Microsoft Corporation ( MSFT ) just released its Q2 FY2026 earnings , and there is a lot to take away, as highlighted by the biggest single-day drop in stock price for the tech giant sinceAs a detail-oriented investor with a strong foundation in finance and business writing, I focus on analyzing undervalued and disliked companies or industries that have strong fundamentals and good cash flows. I have a particular interest in sectors such as Oil&Gas and consumer goods. Basically, anything that has been unlov ...

分组1 - Microsoft Corporation (MSFT) reported its Q2 FY2026 earnings, which resulted in the largest single-day drop in stock price for the company since a significant prior event [1] - The analysis emphasizes a focus on undervalued and disliked companies or industries with strong fundamentals and good cash flows, particularly in sectors like Oil & Gas and consumer goods [1] - The article mentions specific companies such as Energy Transfer, which has been overlooked but shows potential for substantial returns [1] 分组2 - The author expresses a preference for long-term value investing while also exploring deal arbitrage opportunities, citing examples like Microsoft/Activision Blizzard and Spirit Airlines/JetBlue [1] - There is a noted aversion to investing in high-tech businesses or certain consumer goods, with a specific mention of a lack of understanding regarding cryptocurrencies [1] - The article aims to connect with like-minded investors to share insights and build a collaborative community focused on informed decision-making [1]

Market Overview - The S&P/TSX composite index decreased by 992.37 points, closing at 32,023.76 [1] - The Dow Jones industrial average fell by 529.07 points to 48,542.49, while the S&P 500 index dropped by 55.96 points to 6,913.05, and the Nasdaq composite declined by 225.71 points to 23,459.41 [2] Gold and Metal Prices - The April gold contract saw a significant decline of US$348.80, settling at US$5,006.00 per ounce, although gold prices have increased by over 70% in the past year [1] - The decline in metal prices is attributed to the announcement of Kevin Warsh as the new U.S. Federal Reserve chair, which strengthened the U.S. dollar and led to a selloff in gold and other metals [2][3] Federal Reserve Influence - The leadership of the Federal Reserve has a substantial impact on the economy and global markets, particularly regarding interest rate decisions that affect investment prices [3] - Concerns exist that President Trump's influence may compromise the Fed's independence, which has historically allowed it to make difficult decisions to address long-term economic issues like inflation [5] Technology Sector Impact - Large technology companies, particularly Microsoft, have contributed to market declines, with Microsoft experiencing a 10% selloff despite reporting stronger-than-expected earnings [6] - Investors are focusing on Microsoft's investment spending rather than its profit and revenue performance, indicating a shift in market sentiment towards tech stocks [6] Currency Exchange - The Canadian dollar traded at 73.69 cents US, a slight decrease from 73.99 cents US the previous day [6] Oil Prices - The March crude oil contract increased by 26 cents, reaching US$65.68 per barrel [7]

Core Insights - The market's reaction to Microsoft and Meta's AI strategies highlights a shift from valuing potential to demanding immediate results [2][10][11] Group 1: Microsoft’s Challenges - Microsoft reported earnings that exceeded expectations but saw a nearly 10% drop in stock value, resulting in a loss of $357 billion in market capitalization [1] - The company faces significant infrastructure constraints, particularly a lack of electrical power to utilize advanced AI chips, leading to inventory issues [3][4] - Microsoft's Azure revenue growth slowed from 40% in Q1 to 39% in Q2, indicating that even minor decelerations can be problematic given the high spending expectations [4][12] Group 2: Meta’s Advantages - Meta is also investing heavily in AI, with plans to increase spending to $135 billion in 2026, but its investments are already generating revenue [1][5] - The company reported a 24% increase in advertising revenue to $58.1 billion in Q4 2025, with AI improvements directly enhancing ad performance [6][13] - Unlike Microsoft, Meta's AI advancements can be implemented immediately within existing infrastructure, allowing for quicker monetization [7][8] Group 3: Market Dynamics - The market is transitioning to a "Show Me" phase, where companies must demonstrate that their AI investments are yielding immediate returns rather than just future potential [10][15] - Investors are now focused on the ability to deploy infrastructure and generate revenue within a visible timeline, rather than merely announcing large capital expenditures [11][14] - The divergence in stock performance between Microsoft and Meta illustrates the importance of execution and immediate results in the current investment climate [16]

Deerra Bosa has more in today's tech check. Dearra, >> hey Kelly. So the early shift in earning season is how the market is pricing AI.It's become Googleesque, meaning that investors are rewarding companies that really own the full stack of AI. So through that lens, uh Meta spending it does look bullish. It's expensive, yes, but it's also internal.Meta controls the models, the infrastructure, the distribution. So that is the control the full control that the market is rewarding these days. Microsoft by cont ...

Core Viewpoint - Catherine O'Hara, a renowned actress known for her iconic roles in film and television over five decades, passed away at the age of 71 after a brief illness [1][3][11] Career Overview - O'Hara began her career in Canadian television and gained popularity through the sketch comedy series "Second City Television," where she won an Emmy Award, marking the start of her successful comedy career [4][10] - She became a household name with iconic films such as "Beetlejuice," "After Hours," and the "Home Alone" series, where she portrayed Kate McCallister, a mother trying to reunite with her son [6][10] - O'Hara was closely associated with filmmaker Christopher Guest, appearing in several of his mockumentary films, including "Best in Show" and "A Mighty Wind," and lent her voice to animated films like "The Nightmare Before Christmas" [7][10] Recent Achievements - In her 60s, O'Hara experienced a career renaissance with her role as Moira Rose in the CBC sitcom "Schitt's Creek," earning a second Emmy Award and introducing her work to a new generation [8][10] - Her success in "Schitt's Creek" led to further high-profile television roles, including appearances in HBO's "The Last of Us" and Apple TV's "The Studio," where she played a veteran Hollywood executive [8][10]

Shares of Microsoft Corporation (NASDAQ:MSFT) are little changed on Friday. That wasn't the case yesterday. They dropped by 10% after the company reported its earnings.Microsoft is our Stock of the Day. It may have found a bottom, and it could even reverse and move higher.As you can see on the chart, the shares found a bottom around $420. This wasn't a coincidence.Last May the stock gapped up to $420. This was about a 7.5% move. When this happened, many investors and traders sold shares. They thought it was ...

Core Insights - The earnings reports from Microsoft and Meta have elicited mixed market reactions, highlighting contrasting investor sentiments towards their AI investments [2][4][13] Microsoft - Microsoft continues to invest aggressively in AI, but faces concerns regarding its dependency on OpenAI and the potential return on investment (ROI) from these expenditures [3][6] - Azure's growth is projected to remain stable, with a growth rate above 35% considered impressive, yet the market reacted negatively to Microsoft's latest report [3][4] - The company is also grappling with broader disruptions in the software market due to AI, which may affect its revenue model and sales processes [5][6] Meta - Meta's aggressive investment in AI has yielded positive results, particularly in ad revenue growth, which has been significantly enhanced by AI-generated content [4][9] - The company reported a capital expenditure (capex) of up to $135 billion, which investors reacted positively to, contrasting with previous reports [7][12] - Despite the positive revenue growth, concerns remain about Meta's lack of business diversification compared to competitors like Google, as it primarily relies on ad revenue [10][11] Financial Performance - Meta's projected free cash flow for the year is expected to be around $12-13 billion, a significant decrease from nearly $50 billion in the previous year [12] - The company is also increasing its debt levels, raising questions about the sustainability of its aggressive AI investment strategy [12][13]

Core Insights - Microsoft Corp (MSFT) reported a significant increase in operating cash flow, up 60% year-over-year for fiscal Q2 ending December 31, 2025, but free cash flow (FCF) decreased by 9.3% year-over-year and 77% quarter-over-quarter due to increased AI-related capital expenditures [1] - The stock price of MSFT has declined over 10.4% from $481.63 to $430.13, raising questions about its future stability [1] Group 1: Capital Expenditures and Free Cash Flow - Management anticipates a decline in capital expenditures on a sequential basis due to normal variability in cloud spending and finance leases [2] - The increase in capex spending may be attributed to seasonal factors, as seen in previous years where capex spiked in fiscal Q2, leading to a subsequent rise in FCF in the following quarter [3] - In the latest quarter, FCF was only 9% lower than the previous year, despite an 89% year-over-year increase in capex and a 60% increase in operating cash flow [3] Group 2: Operating Cash Flow Trends - Operating cash flow fell from $45 billion in Q1 to $35.758 billion, representing a 20.6% quarter-over-quarter decline, with a worse decline of 34.8% year-over-year in the prior year [4] - The capex spending increase was influenced by a significant quarter-over-quarter rise from $19.394 billion in Q1 to $29.876 billion in Q2, a 48.9% increase [4] - Investors should not expect another quarterly 50% increase in capex spending, and operating cash flow is expected to continue rising significantly [5] Group 3: Free Cash Flow Margin Projections - Despite the 20% quarterly dip in operating cash flow to $35.758 billion and a spike in capex spending, Microsoft's FCF margin remains strong compared to the previous year [7]

Earnings Reports - Microsoft and Meta both beat expectations, with Meta increasing its CapEx spending to $17 billion, a 41% growth from last year [4] - Microsoft stock fell 10% post-earnings, while Meta's stock rose 10%, indicating differing market reactions despite similar news [5] - Meta's average revenue per user reached $16.56, up 16% year-over-year, marking 10 consecutive quarters of double-digit growth [9] - Microsoft continues to see solid growth in its cloud segment, but concerns arise about reaching a peak [10] - Tesla's earnings report showed declines in deliveries and production, with the stock initially rising but then fading [12] - Apple reported record sales with iPhone revenue exceeding $85 billion and services revenue surpassing $30 billion, but the stock declined due to perceived lack of investment in AI [16] Health Insurance Sector - UnitedHealth's stock dropped 20% after projecting a revenue decline in 2026, the first such decline in decades, influenced by proposed minimal increases in payment rates [18] - Other health insurance stocks also fell, with Humana down 21%, CVS down 14%, and Molina Healthcare down 8% [19] Travel and Leisure Industry - Royal Caribbean's stock rose 19% following stronger-than-expected guidance, indicating double-digit growth in revenue and earnings [21] - Southwest Airlines also saw a 19% increase in stock price, projecting a 300% rise in EPS for 2026 compared to 2025 [22] - The performance of these companies suggests underlying demand in the travel and leisure sector [23] Upcoming Earnings - Anticipation builds for Amazon and Alphabet's earnings reports, with a focus on Amazon's AWS performance and Alphabet's investment strategies in AI [24][27] - Other notable companies reporting include Uber, Qualcomm, and several pharmaceutical firms [28] Macro Economic Insights - The upcoming jobs data is expected to be significant, with previous reports showing only 50,000 jobs added, raising concerns about potential negative revisions [36] - Consumer confidence remains low, attributed to persistent inflation and rising prices affecting daily life [39][40] - The political landscape may further influence consumer perceptions of the economy, especially with midterm elections approaching [43]