Meta and Microsoft shares slide after quarterly results. ...

Core Insights - The increasing popularity of exchange-traded funds (ETFs) is largely due to their ability to provide diversification, with many ETFs holding thousands of bonds or stocks, thus offering deep-bench portfolios [1] - However, diversification can be misleading, as capitalization-weighted index funds and ETFs may be heavily concentrated in a few stocks, particularly with the rise of the "Magnificent Seven" stocks, where just five stocks account for over 27% of S&P 500 ETFs [2] - This high level of concentration raises concerns among investors, yet the index's returns remain strong due to the prominence of a small number of stocks [3] ETF Analysis - The Vanguard Dividend Appreciation ETF, with $98 billion in assets under management, is a leading dividend ETF, but it is concentrated with just three stocks—Broadcom, Microsoft, and JPMorgan Chase—making up approximately 15% of its portfolio [5] - The ETF's benchmark, the S&P U.S. Dividend Growers Index, includes companies that have increased dividends for at least 10 consecutive years while excluding the top 25% with the highest yields, with components weighted by market capitalization [6] - Broadcom, Microsoft, and JPMorgan are reliable dividend growers, maintaining manageable payout ratios while allowing for long-term growth, which justifies their significant presence in the ETF [7]

Let's start with matter. That's kind of the equation, right. Okay.Capital expenditures will be higher next year than they were this year. Then what. Give us more. Give us some longer term outlook.That just wasn't a formal guidance. Is that what spooked the market. Yeah, Metta was just in a period of being really comfortable.Zach had had been very comfortable. The company had executed, they had invested and they were harvesting those investments and now they're going back into investment. So I think at the b ...

Let's start with matter. That's kind of the equation, right. Okay.Capital expenditures will be higher next year than they were this year. Then what. Give us more. Give us some longer term outlook.That just wasn't a formal guidance. Is that what spooked the market. Yeah, Metta was just in a period of being really comfortable.Zach had had been very comfortable. The company had executed, they had invested and they were harvesting those investments and now they're going back into investment. So I think at the b ...

Microsoft Corp. is warning investors about a new risk to its expansive data center plans: local backlash https://t.co/T9YAeBozFy ...

Core Insights - Microsoft reported first-quarter fiscal 2026 earnings of $4.13 per share, exceeding the Zacks Consensus Estimate by 13.15% and reflecting a year-over-year increase of 25.2% [1] - Revenues reached $77.6 billion, an 18.4% year-over-year growth, surpassing the Zacks Consensus Estimate by 3.62% [1] - Strong demand for cloud and AI offerings was highlighted, with revenues growing 17% year-over-year at constant currency [1] Financial Performance - Commercial bookings surged by 112%, significantly driven by Azure commitments from OpenAI and growth in high-value contracts for Azure and M365 [2] - Commercial remaining performance obligation rose to $392 billion, a 51% increase year-over-year, nearly doubling over the past two years [3] - Microsoft Cloud revenues were $49.1 billion, growing 26% year-over-year, with a gross margin percentage of 68% [3] Segment Performance - The Productivity & Business Processes segment contributed 42.5% to total revenues, with a 17% year-over-year increase to $33.02 billion [5] - M365 commercial cloud revenues increased by 17%, driven by ARPU and seat growth, with paid M365 commercial seats growing 6% year-over-year [6] - The Intelligent Cloud segment reported revenues of $30.89 billion, growing 28% year-over-year, primarily driven by Azure [11] Capital Expenditure and Guidance - Total capital expenditures for the fiscal first quarter were $34.9 billion, with a focus on short-lived assets like GPUs and CPUs [24] - Microsoft expects total company revenues for the second quarter of fiscal 2026 to be between $79.5 billion and $80.6 billion, representing growth of 14% to 16% [28] - The company anticipates Azure and other cloud services revenue growth of approximately 37% in constant currency for the second quarter [32] Strategic Developments - Microsoft secured exclusive rights for Azure with OpenAI until AGI achievement or through 2030, with an incremental $250 billion in Azure services contracted [27] - The Azure AI Foundry now serves 80,000 customers, including 80% of the Fortune 500, showcasing significant adoption of AI capabilities [19] - Microsoft plans to increase total AI capacity by more than 80% this year and double its data center footprint over the next two years [18]

TRENDING: You Don't Have To Dig Far To Cash In On Rare Earths Ballooning capital expenditures on AI data centers will benefit the entire tech stack of computer gear makers, analysts say. The trend is positive for AI stocks providing the picks and shovels for the modern-day gold rush. BNP Paribas analyst Karl Ackerman said the increased spending revealed Wednesday by tech giants Alphabet (GOOGL), Meta Platforms (META) and Microsoft (MSFT) has positive implications for more than just AI chipmakers AMD (AMD) a ...

Market Overview - The S&P 500 and Nasdaq experienced declines due to post-earnings slumps from Meta Platforms and Microsoft, with shares down 10% and 3% respectively despite better-than-expected quarterly results [1] - The Federal Reserve announced a widely expected interest rate cut for the second time this year, influencing market sentiment [1] Company Updates - Honeywell completed the spin-off of its advanced materials business, now known as Solstice Advanced Materials, which began trading under the ticker "SOLS" on Nasdaq [1] - Honeywell shareholders received one Solstice share for every four shares held, with BMO Capital Markets initiating coverage of Solstice with a buy-equivalent rating and a price target of $70, compared to an initial trading price slightly below $50 [1] - Solstice shares rose nearly 6% on debut, reaching an intraday high of approximately $54, while Honeywell's stock remained flat [1] - DuPont is set to complete the split of its electronics business, Qnity Electronics, next week, with the stock joining the S&P 500 and trading under the "Q" ticker [1] Financial Insights - Goldman Sachs CEO David Solomon addressed concerns regarding the bank's stock drop post-earnings, emphasizing strong profit growth and the bank's leadership in investment banking and M&A [1] - Solomon noted that Goldman's trading businesses have increased their wallet share with clients by 380 basis points over the past five years [1] - Solomon described the U.S. economy as being in "pretty good shape" and indicated a low chance of a near-term recession, highlighting a significant investment boom in AI infrastructure with large companies expected to spend $350 billion this year [1] Upcoming Earnings - Apple and Amazon are scheduled to release earnings on Thursday night, alongside cybersecurity firm Cloudflare [1] - Club stock Linde will report results before Friday's opening bell [1]

Market Overview - The Dow is currently up by 200 points, with significant contributions from Goldman Sachs, Caterpillar, and Sherwin Williams, which together add 193 points to the index [1] Company Performance - Facebook has guided for a 25% year-over-year advertising growth and has exceeded expectations in all metrics except for a one-time tax bill [2] - Google has reported strong performance across all business units, indicating effective AI spending, with current spending levels at 60-70% relative to GDP compared to the internet buildout in the 1990s, suggesting further growth potential [3] - Microsoft is experiencing a decline of $11, but there is speculation about a potential recovery by the end of the day [3][4] Investment Sentiment - There is a prevailing market sentiment favoring buybacks and dividends over long-term investments, indicating a preference for immediate returns [2] - Despite recent selloffs, there is optimism about Meta's potential, especially given its substantial business growth over recent quarters [4][5]

Microsoft (MSFT) became the second U.S. company to join the exclusive $4 trillion market cap club on Tuesday, riding a 4% surge after restructuring its OpenAI partnership. The software giant now values its stake in the AI startup at roughly $135 billion, representing about 27% ownership on a fully diluted basis. The milestone comes as Microsoft and Apple (AAPL) raced toward the $4 trillion threshold, with Apple needing to close above $269.54 to claim its spot. Nvidia (NVDA) reached this valuation for the ...