honglouwawa/iStock via Getty Images There are currently 4 mechanistic, large forces that push up S&P 500 earnings, especially those related to the large tech/AI component. The State Street SPDR S&P 500 ETF Trust ( SPY ) is a tradable proxy for the S&P 500. The effects are below. Capex On One Side, Revenues And Profits On The Other First, there’s a fundamental mismatch between how capex (Capital Ex...
honglouwawa/iStock via Getty Images There are currently 4 mechanistic, large forces that push up S&P 500 earnings, especially those related to the large tech/AI component. The State Street SPDR S&P 500 ETF Trust ( SPY ) is a tradable proxy for the S&P 500. The effects are below. Capex On One Side, Revenues And Profits On The Other First, there’s a fundamental mismatch between how capex (Capital Expenses, investment) is accounted for and how the sales of equipment resulting from that CapEx are accounted for. And this mismatch inflates earnings. Let me explain: For the company investing in CapEx, CapEx isn’t immediately and fully accounted for as a cost. Instead, since the equipment bought (say servers, memory, storage) is used over several years, the cost of the CapEx is itself also only recognized over several years through depreciation. For instance, if we consider a 5-year depreciation period, only 20% of the investment cost is recognized each year. However, on the side of the company selling that capital equipment (selling the servers, memory, storage, etc.), all of the sale is immediately booked in the same year it occurs. All of the revenue and profit of that sale is recognized immediately. And since there’s currently a shortage of computing equipment (GPUs, DRAM memory, NAND memory, HDD storage, etc.), the margins are particularly large and exceed 20% of the sales price at all main vendors, like NVIDIA Corporation ( NVDA ), Micron Technology, Inc. ( MU ), and Seagate Technology Holdings, plc ( STX ). As a result, the AI CapEx boom generates a lot more profit for the sellers of the capital equipment than it generates cost for the buyers of the equipment, even if the buyers didn’t put it to use (which they do)! Losses On The Customer And Revenues, Profits On The Hyperscaler Of course, the buyers of the capital equipment, the hyperscalers, with Microsoft Corporation ( MSFT ), Alphabet Inc. ( GOOG ), and Amazon.com, Inc. ( AMZN ) chief among them, do put the equip...
Key PointsCOO Julie Rubinstein sold 19,037 shares for a transaction value of ~$271,000 on April 27, 2026, at a weighted average price of around $14.23 per share.
Key PointsCOO Julie Rubinstein sold 19,037 shares for a transaction value of ~$271,000 on April 27, 2026, at a weighted average price of around $14.23 per share.
Visa (NYSE: V) has underperformed broader equities over the past year. The financial services specialist has dealt with regulatory hurdles and perceived economic headwinds. Specifically, investors feared that a slowdown in consumer spending would lead to lower payment volume and revenue. However, Visa recently soared after releasing its latest update on April 28 for the second quarter of its fisca...
Visa (NYSE: V) has underperformed broader equities over the past year. The financial services specialist has dealt with regulatory hurdles and perceived economic headwinds. Specifically, investors feared that a slowdown in consumer spending would lead to lower payment volume and revenue. However, Visa recently soared after releasing its latest update on April 28 for the second quarter of its fiscal year 2026, which ended on March 31. Still, Visa's stock remains down 6% over the trailing-12-month period. And at current levels, there is plenty of upside left for the company. Here are three reasons why. Image source: The Motley Fool. Between inflation and the possibility of a recession, some may have thought that Visa would be struggling. The company's latest earnings helped assuage those fears. Net revenue jumped 17% year over year to $11.2 billion, while adjusted earnings per share came in at $3.31, 20% higher than the year-ago period. Visa's results came in ahead of analyst estimates. And it's worth noting that Visa just recorded its fastest revenue growth rate in over three years. Continue reading
Intel stock stalled Monday after its big run-up over the past month. The U.S. announced an effective 10% stake in Intel last August, making it the largest single investor in the U.S.-based chip maker. Since then, the company’s shares are up more than fourfold in large part because Intel makes chips that are used in AI data centers.
Intel stock stalled Monday after its big run-up over the past month. The U.S. announced an effective 10% stake in Intel last August, making it the largest single investor in the U.S.-based chip maker. Since then, the company’s shares are up more than fourfold in large part because Intel makes chips that are used in AI data centers.
The dollar index (DXY00 ) on Monday rose by +0.25%. The dollar moved higher on Monday amid an increase in safe-haven demand after WTI crude oil prices surged more than +4% due to the escalation of tensions in the Middle East. Also, Monday’s better-than-expected US March factory orders report supports...
The dollar index (DXY00 ) on Monday rose by +0.25%. The dollar moved higher on Monday amid an increase in safe-haven demand after WTI crude oil prices surged more than +4% due to the escalation of tensions in the Middle East. Also, Monday’s better-than-expected US March factory orders report supports...
Earnings Call Insights: Cogent Communications (CCOI) Q1 2026 Management View “We have entered into a non-binding LOI for the sale of 10 of these data centers,” and “we expect closing to be early this summer,” said (Founder, Chairman, CEO & President David Schaeffer). “If and once finally documented, the amendment will increase our ability under the indenture to incur pari passu or junior lien secu...
Earnings Call Insights: Cogent Communications (CCOI) Q1 2026 Management View “We have entered into a non-binding LOI for the sale of 10 of these data centers,” and “we expect closing to be early this summer,” said (Founder, Chairman, CEO & President David Schaeffer). “If and once finally documented, the amendment will increase our ability under the indenture to incur pari passu or junior lien secured debt,” and “we will file an 8-K announcing the same and forego our previously announced secured debt realignment plan,” said (VP, CFO & Treasurer Thaddeus Weed). “Our wavelength revenues for the quarter were $13.6 million,” and “we intend to continue to focus on capturing 25% of the North American long-haul market… As of today, we have captured approximately 3% of that market,” said (CEO Schaeffer). “Our total revenue for the quarter was $239.2 million,” and “our gross margin percentage for the quarter increased year-over-year by 150 basis points to 46.1%,” said (CFO Weed). Outlook “We anticipate a long-term average revenue growth rate of 6% to 8% and EBITDA margin expansion of approximately 200 basis points per year,” said (CEO Schaeffer). “We expect to be able to resume our sequential increase in EBITDA margins as well as our year-over-year expansion,” and “we do expect to be over our multiyear guidance of 200 basis points on a year-over-year basis,” said (CEO Schaeffer). On wavelength market share timing, “while we are hopeful that we can reach that by mid ’28… these equipment supply constraints may, in fact, impact that,” and “we are not in a position to make that determination,” said (CEO Schaeffer). Financial Results “Our total revenue for the quarter was $239.2 million,” and “our total revenue for the quarter declined sequentially by $1.3 million or by 0.6%,” said (CFO Weed). “Our total on-net revenue, including on-net wavelength, was $149.2 million,” while “our less profitable off-net revenues were $89 million,” said (CFO Weed). “Our EBITDA as adjusted for the q...