📊 Microsoft Smashes Earnings

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Happy Sunday!

We just had one of the busiest weeks all year for earnings, macro, and headlines, so I’ll keep the intro short.

One quick call out:

• I received a lot of feedback on paywalls, so I’ll be gifting as many full articles as possible.

• Some sources limit gifting, but I’ll do my best to include full details or directly source material like earnings reports or company releases.

As always, thank you for your continued support and engagement!

Key data bites from this week that you should know:

🔥 AI & Tech Investments

• Palantir signed a $10B software and data contract with the US Army.

• Big Tech is on track to spend nearly $400B on AI CapEx this year.

• AMD raised the price of its high end AI chip by nearly 70%.

• OpenAI has raised $8.3B at a $300B valuation.

• Tesla signed a $16.5B deal to source chips from Samsung.

• Tesla signed a $4.3B battery deal with LG Energy Solution.

• Amazon will pay New York Times $20M per year to use its content for AI.

• Alphabet and Nvidia in talks to fund Vast Data at a $30B valuation.

• DOGE is building an AI tool to cut 50% of federal regulations.

💼 Major Deals & M&A Activity

• Barron’s named 11 companies that could be takeover targets.

• Union Pacific will purchase Norfolk Southern in $85B deal.

• Palo Alto Networks will purchase CyberArk in a $25B deal.

• Figma more than tripled after IPO and raised $1.2B.

📉 Macro, Labor Trends, & Government

• EU to accept 15% tariff on exports to US, purchase $750B in American energy, and invest $600M more in the US.

• US GDP beat estimates and increased 3% in Q2.

• Private employees added 104,000 jobs in July, ahead of 76,000 estimate.

• US Jobs for both June and May were revised down by a combined 258,000.

• NASA announced 20% of workforce will leave.

• Trump asked 17 drugmakers to cut US prices within 60 days.

💸 Earnings Highlights

• Robinhood saw net income surge 105% YoY.

• Boeing reported its strongest revenue in 6 years.

• Gucci sales plunged 25% in Q2.

• PayPal saw Venmo grow revenue more than 20% in Q2.

• Reddit saw daily active uniques climb 21% YoY.

• Spotify saw premium subscribers jump 12% YoY.

• Volkswagen reported a $1.5B hit to its H1 revenue due to tariffs.

📊 Market Outlook & Institutional Activity

• Oppenheimer raised its year-end S&P 500 target to 7,100.

• Fidelity International sees Gold hitting $4,000/oz by the end of 2026.

• Hedge funds sold tech stocks at the fastest pace in 12 months.

• S&P 500 companies are replacing CEOs at fastest rate in 2 decades.

In today’s newsletter:

• 📈 SoFi’s Total Member Growth

• ☕️ Starbucks Is Struggling

• ☁️ Microsoft Smashes Earnings

• 🛜 Meta Is Taking Over The Internet

• 📱 Apple’s iPhone Sales Soar

Let’s jump right in.

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SoFi is in one of its strongest stretches yet.

• The company’s Q2 earnings topped expectations, posting $0.08 in EPS vs. the $0.06 consensus.

• Revenue jumped 44% to $858M, easily beating estimates of $804M.

Even better?

• SoFi raised its full-year revenue guidance to $3.375B, implying 30% growth.

Membership growth was just as impressive.

• The company added 850,000 new members in the quarter, bringing its total to 11.7M.

• Management now expects to add 3M members this year, up from its prior estimate of 2.8M.

And if the business does well, the stock eventually follows.

• SoFi is now up 50% in 2025.

The coffee is still tasting sour.

On Tuesday, Starbucks posted its sixth straight quarter of same-store sales declines.

• Global same-store sales fell 2% in fiscal Q3, worse than the 1.3% drop analysts expected.

• But North America held up better, with a 2% decline beating the -2.5% estimate.

Earnings were mixed.

• Adjusted EPS came in at $0.50, well below the $0.65 forecast and down 45% YoY.

• CFO Cathy Smith said a leadership summit and discrete tax item cut $0.11 off earnings.

• Still, revenue rose 4% to $9.5B, topping expectations.

Starbucks is now in turnaround mode under CEO Brian Niccol, who led Chipotle’s comeback post-E. Coli crisis.

• Niccol says the company is ahead of schedule based on his experience of turnarounds, and expects a wave of innovation to kick off in 2026.

Microsoft is firing on all cylinders.

• The tech giant’s fiscal Q4 crushed expectations this past Wednesday.

• Its strong results briefly pushed the company’s market cap past $4T, making it the second company ever to hit that milestone, behind Nvidia.

For the first time, Microsoft broke out Azure’s full-year sales: $75B, up 34% YoY.

• In Q4 alone, Azure grew 39%, well ahead of the 34% estimate.

That strength carried over to the broader business:

• EPS came in at $3.65 vs. $3.37 expected.

• Revenue climbed 18% to $76.44B, also beating forecasts.

• All 3 of the company’s core segments posted strong growth, and net income jumped 24%, reflecting ongoing profit momentum.

Looking ahead, Microsoft expects $75.25B in revenue this quarter (vs. $74.09B estimate) and 37% Azure growth (vs. 34% estimate).

• The company is also ramping up its investments in AI, with plans to spend $30B on CapEx this quarter, well above the $24B forecast.

Shares are now up 25% YTD and nearly 50% off April lows.

Meta’s dominance keeps growing.

The company now counts 3.48B daily active users across its apps, meaning over 60% of global internet users use one of Meta’s apps every day.

Even at that scale, daily users still grew 6% YoY.

That reach is driving serious ad performance:

• Impressions jumped 11%, and the average price per ad climbed 9%.

Meta’s financials delivered too:

• EPS hit $7.14 vs. $5.92 expected, with net income surging 36%.

• Revenue came in at $47.52B, up 22% and ahead of the $44.80B estimate.

And the momentum isn’t slowing.

• Meta is guiding to $49B in Q3 revenue at the midpoint, well above the $46B analyst forecast.

Is Apple finally turning the corner?

The company reported a solid quarter Thursday, with total revenue up 10%, its fastest growth since December 2021.

• The iPhone, Apple’s crown jewel, snapped out of its slump with sales rising 13%.

• Services, a key profit driver, also grew 13% YoY, continuing its double-digit streak.

The biggest surprise came from Macs, where revenue jumped 15%.

• This was the fastest of any segment, fueled by a refreshed MacBook Air lineup.

Not everything impressed.

• iPad and Wearables both missed estimates and declined just under 10% YoY.

Still, Apple beat across the board.

• EPS came in at $1.57, and revenue hit $94.04B, both ahead of expectations.

Looking ahead, Apple expects mid-to-high single-digit revenue growth this quarter, with services growing at a similar pace.

• While some investors worry Apple is falling behind in AI, Tim Cook signaled the company is ready to act, saying they’re “open to M&A that accelerates our roadmap.”

Notable Companies Reporting Earnings Week of August 3rd, 2025:

📚 Recommended Reading

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Buys

• Debbie Wasserman Schultz (D)

  • Company: AngioDynamics ($ANGO)

    • Amount Purchased: $1K - $15K

Sells

• Dave McCormick (R)

  • Company: Delta Air Lines ($DAL)

    • Amount Sold: $250K - $500K

    • Description: Rate/Coupon: 4.375%, Matures: 04/19/2028

  • Company: UPS ($UPS)

    • Amount Sold: $52K - $130K

Buys

• Strategy ($MSTR)

  • Insider: Peter Briger (Director)

    • # of Shares Purchased: 220,000

    • $ Amount: $19,800,000

    • SEC Forms: [1]

Sells

• Arista Networks ($ANET)

  • Insider: Jayshree Ullal (CEO and Chairperson)

    • # of Shares Sold: 1,404,122

    • $ Amount: $166,301,715

    • SEC Forms: [1], [2], [3]

🤝 Review of the Week