AI Spending Finally Pays Rent

 

Good evening, and happy Thursday. The market closed higher, the Nasdaq tech losing streak was ended by Microsoft's record setting $450B market cap gain on the day.  Patrick Sanders, analyst at Motley Fool said the market was rewarding the massive nearly $20B in free cash flow MSFT generated even despite its massive CapEx.  Trump's 90-day tariff pause also helped stoke the fires of a climbing market. PCE inflation data came in cooler than feared, slowing from the last read to 3.3% YoY, and the economy grew just 1.5% in Q2 based on GDP numbers.  After hours, earnings separated proof from promises. Amazon’s 37% AWS growth sent shares higher, while Apple’s refund-assisted beat, Reddit’s choppy search traffic, Coinbase’s falling trading revenue, and Roblox’s weaker monetization drew sellers.  Stocks leaned hardest into Amazon, where 71% of the room stayed bullish on the cloud acceleration.  Today's Briefing: Powered by Stocktwits Community API. After the Bell: Amazon’s AWS acceleration outshone Apple’s tariff-assisted beat.  More Earnings: Reddit’s user mix and Coinbase’s trading slowdown overpowered headline results.  Stocks: Jersey Mike’s closed below its $23 IPO price.  What's Trending Now on Stocktwits  Does Amazon’s AWS acceleration justify the AI spending boom?

AFTER THE BELL Apple’s Beat Had Footnotes  Apple reported record June-quarter revenue and EPS Thursday, but shares slid after hours because tariff refunds supplied a meaningful piece of the earnings beat. Strong iPhone and China sales were not enough to erase the quality-of-earnings question.  The RIP:  $AAPL ( ▼ 1.41% ) dropped -4% after hours. EPS reached $2.02 vs. $1.89 expected, while revenue hit $109.4B vs. $108.9B. iPhone revenue totaled $54.3B, and Services generated $30.7B.  At least Apple's capex wasn't really on the rise Tariff refunds added approximately 2 percentage points to Apple’s 50.1% gross margin and $0.11 to EPS. Without that benefit, earnings were roughly $1.91, only $0.02 above consensus. iPhone sales still jumped 22%, but a stock valued near 45 times earnings needed a cleaner beat than Uncle Sam returning an overpayment.  The Community Read: The $AAPL room is 55% bull after the refund-assisted beat, track the reaction -> AWS Finally Paid Up  Amazon reported second-quarter results Thursday that showed its heavy AI infrastructure spending translating into faster cloud growth. Shares jumped as AWS posted its fastest expansion in 18 quarters and generated most of the company’s operating profit.  The RIP:  $AMZN ( ▲ 3.91% ) climbed +8% after hours. EPS reached $5.75 vs. $1.99 expected, revenue totaled $200.6B vs. $197B, and AWS sales increased 37% to $42.2B. Operating income rose 43% to $27.5B.  The EPS comparison came with a $53.4B pre-tax gain from Amazon’s Anthropic investment. The operating story was cleaner: AWS generated $16.6B in operating income, up from $10.2B, while Amazon guided third-quarter operating income to $22.5B-$26.5B. Trailing free cash flow still swung to a $7.6B outflow as AI infrastructure spending accelerated.  The Community Read: 71% of $AMZN is buying the AWS acceleration, follow the upside ->

MORE EARNINGS  Reddit Beats, Stock Retreats  Reddit, the online discussion platform, crushed second-quarter expectations Thursday and issued above-consensus guidance. Shares still fell after hours as slowing logged-in growth and volatile search referrals overshadowed the advertising surge.  The RIP:  $RDDT ( ▲ 0.03% ) dropped -7% after hours. EPS reached $1.25 vs. $0.95 expected, while revenue hit $805M vs. $730M. Third-quarter revenue guidance of $860M-$870M topped the $828Mestimate.  Advertising revenue grew 64%, but the user mix explains the selloff. Daily users increased 18%, while logged-in users grew just 7% and U.S. users rose 6%. Management also called search referrals “choppy,” leaving investors with limited visibility into Google traffic while Reddit negotiates its reported $60M annual data-licensing agreement.  The Community Read: 55% of the $RDDT room is buying the earnings dip, check the split -> Crypto Winter Hits Revenue  Coinbase, the largest publicly traded U.S. crypto exchange, reported weaker second-quarter revenue Thursday as falling token prices and muted volatility discouraged customers from trading. Shares dropped despite market-share gains and another profitable quarter on an adjusted EBITDA basis.  The RIP:  $COIN ( ▲ 2.18% ) fell -5% after hours. Total revenue reached $1.22B vs. roughly $1.29Bexpected, while the company recorded a $359M net loss, or -$1.36 per share. Transaction revenue dropped 21% quarter-over-quarter to $599M.  Crypto spot volume across the market fell 25%, and Coinbase’s monthly transacting users declined to 7.6M from 8.7M. Coinbase increased its total crypto trading share from 9.1% to 10.3%, but the $208M in adjusted EBITDA showed that gaining share in a shrinking market still leaves less money on the table.  The Community Read: 65% of $COIN is bearish on the miss, see what broke ->

STOCKS Cold Cut, Colder Open  Jersey Mike’s made its New York Stock Exchange debut Thursday, but the franchised sandwich chain opened below its IPO price and never recovered. The weak start gave public investors an immediate discount while raising questions about how much growth was already baked into the offering.  The RIP: $JMKE closed -6% at $21.63 after pricing 43.5M shares at $23. The IPO raised approximately $1B and valued Jersey Mike’s at $7.3B. The chain generated $724M in revenue and $55M in net income last year.  Jersey Mike’s has nearly 3,300 locations, with franchisees operating 99.2% of them, but its IPO valuation equaled roughly 133 times last year’s earnings. Same-store sales grew 3%, and management sees room for 15,000 locations globally. That expansion must carry the story while restaurant traffic remains soft and IPO proceeds pay down debt.  The Community Read: The $JMKE room is split on the debut, see who is buying ->

POPS AND DROPS  TRENDING NOW $AXTI +39.6% | AXT 6.7K WATCHERS · BEARISH · LOW ACTIVITY AXT’s Q2 revenue jumped to $47.6M from $18M a year ago, while gross margin exploded to 44.9% from 8%, flipping the company back to profit. The bearish room was caught leaning the wrong way as AI data-center demand for indium phosphide turned a speculative supply-chain story into actual earnings.  $IBRX +9.1% | ImmunityBio 29.9K WATCHERS · BEARISH · NORMAL ACTIVITY ImmunityBio said the UAE authorized ANKTIVA across three bladder- and lung-cancer settings, broadening the drug’s international reach. Shares climbed even as the bearish room questioned how quickly overseas approvals can translate into revenue while U.S. label-expansion progress remains the bigger prize.  $RBLX -14.6% | Roblox 65.5K WATCHERS · BEARISH · LOW ACTIVITY Roblox’s Q2 revenue rose 36% to $1.5B, but bookings grew just 8% and landed at the low end of guidance as younger users monetized less. The bearish room saw an engagement-quality problem: 123M daily users spent 29B hours on the platform, yet recommendation changes favored retention over near-term spending.