Just_Super/E+ via Getty Images Is the AI bubble going to pop? Will Artificial Intelligence usher in an age of abundance, or could it undo humanity’s social fabric? In sum total, the Q1 earnings reports answer none of these questions, but what’s increasingly clear to me is that for American big tech companies -and others around the globe- AI is either going to pay off big or go completely broke. Cr...
Just_Super/E+ via Getty Images Is the AI bubble going to pop? Will Artificial Intelligence usher in an age of abundance, or could it undo humanity’s social fabric? In sum total, the Q1 earnings reports answer none of these questions, but what’s increasingly clear to me is that for American big tech companies -and others around the globe- AI is either going to pay off big or go completely broke. Crucially, the momentum now may be so great that it’ll be difficult, if not impossible, to hit the brakes. We’re on a speeding train; whether it’s heading towards a cliff or greener pastures remains to be seen. I'm bullish on AI, but I admit that involves some faith. Amazon up ( AMZN ). Microsoft down ( MSFT ). Alphabet up ( GOOG ). Meta down ( META ). Recent earnings reports sent mixed signals , and in response, markets provided diverse outcomes. These earnings, in turn, have created turbulence for Nvidia ( NVDA ) as it dips and rises. Oracle ( ORCL ) has lost more than 7% in the last week owing to AI data center concerns. Other companies are going through similar motions. Is further market turmoil ahead? Of course, that's how markets work on a long enough time scale. I don't think a massive AI bubble is going to pop, at least not for the top players. But if one does, it'll have a huge impact on not just markets, but the global economy and even human civilization as a whole. The last claim I don't make lightly, but I believe it's true for myriad reasons that I will outline later on. The Market Is Now All In There is an unfortunate reality for AI bears: the market and indeed much of the larger economy as a whole are now tethered to AI. If the AI industry does collapse, the market will take massive hits. A severe economic contraction in such a scenario is also likely. Well over 30% of the S&P 500’s total market cap is tied to companies heavily invested and engaged with AI. The weight for individual companies includes (keep in mind, market fluctuations will shift the numbers): ...
lcva2/iStock Editorial via Getty Images In February, I marked Microsoft Corporation ( MSFT ) shares a Strong Buy after the stock had tanked, driven by AI CapEx and SaaS concerns. Since then, shares of the tech giant have risen 6.5% against the S&P 500’s ( SP500 ) 4% return. In this report, I discuss the company’s fiscal Q3 2026 earnings and update my price target. Microsoft Shows Double-Digit Grow...
lcva2/iStock Editorial via Getty Images In February, I marked Microsoft Corporation ( MSFT ) shares a Strong Buy after the stock had tanked, driven by AI CapEx and SaaS concerns. Since then, shares of the tech giant have risen 6.5% against the S&P 500’s ( SP500 ) 4% return. In this report, I discuss the company’s fiscal Q3 2026 earnings and update my price target. Microsoft Shows Double-Digit Growth With Margin Expansion Microsoft Q3 2026 earnings (Microsoft (Earnings Presentation)) Microsoft’s Q3 revenues rose 15% to $82.9 billion, beating analyst estimates by $1.46 billion. Productivity and Business Processes sales grew 17% and 13% on constant currency to $35 billion, while Intelligent Cloud grew 30% and 28% on constant currency to $34.7 billion, and More Personal Computing sales were down slightly to $13.2 billion. Gross profits rose to $56.1 billion, indicating a margin of 68%, which was down one point. Operating income, however, rose 20% to $38.4 billion, indicating a one-point margin expansion to 46%. Operating cash flow was up 26% to $46.7 billion, showing better cash conversion, but free cash flow declined 22% to $15.8 billion on higher capital expenditures. Microsoft revenue growth (Microsoft Press Release (altered by author)) Unsurprisingly, strong growth was realized in the cloud businesses, with 29% growth for Microsoft Cloud, 19% growth in Microsoft 365 Commercial Cloud, 33% growth in Microsoft 365 Consumer Cloud, and 40% growth in Azure and other cloud services. LinkedIn revenues grew 12%, while Dynamics 365 grew 22% and search advertising revenues grew 12%. Windows OEM and Xbox content sales were down. We see that AI continues to have momentum with annual recurring sales in AI of $37 billion, and that marks 123% growth year-on-year. Microsoft is also pushing on expanding Copilot and recorded a 250% increase in seats year-on-year and a 20% sequential growth in search queries per user. We do note that the company is transforming its revenue model from s...
European Central Bank President Christine Lagarde said stagflation is a label that belongs to the 1970s and shouldn’t be used to describe the current predicament of the euro zone. An outlook that combines inflation risks along with the potential for weak growth doesn’t add up to the toxic mix that afflicted the world back then, she told reporters in Frankfurt on Thursday. “It’s quite popular to ta...
European Central Bank President Christine Lagarde said stagflation is a label that belongs to the 1970s and shouldn’t be used to describe the current predicament of the euro zone. An outlook that combines inflation risks along with the potential for weak growth doesn’t add up to the toxic mix that afflicted the world back then, she told reporters in Frankfurt on Thursday. “It’s quite popular to talk about stagflation, and it flags a lot of anxiety and all the rest of it,” Lagarde said. “We have determined that stagflation is the right characterization of what happened in the 70s. But from our perspective, we think that it’s better to park it in the 70s, given the facts that we have at the moment.” The remark amounts to another attempt by a senior central banker to shut off a comparison that has become ubiquitous, not least given how the current challenges of the euro zone stem from a Middle East oil crisis. Federal Reserve Chair Jerome Powell made similar comments last month, insisting that the 1970s featured a “much more serious set of circumstances.” Lagarde arguably went further than him, describing the current juncture as a “completely different situation.” “In the 70s, you had inflation, continuing at a sort of sustainable and solid pace,” she said. “You had very high unemployment, you had a monetary and fiscal framework that had nothing to do with what we have at the moment. So we don’t apply stagflation, that flashy term, to the circumstances.” Further pressed on the matter, Lagarde said that the ECB’s focus makes the comparison invalid. “We contend that our monetary policy framework is strong enough, and our determination is solid enough that we will bring inflation back to 2%,” she said. “What happened in those days is that inflation was on this running course, and continuously, without being being brought back and tamed.” Meanwhile the prospect of economic expansion every year, currently envisaged by the ECB, is another difference, she said. An outlook of ...
watch now VIDEO 2:49 02:49 Elon Musk to return to the stand as OpenAI trial enters its fourth day Squawk on the Street What you need to know Elon Musk will take the stand for the third time on Thursday. Jared Birchall, who manages Musk's family office and is an executive at xAI and Neuralink, is also set to testify Thursday. Musk and OpenAI lawyer William Savitt sparred on Wednesday in a cross-exa...
watch now VIDEO 2:49 02:49 Elon Musk to return to the stand as OpenAI trial enters its fourth day Squawk on the Street What you need to know Elon Musk will take the stand for the third time on Thursday. Jared Birchall, who manages Musk's family office and is an executive at xAI and Neuralink, is also set to testify Thursday. Musk and OpenAI lawyer William Savitt sparred on Wednesday in a cross-examination that was heated. Musk said he lost trust in Sam Altman by late 2022, around the time of Microsoft's $10 billion investment in OpenAI, which was a tipping point. Elon Musk will conclude his testimony on Thursday as the trial in his lawsuit against OpenAI CEO Sam Altman rolls into its fourth day. OpenAI's attorney, William Savitt, cross-examined Musk for several hours on Wednesday, and the two men clashed repeatedly. Musk accused Savitt of lying and asking misleading questions that were "designed to trick" him. His cross-examination is expected to last for another hour on Thursday. Musk sued OpenAI, Altman, and Greg Brockman, the company's president, in 2024, alleging that they went back on their commitments to keep the artificial intelligence company a nonprofit and to follow its charitable mission. He claims that the roughly $38 million he donated to seed OpenAI, a company he co-founded, was used for unauthorized commercial purposes. Once Musk is done testifying on Thursday, his attorneys will call Jared Birchall, who manages Musk's billions at his family office, as their next witness. Brockman and Stuart Russell, a computer science professor at the University of California, Berkeley, could also be called to the stand. Judge Yvonne Gonzalez Rogers is overseeing the proceedings from federal court in Oakland, California CNBC's reporters are covering Thursday's proceedings from the courtroom, as well as from CNBC's bureaus in San Francisco and Englewood Cliffs, New Jersey. 14 Min Ago Three takeaways from Musk’s testimony on Wednesday Elon Musk speaks with U.S. Distric...
Amazon.com posted impressive earnings results Wednesday , and Wall Street is betting that the print only marks the beginning of a much longer stretch of strength for the hyperscaler. The technology firm on Wednesday clocked $181.52 billion in revenue for the first quarter versus the $177.3 billion expected by analyst polled by LSEG. Earnings came in at $2.78 per share, topping the Street's consens...
Amazon.com posted impressive earnings results Wednesday , and Wall Street is betting that the print only marks the beginning of a much longer stretch of strength for the hyperscaler. The technology firm on Wednesday clocked $181.52 billion in revenue for the first quarter versus the $177.3 billion expected by analyst polled by LSEG. Earnings came in at $2.78 per share, topping the Street's consensus estimate of $1.64 per share. Amazon Web Services also accelerated to 28% quarter over quarter, largely due to its core workload shift and Trainium chip business that is gaining ground amid rising artificial intelligence demand. On top of that, the company also raised its forecast for second-quarter revenue to between $194 billion and $199 billion. Amazon shares initially popped more than 4% on Thursday before giving back that gain. "AMZN is adding the most AI capacity of any company over the next few years, and as the coming wave of Agentic AI products take form, all roads lead to AWS," Barclays analyst Ross Sandler said Thursday in a note to clients. The bank has an overweight rating on Amazon. It also raised its price target on shares to $330 from $300, suggesting 25% upside from Wednesday's close. The analyst's comment comes as Amazon races against other Big Tech companies to lead the AI industry amid its ongoing boom in the industry. By the end of this year, the four major hyperscalers, Alphabet , Microsoft , Meta and Amazon , are expected to spend a combined $700 billion to drive their AI build-outs. Here's what other analysts had to say about Amazon stock after the company's better-than-expected earnings report. Citi: buy, $285 Analyst Jake Hallac's price target on shares is 8% above Wednesday closing price. "We justify our valuation approach givenAWS' accelerating growth, improving capacity visibility, expanding backlog, and continued margin progress across retail and advertising. We note Amazon's leading position within AWS and eCommerce, its Prime membership bas...
Fomento Economico Mexicano press release ( FMX ): Q1 net income of Ps.17.64B Revenue of Ps.207.78B (+6.1% Y/Y). More on Fomento Economico Mexicano FEMSA: Proximity Growth At An Attractive Valuation Fomento Económico Mexicano, S.A.B. de C.V. (FMX) Q4 2025 Earnings Call Transcript Fomento Economico Mexicano Q1 2026 Earnings Preview FEMSA targets 1,000 new OXXO Brazil stores and 1/3 Bara expansion in...
Fomento Economico Mexicano press release ( FMX ): Q1 net income of Ps.17.64B Revenue of Ps.207.78B (+6.1% Y/Y). More on Fomento Economico Mexicano FEMSA: Proximity Growth At An Attractive Valuation Fomento Económico Mexicano, S.A.B. de C.V. (FMX) Q4 2025 Earnings Call Transcript Fomento Economico Mexicano Q1 2026 Earnings Preview FEMSA targets 1,000 new OXXO Brazil stores and 1/3 Bara expansion in 2026 as restructuring drives MXN 1B annualized savings Seeking Alpha’s Quant Rating on Fomento Economico Mexicano
A group of Air Baltic Corp ’s bondholders have hired legal advisers as Latvia’s state-backed airline scrambles to deal with its dwindling cash reserves and soaring fuel prices. The law firm Hogan Lovells has been selected by bond investors to provide advice ahead of potential negotiations over the terms of the debt, according to people familiar with the matter, speaking on condition of anonymity. ...
A group of Air Baltic Corp ’s bondholders have hired legal advisers as Latvia’s state-backed airline scrambles to deal with its dwindling cash reserves and soaring fuel prices. The law firm Hogan Lovells has been selected by bond investors to provide advice ahead of potential negotiations over the terms of the debt, according to people familiar with the matter, speaking on condition of anonymity. Air Baltic’s €380 million ($445 million) bonds coming due in August 2029 trade at deeply distressed levels. The notes started the year marked around par, but are now quoted at 31 cents on the euro, according to price data compiled by Bloomberg. A spokesperson for Air Baltic declined to comment, and a representative of Hogan Lovells didn’t respond to a request for comment. Even before the war in Iran sent fuel prices soaring, Air Baltic was in need of a cash injection of as much as €150 million to see it through to 2027. Now the company faces even more pressure. It recently received a €30 million loan from the Latvian government to help steady its finances. Read More: Latvian Parliament Approves €30 Million Loan for Air Baltic Still, the airline’s “liquidity position remains strained” and its ability to meet short-term financial obligations are challenged, according to S&P Global Ratings. It lowered its assessment of Air Baltic one notche to CCC+ last week and warned of a “high risk of a debt restructuring.” The bond carries an annual interest rate of 14.5% and one of the quarterly payments is due on May 14. Air Baltic is working with Seabury Securities , a specialist aviation sector financial and strategic adviser, to help improve its financial performance and strengthen its capital structure, the company said in a statement on April 8.
Sign up now! Sign up now! Sign up now? Sign up now! When Scott Parker led Burnley out of the Championship and into the Premier League last season, he did so with a side showcasing the kind of defensive resilience more readily associated with a medieval fortress, although with more expensive haircuts and less reliance on cauldrons of boiling oil. His team lost just two of their 46 matches, were unb...
Sign up now! Sign up now! Sign up now? Sign up now! When Scott Parker led Burnley out of the Championship and into the Premier League last season, he did so with a side showcasing the kind of defensive resilience more readily associated with a medieval fortress, although with more expensive haircuts and less reliance on cauldrons of boiling oil. His team lost just two of their 46 matches, were unbeaten at home, kept a quite remarkable 30 clean sheets and notched up a combined total of 20 1-0 wins and scoreless draws. So while attending one of their games was about as exciting as reading an air-fryer instruction manual, they were devastatingly resolute. To nobody’s great surprise, they were immediately installed as the white-hot favourites to go straight back down before a ball had even been kicked. I read with interest that David Brent School of Management’s Glenn Hoddle was fishing for the Tottenham job ( yesterday’s Quote of the Day ). Is that a sign of how far Spurs have fallen, or was he trying to pay for sins in a prior life?” – Neale Redington. Can I point out Football Daily’s arrogance in dismissing the entertainment value of a proper match (sans £ billions), in which the mighty Vale handed out a schoolin’ to the resurgent Stockport County on a sunny evening in Edgeley ( yesterday’s Football Daily )? I haven’t watched the pompfest in foreign climes you referenced, but it couldn’t have been a patch on what Pep Guardiola was fortunate enough to choose” – John Timmins. Your reader Ken Muir’s observation that Hearts teams are sweeping all before them this season ( yesterday’s Football Daily letters ), brings to mind an old chestnut. An Englishman goes into a pub in Edinburgh and asks a local: ‘What colour do Hearts play in?’ ‘It’s maroon …’ comes the answer. ‘Thank you! I’ll have a gin and tonic please!’ And I’ll get my coat …” – Allastair McGillivray. Continue reading...