Track market-moving stories before they get noisy

CoreWeave (CRWV 4.58%) stock suffered a double-digit pullback in this week's shortened trading, which saw the market closed on Friday in advance of the July 4 holiday. The company's share price fell 13.2% across the stretch.

While the S&P 500 gained 1.8% and the Nasdaq Composite climbed 2.1% this week, many artificial intelligence (AI) hardware stocks got hit with pullbacks. In addition to a general rotation trend out of AI hardware, CoreWeave stock saw valuation pullbacks in conjunction with news that Meta Platforms is entering the AI processing services market.

Image source: Getty Images.

CoreWeave stock sinks as Meta gears up for AI processing business Meta Platforms is getting ready to offer AI processing to third-party customers, effectively moving into direct competition with CoreWeave. In addition to CoreWeave facing a new competitive threat from a major tech giant, the move also caused concerns about the pricing outlook across the broader AI hardware tech stack.

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Meta's AI processing push has AI valuation implications Meta has been spending massively to build out AI infrastructure resources to compete with other leading technology players, including Microsoft, Amazon, and Alphabet. While the broader AI arms race between these companies is likely to continue, Meta's push to start offering AI processing as a service could be an indication that the company believes that expanding compute capacity for its own internal needs is starting to become less of a priority.

If that's the case, it could have big implications for CoreWeave's business. While demand for AI processing continues to look strong, the company has taken on huge debt in order to facilitate its AI infrastructure buildout. If demand growth for AI processing hardware starts to soften, it's possible that CoreWeave could see significant pricing-power contraction -- and that development could prove damaging to the bullish valuation case in conjunction with the company's heavy debt load.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

No stock has generated more buzz in recent weeks than Space Exploration Technologies (SPCX +2.69%), more commonly known as SpaceX. That's understandable, considering the space technology and artificial intelligence (AI) innovator conducted the largest initial public offering (IPO) in history.

But buzz doesn't always translate to great returns (as many who bought SpaceX shares after its post-IPO surge are finding out). While SpaceX gets the headlines, some smart investors are loading up on another stock instead -- Vertex Pharmaceuticals (VRTX +6.13%).

Image source: Getty Images.

Greater market dominance than SpaceX One key reason investors have been attracted to SpaceX is its commanding position in the satellite internet services and rocket launch markets. However, Vertex arguably has greater market dominance in its core arena than SpaceX.

Only five therapies have been approved for addressing the underlying genetic cause of cystic fibrosis (CF), a rare genetic disease that affects an estimated 105,000 people worldwide. Vertex markets all of them, giving the drugmaker a virtual monopoly in the CF indication.

SpaceX will soon have a formidable competitor to its lucrative Starlink business from Amazon (AMZN +0.55%) Leo. Meanwhile, Vertex has little to worry about from challengers at this point. The most advanced experimental therapies that even have a shot at challenging Vertex's blockbuster CF franchise are only in Phase 2 clinical testing. No patent cliff is in sight that would open the door to serious generic threats, either. Vertex's key U.S. and European patents for its most powerful CF drug, Alyftrek, don't expire until 2039.

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CF isn't Vertex's only area of focus. The company has two other products gaining market momentum -- CRISPR gene-editing therapy Casgevy and non-opioid pain medication Journavx. These two therapies together generated roughly 25% of Vertex's product revenue growth in its latest quarter.

Importantly, Vertex's market dominance is much more profitable than SpaceX's. The big biotech company posted adjusted earnings of $4.7 billion last year, compared with SpaceX's net loss of $4.9 billion.

Transformative launches potentially on the way SpaceX completed 167 launches last year with its Falcon 9 rockets and Starship reusable spacecraft. However, Vertex has some potential launches of a different sort on the way that could be transformative.

The U.S. Food and Drug Administration (FDA) is scheduled to make an approval decision for povetacicept in the treatment of immunoglobulin A nephropathy (IgAN) by Nov. 30, 2026. IgAN affects around three times more patients in the U.S. and Europe alone than CF does worldwide. Vertex is also evaluating povetacicept in Phase 2 studies targeting primary membranous nephropathy and generalized myasthenia gravis, which together affect around three times as many patients in the U.S. and Europe as CF does worldwide.

Patient dosing in a late-stage study evaluating zimislecel in treating severe Type 1 Diabetes has resumed after a temporary delay while Vertex performed a manufacturing analysis. It seems likely that the company will file for global regulatory approvals of the therapy next year, assuming the Phase 3 results are positive.

Two other launches could be around the corner as well. Vertex expects to complete patient enrollment in two Phase 3 studies of suzetrigine (Journavx) in diabetic peripheral neuropathy (DPN) by the end of this year. Eventual approval in treating DPN would open up an additional patient population of around 2.5 million for Journavx.

And that's not all. Vertex's pipeline features another late-stage candidate, inaxaplin, which targets APOL1-mediated kidney disease (AMKD). This disease affects around 250,000 people, and there aren't any approved treatments for it.

Risks vs. rewards Every investment comes with potential risks and rewards. Vertex's approved products and promising pipeline offer clear rewards over the next few years. However, the company faces several risks, notably the possibility of regulatory setbacks and clinical failures.

But many investors could reasonably conclude that Vertex's overall risk-reward proposition is more appealing than SpaceX's. That's especially true given each stock's valuation. SpaceX's shares trade at a whopping 56.7 times projected 2026 sales. Vertex's forward price-to-sales multiple is around 10x.

Investing in SpaceX is tantamount to placing a bet on a future that hasn't arrived yet, with that future already baked into the space stock's valuation. Buying Vertex Pharmaceuticals, on the other hand, is more like betting on a future supported by prior clinical results that inspire confidence, with a share price that reflects some uncertainty. The latter seems like the smarter wager.

SoFi Technologies' (SOFI 1.08%) operations were launched more than a decade ago. Back then, the company's sole activity was providing alumni-funded loans to recent grads.

Fast-forward to today, and SoFi has become a full-fledged digital financial services entity. Growth has been exceptional, as the business expanded its product and service offering. This helped to rapidly bring on new members.

In 2022, SoFi obtained a national bank charter that reshaped the company. Here's how this move could pay off for long-term investors.

Image source: Getty Images.

Taking deposits provides an advantage Before SoFi got a bank charter, its operations were funded by a mix of securitized debt, warehouse facilities, and convertible notes. These sources of capital had obviously helped the business reach that point.

The issue, though, is that this kind of funding can be expensive. And it's dependent on robust capital market conditions. This sets the bar higher. When originating loans, SoFi must aim to achieve a better return than what it pays on its funding capital to generate net interest income. This put it at a huge disadvantage relative to banking peers.

The company announced in January 2022 that it had received approval from the Office of the Comptroller of the Currency and the Federal Reserve to acquire Golden Pacific Bancorp, a community bank that was based in Sacramento, California. This deal, giving SoFi a national bank charter, was then closed in February of that year.

Since that seminal moment, SoFi has been completely transformed. It immediately started offering checking and savings accounts to customers. As of March 31, 2022, the business had $1.2 billion in total deposits. Exactly four years later, that figure had ballooned to $40.2 billion.

Of SoFi's $42.9 billion in total liabilities, 94% are represented by these deposits (up from 17% four years before). This supported SoFi's Q1 2026 net interest margin of 5.94%. Net interest income also jumped 781% from $252 million in 2021 to over $2.2 billion in 2025.

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Deposits are considered extremely sticky, as they establish a bank's direct relationship with where customers park their money. SoFi's savings account pays a standard annual percentage yield of 3.1%, well above the national average, which also attracts capital.

The fact that SoFi's deposit base is expanding so quickly is a sign of heightened demand from individuals for a tech-enabled platform with a superior user experience. This bodes well for the company's long-term success. Management expects adjusted earnings per share to increase at a compound annual rate of 40% (at the midpoint) over the next three years.

Without a national bank charter that drastically lowered its funding costs and opened up the capital floodgates, these profit gains would not be possible. An expanding earnings stream is just what this fintech stock's investors want to see.

The market is soaring, but MercadoLibre (MELI +1.27%) is down 30% over the past year. Investors have soured on the Latin American financial technology and e-commerce player because of its aggressive investments, which are eroding profit margins.

It has been left for dead, with shares up only 10% over the last five years, while the broad market S&P 500 index is up close to 100% over the same timeframe. However, it's at this moment that MercadoLibre looks like a fantastic investment for anyone with a time horizon longer than next quarter. Here's why you should consider buying even more of MercadoLibre as the stock inches lower.

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Playing the long game MercadoLibre operates in two sectors with some strong overlap: financial technology and e-commerce. In e-commerce, it is building an "everything store" similar to Amazon in Latin American countries, investing in fast delivery, a wide selection, and a bundled subscription offering.

Its current crop of investments in free delivery for close to all orders in Brazil has temporarily reduced profit margins. At the same time, it has accelerated revenue growth in the country. In Q1 2026, total commerce revenue grew 47% year over year last quarter in constant currency, on top of 57% growth in the same quarter a year ago.

More buyers, more shopping volume, and more revenue are being spent on MercadoLibre's e-commerce marketplace. This will mean a short-term hit to margins, but it should also lead to a long-term competitive advantage for the business. The same can be said for its MercadoPago consumer finance segment. MercadoPago is accelerating its acquisition of credit card customers to deepen its relationship as a banking application and drive more spending on the MercadoLibre online marketplace.

When a credit card customer is acquired, it requires the bank -- in this case, MercadoLibre -- to allocate loan losses over the life of the customer relationship, which means an upfront hit to margins if many customers are acquired. With all these new credit card customers, MercadoLibre's fintech revenue grew 54% year over year last quarter.

Overall, MercadoLibre's revenue is growing 46% year over year in constant currency, making it one of the fastest-growing large-cap technology players today. However, investors are still not happy because of the short-term hit this accelerated growth has had on profit margins.

Image source: Getty Images.

Why MercadoLibre's stock is cheap today Last quarter, MercadoLibre's overall operating margin fell to 6.9%, and it may fall further in the quarters ahead due to the upfront investments discussed above. This has investors very nervous, but it should not be misconstrued as MercadoLibre losing its lead in e-commerce and consumer finance in Latin America.

Long-term, MercadoLibre should be able to regain or surpass its previous high profit margin of 16%, if not exceed it, due to increased scale, higher-margin fintech revenue, and faster-growing advertising revenue (which is growing faster than the overall business). Combined with a business with a long history of growing revenue at a fast, double-digit rate, it is plausible that the company's revenue of $31.8 billion could climb to $100 billion over the next five years or so. A 15% profit margin would equate to $15 billion in earnings for MercadoLibre five years from now.

Today, MercadoLibre's stock trades at a market cap of $88 billion. Assuming the stock trades at 20x earnings five years from now -- which is a reasonable level for a fast-growing stock, if not a discount -- then MercadoLibre will have a market cap of $300 billion within five years. Buying at today's market cap would deliver north of 20% annualized returns before dividends or buybacks, likely beating the market. This makes MercadoLibre an easy stock to buy on the dip right now.

Rivian (RIVN +8.44%) just gave investors an impressive update. On Thursday, the electric vehicle maker said it delivered 12,194 vehicles in the second quarter, comfortably above its own outlook of 9,000 to 11,000, and raised its full-year delivery target to 65,000 to 70,000 vehicles, up from 62,000 to 67,000.

The stock jumped more than 8% on the news. And the timing sharpened the contrast: Tesla fell about 7.5% the same day following its own delivery report.

Rivian shares have now climbed about 60% from their 52-week low, though they still sit slightly below where they started the year. So, has the underdog finally earned a spot in more portfolios, or is the market right to stay skeptical?

Image source: The Motley Fool.

What the raise actually says The second quarter update begins to answer a question that has hung over Rivian all year: Can the company build and sell its new, lower-priced R2 alongside everything else it makes? Or will it cannibalize the company's sales of other vehicles and ultimately hurt its business?

The R2 matters more than any other vehicle Rivian has made. The company's R1 trucks and SUVs are premium-priced machines with a naturally limited audience. The R2 is Rivian's bid for volume, and a raised outlook one quarter into its ramp suggests the early demand is there.

But it looks like the vehicle will be additive to its business. Rivian delivered 10,365 vehicles in the first quarter and 12,194 in the second, for 22,559 in total. This means that reaching even the low end of the new full-year range requires about 42,000 deliveries in the second half -- nearly double the first-half pace. This spike in second-half deliveries would be Rivian's steepest ramp in history, executed in the same six months the company is scaling an entirely new model.

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The economics still have to catch up Whether the stock works from here likely depends less on delivery counts than on what each delivery earns. And that picture is still mixed.

In the first quarter, Rivian's revenue rose 11% year over year to $1.38 billion, and the company generated $119 million in gross profit, a 9% gross margin. But the composition tells a more complete story. The software and services segment produced $181 million in gross profit, while the automotive segment ran a $62 million gross loss, hurt primarily by a $100 million year-over-year decline in sales of automotive regulatory credits and lower production volumes. In short, the vehicles themselves still lose money, and software and services keep the overall margin positive.

Meanwhile, total company losses remain large.

Rivian's first-quarter operating loss widened to $881 million from $655 million a year earlier, on lower gross profit and higher operating expenses as the company builds toward the R2 era.

None of this is disqualifying for a company at Rivian's stage. Scale is precisely what the R2 is supposed to deliver, and higher volumes could spread fixed costs across far more vehicles.

The bull case is that the second-half ramp pushes automotive gross profit toward positive territory and shifts the conversation from survival to growth. It's unclear, of course, if the company can pull this off.

But the capital runway for the ramp has notably improved recently. In its first-quarter update, Rivian said it raised the initial production capacity planned for its Georgia plant by 50%, to 300,000 vehicles annually, backed by an up to $4.5 billion Department of Energy loan. And a completed testing milestone in March unlocked a $1 billion investment from Volkswagen Group. A steep ramp is much less dangerous with that kind of backing.

The stock's recent run-up, however, has created a new problem. The stock now commands a market capitalization of about $25 billion -- and that's for a company that still loses money on every vehicle it sells.

So, is Rivian finally a buy? The delivery update was arguably the most encouraging news the company has produced in years, and it meaningfully lowers the risk that R2 won't be materially additive to its overall business. But I'd want to see one specific thing before buying: automotive gross profit improving as R2 volumes build. The second-quarter report, due July 30, is the first checkpoint. Until then, Rivian stays on my watch list as a far stronger operation than it was three months ago, but still a show-me stock at this price.

Xbox at a gamescom briefing in 2014. Microsoft is pressing its games division to turn a profit. (Microsoft Photo) In 2007, Microsoft’s Xbox 360 consoles started dying — overheating until three lights on the front blinked red, a defect gamers came to call the “red ring of death.” Microsoft’s response was to extend the warranty on every machine and take a charge of more than $1 billion to fix the problem, making it one of the costliest product failures in the company’s history.

Microsoft could afford it financially, but the bigger factor was strategy. Xbox was a bet on the living room, and for a company minting money on Windows and Office at the time, losing a billion or so was a justifiable cost of staying in the game.

Nearly two decades later, that patience has run out.

“Going forward, this cannot continue,” the new Xbox CEO Asha Sharma wrote in a memo to employees last month, offering a blunt assessment of a business that has spent more than $20 billion over five years, only to see its core revenue fall by nearly half a billion dollars, running at a thin 3% profit margin, by Microsoft’s own internal measures.

Asha Sharma took over as CEO of Microsoft’s Xbox business in February. In a memo to employees last month, she wrote that the division’s heavy spending and shrinking revenue “cannot continue.” (Microsoft File Photo) With thousands of layoffs expected to be announced across Microsoft as soon as next week, the Xbox division is likely to be among the hardest hit.

The cuts reach across the company — including sales and consulting — part of a restructuring that has become routine around the close of Microsoft’s fiscal year. But for Xbox, they’re an early step in a broader effort to reset the business, rein in costs, and position the division for healthier profits.

Microsoft CEO Satya Nadella has been blunt about it: the company has spent years subsidizing Xbox rather than profiting from it, and that era is over. The videos and livestreams of people playing Xbox games that fill YouTube generate more money than Microsoft makes from the games themselves, he noted in an appearance on the Hard Fork podcast.

“No one can accuse Microsoft of not having invested for the last 25 years,” Nadella said. “And now we have to turn this into a sustainable business.”

Long-term strategic bet Turning it around means breaking a pattern that runs through Xbox’s entire history.

Xbox launched in 2001 and lost money for most of its first decade. Microsoft absorbed the losses and stayed in — going up against Sony’s PlayStation and Nintendo — because it saw a strategic prize in owning a piece of the living room, and later of mobile. Online gaming also gave the company early experience running services at scale, which fed its cloud ambitions.

Over time, the goal shifted from selling hardware to selling subscriptions.

Xbox Live, launched in 2002, turned online play into recurring revenue. Game Pass, which arrived in 2017, let players pay a monthly fee — the top tier is about $23 — for a library of games, including Microsoft’s own new releases the day they come out. The idea was to get people paying for Xbox everywhere: consoles, PCs, phones and the cloud.

And when growth stalled, Microsoft doubled down. It paid $7.5 billion in 2021 for Bethesda, the studio behind Fallout and The Elder Scrolls, then $69 billion in 2023 for Activision Blizzard (whose games include Call of Duty, World of Warcraft, Diablo and the mobile hit Candy Crush) the largest acquisition in Microsoft’s history.

A series of economic headwinds Microsoft could afford to be patient through all of it. Now it’s not so simple. In recent years, almost everything about the economics of gaming has turned against Xbox at the same time.

Hardware loses money, and AI is making it worse. Microsoft sells consoles at or below cost, banking on games and subscriptions to make up the difference. But AI data centers are consuming so much memory and storage that chip prices have spiked. That has forced Microsoft to raise Xbox console prices, most recently a $100-to-$150 hike this summer that it blamed directly on component costs.

Xbox lost the console war. By most estimates, Sony’s PlayStation 5 has outsold the Xbox Series X and S more than two to one. A smaller base means fewer game sales and subscriptions to offset the upfront hardware losses. That has left Xbox a distant second for the entire generation.

Revenue is shrinking. Even setting aside the games it gained from Activision, Xbox’s annual revenue has fallen nearly $500 million over five years — while the money going into the business keeps climbing. It has been investing more to earn less.

Microsoft’s most recent quarterly filing shows gaming revenue of $16.8 billion for the nine months through March, down about $1.1 billion, or 6%, from a year earlier.

Game Pass cuts into sales. Handing subscribers a new game the day it launches undercuts the roughly $70 they would have paid to buy it. The service delivers steady subscription income, but thinner economics on the games themselves.

Activision didn’t fix the margins. Even with one of gaming’s most profitable businesses folded in, Xbox earns only about 3 cents of profit on every dollar — well under the 17 to 22 cents typical in the industry. If the biggest acquisition in company history can’t move the margin, little will.

Every spare billion is flowing to AI. Microsoft is pouring more than $100 billion a year into the data centers and chips behind its AI push, trying to capitalize on the boom. Against a risk and payoff that big, a gaming business that barely breaks even feels like yesterday’s strategic bet.

What’s next for Xbox The cuts have already started. In recent weeks, Microsoft has signaled plans to close or sell some studios, including Ninja Theory, maker of the acclaimed “Hellblade” series.

Shedding staff, studios and marketing will lift Xbox’s profit margins in the near term. What it won’t do is fix the underlying problem: a business can trim its way to a better number only so much before it has to generate more revenue.

Sharma’s plan, so far, is to concentrate on Xbox’s biggest franchises, funding blockbusters like Halo and Fallout while pulling back elsewhere. It’s leaning on Game Pass and releasing most of its games on PCs and rival consoles from Sony and Nintendo, reaching players well beyond Xbox’s shrinking base, even as it holds back a few new exclusives like Gears of War to give owners a reason to stay.

Microsoft is also rethinking the console itself. In her memo, Sharma described a “hardware component crisis” that has left the company unable to make as many consoles as players want, and called for “a new business model and partnerships” for its hardware.

How far the reset ultimately goes is an open question. The Information reported that Microsoft has weighed making Xbox a standalone subsidiary, a joint venture, or a spin-off, though nothing is imminent.

Microsoft’s response to the Xbox 360 “red ring of death,” July 6, 2007. (Seattle Post-Intelligencer / NewsBank) Whatever happens next, it’s clear that times have changed. In 2007, as the red ring of death crisis emerged, Peter Moore, who ran the Xbox business at the time, and his boss Robbie Bach went to then-CEO Steve Ballmer to ask for the money to repair and replace the failing consoles.

Ballmer didn’t flinch. “What’s it going to cost?” he asked, as Moore later recalled.

Told it was $1.15 billion, Ballmer said, simply: “Do it.”

Moore credits that decision with saving Xbox. There would have been no Xbox One, he said, without Ballmer’s willingness to spend more than a billion dollars to protect the brand.

But nearly two decades later, Microsoft is done writing that kind of check for Xbox.

A $10,000 investment in Intel (INTC 5.61%) at its Jan. 2 closing price of $39.38 would have bought about 254 shares. At Thursday's close of $120.35, that stake is worth about $30,561 as of this writing. In six months, the money more than tripled.

But two footnotes belong next to that figure. First, it was briefly even better: at Intel's June 30 close of $139.63, the same stake was worth more than $35,000, before the stock gave back about 14% across the first two trading sessions of July. Second, almost nobody saw this coming. In January, Intel was still widely viewed as the chipmaker that had missed the artificial intelligence (AI) boom.

Which raises the question for everyone who watched from the sidelines: What turned Intel into 2026's most dramatic large-cap comeback, and what has to keep going right from here?

Image source: Getty Images.

How Intel tripled The rally wasn't built on PCs. It was built on two things: booming demand for the processors that feed AI data centers, and renewed faith in Intel's foundry -- the company's long-suffering bet on manufacturing chips for other companies.

Intel's first-quarter results, reported in April, showed both engines running. Revenue in the company's data center and AI segment rose 22% year over year to $5.1 billion, and Intel Foundry revenue grew 16% to $5.4 billion, while the classic PC chip business grew just 1%. Total revenue rose 7% to $13.6 billion, and non-GAAP (adjusted) earnings per share more than doubled, to $0.29.

"This deliberate reset to how we operate drove a sixth consecutive quarter of revenue above our expectations, as well as new and deepened relationships with strategic partners," said CEO Lip-Bu Tan in the company's first-quarter earnings release.

For years, the foundry consumed cash and produced doubt. What changed in 2026 is that customers -- and investors -- began treating the manufacturing turnaround as on schedule. Each new commitment matters twice over. It brings future revenue and signals to prospective customers that Intel's factories can be trusted with cutting-edge work.

Add a chip sector in full boom, and the repricing was violent. A stock that entered the year priced for slow decline exited June priced for a successful transformation.

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What has to keep going right But now Intel investors face a problem: At a valuation of about $604 billion, Intel is priced as if both its transformation succeeds and its business will grow rapidly for years to come -- even though the company remains unprofitable over the trailing 12 months. When a stock reprices from skepticism to confidence this quickly, the burden of proof shifts to every subsequent quarter.

The next test arrives July 23, when Intel reports second-quarter results.

When the report is released, three things will arguably matter most: whether foundry revenue continues growing, whether gross margins continue to expand, and whether new customer names continue to arrive. Because the gap between today's revenue and today's price tag is bridged almost entirely by future contracts and expanded profitability.

Meanwhile, the stock's early July slide is a preview of what happens when confidence wobbles. Shares of Intel fell about 9% in a single session on July 1 amid a broad pullback in chip stocks, with no company-specific stumble required. After a run like this year's, many of the stock's owners arrived recently and can leave quickly, which could make drawdowns sharper.

So what should investors who feel they missed it do? The honest answer is that the stock's single biggest repricing -- from left-for-dead to credible -- is probably already over. From here, returns likely have to be earned the slow way, through quarters of foundry growth and proof that profits are following the revenue.

I wouldn't chase the stock after a triple, and I personally wouldn't buy ahead of the July 23 report either. But for patient investors who believe American chip manufacturing has years of demand ahead of it, Intel remains one of the most direct ways to own that idea. Bought gradually, in a position sized to survive the swings a stock like this all but guarantees, it can still earn a place in a long-term portfolio.

CoreWeave (CRWV 4.58%), a neocloud provider of AI infrastructure services, went public at $40 per share on March 28, 2025. By June 20, it had reached a record high of $183.58. But as of this writing, it trades at about $82. Let's see if that pullback is a good buying opportunity.

Image source: Getty Images.

What does CoreWeave do? CoreWeave was originally an Ethereum miner, but it repurposed its GPUs to remotely process AI tasks after the crypto market crashed in 2018. It subsequently expanded its data center count from just three centers at the end of 2022 to 49 centers today, and it supports that infrastructure with more than 250,000 Nvidia (NVDA 1.39%) GPUs.

CoreWeave's AI-optimized servers can handle advanced AI workloads 35 times faster and 80% cheaper than larger cloud infrastructure platforms like Amazon Web Services (AWS) and Microsoft Azure. Its largest customers include Microsoft, Meta (META 4.80%), OpenAI, Anthropic, Nvidia, and the quantitative trading firm Jane Street.

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How fast is CoreWeave growing? CoreWeave's revenue surged from $16 million in 2022 to $5.1 billion in 2025. Its backlog swelled to $99.4 billion at the end of the first quarter of 2026, and analysts expect its annual revenue to grow at a three-year CAGR of 99% to $40.3 billion in 2028. That's a jaw-dropping growth rate for a stock that trades at just 3.5 times this year's sales.

However, CoreWeave's net loss also widened from $31 million in 2022 to $1.2 billion in 2025, and analysts expect it to nearly double to $2.2 billion by 2028. It also ended its latest quarter with $50.8 billion in total liabilities, giving it a high debt-to-equity ratio of 10.8. When we include that debt in its enterprise value of $86.3 billion, it looks a bit pricier at 6.8 times this year's sales.

Is CoreWeave's pullback a buying opportunity? CoreWeave has plenty of growth potential, but investors aren't sure it can execute its expansion without breaking the bank. When CoreWeave's stock hit a record high last summer, investors were expecting the Fed to cut interest rates, making it cheaper for the company to expand.

But today, more analysts expect interest rate hikes in the second half of 2026 if inflation doesn't cool off. That's why investors backed away from unprofitable, high-growth companies like CoreWeave. Competition from other neocloud companies and Meta, which recently decided to sell some of its excess cloud computing power, is exacerbating that pressure. However, CoreWeave should become appealing again as interest rates stabilize, it locks in more customers, and economies of scale kick in. So if you're looking for an AI stock to hold for a few years instead of a few quarters, CoreWeave's latest pullback could be a golden buying opportunity.

Leo Sun has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Amazon, Ethereum, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

Rocket Lab (RKLB +0.32%), a developer of reusable orbital rockets, recently agreed to acquire Iridium (IRDM 3.54%), a provider of satellite communications services, for approximately $8 billion. It expects to close the cash-and-stock deal by mid-2027.

Image source: Getty Images.

Rocket Lab generates most of its revenue from launch services for its Electron rockets (and upcoming Neutron rockets) and from the sale of satellite subsystems. These businesses are growing, but they're capital-intensive and operate at low margins. SpaceX's (SPCX +2.69%) upcoming Starship rocket could exacerbate that pressure by drastically reducing launch costs.

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By acquiring Iridium, Rocket Lab gains a higher-margin, cash-generating business with recurring revenue from more than 2.5 million subscribers. It also gains dozens of satellites, its own weather-resilient L-band spectrum, and Iridium's consumer-facing data network. That expansion could pave the way toward stable profits in the future.

Rocket Lab's improved scale and diversification will make it a more formidable competitor for SpaceX -- which launches its own rockets through its space division, supports internet satellite services through Starlink, and is trying to tie it all together with its nascent AI business. Rocket Lab is still a lot smaller than SpaceX. Still, it will become the only other company to control the entire stack -- the factory, the rocket, the spectrum, and orbital operations -- for the space economy.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.

Growth for artificial intelligence (AI) cloud infrastructure company Nebius Group (NBIS 6.09%) has exploded over the last year, and investors have poured into the stock. A nearly 20% surge in shares in June reversed course in July, though, and investors should continue to expect volatility of this kind.

Nebius stock jumped 19.5% in June, according to data provided by S&P Global Market Intelligence. But it crashed nearly the same amount in the first trading week of July. Here's what investors need to know, and what they should expect ahead.

Image source: Nebius Group.

Building out capacity Investors have been attracted to Nebius stock in droves because of its spectacular growth rates. In its May earnings report, the company said it was again raising its guidance for contracted power capacity to support its data centers, which provide cloud computing infrastructure for AI model development and growth.

That guidance has soared since last August, from at least 1 gigawatt (GW) to over 4 GW. In May, Nebius said it has already secured as much as 1.2 GW of power and land for an AI factory at a new site in Pennsylvania.

Investors continued to boost Nebius stock when it announced it would also partner with fuel cell maker Bloom Energy to install additional power capacity for its data center build-out.

What to make of Nebius stock Revenue has grown stunningly alongside Nebius' data center expansion.

From sales of just $105 million in Q2 a year ago, the company reached an annual revenue run rate of $1.25 billion by the fourth quarter. That remarkable growth rate continues to accelerate. Management now anticipates exceeding $3 billion in revenue for 2026, concluding the year at a rate that could more than double once again in 2027.

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But the stock movement has also anticipated that growth, with shares rising more than 150% year to date and more than quadrupling over the last 12 months. It has reached a market cap of about $55 billion, which puts it at a lofty valuation even for its expected 2027 sales.

While demand is extremely strong, competitors like CoreWeave are also in the space. Any sign of a slowdown in spending for cloud capacity will likely hit shares of companies like Nebius and CoreWeave disproportionately compared to the tech sector as a whole.

That makes it a good candidate for investing over time. Long-term investors can purchase more as the stock corrects along the way. There's a good chance that better opportunities will come with the volatility.

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

United Parcel Service (UPS +1.02%) is deeply unloved on Wall Street, with the stock down 50% from its 2022 high. To be fair, the parcel delivery company has been going through a massive business overhaul, and its quarterly earnings results have been pretty tough to read. But it is important to keep in mind what the company is doing and why. The announcement of a $48 million investment in temperature-controlled facilities highlights something big.

UPS is updating its business approach To simplify this industrial giant's turnaround effort, it is basically trying to modernize. That requires spending money to update technology, cut staffing levels, and shutter less efficient facilities. At the same time, however, UPS has been honing in on its best customers, which has required limiting its relationship with high-volume customers that offer only small profit margins.

Image source: Getty Images.

From a high-level view, this overhaul has led to lower revenue and higher costs. Which investors have clearly been worried about. However, there are early signs of success: revenue per package in the U.S. market has been rising despite lower overall revenue in the division. That's exactly the goal. Management is also calling for the second half of 2026 to be the inflection point for the turnaround effort.

UPS is building for the future UPS isn't just moving away from low-margin customers; it is also moving toward high-margin customers. One customer segment earmarked for growth is the healthcare sector. That's why UPS is spending $48 million on 27 temperature-controlled facilities. There is an increasing demand for medications that must be kept at low temperatures during the delivery process, notably including GLP-1 weight-loss drugs.

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This isn't a brand new business; UPS has been using acquisitions to bolster its global position in this sector. However, the key is that healthcare customers offer wider profit margins and attractive growth opportunities. It is far more desirable to invest in moving medicine than to boost operations that just move more low-value boxes.

UPS has a huge 6% dividend yield because investors are worried about the turnaround. That's fair given recent results. But the investment in temperature-controlled facilities highlights the company's long-term strategic focus and opportunity. It is one more sign that UPS could be close to shifting from shrinking its business to growing it. And when that happens, the growth will likely be more impactful because it will come with wider profit margins.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends United Parcel Service. The Motley Fool has a disclosure policy.

Berkshire Hathaway (BRKA +1.14%)(BRKB +1.40%) is widely followed for its investment approach, which includes buying companies outright and buying shares of publicly traded companies. However, holding cash is also an investment decision, and at the end of the first quarter of 2026, Berkshire Hathaway had nearly $400 billion in cash. It would be better if CEO Greg Abel could find attractive investment opportunities for that cash, but that cash isn't dead money anymore.

The good and the bad of cash Former Berkshire Hathaway CEO Warren Buffett had a pretty simple concept around cash: If he couldn't find anything worth buying, he would hold cash. Buffett would rather wait than buy something just to buy something. Abel, his hand-picked successor, appears to have a similar mindset, noting that the cash balance rose in the single quarter that he was at the helm.

Image source: Getty Images.

That cash will be valuable during the next bear market, providing the business with a cushion. It will also give Abel the wherewithal to step in and buy while others are fearful and selling, effectively allowing the CEO to buy attractive assets while they are on sale. From this perspective, noting that the S&P 500 index (^GSPC +0.00%) is trading near all-time highs, investors should be pleased with the balance sheet positioning of Berkshire Hathaway.

The flip side of that argument is that the cash would likely yield higher returns if invested. That's true, but only if it is invested wisely. If Buffett and now Abel couldn't find anything worth buying, it is better for the money to sit in cash. A few years ago, while interest rates were near historical lows, holding cash was a real burden. But today, interest rates are higher, and cash is providing reliable low single-digit returns, with the Fed's target range for the federal funds rate currently set at 3.5% to 3.75%.

The news could get better on this front, as well. Although the new Fed chief, Kevin Warsh, had been talking about cutting rates before his appointment, the rate was held steady after his first Fed meeting. And the indication appears to be that rates will remain at current levels or perhaps rise. So Berkshire Hathaway's huge cash hoard could actually generate more income in the future, noting that the company largely holds short-term U.S. Treasury Bills ($339 billion at the end of the first quarter).

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As those government bonds roll over, Berkshire Hathaway buys new ones at the current rate. That step up in yield should happen fairly quickly, as Treasury Bills have durations that range from four weeks to a year. So the company's cash is a safety valve, a source of capital, and, increasingly, a valuable source of income. Getting paid more to wait for the right investment to come along is hard to complain about.

Berkshire Hathaway could be attractive if you are worried about the market Berkshire Hathaway is a very unique and complex company. However, if you are worried about the market's lofty levels, Berkshire Hathaway's huge cash pile could actually be a reason to buy the stock. That cash isn't the drag it once was, and it sets CEO Abel up to buy when others, perhaps including you, are fearful.

© Chip Somodevilla / Getty Images

The AI arms race has entered a new phase. For the past three years, the biggest technology companies have competed by buying as many Nvidia (NASDAQ:NVDA | NVDA Price Prediction) GPUs as they could get their hands on. Now they’re racing to build something even more valuable: their own AI chips. 

That shift is about more than lowering costs. It gives hyperscalers greater control over performance, supply chains, and the pace of innovation. Meta Platforms (NASDAQ:META) appears ready to take another major step in that direction with a reported $6.5 billion agreement that could strengthen its long-term AI ambitions while reshaping the semiconductor landscape.

Meta Is Building More Than Just Another AI Chip According to reports from Korean media, Meta is negotiating a roughly $6.5 billion agreement with Samsung Foundry to manufacture its third-generation Meta Training and Inference Accelerator (MTIA) processors. Unlike the first two MTIA generations, which were built by Taiwan Semiconductor Manufacturing (NYSE:TSM), the new chips would be produced using Samsung’s cutting-edge 2-nanometer SF2 manufacturing process featuring Gate-All-Around (GAA) transistor technology.

The scale of the reported agreement stands out. The contract reportedly covers hundreds of thousands of semiconductor wafers, making it one of Samsung Foundry’s largest AI orders after its reported $16.5 billion Tesla (NASDAQ:TSLA) agreement.

The supplier change is just as important as the technology.

MTIA Generation Manufacturing Partner Strategic Focus First Generation TSM Launch custom AI silicon Second Generation TSM Expand AI inference capabilities Third Generation (reported) Samsung Foundry Diversify supply chain and adopt 2nm process This isn’t simply about building faster chips. It’s about ensuring Meta can keep expanding its AI infrastructure without depending on a single manufacturing partner.

Why This Matters for Meta’s AI Strategy Meta has made no secret of its AI ambitions. CEO Mark Zuckerberg has said the company plans to invest hundreds of billions of dollars in AI infrastructure while targeting as much as 5 gigawatts of computing capacity by 2030. That scale demands more than buying Nvidia hardware — it requires custom silicon optimized for Meta’s own Llama models and recommendation engines.

Custom chips also improve economics. NVIDIA’s GPUs remain the gold standard for AI training, but they command premium pricing and face periodic supply constraints. By designing its own accelerators, Meta can tailor performance to its workloads while reducing dependence on outside suppliers.

Buying chips is a race to the bottom—owning them is a bid for total dominance. Inside the $6.5 billion power play that signals the end of the Nvidia arms race. © 24/7 Wall St. Diversifying manufacturing adds another layer of protection. TSM remains the world’s leading foundry, but its production capacity is stretched by demand from companies including Apple (NASDAQ:AAPL), Nvidia, Advanced Micro Devices (NASDAQ:AMD), and Broadcom (NASDAQ:AVGO). Using Samsung reduces concentration risk while providing leverage during future pricing negotiations. It also helps hedge against geopolitical uncertainty surrounding Taiwan.

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Looking ahead, these chips could support something even bigger. As Meta expands into AI cloud services, proprietary hardware could become a competitive advantage, much like Amazon‘s (NASDAQ:AMZN)  AWS built custom Graviton processors or Google developed its Tensor Processing Units (TPUs).

The Bigger Trend Investors Should Watch Meta isn’t acting alone. Alphabet (NASDAQ:GOOG), Amazon, Microsoft (NASDAQ:MSFT), and Tesla have all invested heavily in custom AI silicon. The common goal is simple: reduce long-term infrastructure costs while differentiating their AI platforms.

That doesn’t spell the end for Nvidia. Training frontier AI models will continue requiring enormous numbers of GPUs for years. But inference — the process of actually running AI models — and specialized workloads increasingly favor application-specific chips that consume less power and cost less to operate.

Samsung also benefits if the reported agreement closes. After trailing TSM in advanced manufacturing for years, landing another hyperscaler on its 2nm process would strengthen its credibility and help build momentum for its foundry business.

Key Takeaway In short, Meta’s reported $6.5 billion Samsung agreement is about far more than changing chip suppliers. It’s another sign that the largest AI companies are shifting from buying generic hardware to building customized infrastructure designed around their own software.

Granted, Nvidia remains the dominant force in AI accelerators, and custom chips won’t replace its GPUs overnight. That said, investors should recognize the broader trend. The AI chip market is becoming more fragmented, with hyperscalers increasingly controlling their own destinies.

Ultimately, Meta’s reported move strengthens its long-term competitive position by lowering supply chain risk, improving cost control, and supporting future cloud ambitions. For long-term shareholders, that’s the real story — and one worth following well beyond the latest headline.

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Contact [email protected] for any questions or corrections.

Visa (V +2.87%) has historically been a market-beating stock, but it's been struggling this year, and investors are noticing several headwinds. The stock is down 2% this year, compared with a 9% increase for the S&P 500. Is this a buying opportunity?

The world's tollbooth Visa is the largest credit card network in the world, with more than $17 trillion in payments processed last year and more than 330 billion transactions. It works with 14,500 partnering financial institutions that provide credit, while Visa provides the network that moves the money, taking a small fee from each transaction. It acts as a global "tollbooth" for payments, a service-oriented business that generates high revenue and strong profits.

This is a classic "cash cow" business, with Visa in a dominant position and high barriers to entry. Its network is entrenched in global payments, and it continually adds new services to its platform as finance enters the digital age.

Image source: Getty Images.

In the 2026 fiscal second quarter (ended March 31), revenue increased 17% year over year, while adjusted earnings per share (EPS) were up 20%. Those are powerful results, especially in the high-inflation climate.

However, the market isn't seeing it that way. There are several headwinds, specifically in the rise of stablecoins, which challenge the Visa global network, and legislation related to interchange rates. Stablecoins bypass the Visa rails, and the Credit Card Competition Act (CCCA) threatens to lower fees and break up the Visa-Mastercard duopoly.

On top of that, cross-border volume has been trending down over the past few quarters since it bounced back from pandemic lows.

Is Visa stock a bargain at this price? Visa has a strong economic moat and a dominant position by far. It has an excellent, profitable business model that makes it an important part of the global economy, and it has a robust innovation engine. These are prized features, and Visa stock is typically expensive because of them.

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At the current price, Visa stock trades at a price-to-earnings (P/E) ratio just under 30, which is slightly below recent averages (31 over the past three years) and much lower than historical averages (35 over the past 10 years). It's a good deal, but not an incredible bargain.

Visa is an excellent, all-weather stock to own for the long term. At this price, I'd call it a great business at a fair price, which is how Warren Buffett looks for stocks. It was part of the Berkshire Hathaway portfolio for years until Greg Abel recently sold it, and it could be a great stock to add to a diversified portfolio at the current price.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Mastercard, and Visa. The Motley Fool has a disclosure policy.

Shares of semiconductor giant Broadcom NASDAQ: AVGO got pummeled after the company’s last earnings report, dropping nearly 20% in two days. Possibly the biggest reason for the company’s large post-earnings decline was its decision not to raise its AI semiconductor revenue guidance.

Broadcom Today

$360.45 0.00 (0.00%)

As of 07/2/2026 04:00 PM Eastern

52-Week Range$269.58▼

$495.00Dividend Yield0.72%

P/E Ratio60.08

Price Target$493.24

In its fiscal year 2027, Broadcom continues to place its sales forecast at over $100 billion for this segment. However, there is a belief in the market that Broadcom’s AI semiconductor sales will be much higher than $100 billion. CEO Hock Tan himself alluded to this, saying in the company’s last earnings call, “2027 will exceed very easily $100 billion.”

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One customer that is likely to play a significant role in Broadcom reaching and potentially soaring past this milestone is ChatGPT maker OpenAI. In 2025, the two companies announced a massive 10-gigawatt (GW) partnership, where Broadcom will develop chips for OpenAI. Notably, the two firms just took a key step forward in their partnership: unveiling Jalapeño, OpenAI’s first Intelligence Processor. For Broadcom, Jalapeño isn’t just a fancy new chip; it’s the key to unlocking a huge revenue opportunity over the coming years.

Jalapeño: Unlocking the Door to $200 Billion in Revenue?Approximately nine months ago, Broadcom and OpenAI announced their 10 GW partnership. At that time, Broadcom noted that it would not start deploying AI chips and systems for the partnership until the second half of 2026. With the firms just now unveiling Jalapeño, it appears that the partnership is progressing right on schedule. In turn, Broadcom’s plan to convert its 10 GW partnership into a large revenue stream is on track.

GWs are a standard unit of measurement for evaluating the size of data center deployments, and each one can translate into billions of dollars in revenue. In fact, in a Broadcom earnings call, Bernstein analyst Stacy Rasgon estimated that Broadcom’s revenue opportunity was in the range of $20 billion per GW. While the revenue opportunity per GW can vary significantly, Hock Tan said the reality was “not far from” Rasgon’s estimate.

Thus, while acknowledging that these estimates are not precise, it is possible that Jalapeño marks an early step in Broadcom unlocking a $200 billion opportunity. While 10 GWs are not expected to be fully deployed until the end of 2029, that would be a massive revenue driver, nonetheless. Notably, Broadcom’s total revenue over the last 12 months was “only” around $75.5 billion.

OpenAI: A Testament to Broadcom’s Long-Term PartnershipsThe potential size of this opportunity highlights the value of the long-term partnerships that Broadcom engages in. Notably, the two firms announced their partnership nine months ago. However, investors are only now getting a substantial update. Furthermore, significant revenue generation from the deal will not begin until 2027, as revenue will be small through the rest of 2026. This equates to well over a year between the deal announcement and substantial sales. That may seem like an uncomfortably long timeline, but it is exactly what investors should expect from Broadcom.

This is due to the nature of Broadcom’s AI chips. Broadcom designs application-specific integrated circuits (ASICs). ASICs are fundamentally different from NVIDIA’s NASDAQ: NVDA graphics processing units (GPUs). GPUs are highly flexible, being able to perform many different tasks well. Due to this, they can serve a wide range of customers right out of the box.

By contrast, as their name implies, ASICs are application-specific; they perform a specific set of tasks extremely well. The tasks they perform depend on each customer's needs. Thus, Broadcom has to closely collaborate with its customers to design a customized chip in the first place.

In the case of Jalapeño, the companies designed it specifically for large language model (LLM) inference. Inference refers to when an LLM generates answers. This contrasts with training, where LLMs learn to think.

Importantly, the vast majority of revenue generation doesn’t take place until after this design phase, when the chips actually get deployed into data centers. Considering this, when Broadcom announces a new custom chip design partnership, investors should not expect it to have an immediate sales impact. Rather, investors should understand that it takes time for these sales to ramp up, and the OpenAI partnership is just another reason to have confidence in Broadcom’s long-term growth opportunities.

Broadcom’s Valuation Sinks as OpenAI Opportunity Nears CloserBroadcom shares now trade at a price-to-earnings (P/E) ratio of around 62x. That sits substantially below its average P/E near 80x over the past three years.

Broadcom Inc. (AVGO) Price Chart for Saturday, July, 4, 2026

Meanwhile, with Jalapeño, Broadcom’s huge opportunity with OpenAI is one step closer to becoming a reality. With its valuation down and a large growth driver not far on the horizon, Broadcom shares look well positioned going forward.

Should You Invest $1,000 in Broadcom Right Now?Before you consider Broadcom, you'll want to hear this.

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Defense stocks are the rare corner of the market where geopolitical anxiety, fiscal generosity and multi-year revenue visibility all converge at once. With the Fiscal Year 2027 investment request by the Department of War totaling $756.8 billion, and President Trump declaring that “our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars,” the demand backdrop heading into July is as durable as it gets. Goldman Sachs frames it similarly, arguing that economic security will be a prominent theme in 2026, with NATO defense commitments and reindustrialization creating substantial opportunities for active managers.

Three names anchor that thesis. Each has a tool-verified data point supporting the “resilient” label, each has a clear bull case for July, and each carries a real risk worth pricing in.

Lockheed Martin (NYSE: LMT) Lockheed Martin (NYSE:LMT | LMT Price Prediction) trades at $545.70 as of July 2, up nearly 8% over the past month. The stock is up around 10% over the trailing year, but some recent weakness has created a more interesting entry. Forward P/E sits at 17, with a dividend yield of 3% and a Wall Street average target of $624.11.

The bull case is built on backlog and program lock-in. Lockheed ended 2025 with a record $194 billion backlog, representing more than 2.5 years of sales, and management reaffirmed FY2026 guidance of $77.5 to $80.0 billion in sales and diluted EPS of $29.35 to $30.25. Critically, the Department of War signed multi-year framework agreements to scale Patriot, THAAD, and PrSM production by three to four times current rates, and Lockheed just landed a $4.8 billion PAC-3 missile production contract. CEO Jim Taiclet said the year’s start “reinforces our confidence in Lockheed Martin’s continued operational and financial growth in the year ahead.”

Risk: Q1 2026 EPS of $6.44 missed the $6.70 estimate, dragged by a $125 million F-16 unfavorable profit adjustment. Fixed-price contract execution remains the perennial caveat.

Northrop Grumman (NYSE: NOC) Northrop Grumman (NYSE:NOC) has been the worst-performing of the three this year, down 12% year-to-date to $504.60. That underperformance is the opportunity. Forward P/E sits at 18, the dividend yields 2%, and the analyst target of $695.05 implies meaningful upside from current levels.

The resilience case is the cleanest of the group. Q1 2026 saw EPS of $6.14 beat the $6.06 estimate, revenue grew 4% to $9.88 billion, and net income climbed 82% year-over-year. The B-21 Raider swung from a $183 million operating loss to $305 million in operating income, a turnaround that should compound as production expands. Backlog stands at $95.61 billion with a 1.10 book-to-bill.

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The most telling signal came from the boardroom. On May 20, 2026, ten Northrop directors purchased 349 shares each at $552.17, a coordinated buy that strongly suggests management views the stock’s pullback as a gift. CEO Kathy Warden described the quarter as reflecting “our ability to deliver in today’s unprecedented global demand environment.”

Risk: The B-21 LRIP program still has memory of a $477 million loss provision, and government shutdown risk is explicitly not in guidance.

RTX Corp (NYSE: RTX) RTX (NYSE:RTX) is the only one of the three to raise full-year guidance after Q1, and its price action shows it. The stock trades at $188.54, up 32% over the past year and 4% in the past month. Forward P/E of 27 is the highest of the trio, but the growth profile justifies it. The yield is 1%, and analysts carry a target of $215.73.

The bull case is execution. Q1 2026 adjusted EPS of $1.78 beat the $1.52 estimate by 17%, the eighth consecutive quarterly beat. RTX then raised its FY2026 outlook to adjusted sales of $92.5 to $93.5 billion and adjusted EPS of $6.70 to $6.90. Backlog finished Q1 at $271 billion, split $162 billion commercial and $109 billion defense. Recent wins include a $1.1 billion U.S. Navy AIM-9X contract and a $515 million SPY-6 radar contract. CEO Chris Calio cited “organic sales and adjusted operating profit growth across all three segments” as the reason for the raise.

Risk: The Pratt & Whitney powder metal matter requiring accelerated GTF fleet inspections remains a multi-year cash drag, and tariff exposure at Collins and Pratt is a watch item.

What to Watch in July Q2 earnings land in late July for all three. Lockheed and Northrop report on the same calendar week, with RTX close behind. The question is whether RTX raises again, whether Northrop’s B-21 momentum is sustainable, and whether Lockheed can put the F-16 charge behind it. With backlogs collectively approaching $560 billion and a defense budget trajectory that only points higher, the setup favors continued operational delivery over multiple expansion.

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Contact [email protected] for any questions or corrections.

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Disney is bolstering its namesake streamer by integrating shows and features from Hulu. Illustration by Samuel Boivin/NurPhoto via Getty Images; Chris Delmas/AFP via Getty Images Disney has momentum in streaming, and its leaders are looking for ways to further narrow the gap with Netflix in the battle for eyeballs.

Since launching Disney+ in 2019, Disney's direct-to-consumer business has gone from a promising but costly project to a profit engine.

CEO Josh D'Amaro is prioritizing streaming by investing in technology like AI-generated ad tools for Disney+. He's also named TV head Dana Walden as the company's first-ever chief creative officer and tapped Adam Smith and Joe Earley as co-presidents of the DTC business.

Business Insider recently published organizational charts showing who reports to D'Amaro and Walden, and we have new details on who's helping lead its streaming strategy, including key product and tech executives.

Smith, who's also the product and tech chief for Disney Entertainment, joined the company in September 2024 from YouTube. He has eight direct reports, including Andre Rohe, Disney's EVP of Product Engineering.

Smith has delivered a number of key updates to streaming staffers, including clarity on its "super app" ambitions, news of a shake-up of its streaming commerce and data teams, and a progress report on the Disney+ AI ad tool, which the tech chief said in a recent meeting is "one of the clearest areas where we're really making traction."

Rohe has helped Disney tech staffers better grasp the company's AI goals, including by saying that employees shouldn't be "tokenmaxxing," or using AI tools regardless of how productive they are.

Disney's standing in the streaming warsDisney's streamers have gained ground in 2026, scoring their highest monthly TV viewership share in nearly three years in March before posting their best month versus Netflix in nearly a year, according to Nielsen's US data. The slight rebound comes after Disney's streaming viewership had stagnated for years.

Disney+ and Hulu have become profitable thanks to a large base of loyal, engaged subscribers. Disney made $582 million in streaming profits last quarter, and while the company no longer discloses its subscriber count, it had 196 million subscriptions as of late September 2025.

Despite a steady stream of price hikes, Disney+ and Hulu have the lowest cancellation rates in the business, besides Netflix. Less than 4% of those services' customers quit in May, according to data firm Antenna.

To boost engagement further, D'Amaro is bringing Disney+ and Hulu together to create a one-stop shop in streaming, while looking to use resources more efficiently. The Mouse House's flagship streamer is also betting on short-form video, as are Peacock, Netflix, and Paramount+.

To better understand Disney's product and tech strategy, Business Insider is publishing parts of Disney's internal streaming org chart, based on screenshots sent by an employee.

Below are the complete org charts showing Smith's and Rohe's direct reports, based on Disney's records.

Here are the direct reports to Smith, Disney Entertainment's product and tech chief, in alphabetical order by first name:

NamePositionAndre RoheEVP, Product EngineeringChristopher (Chris) LawsonEVP, Content Platforms & OperationsDanette DugasSenior Executive AssistantDimitri KontopidisExecutive Director of Product & Tech Strategy and OperationsErin TeagueEVP, Product ManagementMeghan BorsicSVP, DesignMichael CupoSVP, Business OperationsTony DonohoeEVP, Ad PlatformsHere are the direct reports to Andre Rohe, Disney's EVP of product engineering, in alphabetical order by first name:

NamePositionAndrew HydeVP, Product Software EngineeringChristopher ShattuckHead of India Product & TechChristopher (Chris) SwordDirector of Data AnalyticsDevika ChawlaSVP, Product Software EngineeringDominique CharretteVP, Data AnalyticsJay DonnellSVP, Product Software EngineeringJustin AltwiesDirector of Product Engineering and Business OperationsMali SonnierSenior Executive AssistantMayank SachanVP, Growth EngineeringMehran BozorgiSVP, Product Software EngineeringNicholas BrookinsSVP, Media EngineeringZachary CavaVP, Product Software EngineeringDo you work for Disney or have a tip? Contact this reporter via email at [email protected] or Signal at jamesfaris.01.

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For the first time in six decades, Berkshire Hathaway (BRKB +1.61%)(BRKA +1.41%) is run by someone other than Warren Buffett. Greg Abel took over as CEO at the start of 2026, and his first months have given investors plenty to chew on -- most of all a record cash pile of about $397 billion at the end of the first quarter, up from $373 billion at the end of last year. That war chest is equal to more than a third of the company's $1.1 trillion market value.

So, with a new leader and an enormous amount of dry powder, is the stock a buy?

Image source: They Motley Fool.

Abel is already putting his stamp on it Abel has not sat still. In his first big deal, Berkshire agreed to buy homebuilder Taylor Morrison for $6.8 billion, or $72.50 a share -- a 24% premium. He also steered Berkshire into an unusual place for a firm that long avoided technology: a $10 billion private placement in Alphabet, taken at a discount, that pushed its stake in the Google parent past $26 billion. Meanwhile, he put a stop to the recent trimming of the Apple position before he took over, leaving it the portfolio's largest at about 22%. And he restarted buybacks with a repurchase of about $234 million in March, after a 21-month pause.

The pattern says a lot. Abel is deploying capital, not just hoarding it -- but selectively, waiting for a price he likes before he acts. That is recognizably the Buffett playbook, with a sharper willingness to move on a good opportunity.

Taken together, the moves sketch a CEO willing to lean into places his predecessor mostly sidestepped -- homebuilding tied to a national housing shortage, and artificial intelligence by way of Alphabet's spending on it. Warren Buffett, who stayed on as chairman, publicly praised the Taylor Morrison deal, saying Abel pulled it off faster than he could have himself. That matters because the biggest question hanging over Berkshire was never its businesses. It was whether a new hand could allocate capital with the same discipline. Early on, Abel is answering it.

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On valuation, Berkshire trades at about 1.5 times book value, close to its 10-year average, and around 15 times earnings. That is neither cheap nor expensive. What you get for it is a collection of durable businesses -- a sprawling insurance operation, the BNSF railroad, a large energy unit, and an equity book worth more than $300 billion -- plus that record pile of cash.

The operating businesses are pulling their weight, too. First-quarter operating earnings rose about 18% year over year, helped by the insurance units whose float gives Berkshire cheap capital to invest. Those earnings are lumpy (insurance almost always is), but the collection of railroad operations, utilities, and wholly owned businesses under the stock generates meaningful, growing profit that doesn't depend on which way the equity portfolio swings in a given quarter.

And the company's cash is the real swing factor. In a jittery market -- and the recent sell-off in chip stocks is a reminder that volatility always finds its way back -- $397 billion of ready capital is an asset, giving Abel the means to pounce if prices fall. The flip side, however, is that the same cash raises the stakes on how well he deploys it. A misjudged megadeal is the clearest downside, and the fresh tech tilt adds both some opportunity and a risk to a famously tech-averse portfolio. With that said, Apple has been Berkshire's largest equity holding for years. So maybe the growing Alphabet stake is just a normal evolution of Berkshire's business.

On balance, I think Berkshire is a reasonable buy here for patient investors. It isn't a bargain, but it is a fairly priced set of high-quality businesses backed by a record war chest and a new CEO who has shown he will act. The Abel era looks like continuity with a harder edge -- and at about 1.5 times book value, that strikes me as a fair price to pay for it.

Every so often, a company's numbers stop making sense next to its soaring profits. Micron Technology (MU 5.68%) is having one of those moments. In its fiscal third quarter (the period ended May 28, 2026), the memory maker earned $24.67 per share on a generally accepted accounting principles (GAAP) basis. Its quarterly dividend, declared the same week, was $0.15 -- the same $0.15 it declared last quarter. A company earning that much cannot keep paying that little forever.

Something has to give.

Image source: Getty Images.

A cash machine, for now The quarter was a blowout in the truest sense. Revenue rose 346% year over year to a record $41.46 billion, and net income reached $28.24 billion, powered by demand for the high-bandwidth memory that goes into AI accelerators. Management guided for even more in the current quarter: about $50 billion in revenue.

To grasp the scale, Micron earned more in this single quarter than it did in some entire years of the last cycle. Revenue of $41.46 billion was up from $9.3 billion a year earlier, and that guide of $50 billion would be another 20% jump on top of it. High-bandwidth memory -- the specialized chips stacked next to AI processors -- is booked out well into next year, which is why the company can guide with such unusual confidence.

"Micron's record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era," said CEO Sanjay Mehrotra in the company's earnings release.

And, unsurprisingly, the cash is piling up.

Micron generated $25.4 billion of operating cash flow and $18.3 billion of adjusted free cash flow in the quarter, ending with about $30.2 billion in cash and investments. Set the $0.15 quarterly dividend against $24.67 of quarterly earnings and the payout ratio is well under 1% -- almost a rounding error.

Today's Change

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-58.69

Current Price

$

973.59

Where the cash goes next So where does all that money go?

Three doors are open: a much bigger dividend, share buybacks, or reinvestment in the business. History offers a warning on that last one. Memory is cyclical, and makers have a habit of plowing cash into new capacity at the peak, only to watch prices crash once it comes online. Micron is doing some of that already -- capital expenditures were $7.1 billion in the quarter and rising as it builds cleanroom capacity for AI memory.

Management has been fairly explicit about the sequence. It says it expects to return 100% of its excess cash to shareholders over time, and plans to step up capital returns later this year.

So, what is its plan? Capacity first, bigger shareholder returns after. A boosted dividend and buybacks are the pressure valve that hasn't been opened yet.

This order of priorities when it comes to how Micron plans to deploy its excess cash makes sense. Buy back a lot of stock at the top of a memory cycle, and you risk overpaying right before earnings roll over. Hike the dividend too aggressively, and you may have to defend it through the next downturn. Micron has been burned by both mistakes before, and its cautious approach here arguably reflects a management team that remembers exactly what the bottom of a memory cycle feels like.

For a dividend stock trading at about 22 times earnings, that gap between what Micron makes and what it pays is the clearest sign of how extreme this memory up cycle has become. I'd expect the payout and buybacks to climb meaningfully once those commitments free up.

Eli Lilly (LLY +1.35%) is a Wall Street darling thanks to its success in the GLP-1 weight-loss market. There's a problem here, however, because weight-loss drugs now account for nearly two-thirds of the drug maker's revenues. Johnson & Johnson (JNJ +3.57%) CEO Joaquin Duato isn't interested in being so reliant on just one healthcare niche. In fact, he's steering the company away from the hot GLP-1 sector. Here's why.

Wall Street loves a good story GLP-1 weight-loss drugs are a new product category in the pharmaceutical sector. They appear to be miracle drugs, with Eli Lilly a leading company in the space. But Novo Nordisk (NVO +3.29%) is in the mix, too, as are several other companies working on these hot new drugs. If you get caught up in the hype, it almost seems like a drug stock has to have a GLP-1 drug plan, or they aren't even worth looking at as an investment. However, there are a lot of other conditions that are treated with drugs.

Image source: Getty Images.

J&J has decided to sidestep the hype and focus on areas where it has core competencies. One area of focus is oncology, or cancer drugs. The company has a strong position in bone and lung cancer, and it recently acquired a company with an attractive prostate cancer drug candidate. Instead of playing catch-up in weight loss, J&J is leaning into areas where it already has a strong position. And there are multiple levers for growth in the drug niches where J&J is focused, providing diversification that doesn't exist in the GLP-1 weight loss space today.

Diversification is a key part of the J&J story That said, while Eli Lilly is starting to look like a one-trick pony, J&J is anything but. In addition to being one of the world's largest drug companies, it is also one of the largest medical device companies, too. This segment of the business focuses on products such as surgical items and new joints. Like drugs, medical devices are usually life necessities. And this segment allows J&J to offer investors diversification that a pure-play drug-maker can't.

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3.57

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Current Price

$

263.04

There's one more little wrinkle to consider. GLP-1 drugs are so hot that Eli Lilly's leading position has resulted in a massive stock price advance. Its price-to-earnings ratio is over 40x. J&J's P/E is 29x. It wouldn't be fair to suggest that J&J is cheap, but it is notably cheaper than Eli Lilly. It also offers a more attractive dividend yield, at 2.1% compared to Eli Lilly's 0.6%.

All in, Johnson & Johnson looks like a more attractive investment than Eli Lilly, even though it has chosen to stay away from the hot new drugs that are all the rage among investors. But, sometimes, operating out of the spotlight can be very rewarding for investors who think long term, particularly if you have an income focus.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Novo Nordisk. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

The market is focused these days on the immense amount of capital flooding the artificial intelligence (AI) build-out. The hyperscalers are getting all the attention as they embark on an extraordinary investment cycle.

Meta Platforms (META 4.80%) is one such business. The dominant social media platform, which has historically posted huge profits and free cash flow, plans to spend $125 billion to $145 billion on capital expenditures (capex) in 2026, mostly for AI infrastructure. That upper bound is about double the $72 billion figure from last year.

Investors are probably wondering why Meta is transitioning from a capital-light business to a capital-intensive one. There might only be one reason.

Image source: The Motley Fool.

It's all about Meta's advertising On the Q1 2025 earnings call, Meta founder and CEO Mark Zuckerberg said the company has five major opportunities related to the AI revolution. The list includes better recommendations and content, business messaging, the Meta AI assistant, and AI devices. But perhaps the most important priority is leveraging AI to improve advertising capabilities.

"Our goal is to make it so that any business can basically tell us what objective they're trying to achieve -- like selling something or getting a new customer -- and how much they're willing to pay for each result, and then we just do the rest," Zuckerberg mentioned on the call.

He continued by saying that if Meta is successful in this regard, then "the increased productivity from AI will make advertising a meaningfully larger share of global GDP than it is today."

Connect the dots, and it becomes clear that Meta's ultimate goal is to keep growing its ad revenue at a rapid clip over the long haul. Ad sales totaled $55 billion in the first quarter (ended March 31), representing 98% of the company's entire top line. Advertising is what Meta is all about. That's not going to change.

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The market looks concerned During Q1, Meta reported a 19% year-over-year increase in ad impressions, while the average price per ad rose 12%. These two variables helped lift the company's revenue by 33% compared to the first quarter of 2025. That was the fastest growth rate since Q3 2021.

To justify the $135 billion in capex earmarked for 2026, investors will become more demanding about Meta's financial performance. In fact, they probably already are, as the "Magnificent Seven" stock is down 15% in 2026 (as of June 29) and 29% off its record.

Time will tell whether this AI capex boom will lead to satisfactory returns for one of the world's elite businesses.

With the artificial intelligence (AI) trade captivating investors' hearts and minds (and their dollars), it's not surprising that some market participants may be overallocated to that theme. These days, it's an understatement to say tech stocks are prominent.

Just look at the S&P 500 (^GSPC +0.00%). A once-diverse collection of large-cap U.S. companies, the index is heavily weighted toward AI and tech. Each of its top 10 holdings, which account for more than 34% of the index's weight, touches AI in some form.

Most of those are low-yielding stocks, and some don't even pay dividends. So investors seeking the benefits of sector diversification and equity income should augment their tech holdings with some different "flavors," one of which is Lockheed Martin (LMT +4.45%).

Image source: Lockheed Martin.

Lockheed Martin may be an inviting entry point As things stand today, Lockheed Martin is arguably a good-news/bad-news stock. In an effort to finish on an upbeat note, let's dispense with the bad news.

Investors expecting this aerospace stock to benefit from the war in Iran are disappointed. Over the past 90 days, the stock has fallen 15.7% and is 27% below its 52-week high, putting it in bear-market territory.

Those are ominous statistics, but there are bright sides to the story. For example, the company has a $194 billion backlog, confirming it remains one of Uncle Sam's go-to large-scale defense contractors. That's valuable at a time when the White House is seeking $1.5 trillion in fiscal 2027 defense spending, roughly half of which will be allocated to weapons modernization and procurement, areas of Lockheed's expertise.

Adding to the case for this industrial stock, particularly for long-term investors, is the dividend. Lockheed yields 2.7%, or more than double the dividend yields of the S&P 500 and the largest industrial exchange-traded fund (ETF). The defense giant is committed to that payout, as evidenced by the fact that the dividend hike unveiled last October marked the 23rd consecutive year the dividend was increased.

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545.04

Investors may find comfort in knowing that the industrial sector's shareholder yield, a combination of buybacks and dividends, is above that of the S&P 500 and the technology sector.

Lockheed has some tech inroads To be sure, Lockheed Martin isn't a tech stock, but it does have some exposure to tech themes that resonate with investors. Included in the Pentagon's budget is $66 billion for overall tech spending and $13.4 billion for AI, marking the first time the department is breaking out dedicated AI expenditures.

Much of that spending is slated for autonomous systems, an area of focus for Lockheed. The company's ability to integrate autonomous systems across a variety of frontiers, including air, cyber, land, and sea, makes it a valuable long-term provider to the U.S. government.

While Lockheed isn't a tech company in the traditional sense, tech is very much a part of the long-term growth story. So investors are getting a stock with the potential to benefit from tech and one committed to dividend growth. That may just be a win-win.

This year, technology stocks have dominated headlines, with the tech-heavy Nasdaq Composite up 12% since the start of the year. The strong performance is driven largely by memory and semiconductor stocks as hyperscalers invest heavily in building out their AI infrastructure.

While tech stocks are grabbing the headlines, insurance stock Travelers (TRV +2.30%) is trading near a record high, underscoring its resilience and fundamental strength. The stock has also increased 15.4% since the start of the year.

Can it continue to rally? Let's dive into what's driving the stock to find out.

Image source: Getty Images.

Travelers' stellar growth is driven by higher interest rates and underwriting discipline Travelers has reached record heights, fueled by a robust business model that demonstrates disciplined insurance underwriting while reaping rewards from elevated interest rates through its investment portfolio.

Unlike cyclical financial stocks, such as banks, Travelers benefits from higher-for-longer interest rates. That's because insurers invest premium float before claims are paid, and elevated bond yields translate directly into growing net investment income, providing growth independent of insurance premiums.

In the first quarter, Travelers' net investment income rose 8% to $1 billion, up from $930 million last year. This solid growth was driven by its fixed maturity portfolio and higher long-term reinvestment yields on its invested assets.

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Net written premium growth was down 2% year over year in the first quarter; however, a large portion of this was due to Travelers' divestment from its Canadian insurance business. When adjusting for this change, the company's premiums grew modestly year over year. Its slower premium growth reflects the softening of the insurance market after years of inflation and hard-market conditions. With that said, insurance underwriters continue to maintain pricing power to offset inflationary pressures.

What stood out for Travelers was its improving profitability, with net income surging 333% to $1.7 billion. The company benefited from easier year-over-year comparisons to 2025, which was punished by the California Palisades and Eaton wildfires.

Travelers' combined ratio, which represents underwriting profitability by dividing claims costs and expenses by total premiums earned, was a stellar 88.6%. This, coupled with favorable reserve developments and growth in interest income, boosted earnings.

Data by YCharts.

Looking ahead, catastrophe expectations look favorable for property insurers like Travelers. Forecasts from NOAA's National Weather Service predict a below-average hurricane season, which would limit large catastrophe losses if projections are accurate.

Travelers is a smart stock that can provide diversification Travelers' stock is trading near all-time highs and priced cheaply at around 11.8 times forward earnings. Insurance stocks tend to trade at low multiples, but the stock remains attractively priced despite its new highs. Looking ahead, the company stands to benefit if Treasury yields remain elevated while also having pricing power to adapt if inflationary pressures persist.

The company continues to post stellar underwriting results, and its future performance hinges on maintaining underwriting discipline, as growing interest income isn't guaranteed. With this in mind, Travelers' stock is more defensive and an excellent choice for investors looking to diversify away from volatile technology stocks.

AGNC Investment Corp. (AGNC +1.72%), one of the largest mortgage real estate investment trusts (mREITs) in America, pays a massive forward dividend yield of 13.1%. Is that high yield a bright red flag, or is AGNC actually a safe income play for long-term investors?

Image source: Getty Images.

How does AGNC pay such a high dividend? Unlike equity REITs, which buy properties and lease them out to generate income, mREITs buy mortgages and mortgage-backed securities (MBS) to collect interest. To insulate itself from another credit crunch or housing market crash, AGNC allocates 89% of its $94.7 billion portfolio to Agency MBS assets backed by Fannie Mae, Freddie Mac, or Ginnie Mae. REITs and mREITs also must pay out at least 90% of their taxable income as dividends to maintain a lower tax rate.

To generate stable profits, mREITs must earn sufficient interest on their long-term MBS to cover the debt financing of their short-term MBS purchases. This strategy works as long as the housing market remains stable and the Fed's short-term rates remain lower than its long-term rates.

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10.97

To see how sustainable AGNC's dividend is, we should check its net interest spread, or the gap between the average yield it earns on its MBS and the average costs of funding its ongoing purchases, and the ability of its net spread and dollar roll income (the profit it books from its ongoing sales and purchases of MBS) per share to cover its dividends.

Metric

2021

2022

2023

2024

2025

Year-end net interest spread

2.15%

2.74%

3.08%

1.91%

1.81%

Net spread & dollar roll income per share

$3.02

$3.11

$2.61

$1.88

$1.50

Dividends per share

$1.44

$1.44

$1.44

$1.44

$1.44

Data source: AGNC.

AGNC hasn't raised its dividend since it reduced its payout in 2020. Its net interest spread remains positive -- and its net spread and dollar roll income per share can still cover its dividends -- but that gap has been shrinking over the past two years.

The Fed's six rate cuts in 2024 and 2025 reduced its borrowing costs for funding new MBS purchases, but they also reduced the value of its older, higher-rate mortgages. Homeowners refinanced at lower rates, but AGNC's own interest rate swaps were locked in at higher rates. The Fed could raise its rates in the second half of 2026 if inflation doesn't cool off. That would simultaneously raise AGNC's short-term borrowing costs while cooling the housing market.

While AGNC's dividend is sustainable for now, there's no guarantee it can cover its future dividends with its net spread and dollar roll income. If you don't fully understand that delicate balancing act, it's smarter to stick with other lower-yielding dividend stocks instead.

Leo Sun 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.

Bloom Energy (BE 6.47%) has launched into the stratosphere.

The clean energy stock started 2026 trading at about $98 per share. Since then, it has nearly tripled to about $289 per share.

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Bloom's momentum was driven by a flurry of exciting news. The company inked and expanded strategic deals with Nebius and Oracle, while also reporting explosive revenue growth and raising its outlook for the remainder of 2026.

Image source: Bloom Energy.

The second half of 2026 has already gotten off to a good start. On June 30, the company expanded its $5 billion deal with Brookfield Asset Management to $25 billion. This, of course, is a financing for AI infrastructure projects, not direct revenue to Bloom. But since that capital will only go to projects that use Bloom's energy servers, it should, in the end, contribute significantly to Bloom's top-line growth.

Still, Bloom has a lot to prove in the second half of 2026 and beyond. Foremost, it needs to show Wall Street that it can translate these exciting partnerships and deals into sustained revenue growth that improves profitability and cash flow.

After its stellar run over the last year, Bloom is trading at a premium, with a forward price-to-earnings (P/E) figure of about 147. Bloom reports second-quarter earnings at the end of July, and another blowout quarter could push this stock to new heights. At the same time, investors should maintain caution, as the stock's pricy valuation could invite downward pressure if the price runs ahead of fundamentals.

Steven Porrello has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bloom Energy, Brookfield Asset Management, and Oracle. The Motley Fool has a disclosure policy.