassy told analysts Trainium “will save us tens of billions of dollars of CapEx each year and provide several hundred basis points of operating margin advantage” versus buying outside silicon. Trainium2 is largely sold out, Trainium3 is nearly fully subscribed, and Graviton runs inside 98% of the top 1,000 EC2 customers. That is a structural cost advantage over any hyperscaler paying full freight for GPUs.
Why Not Microsoft or Alphabet The obvious alternatives are Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL). I own some of both and still keep adding Amazon. Microsoft’s most recent quarterly revenue grew 18.3% year over year, and Alphabet’s grew 21.8%. Amazon’s AWS is growing faster than both at 28%, yet Amazon trades at a trailing P/E of 30, close to Microsoft at 23 and Alphabet at 26, without a proprietary silicon revenue stream on Trainium’s scale. That valuation setup, paired with the fastest cloud growth of the three, keeps my capital flowing to AMZN first.
The Risk I Own With Open Eyes Free cash flow is the visible bruise. TTM free cash flow fell to $1.2 billion, down 95%, because property and equipment purchases jumped $59.3 billion year over year. Long-term debt climbed to $119.1 billion from $65.6 billion. If AI monetization stalls, the payback window stretches. Jassy addressed this directly: capex funds assets with “many-year useful lives, 30-plus years for data centers, five to six years for chips, servers, and networking gear,” and the free cash flow shows up a couple of years after capacity comes online. I have watched Amazon run this playbook before, and the compounding on the other side is why I stay.
Why the Buy Button Stays Warm Polymarket traders assign a 93.5% probability to Amazon beating its next quarter, and analyst consensus sits at 62 buy ratings and zero sells. My conviction is simpler. A $364 billion backlog, a $20 billion chip business, and an AI run rate already north of $15 billion tell me the capex was pre-sold, and I intend to keep buying the receipts.
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.
Despite producing record cash from its business, the e-commerce and cloud giant has watched its free cash flow evaporate as AI infrastructure spending accelerates.
The contrast highlights an emerging reality of the AI arms race: generating cash is no longer the challenge. Keeping it is.
Big Tech’s Cash Machines Keep Getting BiggerOperating cash flow — the cash generated from day-to-day business operations — has surged across the largest technology companies over the past three years.
Microsoft’s operating cash flow has climbed from $89.03 billion in 2022 to $169.65 billion on a trailing 12-month basis, per Benzinga’s MSFT Report.
Alphabet has nearly doubled its operating cash generation over the same period, rising from $91.50 billion to $174.35 billion, while Meta’s operating cash flow has jumped from $50.47 billion to $124 billion.
Amazon’s growth has been equally impressive. The company has more than tripled its operating cash flow from $46.75 billion in 2022 to $148.53 billion over the trailing 12 months, underscoring the strength of its retail operations and AWS cloud business.
On the surface, Big Tech has never looked healthier.
Amazon’s Free Cash Flow Tells A Different StoryBut one number stands out.
Amazon’s free cash flow has swung from $32.88 billion in 2024 to $7.69 billion in 2025, before turning negative $2.47 billion on a trailing 12-month basis.
By comparison, Microsoft’s trailing free cash flow remains at $72.92 billion, Alphabet’s at $64.43 billion, and Meta’s at $48.25 billion.
The divergence suggests Amazon is reinvesting virtually every additional dollar it generates back into the business, largely to fund the enormous infrastructure buildout required to support artificial intelligence workloads.
Chief Executive Andy Jassy has repeatedly described AI as a once-in-a-generation opportunity, with Amazon pouring tens of billions of dollars into expanding AWS data centers, custom Trainium chips and broader cloud infrastructure.
AI Is Changing The Cash EquationThe numbers illustrate a shift that investors may increasingly need to watch.
For years, Big Tech’s biggest attraction wasn’t just rapid revenue growth—it was the ability to convert that growth into massive amounts of free cash, fueling share buybacks, acquisitions and strategic investments.
Today, AI is changing that equation.
Microsoft, Alphabet and Meta continue to generate enormous free cash flow even as spending rises. Amazon, however, is offering an early glimpse of what happens when AI infrastructure investment begins consuming nearly all of the cash a company generates.
That doesn’t necessarily make Amazon’s strategy a negative one. If today’s investments produce years of AI-driven growth through AWS, they could strengthen the company’s long-term competitive position.
For investors, however, the AI story is evolving. Revenue growth remains important, but the next question may be even more consequential: how much of Big Tech’s record cash generation actually makes it back to shareholders—and how much is being recycled into the AI arms race?
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Microsoft (NASDAQ:MSFT | MSFT Price Prediction) briefly touched the $4 trillion market cap club before losing ground. Shares now trade at $393.82, down 18.21% year to date, even as CEO Satya Nadella told investors “Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.”
Azure still grows 40%. Commercial RPO sits at $627 billion. Can Microsoft reclaim $540 per share, the level that puts it back in the $4 trillion club, by the end of 2027?
What’s Holding Microsoft Back Right Now Shares are off 22.42% over the past year and only up 3.93% in the last month after a 2.26% weekly bounce.
Two headwinds loom. First, a securities class action filed on July 19, 2026 alleges Microsoft made misleading statements about Copilot performance and AI capex between May 1, 2025 and January 28, 2026.
Second, investors are choking on capex intensity. Q3 FY26 capital expenditures ballooned to $30.88 billion, up 84.39% YoY. With a beta of 1.13, MSFT was never going to escape a sector derating unscathed. The multiple is compressed while the market waits for AI monetization to catch up to spending.
Wall Street Sees 42% Upside. Our Model Says 28% Analyst consensus target sits at $558.21, with 13 Strong Buy, 41 Buy, 3 Hold, and zero Sell ratings. That is 95% bullish sentiment. My base case is more measured at $503.03, or 27.73% upside, with a bull case of $600.73 and a bear case of $446.41. Confidence sits at 90%.
Analysts are directionally right but too aggressive on near-term multiple recovery. Earnings growth of 23.4% YoY supports rerating, but not in a straight line while capex peaks.
The Path to $540 Per Share Reaching $540 from today’s price of $393.82 requires a 37.1% gain. That level puts Microsoft’s market cap back above $4 trillion given 7.43 billion shares outstanding. With forward EPS of $18.89, a price of $540 implies a forward P/E of 29x. My base case of $503.03 already implies 24x, meaning the $4T target requires 4.3x additional multiple expansion.
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.
Is that reachable? Yes. Microsoft has beaten EPS estimates in 7 of the last 8 quarters, capped by a 31.63% surprise in Q4 FY25. Commercial RPO nearly doubled year over year. Nadella called this the “agentic computing era”.
If capex peaks in FY27 and AI revenue compounds at triple digits, forward EPS estimates rerate higher and 28x on rising earnings becomes math, not hope. Primary risk: Copilot monetization stalls and Azure growth decelerates before capex normalizes.
The Valuation Case for Microsoft Right Now At $393.82, MSFT trades at roughly 21x forward EPS of $18.89. That is cheap for a business compounding earnings above 20% with 45%+ operating margins. Shares sit 1% below the 52-week high of $551.05 only because the market recently tested the $349.20 low.
Over the last decade, MSFT has returned 739.01%. This is the cheapest Microsoft has looked relative to earnings power in years, right as AI revenue scales fastest.
Is $540 Realistic? Reclaiming $540 and the $4 trillion club requires a 37.1% gain. My verdict: realistic by year end 2027, a stretch by mid 2027.
Three things need to break right. Azure has to stay pinned near 40% growth. Copilot needs a monetization inflection that quiets the lawsuit narrative. Capex intensity has to plateau, letting free cash flow reaccelerate. A cloud growth deceleration below 30% would gut the rerating thesis fast. We’ve outlined the blueprint for how Microsoft could reach $540 in 2027.
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.
by Lisa Stiffler on Jul 20, 2026 at 10:35 amJuly 20, 2026 at 10:41 am
Melanie Nakagawa, Microsoft chief sustainability officer, left, speaking with GeekWire reporter Lisa Stiffler at a fireside chat at Seattle City Hall on July 17. (PNW Climate Week / Fer Sagastume Photo) Microsoft Chief Sustainability Officer Melanie Nakagawa faced a barrage of pointed questions from the audience Friday during a session at the annual Pacific Northwest Climate Week in Seattle.
Protesters challenged Nakagawa through most of the 30-minute session held in a conference room at Seattle’s City Hall, calling out the company’s use of fossil fuel energy sources to power its AI data centers and challenging Microsoft’s commitment to climate goals set years ago.
As a reporter covering sustainability issues for GeekWire, I moderated the session. Many of the issues raised by the crowd were on my list of questions for Nakagawa. The disruptions also included chants from protesters seated among attendees, at times going beyond climate issues to condemn Microsoft’s technology deals with Israel.
Security guards ultimately ushered some protesters out of the space, while others remained. Interruptions from the audience continued for all but the final 10 minutes of the session.
The event capped off Pacific Northwest Climate Week, which included conversations around the city and region about climate change solutions, policies and innovations.
Microsoft has for many years been viewed as an environmental corporate leader, setting an ambitious goal in 2020 to become carbon negative within a decade. It created an internal carbon tax — one of the corporate world’s largest — that charges individual Microsoft divisions for emissions from sources like air travel to fund climate-friendly initiatives. The company is credited with helping create and sustain the carbon dioxide removal sector, among other roles.
But the rapid expansion of AI data centers and their huge energy demands are undercutting Microsoft’s standing. The company recently released its annual sustainability report, disclosing that its carbon footprint grew 25% last year, moving it further from its 2030 target.
Microsoft CSO Melanie Nakagawa, left, and GeekWire reporter Lisa Stiffler before a fireside chat was derailed by protesters. (PNW Climate Week / Fer Sagastume Photo) One protester’s question was about a deal announced earlier this year in which Microsoft is partnering with Chevron to build a 2.7 gigawatt natural gas facility to power a data center campus in Texas. I asked Nakagawa how the company defends the agreement, and she pointed to the 4.7 gigawatts of renewable energy that Microsoft has supported in the state. I followed up by asking about the Redmond, Wash.-based company’s commitment to carbon dioxide removal (CDR) projects given recent reports about a pause on new deals.
Nakagawa was unable to answer before the crowd drowned her out with a call-and-response chant: “Microsoft, you can’t hide. We can see your dirty side.”
Another protester criticized the escalating pursuit of AI. “You’re selling us a product that we don’t even need, and we never should ask for,” he said. “No one wants AI. You’re destroying the climate with AI.”
I brought up legislation proposed earlier this year in Washington to mandate clean energy use and bring transparency to data center impacts in the state. Microsoft opposed and helped defeat the bill, though the company says it wants to work with lawmakers to pass rules next year. I asked what needed to change in the legislation for Microsoft to support it.
Nakagawa didn’t provide specifics, but noted that this year, for the first time, the company shared facility-level information in its annual report on electricity and water use for data centers worldwide.
“People want to know more about the data, and we believe you can have an honest and candid conversation with transparency and access to that information and data,” she said.
Given the obvious public concerns, I asked Nakagawa, “Do you really honestly believe that by 2030, the company can hit that carbon-negative goal?”
Nakagawa pointed to wide-ranging initiatives that are starting to help curb specific emissions, including investments to make Xbox devices lower carbon and financial support for the recent opening of a production plant in Moses Lake, Wash., for sustainable aviation fuel company Twelve.
“There are a couple areas where we’re seeing a lot of promising progress,” she said. “Look, this is going to be a hard target. We’ve not been at all shying away from the fact that this is a difficult goal.”
MSFT stock is moving. See the chart and price action here. Valuation CaseThe valuation argument reflects both durability and margin expansion. Microsoft still trades at a premium, with a forward price-to-earnings ratio of 20.284, according to Benzinga Pro.
Morningstar believes the market underestimates long-term cash flow growth, supported by strong free cash flow, consistent double-digit revenue gains and rising operating leverage. A growing mix of subscription and cloud revenue improves earnings quality and reduces volatility.
Cloud and AI LeadershipCloud and AI remain central to the thesis. Microsoft stands among a small group of hyperscale providers offering broad platform and infrastructure services.
Its investment in OpenAI strengthens its role in enterprise AI adoption. This positioning supports long-term demand across industries adopting automation and data-driven tools.
Azure as the Core EngineAzure drives much of Microsoft’s growth. The platform generates roughly $75 billion in annual revenue and continues expanding at nearly 30%. Its hybrid cloud model allows companies to shift workloads gradually while maintaining existing systems. The flexibility lowers adoption friction and strengthens customer retention over time.
Ecosystem AdvantageMicrosoft’s installed base across Windows, Office and enterprise tools creates a powerful funnel into Azure. Customers can move data and applications seamlessly into the cloud within the same ecosystem. This structure increases switching costs and deepens customer relationships as Azure also serves as a foundation for AI, analytics and Internet of Things workloads.
The company’s transition to cloud-based software is largely complete. Office 365, LinkedIn, Dynamics 365, and the Power Platform now run on subscription models. Office maintains dominance in productivity software, while premium tiers increase revenue per user. Gaming is also shifting toward cloud delivery and recurring revenue streams.
Key RisksThe Bottom LineMorningstar’s thesis depends on sustained execution. Continued leadership in cloud and AI, combined with expanding margins, supports the view that Microsoft trades more like a value opportunity than a fully priced growth stock.
MSFT Stock Price Activity: Microsoft stock was up 2.08% at $402.00 at the time of publication Monday, according to data from Benzinga Pro.
Over the past month, MSFT has gained about 7.0% versus a 0.5% decline in the S&P 500 and is down roughly 17% year-to-date compared to the index’s 8.5% gain.
Photo: Sudarsan Thobias / Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Microsoft Corp (NASDAQ:MSFT) and Advanced Micro Devices Inc (NASDAQ:AMD, XETRA:AMD) have announced an expanded strategic partnership focused on deploying AMD’s next-generation AI infrastructure across Microsoft Azure, including the rollout of AMD’s Helios rack-scale systems to support large-scale AI inference workloads.
Under the agreement, Microsoft will deploy AMD Helios systems on Azure to power frontier model inference for Microsoft’s AI services, customers and Azure AI offerings. AMD said Helios combines its Instinct MI455X GPUs, 6th Gen AMD EPYC “Venice” processors, Pensando networking technology and ROCm software into an integrated platform designed for large-scale AI training and inference.
AMD expects to begin shipping Helios systems to customers, including Microsoft, in the second half of 2026.
The companies are also expanding AMD’s CPU and networking presence on Azure. Microsoft will introduce two new virtual machine series powered by AMD EPYC “Venice” processors, including Azure HDv2 for agentic AI and data pipeline workloads and Azure HXv2 for semiconductor design applications.
In addition, Azure will broaden its deployment of AMD Pensando DPUs within its networking infrastructure and select Azure services. AMD and Microsoft are integrating Azure Boost with AMD technologies to improve cloud networking performance and efficiency across Azure’s infrastructure.
“AMD and Microsoft have spent years building high-performance infrastructure together, and today we're extending that partnership across the full stack of AMD AI solutions on Azure,” AMD Chair and CEO Lisa Su said.
“Microsoft's new AMD deployments mark an important milestone as we deliver leadership compute solutions to Azure customers and scale the next generation of AI infrastructure together.”
Microsoft CEO Satya Nadella said that the collaboration will expand Azure’s infrastructure options for customers building AI applications.
“Customers are looking for AI infrastructure that is optimized for a wide range of workloads, from training and inference to data preparation, search, and reinforcement learning,” Nadella said.
“Through our collaboration with AMD, we are expanding the Azure infrastructure portfolio with AMD Helios to give customers the performance, scale and choice they need to build and run the next generation of AI applications.”
Shares of AMD added almost 3% on the news, while Microsoft shares added 0.6%.
A major new customer for Advanced Micro Devices' latest tech has the chipmaker's stock rising to start what could be a pivotal week for the Nvidia rival.
HomeIndustriesComputers/ElectronicsTech StocksTech StocksChip stocks were broadly recovering Monday, and AMD investors are gearing up for a big product event later in the weekJuly 20, 2026, 1:24 p.m. ET
Advanced Micro Devices is further entrenching itself with Big Tech customers — and investors are cheering even without knowing the financial details of the company’s latest deal extension.
Shares of AMD AMD were up 4% on Monday after the company announced a expanded partnership with Microsoft MSFT, whereby the software giant will deploy AMD’s Helios solutions for inference work involving frontier models, Azure artificial-intelligence services and customer applications.
Summary4D Molecular Therapeutics, Inc. maintains a Buy rating, driven by advancing 4D-150 gene therapy for Wet-AMD and DME into late-stage pivotal trials.FDMT's 4D-150 demonstrated up to 89% reduction in injection burden and maintained visual acuity over two years, with phase 3 topline data expected in 2027.Strong financial position with $458M cash and milestone payments, supporting operations into 2H 2028 and minimizing near-term dilution risk.Upcoming FDMT catalysts include 2-year SPECTRA DME data [2H 2026] and phase 3 4FRONT topline results [1H and 2H 2027], with global regulatory alignment.Looking for a portfolio of ideas like this one? Members of Biotech Analysis Central get exclusive access to our subscriber-only portfolios. Learn More » Thicha Satapitanon/iStock via Getty Images
The last time I spoke about 4D Molecular Therapeutics (FDMT) it was with a Seeking Alpha article entitled "4D Molecular Therapeutics: R100 Vector Pushes Forward To Bring Q4 Of 2024 DME
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Key Takeaways Nokia reports Q2 2026 earnings July 23, with consensus estimates of $5.59B in sales and EPS of 7 cents.Nokia expanded AI initiatives with a networking lab, AI framework and new industry collaborations.NOK benefits from customer wins and patents, but faces competition and uneven telecom spending. Nokia Corporation (NOK - Free Report) is scheduled to report second-quarter 2026 earnings before market open on July 23. The Zacks Consensus Estimate for sales and earnings is pegged at $5.59 billion and 7 cents per share, respectively. Over the past 60 days, estimates for NOK have remained unchanged for 2026, while it has increased 4.17% to 50 cents for 2027.
NOK Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise HistoryThe leading wireless manufacturer delivered a four-quarter earnings surprise of 2.91%, on average.
Image Source: Zacks Investment Research
Earnings WhispersOur proven model does not conclusively predict an earnings beat for Nokia for the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Nokia currently has an ESP of -16.67% and carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping the Quarterly PerformanceDuring the quarter, Nokia introduced an agentic AI framework in its Network Services Platform to enable trust-based AI operations for IP networks, helping service providers improve automation, decision-making, and network efficiency while ensuring secure and reliable network management.
NOK also launched its AI Networking Innovation Lab in Sunnyvale, CA. The facility is designed to accelerate the development, testing and validation of next-generation AI-native data center networking technologies through collaboration with leading AI and cloud ecosystem partners. It has announced a major expansion of advanced semiconductor testing and packaging operations in Pennsylvania, to strengthen U.S. chip capabilities and support rising demand from AI applications and next-generation computing technologies. Such efforts to gain prominence in expanding the AI ecosystem will likely have a positive impact on upcoming results.
In the quarter under review, Virgin Media O2, a leading British telecom company, has opted to leverage Nokia’s AirScale RAN portfolio for 5G Radio Access Network (RAN) deployment and modernization program across the UK. Nokia and Cinia partnered to strengthen Finland’s critical infrastructure with advanced DDoS protection. The collaboration aims to enhance network security, ensure service continuity and safeguard essential digital systems against rising cyber threats across the country. It has also formed a strategic collaboration with Blaize Holdings, Inc. and PT Datacomm to accelerate the deployment of hybrid AI inference infrastructure across Indonesia and the broader Asia-Pacific region. Such growing collaboration with industry leaders and customer wins will likely have a positive impact in upcoming quarters.
The company faces competition in each of its served markets. In the AI data center market, it faces competition from Arista Networks, Inc. (ANET - Free Report) , while Ericsson (ERIC - Free Report) remains a major rival in the legacy telecom space.
Price PerformanceOver the past year, Nokia has surged 113.1% compared with the industry’s growth of 26.4%, outperforming its peers, ANET and ERIC. While Arista has gained 51.1%, Ericsson has soared 31.5% over this period.
Image Source: Zacks Investment Research
Key Valuation MetricFrom a valuation standpoint, Nokia appears to be relatively premium than the industry but above its mean. Going by the price/earnings ratio, the company’s shares currently trade at 22.15 forward sales, higher than 18.91 for the industry and higher than the stock’s mean of 17.81.
Image Source: Zacks Investment Research
Investment ConsiderationNokia is benefiting from growing demand across software, enterprise and cloud-oriented networking markets. The company remains positioned to benefit from passive optical networking deployments and is the only global supplier offering O-RAN with commercial 5G Cloud-RAN networks.
Rapid expansion into the AI infrastructure market is a positive. Its newly launched AI innovation lab is also gaining strong traction. The lab already includes partnerships with major players such as AMD, Lenovo, Viavi, Keysight and Supermicro. Such growing collaboration with industry leaders is expected to drive the adoption of NOK data center switches and increase its overall AI-related revenue opportunity.
Nokia is also embedding AI directly into the operation of broadband networks. The company is introducing AI agents across its Altiplano, Corteca and Broadband Easy platforms, enabling telecom operators to automate network planning, deployment, troubleshooting and customer support. Such initiatives are expected to boost its competitive edge.
Nokia owns approximately 20,000 patents, including around 7,000 patents essential to 5G technologies. Its 5G portfolio continues to gain traction among enterprise customers, supporting recurring opportunities beyond traditional carrier spending cycles. However, Nokia remains exposed to the cyclical nature of telecommunications infrastructure spending. Periods of elevated network investment are frequently followed by slower spending environments, creating variability in revenue growth.
Despite growing AI-related revenues, gaining a leadership position in the AI networking domain remains an uphill task for Nokia due to the presence of strong players such as Arista and HPE. Nokia also generates substantial revenue across international markets and remains exposed to economic slowdowns, political uncertainty, regulatory changes and geopolitical disruptions.
End NoteNokia remains positioned to benefit from increasing demand for next-generation connectivity, given the breadth of its end-to-end portfolio. Growing collaboration with industry leaders and customer wins are positive factors. A comprehensive patent portfolio will likely propel further customer acquisition. However, stiff competition, softness in the mobile infrastructure market and fluctuating spending patterns by telecom players are headwinds. Geopolitical unrest and forex volatility are concerning. Hence, with a Zacks Rank 3 (Hold), Nokia is treading in the middle of the road, and new investors should remain cautious. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alibaba Group Holding (BABA), the Chinese company behind the AliExpress e-commerce marketplace, has been fined â¬550 million ($629 million) by the European Uni
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On the July 16, 2026 episode of Mad Money, a caller identified as D phoned in about his sizable Alibaba (NYSE:BABA | BABA Price Prediction) position and asked Jim Cramer whether patience was still the right call. Cramer’s response was to hold the position and let the investment cycle play out.
Cramer told D, “I think you need to have patience here. I think it’s just down on a dip. It’s really still the best way to play China.“ He then framed his own geopolitical stance, saying, “I am a harder line on the Chinese than most people you see on air. But you know what? I want to try to help people make money, and I think you can make money on Alibaba.“ Cramer also referenced China’s GDP growth figures as “down 20% and 4.4%” during the segment.
Alibaba Is Sacrificing Profits to Build Its AI Future Alibaba, run by CEO Eddie Wu, is in a deliberate reinvestment phase. Fiscal Q4 2026, reported May 13, 2026, showed revenue of $35.28 billion, up 3% YoY, with EPS of $0.09 and an operating loss of $123 million. Adjusted EBITA collapsed 84% to $740 million as the company poured capital into AI infrastructure and quick commerce. Free cash flow ran to negative $2.508 billion on capex of $3.898 billion.
Cloud Revenue Jumps 40% as Alibaba’s AI Bet Takes Off The bright spot was the business’s cloud unit. Cloud Intelligence Group revenue accelerated to 40% growth, with AI-related products at 30% of external cloud revenue, hitting an 11th consecutive quarter of triple-digit AI product growth. CEO Eddie Wu said, “Alibaba’s full-stack AI investments have progressed from incubation to commercialization at scale.”
BABA opened at $114.97 on Monday, July 20, before soaring 5.71% in intraday trading. The stock is down roughly 17.51% year-to-date but up 13.50% over the past month. Wall Street’s consensus target sits at $190.01, with 8 Strong Buy and 30 Buy ratings against just 2 negative calls.
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Cramer Says Balance Alibaba With These 2 Long-Term Winners Cramer paired his Alibaba call with 2 other top long-term ideas: “If you want some long-term winners, look at something like a J&J or Wells Fargo.” Both fit the steady-compounder profile that balances a volatile China ADR.
Johnson & Johnson (NYSE:JNJ) posted Q1 2026 revenue of $24.06B, up 9.9% YoY, and raised FY guidance to $100.3B-$101.3B in revenue with adjusted EPS of $11.45-$11.65. It just delivered its 64th consecutive year of dividend increases. Shares are up 23.63% YTD and carry a beta of 0.235.
Wells Fargo (NYSE:WFC), under CEO Charlie Scharf, reported Q1 2026 revenue of $21.45B and EPS of $1.60, returned $5.4B to shareholders including dividends, and now targets ROTCE of 17-18% after the Fed’s asset cap was removed in 2025. It trades at a forward P/E of just 12.
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Boeing (BA), the U.S. aircraft manufacturer, has secured the first standout order at the Farnborough International Airshow as SMBC Aviation Capital, an aircraft
Boeing (BA), a major U.S. commercial aircraft manufacturer, expects it may need until around the end of the 2030s to bring its next-generation single-aisle jet
Nvidia (NVDA +0.34%) is expanding the AI story beyond hyperscalers. Its newest partnership with Palantir could help government agencies build secure, sovereign AI systems they control, creating a fortress-like growth thesis that may appeal to long-term institutional investors. But, is it enough to spark a new bull run?
Stock prices used were the market prices of July 9, 2026. The video was published on July 18, 2026.
Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) has become the defining name of the AI infrastructure buildout. The question dominating investor inboxes is whether the stock can punch through $300 before year-end. Our answer, based on our proprietary model, is no.
Our 24/7 Wall St. price target for NVIDIA is $258.38, implying 27.4% upside from the current price of $202.81. We rate NVDA a buy with a 90% confidence level.
Metric Value Current Price $202.81 24/7 Wall St. Price Target $258.38 Upside 27.4% Recommendation BUY Confidence Level 90% Why NVDA Cooled Off Into July NVIDIA is up 8.88% year to date and 17.38% over the past year, but shares have slipped 3.86% in the last week and sit 28% below the 52-week high of $236.26.
The pullback follows a blowout Q1 FY27 report: revenue of $81.61 billion beat estimates by 3.16% and grew 85.2% year over year, with Data Center revenue of $75.25 billion up 92%. Management guided Q2 revenue to $91 billion at the midpoint.
Reuters-cited reporting on Google promoting its TPUs and headlines about Japanese firms exploring South Korean NPU alternatives have pressured sentiment, even as Munich Re raised its NVDA position 12.5% and made it their largest holding.
The Case for $268 and Beyond Our bull case lands at $268.52 over the next twelve months, with Wall Street targets clustered around $302.31 and 58 Buy ratings against just 2 Holds and 1 Sell. The Blackwell 300 ramp, the Vera Rubin platform announcement, and multi-generation commitments from Meta, OpenAI (10GW deployment), and CoreWeave (5GW by 2030) frame a Data Center run-rate that could push forward EPS well past $8.26.
Jensen Huang described the AI factory buildout as “the largest infrastructure expansion in human history.” If China DC compute revenue returns and gross margin holds near the 75% guided level, the multiple can expand and $290 becomes reachable.
What Could Go Wrong Our bear case sits at $225.11. Risks include $119 billion in supply commitments, TSMC concentration, export restrictions that keep China DC compute at zero in guidance, and rising custom-silicon threats from Google’s TPUs and hyperscaler in-house chips.
NVDA has beaten earnings five straight quarters yet posted an average day-of reaction of -1.58%, a classic sell-the-news pattern. The recent post-earnings drawdown coincided with broad market weakness, and the $80 billion buyback authorization and dividend hike from $0.01 to $0.25 signal management’s confidence in the through-cycle earnings trajectory.
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How NVIDIA Compares to AMD and Broadcom Advanced Micro Devices (NASDAQ:AMD) is the most direct GPU competitor and just beat with 37.8% YoY revenue growth. AMD trades at a forward P/E of 69 against NVIDIA’s 23, which makes NVDA look cheap on forward earnings despite the mega-cap dampening in our model.
Broadcom (NASDAQ:AVGO) is the closest custom-silicon comp given its hyperscaler ASIC work, and it trades at a forward P/E of 20 with 47.9% quarterly revenue growth.
Company Forward P/E Quarterly Revenue Growth NVIDIA 23 85.2% AMD 69 37.8% Broadcom 20 47.9% NVDA grows fastest, prints the highest margins in the group, and trades at a forward multiple only slightly above Broadcom’s despite roughly double the growth rate.
Buy It Here, Just Not for $300 by December Our 24/7 Wall St. price target of $258.38 with a buy rating and 90% confidence reflects a straightforward view: NVIDIA remains the highest-quality way to own the AI capex cycle, but the math to $300 in six months requires multiple expansion that the market is not underwriting today.
I’d be a buyer here if Q2 FY27 guidance again lands above the $91 billion bar and China DC compute reopens. I’d stay patient if hyperscaler custom-silicon disclosures accelerate this fall.
Looking further ahead, here is where our model projects NVIDIA could trade in the coming years, assuming current growth trajectories and market conditions hold.
Year 24/7 Wall St. Price Target 2026 (year-end) $240 2027 $258 2028 $310 2029 $360 2030 $410 These projections assume NVIDIA continues executing on Blackwell, Vera Rubin, and hyperscaler partnerships. Significant upside or downside could result from a China market reopening, a breakthrough in customer custom silicon, or a broader capex pause across the top five AI buyers.
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Ray Dalio's Bridgewater Associates continues to hold heavy stakes in the mega-cap technology names powering the AI buildout, and three of the most closely watched positions are Amazon, NVIDIA, and Alphabet.
Nvidia NVDA stock traded modestly higher on Monday, but investor attention is increasingly shifting toward the upcoming earnings season, where major technology companies are expected to provide fresh updates on artificial intelligence spending.
Shares of the AI chipmaker rose 0.93% to $204.69 on Monday, although the gain trailed the 1.8% advance in the PHLX Semiconductor Index.
Nvidia has underperformed the broader market, with the S&P 500 posting a 9% year-to-date gain against Nvidia's 8% gain.
The stock had declined 2.2% on Friday and narrowly held onto its position as the world's most valuable publicly traded company after Apple briefly overtook it by market capitalization before Nvidia regained the lead.
With Nvidia scheduled to report earnings later in the season, investors are looking to its largest customers for signals on future AI infrastructure spending.
Alphabet is set to kick off earnings for major technology companies on Wednesday, making its results an early indicator of whether hyperscalers remain committed to investing heavily in AI hardware.
AI spending outlook remains the key catalystWall Street continues to view spending plans from large technology companies as the biggest near-term catalyst for Nvidia shares.
Strong commitments to AI infrastructure could reinforce demand for Nvidia's processors, while any signs of slower capital expenditure may increase investor concerns following the recent pullback in semiconductor stocks.
KeyBanc analyst John Vinh acknowledged Nvidia's leadership position but noted that investors remain cautious about several factors affecting sentiment.
“Street sentiment on the name is mixed, while Nvidia is the clear leader in Gen ai, concerns surround delays in Vera Rubin ramp timing and increasing competitive pressures,” Vinh wrote in a research note on Sunday.
Vinh maintained an Overweight rating on Nvidia stock with a $330 price target.
Competition within the AI hardware market also continues to intensify.
Startup Etched, which develops chips designed for AI inference workloads, is reportedly preparing to quadruple its valuation to approximately $20 billion in a new funding round led by existing investor Jane Street, according to a Wall Street Journal report.
Wall Street remains constructive despite sector volatilityDespite recent volatility across semiconductor stocks, several Wall Street firms continue to express confidence in Nvidia's long-term outlook.
Oppenheimer included Nvidia and Lam Research among the largest companies featured in its latest "best of the best" momentum screen.
The firm's proprietary Momentum Overlay scoring system ranks stocks based on risk-adjusted returns over six-, nine-, and 12-month periods while excluding the most recent month.
According to Oppenheimer, companies included in the screen carry Outperform ratings and Buy trend assessments.
Morgan Stanley also described the recent semiconductor selloff as an attractive buying opportunity.
According to a CNBC report, Morgan Stanley analyst Joseph Moore said the firm's preferred AI investments remain compute-focused companies such as Nvidia and Broadcom.
While maintaining its preference for AI compute leaders, Moore also said memory stocks have become increasingly attractive following the recent correction, describing them as a “compelling entry point.”
The upcoming earnings season is expected to provide investors with greater clarity on enterprise AI demand, capital spending plans, and whether Nvidia's largest customers remain committed to expanding their AI infrastructure investments.
Those updates could play a significant role in determining the next direction for Nvidia shares.
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