Apple beats estimates while AI memory costs crush tech cash
$45B AI fund crashes to $10B in brutal fire sale
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Apple beats estimates while AI memory costs crush tech cash
Apple exceeded third-quarter expectations with $109.4 billion in revenue and strong iPhone sales of $54.2 billion, but shares fell as Services and China missed while memory constraints from the AI boom darkened guidance.
iPhone sales drive beat: iPhone revenue climbed to $54.2 billion from $44.5 billion a year earlier, topping the $53.5 billion estimate and helping overall revenue reach $109.4 billion against $108.8 billion expected.
Services China miss targets: Services generated $30.7 billion, below the $31.3 billion forecast, while Greater China contributed $18.8 billion versus the $19.5 billion analysts anticipated for the quarter.
Memory prices force hikes: Soaring memory costs from AI demand led Apple to raise Mac and iPad prices with iPhone hikes expected, as Tim Cook warned of rises beyond September before stepping down.
Hyperscalers face cash strain: Amazon, Alphabet and Tesla reported negative cash flow while Meta’s generation plunged 91%, with AI spending projected at $765 billion this year and Amazon lifting capex to $220 billion.
$45B AI fund crashes to $10B in brutal fire sale
Former OpenAI researcher Leopold Aschenbrenner’s Situational Awareness hedge fund plunged from a $45 billion peak to around $10 billion after leverage-driven margin calls forced a fire sale of all public stock positions to Citadel.
Leverage triggers forced sale: Reported leverage of up to 400% amid tumbling semiconductor stocks forced the fund to sell all leveraged public equity bets including SK Hynix and CoreWeave.
Citadel buys at discount: Ken Griffin’s Citadel acquired the positions at a discount as prime brokers including Bank of America, Goldman Sachs and JPMorgan managed the margin calls.
AI stocks drive losses: Portfolio holdings such as Nebius, Sandisk, Micron and CoreWeave fell more than 35% this month while short positions in software like Adobe moved against it.
Gains reverse amid wedding: The fund had posted more than 1,000% returns since its 2024 launch before the crash, which coincides with Aschenbrenner’s wedding this weekend.
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Chip stocks explode higher as Lam Research and memory names surge
Semiconductor shares rocketed higher after strong earnings from Microsoft and Lam Research, with Lam climbing 18% for its best day since 1999 and memory stocks surging on Samsung’s warning of a prolonged crunch into 2028.
Lam Research posts big gain: Lam Research shares climbed 18% after reporting strong earnings and guidance driven by artificial intelligence demand, marking the company’s best day since 1999.
Memory stocks rebound hard: Micron rose 18% and Sandisk jumped 26% after Samsung warned the memory crunch could last into 2028, reversing recent underwhelming SK Hynix results.
Broader chip rally spreads: Advanced Micro Devices gained 13%, Applied Materials 15%, Intel 11%, and the iShares Semiconductor ETF rose 8% as AI infrastructure demand fueled the rebound.
Arm sees strong demand: Arm Holdings advanced 7% after CEO Rene Haas said demand for its first in-house AGI CPU has surpassed $2 billion across fiscal 2027 and 2028.
Novo Nordisk shares crash after heart drug trial fails
Novo Nordisk shares fell as much as 10% after its experimental heart medicine Ziltivekimab failed to show a statistically meaningful reduction in major adverse cardiovascular events in a late-stage trial of more than 6,300 patients.
Trial misses key endpoint: Ziltivekimab did not achieve a statistically meaningful reduction in major adverse cardiovascular events versus placebo in patients with atherosclerotic cardiovascular disease and chronic kidney disease.
Biological effect falls short: The medicine showed some biological effect by blocking the IL-6 pathway but that did not translate into clinical benefit on cardiovascular death, non-fatal heart attack or stroke.
Company remains committed: Chief scientific officer Martin Holst Lange said the result does not change Novo Nordisk’s strategic commitment to cardiovascular disease despite the disappointment.
Pipeline faces fresh pressure: The miss is the latest blow as the company races to restore investor confidence amid intense competition from Eli Lilly and prior setbacks in its obesity pipeline.
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Wider losses hammer Coinbase, shares tumble on revenue miss
Coinbase shares dropped more than 7% after the crypto exchange posted a wider-than-expected second-quarter loss of $1.36 per share and revenue of $1.2 billion that missed Wall Street estimates amid ongoing crypto market weakness.
Loss widens beyond forecasts: Coinbase reported a loss of $359.5 million or $1.36 per share against expectations of a 17 cent loss, compared with a $1.43 billion profit a year earlier.
Revenue declines year over year: Second-quarter revenue fell to $1.2 billion from $1.5 billion a year ago and missed the $1.3 billion forecast, marking the third straight quarterly miss.
Subscriptions offer bright spot: Subscription revenue reached $555 million while transaction revenue was $599 million, though both missed expectations and declined from the prior year.
CEO highlights market share: Brian Armstrong said Coinbase reached an all-time high in crypto trading market share and is no longer just a bet on the price of bitcoin.
Amazon stock surges as AWS growth smashes every estimate
Amazon shares jumped more than 13% after second-quarter results showed AWS revenue climbing 36.7% to $42.2 billion, with AI and custom chip businesses each topping a $25 billion annualized run rate and capital spending raised to $220 billion.
AWS delivers record growth: AWS generated $42.2 billion in second-quarter revenue, up 36.7% year over year, after adding $4.6 billion quarter over quarter — about 80% more than its largest prior increase.
AI chips hit milestones: Amazon said its AI services and custom chip businesses have each surpassed a $25 billion annualized revenue run rate amid surging demand for inference and cloud capacity.
Capex guidance rises higher: The company raised its capital expenditures forecast to approximately $220 billion from prior guidance of around $200 billion to support AI infrastructure already booked into 2028.
Analysts call it home run: CFRA Research described the quarter as a home run, noting AWS now runs at about a $170 billion annual revenue rate, more than four times its 2019 level.
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