The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
1647 ET - Microsoft gains 3.2% in after-hours trading, as the company's report of 18% revenue growth in the fourth quarter exceeded Wall Street's expectations. Headline metrics include Microsoft 365 Copilot surpassing 30 million paid seats, as well as 27% growth in Microsoft Cloud revenue -- evidence that Microsoft is becoming an important beneficiary of artificial-intelligence adoption, CEO Satya Nadella says. The strong print spares Microsoft, at least for now, from the fate of other technology companies who have failed to convince the market that their heavy AI investments are generating sufficient returns. One such company -- Meta Platforms -- is down 6% post-close after missing Wall Street's profit expectations. (elias.schisgall@wsj.com)
1636 ET - Meta now expects capital expenditures of $130 billion to $145 billion this year, bumping up the bottom end of its prior forecast of $125 billion to $145 billion. The updated guidance comes amid worries about the massive amounts of cash that big tech companies are spending on artificial intelligence. Meta in particular has been piling on debt to fund its AI infrastructure buildout. Shares fell 6.3% in after-hours trading. (kelly.cloonan@wsj.com)
1408 ET - CGI's organic growth should benefit from a stronger pipeline. National Bank of Canada's Doug Taylor notes in a report that organic growth improved sequentially, to a contraction of 1.2% from -3.0% in the previous quarter. This should continue to get better, as U.S. Federal contracts returned to growth with a "strong pipeline across Managed services (+20% Y/Y), SI&C (+30%), IP (+30%) and AI (double Y/Y)," which should help drive bookings and organic growth in the quarters to come, Taylor says. "This reacceleration back into positive territory is a key tenet of our positive near-term thesis," he adds.(adriano.marchese@wsj.com)
1312 ET - SoFi Technologies decided to raise revenue forecasts but not earnings guidance for 2H because of the potential for Fed rate hikes in the months ahead, CEO Anthony Noto tells CNBC. The company's stock is getting dinged despite SoFi beating top and bottom line figures in 2Q. Noto says it wouldn't have been prudent to raise the EPS targets without a better view on where rates will go, after having entered the year with expectations that rates would go down. "I just think higher rates create some uncertainty generally," Noto says, adding, "we just wanted to leave some cushion." SoFi also didn't want to undercut its flow of reinvestment in growth opportunities, including its stablecoin, for a guidance boost, Noto says. SoFi falls 8%. (dean.seal@wsj.com)
1236 ET - Spotify investors are still debating when the music-streaming platform will launch its AI add-on, Deutsche Bank analysts say. Expectations have shifted to 4Q from 3Q, as Spotify appears to be increasingly focused on rights agreements and artist participation. The analysts think Spotify would benefit from waiting to get more content from Warner Music or Sony to train its AI and expand its available roster. The analysts see such a collaboration as mutually beneficial to all three parties, if they were to get involved. They expect Warner Music and Spotify to potentially sign an AI deal in the next one to two quarters. (katherine.hamilton@wsj.com)
1022 ET - Cryptocurrencies are mixed, with traders opting to move cautiously ahead of this afternoon's Fed rate decision. "Bitcoin and other crypto assets are in a holding pattern," says Nic Puckrin of Coin Bureau. "There's a lot in the pipeline in the next few hours that could move prices, so traders are hedging their bets." The CME Group's FedWatch tool is currently assessing a 64% chance of a hold on rates, with a 36% chance of a hike. Bitcoin rises 1.1% to $64,532, while ethereum drops 0.6% to $1,906. XRP is up 1.2% to $1.07, solana falls 0.4% to $73.67, and HYPE is up 0.4% to $55.37. (kirk.maltais@wsj.com)
1010 ET - GE HealthCare Technologies posts 2Qcrevenue of $5.3 billion, up 5.8% from last year and ahead of Wall Street models. CEO Peter Arduini on a call with analysts attributes the growth to strength across the company's pharmaceutical diagnostics unit, as well as its advanced imaging solutions arm. "Patient care solutions performance remained challenged," he says. "While we are focused on returning the business to growth and profitability, we are reviewing strategic options to maximize its long-term value." GE HealthCare jumps 12% after the medical-technology company posts higher-than-expected adjusted EPS in the recent quarter. (connor.hart@wsj.com)
0830 ET - Bitcoin gains modestly as U.S. stock futures mostly rise ahead of the Federal Reserve's policy decision at 1800 GMT and earnings from tech giants. "Although it's unlikely that the Fed will hike interest rates on Wednesday, the new regime at the central bank has done away with forward guidance, increasing the risk of surprises," XM analyst Raffi Boyadjian says in a note. Microsoft and Meta are both due to publish results after Wall Street closes. Any signs that more big tech companies are tapping into their free cash flow to pay for costly AI vanity projects will likely spook investors, Boyadjian says. Bitcoin rises 0.8% to $64,387, LSEG data show.(renae.dyer@wsj.com)
0522 ET - Meituan's food delivery segment unit economics likely turned profitable in 2Q on a reduction in its segment subsidies, say analysts at China Galaxy International. The Chinese food delivery platform's leading sector position appears underpinned by its high-quality user base and higher average order value, they say. They project Meituan's core local commerce segment revenue to grow 4% in 2Q. Meituan is meanwhile likely to face easing competition in its in-store business, as rival Douyin shifts its focus to profitability, they add. CGI raises its 2026-2028 adjusted earnings per share forecasts by 1%-29% and upgrades its rating to add from hold. It also lifts its target price to 105 Hong Kong dollars from HK$86.00. Shares closed 2.2% higher at HK$92.30.(megan.cheah@wsj.com)
0453 ET - Consensus estimates for ASM International's 2027 revenue are unlikely to materially rise even though the company said it expected sales to grow more than previously thought, Jefferies analysts write in a note to clients. The Dutch group, which supplies chip makers with wafer processing equipment for the deposition of thin films, said 2027 revenue should exceed the top end of a range from 3.7 billion to 4.6 billion euros. Analysts had already forecast revenue well above the range at nearly 4.89 billion euros, according to Visible Alpha. ASM International shares trade 8% lower at 695.60 euros. (mauro.orru@wsj.com)
0341 ET - Asian equities are seeing a rotation away from tech, Tickmill Group's Patrick Munnelly says in a research note. SK Hynix's shares ended 9.6% lower despite reporting stellar earnings, sending the Kospi 6.0% lower. Taiwan and Japan, the other two markets with heavy semiconductor exposure, fell 3.8% and 1.5%, respectively. Chip makers have "moved from market darlings to volatility transmitters over the past month," as Asian leadership has shifted toward consumer discretionary, financials, and energy, Munnelly says. While the AI story hasn't disappeared, the market's tolerance for disappointment has collapsed, he says. (sherry.qin@wsj.com)
0313 ET - Telefonica delivered a strong set of second-quarter results, Bernstein analysts write in a note. The Spanish telecommunications company raised its full-year guidance for adjusted operating cash flow after leases and reported a swing to a net profit alongside higher revenue in the quarter. "[The] second quarter is the last quarter with the full headwind from the loss of 1&1's wholesale business last year," they say. The group seems to be on track to meet its full-year outlook, they add. Shares are flat at 3.73 euros.
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