Track market-moving stories before they get noisy

The company is letting its Big Tech peers pony up for research and development and then is ready to swoop in to grab the best models when the dust settles.

Meta Platforms (META 3.07%) stock tumbled 5.3% through 11:20 a.m. ET Friday amid a tech sell-off that's dragging down the Nasdaq by about 1.5%. You can probably blame banker BMO for that.

Or at least for the Meta part of the sell-off.

Image source: Getty Images.

BMO is "meh" on Meta BMO analyst Brian Pitz reiterated his market perform (i.e., hold) rating and $720 price target on Meta stock this morning. That doesn't sound like bad news -- Meta stock trades below $630 per share, so a $720 PT suggests the stock could rise 14% over the next 12 months.

And yet, Pitz isn't telling investors to buy Meta stock. Why not?

On the one hand, the analyst likes Meta's efforts to launch a cloud computing business centered on artificial intelligence -- but he does have concerns about the cost. Meta's expected to spend $140 billion on capital investment this year, yet has precious little to show for the investment.

"META has the least visible AI ROI story," warns Pitz, even as governments globally threaten its core business by restricting use of Meta's core social media products in an effort to curb societal ills surrounding children.

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What's next for Meta The regulatory risk seems to me the biggest concern for Meta, as it threatens the company's cash cow -- the source of all the money Meta is currently pouring into AI investment. The good news is that, so long as this cow remains alive and kicking, Meta can afford the investment; free cash flow for the past 12 months was still a healthy $49.4 billion.

The better news is that if Meta ever ratchets back its AI spending, free cash flow could easily double to $100 billion or better. On a $1.7 trillion market cap, that could be enough to make Meta stock a buy.

Rich Smith has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.

Tesla Inc (NASDAQ:TSLA) is heading into its second-quarter earnings report with robotaxis doing most of the talking.

Bank of America reiterated its Buy rating on the stock and $460 price objective, pointing to the service's rapid expansion, a delivery number that blew past Wall Street estimates, and looming production milestones for the company's Optimus humanoid robot.

The bank said investor focus will center on the pace of robotaxi fleet scaling and new market launches. Tesla now operates in five markets following its July 3 launch in Miami, though its San Francisco service still requires a safety driver. Four additional markets are in preparation, compared with the company's original target of nine cities by the first half of 2026.

Tesla's Texas fleet has scaled quickly, adding more than 100 vehicles over the past month to reach 175, the fastest growth among the robotaxi operators Bank of America tracks. Safety data has remained compelling, with 22 incidents recorded through mid-June since the service's inception and no serious injuries or fatalities. A San Francisco pricing study the bank conducted in June found Tesla was 21% cheaper on average than Waymo, Uber and Lyft, though wait times ran three to four times higher, suggesting demand is outpacing supply.

On the core auto business, Tesla reported second-quarter deliveries of approximately 480,000 vehicles, above consensus estimates of about 406,000 and up 25% year-over-year. That compares with S&P forecasts for global battery electric vehicle sales growth of 15% year-over-year, suggesting Tesla gained roughly 95 basis points of BEV market share. U.S. share rose 50 basis points year-over-year to 46.1% in the quarter.

Bank of America also flagged upcoming updates on Optimus. Tesla is targeting initial production at Fremont for late July or August, around the same time as a possible Gen 3 reveal, with Giga Texas production expected around summer 2027. The bank expects a slow ramp but sees long-term opportunity, forecasting global humanoid shipments of 1.2 million units by 2030 and 10 million by 2035.

Beyond Optimus, the bank expects focus on energy storage following Tesla's agreement with NatPower for 25 GWh using its Megapack system. Tesla remains the leading battery energy storage systems company in the U.S., an area now drawing entrants including Ford, General Motors and BorgWarner.

Bank of America said Tesla is in the early stages of monetizing its autonomy capabilities, which it views as the most significant change agent in the shift toward autonomous, electric transportation.

Uber Technologies Inc (NYSE:UBER, XETRA:UT8)'s planned acquisition of Delivery Hero (XETRA:DHER, OTCQX:DLVHF) could strengthen its cross-platform strategy and create additional opportunities to grow customer engagement, according to Jefferies, which highlighted the strategic benefits of the $14.8 billion transaction.

Jefferies wrote that the combination could increase the value of Uber One and expand cross-selling opportunities across additional delivery markets. The analysts noted that the deal is expected to nearly double the number of markets where Uber offers both mobility and delivery services, increasing those markets from 34 to 58.

The acquisition is expected to add more than 35 million Delivery Hero (XETRA:DHER, OTCQX:DLVHF) users and more than 15 million Uber mobility users located in markets where both services are available. Jefferies highlighted that customers using both Uber mobility and delivery products are more valuable to the company, generating three times more bookings and profits than single-product users. The analysts also noted that cross-platform engagement can serve as a more efficient customer acquisition channel, with costs approximately 50% lower.

Jefferies wrote that Uber’s expected $1.2 billion in run-rate synergies by the end of 2027 should enhance the financial contribution of the deal. The analysts noted that savings are expected to come primarily from deploying a common technology platform and reducing localized headcount outside Berlin.

The analysts also highlighted Uber’s expectation that the integration process will be relatively straightforward, as Delivery Hero will use existing Uber Eats technology rather than requiring a costly, multi-year technology overhaul.

Jefferies estimated that the transaction implies a valuation of roughly eight times 2027 enterprise value to EBITDA after including expected synergies, compared with about 11 times for Uber and 18 times for DoorDash.

While some investors have raised concerns that the acquisition could signal a more aggressive M&A strategy from Uber, Jefferies wrote that the company’s decision not to pursue additional large-scale acquisitions in the coming years should help address those concerns. The analysts noted that Uber remains focused on integrating Delivery Hero while maintaining its existing capital allocation priorities, including investment in its core businesses, autonomous vehicle development and share repurchases.

Jefferies added that Uber continues to have flexibility through more than $10 billion in annual free cash flow and selective divestitures of minority equity stakes, while maintaining its goal of returning roughly 50% of rolling 12-month free cash flow through share repurchases.

Shares of Uber traded down about 3% on Friday at $72, down almost 12% so far this year.

Alphabet (GOOG 2.35%) (GOOGL 2.29%) stock slipped 2% through 10:15 a.m. ET Friday after Bloomberg reported, Thursday afternoon, that its Gemini 3.5 Pro flagship AI model is "months behind schedule" and at risk of losing the AI footrace to OpenAI and Anthropic.

Image source: Alphabet.

Google wants to code What's holding up Gemini 3.5 Pro? Alphabet is trying to get the model more competitive with OpenAI and Anthropic in coding software -- and its engineers are frustrated that Gemini 3.5 Pro still lags its rivals in coding ability.

The report also notes that Alphabet is struggling to balance the demands of multiple stakeholders using its models in Google Search, Google Maps, and on YouTube, so that Gemini 3.5 Pro will work well for all of them -- while also being able to code well.

But not too well. Further complicating matters is interference from the U.S. government, which wants to test and approve bleeding-edge AI models before they hit the market to ensure they're safe and won't pose security risks to other companies.

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What it means for Alphabet Why is this concerning for Alphabet? Alphabet is spending a lot of money trying to be competitive in the artificial intelligence space. Analysts forecast its capital investment will approach $187 billion this year, according to S&P Global Market Intelligence, eating up nearly all the $212 billion in cash from operations Alphabet will produce, and leaving the company with only about $25 billion in positive free cash flow.

That's barely one-third of the roughly $73 billion in FCF Alphabet generated last year. If the company doesn't have much to show for it -- if it keeps losing ground to OpenAI and Anthropic despite all the spending, well, investors might not be too happy about that.

And they might continue selling off Alphabet stock.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

© On with Kara Swisher via YouTube

Ahead of Alphabet’s Q2 2026 earnings report, Bank of America has struck a bullish tone, and our proprietary model largely agrees. Alphabet (NASDAQ:GOOG | GOOG Price Prediction) has already returned 102.77% over the past year, and the setup into next week’s report looks unusually clean.

Our 24/7 Wall St. price target for Alphabet is $440.13, implying 19.06% upside from the current $369.68 quote. Our model carries a high-conviction bullish reading.

24/7 Wall St. Price Target Summary Metric Value Current Price $369.68 24/7 Wall St. Price Target $440.13 Upside 19.06% Recommendation BUY Confidence Level 90% The Setup Heading Into Q2 Earnings Alphabet is a coiled spring right now. The stock is 6% below its 52-week high of $404.23, well off the 52-week low of $184.20, and up 18.13% year to date.

Q1 2026 was a blowout: revenue of $109.9 billion (+21.79%), EPS of $5.11 against a $2.6327 consensus, and Google Cloud revenue up 63% to $20.028 billion, with cloud backlog nearly doubling sequentially to $462 billion. Prediction markets currently assign a 96.6% probability that Alphabet beats again on July 22.

Why Bulls See a Breakout Past $450 The bull case rests on cloud, AI monetization, and Waymo optionality. Google Cloud operating margin already expanded from 17.8% to 32.9% year over year, and revenue from products built on GenAI models grew nearly 800%.

Gemini now processes 16 billion tokens per minute, Gemini Enterprise paid monthly active users grew 40% quarter-on-quarter, and Waymo just crossed 500,000 fully autonomous rides per week. If Q2 confirms cloud acceleration and TPU hardware revenue starts flowing in 2027, our bull case scenario points to $458.61.

What Could Go Wrong The bear case centers on capital intensity. CapEx more than doubled to $35.674 billion in Q1, pushing free cash flow down 46.63%, and 2026 CapEx guidance was raised to $180 billion to $190 billion.

A $3.5 billion EC fine and Google Network revenue declining year over year add pressure. Bulls would counter that heavy investment reflects committed enterprise demand, evidenced by backlog nearly doubling sequentially. Our bear scenario lands at $357.83.

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How Alphabet Compares to Microsoft and Meta Microsoft (NASDAQ:MSFT) is the most direct cloud comparable. Microsoft trades at a P/E of roughly 29, with Azure growing 40% and commercial RPO surging to $627 billion. Google Cloud’s 63% growth is faster off a smaller base, and Alphabet’s lower multiple leaves room for our target to look conservative.

Meta Platforms (NASDAQ:META) is the ad-market counterpoint. Meta trades at a P/E of roughly 25, delivered 33.1% Q1 revenue growth, but guided full-year 2026 CapEx to $125 to $145 billion. Alphabet’s forward P/E of roughly 25 sits between the two, which makes our $440.13 target look reasonable.

Company P/E Recent Revenue Growth Alphabet 27 21.8% Microsoft 29 18.3% Meta 25 33.1% Alphabet Price Prediction 2026-2030 The 24/7 Wall St. price target is $440.13, our recommendation is buy, and confidence is 90%. Cloud acceleration paired with a below-peer forward multiple tips the scale.

The bullish thesis strengthens if Q2 confirms sustained cloud growth at recent levels and stable ad monetization. The thesis weakens if CapEx pushes free cash flow into further contraction without commensurate backlog conversion.

The table below shows our 2026 and 2030 targets from the model; intermediate years are not published as separate point estimates.

Year 24/7 Wall St. Price Target 2026 $440 2030 $634 These projections assume Alphabet continues executing on cloud, Gemini, and Waymo. Regulatory rulings or an AI CapEx overbuild could push the trajectory materially lower.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Google didn't make the cut. Grab the names FREE today.

Contact [email protected] for any questions or corrections.

Key Takeaways Alphabet is expected to post Q2 revenues of $101.22B and EPS of $2.86, both up more than 23%.GOOGL's Search, Cloud and YouTube growth is being fueled by Gemini, AI tools and stronger engagement.Alphabet's $180B-$190B capex plan and Wiz dilution could pressure margins and free cash flow. Alphabet (GOOGL - Free Report) is set to report second-quarter 2026 results on July 22.

For second-quarter 2026, the Zacks Consensus Estimate for earnings is pegged at $2.86 per share, unchanged over the past 30 days, and indicating 23.81% year-over-year growth.

The consensus mark for second-quarter revenues is pegged at $101.22 billion, implying growth of 23.86% from the year-ago quarter’s reported figure.

Alphabet has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 34.43%.

Consensus Estimate Trend
Image Source: Zacks Investment Research

Let’s see how things have shaped up for the upcoming announcement:

Growing AI Usage in Search & Cloud to Aid GOOGL’s Q2 ResultsAlphabet’s second-quarter results are expected to have benefited from sustained momentum in Google Search. AI Overviews and AI Mode have been increasing user engagement and pushing search queries to record levels, while Gemini is improving Google’s understanding of longer and more complex queries. This should have supported paid-click growth, ad relevance and advertiser returns. The continued adoption of AI Max and Performance Max could also have lifted advertising demand as businesses use generative AI for targeting, creative development and bidding. Search revenues increased 19% in the first quarter of 2026, supported by retail and financial-services advertisers. The trend is expected to have continued in the second quarter of 2026.

Google Cloud is likely to have remained the fastest-growing part of Alphabet’s business. First-quarter Cloud revenues surged 63% year over year to $20 billion as enterprise AI solutions became the segment’s largest growth contributor. Demand remains strong for Gemini models, AI infrastructure, cybersecurity, data analytics and Workspace. Cloud’s backlog reached roughly $462 billion, with slightly more than half expected to convert into revenues over the next 24 months. A fuller quarterly revenue contribution from Wiz after the acquisition closed in March is expected to have benefited top-line growth.

YouTube should have provided another growth catalyst, supported by direct-response advertising, connected-TV viewing, Shorts monetization and improving brand demand. U.S. users are watching more than 200 million hours of YouTube content on television screens each day, while Gemini-powered recommendations and creator-advertiser matching should have improved engagement and advertising effectiveness. Subscription revenues are expected to have benefited from YouTube Music, Premium and Premium Lite, which were scheduled to enter more than a dozen additional countries during the second quarter. Google One’s AI plans and the Gemini app should further strengthen subscriptions, platforms and devices revenues after Alphabet reached 350 million paid subscriptions in the first quarter of 2026.

However, Alphabet’s aggressive AI infrastructure expansion could weigh on second-quarter profitability and free cash flow. The company raised its 2026 capital-expenditure outlook to $180-$190 billion, with most spending aimed at servers, data centers and networking infrastructure. These investments are expected to have increased depreciation, energy, equipment and data-center operating costs. GOOGL’s plan to continue hiring in AI and Cloud and spending on marketing for Gemini and Search is expected to have raised operating expenses in the to-be-reported quarter.

The dilutive effect of the Wiz acquisition, as well as weakness in Google Network advertising, has been a headwind. Network revenues declined 4% year over year in the first quarter, reflecting lower AdSense revenues and a 9% decline in impressions. The trend is expected to have continued in the second quarter of 2026.

GOOGL Shares Lag Sector, Trade at a PremiumAlphabet’s shares have climbed 13.3% year to date (YTD), underperforming the broader Zacks Computer & Technology sector’s return of 16.6%. Alphabet shares have underperformed Apple (AAPL - Free Report) but outperformed Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) over the same timeframe. While Apple and Amazon shares have jumped 22.6% and 8.3% YTD, respectively, Microsoft has dropped 17%.

GOOGL Stock’s Price Performance
Image Source: Zacks Investment Research

GOOGL shares are overvalued, as suggested by Value Score D.

Currently, GOOGL is trading at a premium, with a forward 12-month price/sales of 9.04X compared with the broader sector’s 6.88X, Apple’s 9.6X, Microsoft’s 7.75X and Amazon’s 3.04X.

GOOGL Shares Trade at a Premium
Image Source: Zacks Investment Research

GOOGL Benefits From AI Push & CloudAlphabet’s most significant long-term opportunity is the integration of Gemini across its global product portfolio. Gemini already powers products serving billions of users, including Search, YouTube, Maps, Chrome and Workspace. AI Mode, personalized search, agentic features and the Gemini app can increase engagement while creating new advertising, subscription and transaction opportunities. Alphabet has also reduced the cost of core AI responses by more than 30%, suggesting that improving model and infrastructure efficiency could support profitable AI monetization over time.

Google Cloud has substantial long-term growth visibility. Approximately 75% of Cloud customers are using Alphabet’s AI products, while new customer acquisition and the number of deals worth between $100 million and $1 billion doubled year over year in the first quarter of 2026. The accelerating Cloud backlog ($462 billion at the end of Q1), growing Gemini Enterprise adoption and demand for Vertex AI, BigQuery, Workspace and Wiz provide a multiyear revenue pipeline. Direct sales of TPUs for customer-owned data centers also expand Alphabet beyond hosted cloud services into a new infrastructure market.

GOOGL’s vertically integrated AI stack is a structural advantage. The company controls models, software, data-center infrastructure and custom processors such as TPUs and Axion CPUs while also offering NVIDIA GPUs. This breadth allows Alphabet to optimize performance and costs across Search, Cloud and consumer applications.

Buy GOOGL Ahead of Q2While elevated AI infrastructure investments and higher operating expenses may weigh on near-term margins, robust AI adoption across Search, Cloud and YouTube are strengthening GOOGL’s competitive position in fast-growing AI and cloud markets. With Gemini driving engagement across its ecosystem, a rapidly expanding Cloud business and a differentiated full-stack AI strategy, Alphabet remains well positioned to capitalize on the long-term AI opportunity. Investors should continue to benefit from the company's strong innovation pipeline and diversified growth.

Alphabet currently sports a Zacks Rank #1 (Strong Buy), suggesting that it may be wise to buy the stock ahead of second-quarter earnings. You can see the complete list of today’s Zacks #1 Rank stocks here.

© Dimitrios Kambouris / Getty Images Entertainment via Getty Images

As it turned out, it was Warren Buffett who was to thank for Berkshire Hathaway‘s (NYSE:BRK.B | BRK.B Price Prediction) big bet in Alphabet (NASDAQ:GOOG). And while the great Oracle of Omaha may have wished he’d gotten the legendary conglomerate into the AI blue-chip far sooner in the game, I think it’s far better late than never, especially when it comes to a company that’s already shown it knows how to generate serious alpha over the long haul.

Indeed, if you’re surprised that Warren Buffett himself would choose Alphabet, you’re definitely not alone, given the man’s long-time hesitance when it comes to stocks within the technology sector.

The next great Warren Buffett bet after Apple? Now that we’ve got more clarity that Buffett himself made the move, as he admitted in a sitdown with CNBC’s Becky Quick, the big question is whether Alphabet is about to take the throne away from Apple (NASDAQ:AAPL) as the largest holding within the Berkshire Hathaway public portfolio.

As it turned out, trimming Apple shares over the years wasn’t the optimal call, especially with the iPhone maker blasting off to new all-time highs while much of the Magnificent Seven are still some percentage off their highs. And while Buffett still had high praise for the Cupertino-based giant, which is poised to deliver Siri AI in a matter of weeks, the valuation is a giant question mark right now. After soaring 35% in six months, Apple now trades for more than 40.0 times trailing price-to-earnings (P/E).

That’s the most expensive that Apple has been in a very long time, and prospective new buyers are right to question the higher price of admission, even given the catalysts on the horizon and the big CEO change that’s also just weeks away.

Indeed, Alphabet’s Google is to thank for helping Apple get up to full speed in the AI race with its latest Apple Foundation Models. And while Apple has seemingly found a smart shortcut to close the gap in the AI race, I do think that investing in the firm behind the profound AI lab also makes a lot of sense, especially since frontier enterprise-grade AI and consumer AI are completely different ballgames.

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Alphabet certainly seems mispriced as investors ponder its position in the AI race While Berkshire started buying quite a while ago, I still view Alphabet stock as far easier to justify at 26.9 times trailing P/E, especially after the latest 5% intraday decline surrounding delays for Gemini 3.5 Pro, which should have been launched last month.

On the surface, the delay feels like Google is losing its luster in this AI race when, in reality, the company is probably just taking its time to ensure sufficient polish on an advanced AI model that could change the game. Delays are never fun, but if Google has taught us anything in this multi-year AI race, it’s that it’s a wonderful company that’s worth the wait.

In any case, I think covering both bases in AI (consumer with Apple, frontier with Google) makes the most sense. It doesn’t have to cost a fortune to get these sought-after seats to the AI revolution.

No IPO-chasing needed.

At the end of the day, Google is an AI powerhouse that could surprise with its coming release, even if it’s dubbed as losing some spots in the AI leaderboard until it can finally release Gemini 3.5 Pro. In my view, a month or so of delay is nothing in the grander scheme of things. Personally, I think delays are good news, given that Google knows the risks of pushing something out the door that isn’t up to standards.

The bottom line While time will tell how Alphabet shares fare for Berkshire in the AI age, I do think it could be one of Warren Buffett’s last brilliant, needle-moving stock picks, one that I believe has a chance to match the big move in Apple over the past decade.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Apple didn't make the cut. Grab the names FREE today.

Contact [email protected] for any questions or corrections.

Amazon-owned Zoox recalled software in 105 of its robotaxis over concerns its vehicles failed to detect heavy smoke and drove into it.

Zoox notified the National Highway Traffic Safety Administration of the recall on July 8 and said it became aware of the smoke detection issue following an incident last month.

On June 20, an unoccupied Zoox robotaxi encountered heavy smoke that obscured an active emergency fire scene that was not cordoned off with cones, the company wrote in its report. The vehicle entered the scene, then braked hard while attempting to steer away before coming to a stop, Zoox said.

The company said the incident took place in Las Vegas.

A Zoox teleguidance employee instructed the vehicle to reverse, then first responders placed traffic cones to block off the scene, according to the report.

Zoox said it investigated the incident and determined it's "the only event of this kind" that has occurred. No injuries were identified.

Read more CNBC tech newsElon Musk's Memphis AI empire is the epicenter of the data center backlashChinese startup Moonshot AI unveils Kimi model it says rivals OpenAI, AnthropicSpaceX stock falls after Starship test flight abortedMicrosoft's Nadella criticizes Anthropic's Fable for being 'editorially controlled'Amazon acquired Zoox for $1.3 billion in 2020. The company operates driverless buggies that have no steering wheel or pedals, and feature four carriage-style seats that face inward, giving them a shuttle-like atmosphere.

Zoox currently offers free rides in parts of Las Vegas and San Francisco, and it's allowing select users to hail its robotaxis in small zones in Miami and Austin, Texas. Testing is also underway in six other U.S. cities.

The voluntary recall comes after NHTSA Administrator Jonathan Morrison last week issued a directive to autonomous vehicle developers to ensure their vehicles get out of the way of first responders.

Morrison said in the letter that the agency has "identified a clear pattern of driverless AVs interfering with law enforcement and other first responders," citing incidents where AVs drove into active emergency scenes, blocked the paths of ambulances or firefighters, or failed to recognize or respond to flashing lights, flares, smoke, fire and traffic cones.

He called on AV developers and operators "to immediately focus their resources on fixing this issue" and present their solutions to the agency by the end of the month. The letter doesn't name specific AV companies.

Zoox issued several software recalls last year to address issues over lane crossings, as well as its ability to predict the movement of other vehicles and pedestrians.

The company is racing to catch up to Alphabet's Waymo, which is the dominant robotaxi service in the U.S., with a fleet of about 4,000 automated vehicles in the country.

Last month, Waymo recalled about 3,900 robotaxis after some of its vehicles drove into closed construction zones on freeways, increasing "the risk of a crash."

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In Brief

Posted:

8:29 AM PDT · July 17, 2026

Image Credits:TechCrunch Some Amazon cloud customers woke up on Friday to a surprise bill estimate that said they owed billions of dollars for cloud services they had never used.

Amazon confirmed on Friday that it’s trying to resolve a bug in its Amazon Web Services (AWS) billing portal that showed some customers “owed” millions or billions in cloud computing costs. 

In an update on its status page, Amazon said it began seeing inaccurate billing data as of late Thursday. But by Friday morning, the company conceded that the “rollback of a recent change did not resolve the issue.” Amazon said the change relates to its billing computation subsystem.

The good news for the customers who were told they “owe” millions or billions to Amazon is they are likely off the hook. The billing estimates “do not reflect actual usage and charges,” Amazon said.

According to several screenshots posted by Amazon customers on Reddit, one customer was quoted a billing estimate of close to $2.5 billion for this month’s AWS usage, while others had similar alerts, ranging from a few million dollars to hundreds of millions of dollars.

A spokesperson for Amazon did not immediately return a request for comment. The issue is expected to last several more hours, per Amazon’s status page.

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STAMFORD, Conn.--(BUSINESS WIRE)---- $III #Azure--Firms in the U.S. are integrating Microsoft AI and cloud capabilities into AI-native operating models that improve enterprise performance, ISG says.

Microsoft Corp (NASDAQ:MSFT) CEO Satya Nadella criticized Anthropic's Fable 5 model in an internal meeting with Copilot engineers, saying the AI's refusal of certain requests feels "editorially controlled" and "doesn't make sense," CNBC reported.

"If you use Fable, when it refuses for any random thing, it just is like, when was the last time you had a creation tool that was so editorially controlled?" Nadella told the engineers. "It doesn't make sense."

Nadella also weighed in on the broader question of AI concentration, arguing against a market dominated by a small number of players. "It can't be that there are only two companies in the world with token capital, and everybody else is renting it," he said.

Anthropic restored access to Fable on July 1 after suspending the model to comply with a U.S. government export control directive. The company said at the time that the updated safeguards would flag a somewhat higher share of harmless requests than the previous version had. A support page indicates that queries touching on certain elements of large-scale model development, among other subjects, may be handled by an earlier version of Fable rather than the current one.

Microsoft has committed $5 billion to Anthropic, while Anthropic has pledged to direct $30 billion toward Microsoft's Azure cloud platform. Microsoft also launched Copilot Cowork this year, a workplace productivity offering built around Anthropic's technology.

Microsoft shares were down 2% in early Friday trading.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Microsoft (NASDAQ:MSFT | MSFT Price Prediction) has become one of the most closely watched stocks in the S&P 500 as it grinds sideways through a rough first half of 2026. With 54 analysts rating shares Buy or Strong Buy and only three at Hold, sell-side conviction is nearly unanimous. Our proprietary model agrees, but with a more conservative destination than Wall Street’s consensus.

Our 24/7 Wall St. price target for Microsoft is $503.02 over the next 12 months, implying 26.12% upside from the current price of $398.84. We rate MSFT a buy with high confidence at 90%.

24/7 Wall St. Price Target Summary Metric Value Current Price $398.84 24/7 Wall St. Price Target $503.02 Upside 26.12% Recommendation BUY Confidence Level 90% A Painful Year Meets a Fortress Business Microsoft has lagged in 2026. The stock is down 17.83% year to date and 21.16% over the past year, trading 2% below its 52-week high of $551.05 only because it recently bounced 3.21% in the past week off its $349.20 low.

Recent bearish coverage includes securities class action filings alleging misleading statements about Azure growth and Copilot functionality, which have weighed on sentiment ahead of the July 29, 2026 earnings report.

Fundamentals tell a different story. In Q3 FY2026, Microsoft delivered EPS of $4.27 against a $4.07 estimate on revenue of $82.89 billion, up 18.3% year over year.

Azure grew 40%, the AI business hit a $37 billion annualized run rate, up 123%, and commercial remaining performance obligations swelled to $627 billion. This is Microsoft’s fourth consecutive EPS beat.

Why Bulls See a Breakout Ahead The bull case rests on three pillars: contracted backlog, the restructured OpenAI partnership, and Azure’s competitive position. Commercial RPO of $627 billion nearly doubled year over year gives Microsoft the deepest forward revenue visibility in software.

Microsoft’s IP rights extend through 2032. Azure surpassed Citi Q2 2026 CIO survey identified Microsoft as the top vendor enterprises plan to increase AI spending with, Amazon and Google.

If Azure sustains 40% growth and margins normalize as capex intensity peaks, the bull scenario points to $600.73 within 12 months, a 50.62% total return, aligning with the high end of Street targets.

What Could Go Wrong Capex is the elephant. Q3 FY2026 capital expenditures reached $30.88 billion, up 84.4%, and full-year FY2025 free cash flow contracted. Bulls counter that this spending backs the $627 billion RPO and a Morgan Stanley projection of nearly 4x hyperscaler compute capacity by 2028.

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Two active securities class actions cite these concerns, and analyst target trims have been noted. The bear case lands at $446.40, an 11.92% return, if Azure decelerates and AI monetization slips.

How Microsoft Compares to Alphabet and Amazon Alphabet (NASDAQ:GOOGL) offers a sharper cloud comparison. Google Cloud has been growing faster than Azure’s 40%, and Alphabet trades at a similar forward multiple, making Microsoft’s premium narrower than it looks.

Amazon (NASDAQ:AMZN) provides counterpoint. AWS continues to trail Azure’s 40% growth but on a larger base. Amazon trades at a richer trailing P/E than Microsoft’s 23. On a growth-adjusted basis, MSFT looks reasonably priced.

Company Trailing P/E Cloud Growth (Latest Q) Microsoft 23 40% Alphabet ~28 63% Amazon 35 28% The peer group makes our $503 target look conservative. MSFT is the cheapest hyperscaler on trailing earnings while running the second-fastest cloud growth rate.

Our Take on Microsoft Here The 24/7 Wall St. price target of $503.02 and buy rating reflect our view that the current selloff has overshot fundamentals.

The setup strengthens if Q4 FY2026 earnings on July 29 confirm Azure guidance in the high 30s and show capex intensity beginning to plateau. The thesis weakens if securities litigation gains traction or Azure guides below 35%.

Microsoft Price Projection 2026-2030 Our model projects Microsoft could compound from here at a rate consistent with our five-year base case annualized return of 14.55%.

Year 24/7 Wall St. Price Target 2026 $503 2027 $576 2028 $660 2029 $756 2030 $866 These projections assume Microsoft continues executing on Azure and AI monetization. Significant upside could come from faster AI diffusion; downside would follow prolonged capex overhang or material AWS or Google Cloud share gain.

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The meteoric rise of Advanced Micro Devices (NASDAQ:AMD | AMD Price Prediction) has been a thing of beauty, even after the latest surge in turbulence, thanks in part to the fading of numerous names across the semiconductor industry. Even with the latest slide, shares of Lisa Su’s AI chip titan are up close to 125% year to date or about 480% since March 2025. Indeed, the vertical spike might scream unsustainable bubble to some.

And the higher price of admission (shares going for 165.8 times trailing price-to-earnings (P/E)) is doing the name no favors, especially as investors look for candidates to take profits off of as the technicals start looking nasty, while investors brace for more AI IPOs to land. Most notably, Anthropic, the AI lab behind Claude with Dario Amodei running the show, is a frontrunner, and it could move markets in a bigger way than Space Exploration Technologies (NASDAQ:SPCX).

Nvidia looks like a hands-down winner over AMD, or is it? When stacked side-by-side with Jensen Huang’s Nvidia (NASDAQ:NVDA), it seems just a bit illogical to see shares of Advanced Micro Devices post another stunning year while Nvidia shareholders patiently wait for that massive bid higher.

With Dr. Michael Burry saying things like this is “the beginning of the end” for the AI trade, it certainly feels like that big breakout for Nvidia stock isn’t coming, after all.

Burry, who views semis as a cyclical commodity, rather than subscribing to that “things are different this time” narrative that points to structural drivers behind semis, is short in all the right areas, and while he’s already made some wonderful, profitable trades in these earlier innings, it certainly seems like the man, who’s also short Nvidia, is getting the popcorn out as volatility intensifies for the summer.

Why Advanced Micro Devices might be the winner in a tougher climate for semis as well With the Magnificent Seven stocks rising without the semis leading the way, it certainly feels like a crash in semis doesn’t have to drag everything lower. In a prior piece, I noted that the Mag Seven actually stood to benefit as semis faded, as hopes for lower CapEx spend (less money for GPUs) meant more money in the pockets of the firms holding all the cards with the actual power to monetize the technology while forming wide economic moats in the process.

Of course, it’s too soon to say it’s “game over” for the semis, but, in my view, Advanced Micro Devices might be better positioned to outperform as the tides go out. Indeed, Nvidia is the king and Advanced Micro Devices is a runner-up — a distant runner-up.

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As the firm captures a greater slice of the market while doubling down on inference and higher-value chips (less cost per token) in a climate that’s rotating from “tokenmaxxing” to something more cost-conscious, it just feels like Advanced Micro Devices is poised to keep marching higher. And once Fed chairman Kevin Warsh raises the bar on interest rates?

I think the value-consciousness within the enterprise could get a big shot in the arm. Whether we reach a point where firms “trade down” to cheaper GPUs, though, remains the big question. Nvidia’s CUDA moat could make its ecosystem too sticky to leave, but who knows? Any way you look at it, the case for the cheaper alternative, I think, hasn’t been this loud throughout the entire AI boom.

How could Advanced Micro Devices keep winning and outpacing the best when it’s still in that distant second spot? The higher growth ceiling, combined with increased price sensitivity and being on the right side of a rotation, I think, makes Advanced Micro Devices a more compelling buy despite the far heftier price tag on the shares.

Despite recent volatility, analysts aren’t afraid to hike their targets, with KeyBanc recently raising the price target by close to $200 to $725 per share in the past week. That’s some serious conviction.

At the end of the day, AMD chips aren’t going to close the gap with Nvidia anytime soon, but the key thing here is that it was never expected to. As the firm does its best to pass its own bar, my guess is that shares can keep beating those of Nvidia.

Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.

Contact [email protected] for any questions or corrections.

The stock market’s AI trade is entering a new phase. For much of the past two years, investors rewarded companies building the infrastructure behind artificial intelligence — chips, data centers, and networking equipment. That made Nvidia (NASDAQ:NVDA | NVDA Price Prediction) the undisputed market leader as demand for its processors exploded. But markets rarely move in straight lines. 

As AI spending has expanded, investors have started looking beyond the companies writing the biggest checks and toward businesses with durable earnings, strong cash generation, and less dependence on massive capital investments. 

That shift has helped Apple (NASDAQ:AAPL) once again become the world’s most valuable publicly traded company, with a market capitalization of roughly $4.9 trillion, edging past Nvidia at approximately $4.8 trillion.

The changing of the guard says less about Apple suddenly becoming an AI winner and more about investors reassessing what they want from AI exposure.

Nvidia’s AI Crown Is Slipping Nvidia’s rise was one of the defining market stories of the decade. In June 2024, the company became the world’s most valuable stock as demand for its high-end GPUs used to train and run AI models overwhelmed supply.

The company’s dominance was reflected in its financial results, and investors rewarded that growth so that Nvidia’s shares eventually surpassed a $5 trillion valuation. Momentum, though, has since faded. Its stock effectively stalled in August 2025 after its historic run, and while several rallies pushed shares higher, none held. Nvidia now trades about 15% below its all-time high.

The concern is not that AI demand disappeared. It is that expectations became almost impossible to exceed. Nvidia remains the essential supplier of AI computing power, but investors have started asking a different question: How much more upside is left after such a massive run?

The AI trade is shifting from infrastructure to earnings. Apple’s massive cash flow and device ecosystem just pushed it past Nvidia in the race for market supremacy. © 24/7 Wall St. Apple Took The “Lazy” AI Approach — And Investors Like It Conversely, Apple has benefited from doing something unusual in the current AI race: moving slower.

While Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) have committed hundreds of billions of dollars toward AI infrastructure, Apple avoided matching that spending spree. According to company filings, Apple’s capital expenditures totaled $12.7 billion in fiscal 2025 — a fraction of the investment levels from major AI infrastructure players.

That restraint has preserved Apple’s financial flexibility. The company generated $98.8 billion in free cash flow that year, allowing it to continue buybacks, maintain its ecosystem, and invest selectively rather than chase every AI trend. Apple was able to avoid the AI infrastructure spending trap and has positioned itself for a major iPhone upgrade cycle.

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Surprisingly, Apple’s so-called “lazy” AI strategy has become a competitive advantage. Instead of selling AI infrastructure, Apple can focus on putting AI features directly into products used by more than 2 billion active devices.

The market has responded. Apple shares have gained nearly 59% over the past year, driven by expectations that AI-powered iPhone upgrades could unlock a new replacement cycle.

Why Apple May Keep The Lead Apple briefly surpassed Nvidia in April 2025, but this latest victory could prove more durable. This current lead reflects a broader rotation toward companies with predictable earnings and lower capital intensity. Granted, Nvidia remains a critical player in the AI revolution, as its GPUs power the world’s largest AI systems and demand remains strong.

Yet, markets reward future expectations. Investors are increasingly valuing companies that can benefit from AI without spending like AI infrastructure builders.

Key Takeaway In short, Nvidia created the AI boom, but Apple may be better positioned for the next stage of the cycle.

The market is shifting from rewarding companies that spend the most on AI toward companies that can turn AI into profits. Apple’s conservative approach has kept its balance sheet strong while leaving room for a potential iPhone-driven upgrade cycle.

Smart investors should not dismiss Nvidia’s long-term opportunity, but Apple’s combination of cash flow, ecosystem strength, and lower capital requirements gives it a compelling advantage.

The AI race is not only about who builds the biggest machines. Increasingly, it is about who makes the most money from them. Apple appears ready to prove that the winner does not always need the biggest shovel — sometimes it just needs the best business model.

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Apple (AAPL) briefly surpassed Nvidia (NVDA) in market cap as the biggest company on Wall Street after HSBC upgraded the stock to buy from hold. Jenny Horne talks about the “operational turning point” the firm sees in the company, offering insight into the upgrade and price target hike.

I keep hitting the buy button on NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) because every time Main Street panics about Trainium, TPUs, or Meta’s Iris chip stealing Jensen Huang’s lunch, the receipts land and the panic looks smaller. Reddit sentiment on NVDA dropped to a bearish score of 32 on July 9 on the back of the DeepSeek and Meta $145B chip budget posts. I read those threads. Then I read the earnings report. Then I bought more.

What Actually Keeps Me Buying The custom silicon story sounds terrifying until you look at what hyperscalers are actually doing with their money. Amazon’s own $200 billion 2026 capex plan explicitly funds one million+ NVIDIA GPUs to be deployed starting in 2026 alongside Trainium. ASICs are narrow. NVIDIA sells the general-purpose fabric that every model, every framework, and every cloud already runs on. That is the flexibility bottleneck ASICs cannot break, the CUDA software fort I refuse to bet against, and the system-level engineering (NVLink, InfiniBand, Dynamo, Blackwell, Vera Rubin) that turns racks into what Jensen calls AI factories.

The numbers back the story. Q1 FY2027 revenue landed at $81.615 billion, up 85.23% year over year, with Data Center at $75.246 billion (+92%) and networking up 199%. Non-GAAP gross margin sat at 75.0%. Free cash flow hit $48.554 billion in a single quarter. That is a fourth consecutive EPS beat, at $1.87 versus $1.7738 consensus.

Then there is the demand signal. $119.0 billion in total supply-related commitments represents booked capacity. Management is confident enough to raise the dividend from $0.01 to $0.25 per share and add an $80 billion buyback authorization, with roughly $20 billion returned in Q1 alone.

Why Not Just Buy Amazon Instead Amazon (NASDAQ:AMZN) is the obvious counter. I own some. I am not adding here. Amazon’s P/FCF sits at 349.33 against NVIDIA’s 51.96, ROE is 22.3% versus 101.5%, and gross margin is 50.3% versus 71.1%. The kicker: Amazon’s TTM free cash flow declined 95% to $1.2 billion as capex ripped higher, while long-term debt jumped to $119.1 billion from $65.6 billion. NVIDIA collects the checks Amazon is writing.

The Risk I Will Not Wave Away China is real. Zero H20 shipments in Q1 versus $4.6 billion the prior year, and Q2 guidance assumes no China Data Center compute revenue. The $119 billion in supply commitments also creates real downside if AI capex cools. The company delivered 85% revenue growth with China at zero. The moat held while the largest customer market was subtracted.

Why I Keep Adding Analyst consensus target is $301.62 against a current price of $207.40, with 58 Buy ratings. FY2026 free cash flow of $96.58 billion funds the compounding I care about. Every hyperscaler that builds its own chip still buys more NVIDIA. That is the trade I keep making, and I am not done making it.

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Netflix, Inc.'s decelerating growth profile, the missed M&A with WBD, and the increased streaming competition have pressured its share performance. This is, albeit, with the market leader still reporting robust engagement trends, growing revenues/margins, lower net debts, and higher ad monetization. The meltdown has triggered NFLX's cheap EV/EBITDA of 18.42x and 3Y PEG ratio of 0.94x, with an upward re-rating supporting a bull-case LTPT of $119.40.

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Nasdaq Struggles As Memory Names Plunge Further; Netflix Sells Off Late On Soft Outlook

Nasdaq Breaks Support As Chip Sell-Off Deepens; Knight-Swift, Canadian Pacific, AbbVie In Focus Internet television network Netflix (NFLX) disappointed investors with mixed second-quarter results, soft Q3 guidance and news that it will reduce how often it reports subscriber engagement numbers. Netflix stock tumbled on Friday. "A light Q3 guide plus another disclosure pullback is a tough combination for a stock trying to find a bottom," Jeremy Mullin, stock strategist at Zacks Investment Research,…

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On the surface, Netflix's (NFLX 7.33%) second-quarter earnings report wasn't terrible. Revenue came in slightly below expectations, but grew 13% year-over-year, and earnings per share grew by 11% and came in ahead of what analysts had been looking for. Membership growth, pricing increases, and ad revenue growth all contributed to the double-digit growth.

Even when it comes to forward guidance, there's not much to complain about. It gave a full-year outlook in line with its previous forecast and narrowed (but did not lower) its 2026 revenue guidance.

However, there was one item that investors seemed to have fixated on-Netflix's user engagement. And the stock fell by about 10% shortly after the earnings release.

Image source: Getty Images.

A reporting shift is bothering investors The company's conference call featured several analyst questions about user engagement, a key focus for investors. And to put it mildly, it seems like the market didn't love the answers. For starters, Netflix called its user engagement "healthy" and said that there wasn't any significant change in viewership for the second season of some of its series versus the first.

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On the other hand, management said it would reduce the frequency of its engagement reports, changing the cadence of its "What We Watched" reports from semiannual to annual starting in 2027. So, investors will still see engagement figures, only less frequently.

Now, Netflix claims the shift is to keep the focus on metrics such as revenue and profit. But the reality is that Netflix has been under scrutiny in recent years over whether or not engagement is declining. Reducing how often investors get fresh engagement data at a time when many are questioning it isn't exactly a good look.

Is this a smart move by Netflix? There's a case to be made that this is a smart move. It isn't exactly unprecedented either. The company stopped reporting subscriber counts in 2025 to focus on revenue and profit, and there's a legitimate point that looking at engagement hours alone can be misleading -- for example, Netflix reported that live programming makes up 1% of viewing hours but pulls in the most advertising dollars.

Of course, this only works if the company can deliver on revenue growth, advertising growth, profit margins, and other metrics management wants investors to focus on. But with revenue guidance for the third quarter falling a bit short of expectations, there are some big questions surrounding whether that will be the case.

Netflix NFLX shares tumbled on Friday after the streaming giant delivered mixed second-quarter results and announced plans to provide less frequent disclosure of viewer engagement data.

This has increased concerns among investors who were already worried about slowing growth and rising competition.

The stock fell 8% on Friday, extending its decline for 2026.

Shares had already dropped 25% for the year as Wall Street grappled with questions about viewer engagement trends, competition from short-form video platforms, and the sustainability of Netflix’s growth trajectory.

The latest selloff came after Netflix reported revenue of $12.56 billion for the second quarter, narrowly missing analysts’ expectations of $12.58 billion.

The company also issued third-quarter revenue guidance of $12.86 billion, below Wall Street forecasts of $12.99 billion.

Investor concerns were amplified by Netflix’s decision to further reduce the amount of operating data it shares with the market.

After discontinuing subscriber disclosures last year, the company announced that beginning in 2027 it will publish its "What We Watched" engagement report annually instead of twice a year.

Netflix said the move was intended to "keep the focus on our primary financial metrics - revenue and operating profit."

The decision comes at a time when engagement metrics have become increasingly important to investors seeking evidence that Netflix can maintain growth amid intensifying competition.

The company reported that viewing hours increased 2% year over year during the first half of 2026.

However, concerns remain over its share of the broader streaming market.

According to Nielson's data, Netflix's share of US streaming has declined to 17% from 21% in the 2 year period till March 2026.

Morningstar analyst Matthew Dolgin said the reduction in engagement reporting could reinforce investor fears.

"The prevailing narrative is that Netflix’s business is deteriorating. Management’s decision to pull back on its engagement report should only encourage this thinking. We believe this is the biggest reason for the high-single-digit stock decline after hours."

MoffettNathanson analyst Robert Fishman also highlighted concerns about the relationship between engagement and financial performance.

There’s a "negative narrative that if viewing hours are set to decline, then revenue and profits must quickly follow," Fishman said.

Competition and engagement trends remain under scrutinyNetflix continues to face growing competition from platforms such as TikTok, YouTube and Instagram, which have gained traction through short-form video content and mobile-first experiences.

Investors have increasingly focused on whether declining engagement could eventually weigh on revenue growth and profitability.

Executives sought to reassure investors during the earnings call, pointing to ongoing membership growth, positive responses to recent price increases, and strong performance from several series and films.

The company also emphasized its global growth opportunity, noting that it remains present in less than 45% of addressable households worldwide.

Co-Chief Executive Officer Greg Peters pushed back against the assumption that viewing hours directly determine financial performance.

"There is not a linear relationship between viewers and revenue and profit, because all hours are not created equal," he said.

Peters noted that live programming can generate advertising revenue and drive subscriber growth despite accounting for a relatively small share of viewing hours.

Despite investor concerns, Netflix highlighted several areas that could support future growth.

The company said advertising revenue is expected to roughly double this year to approximately $3 billion. It is also exploring new initiatives including live entertainment, games, podcasts and shorter-form video content.

Morningstar maintained its $80 fair value estimate on Netflix and argued that the market reaction may have been excessive.

"The stock is reasonably valued for the cash generation and growth it has. It is now trading below 20 times expected 2026 earnings, and we expect profits to continue growing at a faster pace than revenue each year."

Bank of America has announced senior appointments to drive AI ​adoption and implementation across its global markets ‌group, according to an internal memo seen by Reuters on Friday.

A Walmart logo appears in this illustration taken August 18, 2025. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab

CompaniesJuly 17 (Reuters) - Kieran Shanahan, chief operating officer of Walmart's (WMT.O), opens new tab U.S. operations, is leaving the retailer and will ​be replaced by the company's international division ‌COO, Kyle Kinnard, an internal memo showed on Friday, amid a major management rejig under CEO John Furner.

Here ​are some details:

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Kinnard has been with Walmart ​for more than 25 years handling multiple senior ⁠roles, including executive vice president of health & ​wellness for Walmart U.S., the company said in the ​memo seen by Reuters.

The change follows Tom Ward, COO of warehouse chain Sam's Club, and Cedric Clark, U.S. store ​operations chief, leaving the company in May, and David Guggina ​and Chris Nicholas being named CEOs of Walmart's domestic and ‌international ⁠operations, respectively.

Walmart also said on Friday it promoted another executive, Juan Galarraga, to oversee the international businesses in Latin America.

Under Furner, Walmart has been ​pushing a technology-focused ​strategy aimed ⁠at expanding Walmart's marketplace and delivery businesses and attracting higher-income shoppers. It ​had also eliminated 1,000 roles in May.

The retailer ​in ⁠May had reiterated its conservative annual sales and profit targets amid softer consumer spending, and said earlier ⁠this month ​that it would cut prices on ​many summer barbecue favorites, including meat, chips, and soda.

Reporting by ​Neil J Kanatt in Bengaluru; Editing by Maju Samuel

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