ASML

The most consequential corporate event of the quarter lands tonight. Nvidia will drop its earnings after the US close at around 22:00 CET, and while the past quarter is expected to be enormous, what will move markets is what CEO Jensen Huang says about the months ahead. Nvidia's matters more than most because it makes the chips that power the artificial intelligence boom. If its outlook disappoints, the shockwaves will not stay in Silicon Valley. The company has become a proxy for the entire AI rally. The report will land on the back of a difficult run for Nvidia's stock, having lost ground for seven consecutive sessions, its longest losing streak since 2022. Shares rebounded roughly 3% since Monday ahead of the earnings report but are still down over 6% from last week's open. European chipmakers have as much riding on tonight's guidance as Wall Street. ASML, the Dutch group whose lithography machines underpin Nvidia's entire supply chain, has raised its own 2026 sales forecast twice this year on the back of AI demand, and its shares — along with those of Dutch chip-equipment maker BE Semiconductor and German optics group Jenoptik — tend to move in step with Nvidia's outlook. For the month of August, Nvidia is still up around 8% and year-to-date performance is solid with the stock increasing over 13% since the yearly open. Analysts polled by Bloomberg expect adjusted earnings of $2.09 a share on revenue of roughly $92 billion (€78.8bn), which would represent growth of 96% on the same quarter last year. Nvidia itself had forecast $91 billion (€78bn), give or take 2%, meaning consensus sits less than a percentage point above the company's own midpoint. That narrow gap raises the bar as a modest beat may not be enough to satisfy investors. Related Nvidia raises over €21.5bn in first bond sale since 2021 as AI growth race continues What Nvidia's $500 billion Wall Street deal signals about the AI boom As for data centre revenue, it is forecast to top $85.4 billion (€73.1bn), up around 105%. Investors will get a clearer look at where that money comes from, because Nvidia changed its reporting last quarter to separate sales to hyperscalers and AI clouds, expected at $43.5 billion (€37.2bn), from industrial and enterprise customers, projected at $41.7 billion (€35.7bn). The company has beaten Wall Street estimates in 22 of the past 24 quarters. The main concern regarding Nvidia is concentration. The firm still draws the bulk of its revenue from Amazon, Google and Microsoft, each of which is designing its own chips to reduce reliance on the company, and the new disclosure will show precisely how large that dependence remains. Huang's commentary on demand into 2027 therefore carries more weight than any single figure. The question has grown sharper since July, when markets fell on doubts about whether vast AI investments will generate returns. Nvidia's answer has been to help finance the buildout itself, assembling a $500 billion (€433bn) capital pool with Wall Street firms this month and backing an eight-gigawatt data centre in Ohio alongside OpenAI. Nvidia is not the only major test for the markets this week. July's personal consumption expenditures index, the Federal Reserve's preferred inflation gauge, is due at 14:30 CET on Wednesday alongside a second estimate of second-quarter GDP. Economists expect headline prices to have risen 0.1% on the month and the core measure 0.2%, leaving the annual core rate at 3.3%. Attention then shifts to Wyoming, where the Kansas City Fed's Jackson Hole symposium opens on Thursday. Kevin Warsh delivers the keynote on Friday, his first as Fed chair, 19 days before a September policy meeting that markets currently price as roughly a one-in-three chance of a rate rise. The ECB's Isabel Schnabel joins a panel the same day.

(Bloomberg) -- Equity investors are learning a harsh lesson this corporate earnings season: Not all artificial intelligence trades are created equal. Most Read from Bloomberg Singapore's Gated Island for the Rich Is Marred by Decayed Homes Moonshot’s Kimi Uses 20,000 Nvidia Chip Cluster From Alibaba Trump Orders Iran Attack as Soon as This Weekend, WSJ Says Anthropic AI Models Hacked Three Organizations During Tests Vitol, Cargill Cut Ties With Radiant World Amid Fake Invoice Concerns While profits at S&P 500 and Stoxx Europe 600 constituents as a whole are tracking one of the best quarterly increases in years, traders have been much more discerning about how much cash is being spent on developing generative AI. Shares of tech heavy-hitters such as Meta Platforms Inc. and Alphabet Inc. have been penalized after the companies signaled even more capital expenditure, while the likes of Microsoft Corp. have been rewarded for preserving their cash reserves. The semiconductor supply chain has also felt the ripple effects, with Lam Research Corp., Schneider Electric SE and Prysmian SpA among the outperformers on robust demand for their technology that enables AI. “Earnings have remained resilient, but investors have become much more disciplined about paying ever higher valuations for large-cap technology,” said Violeta Todorova, senior research analyst at Leverage Shares. “On the other hand, Europe has quietly delivered improving profit expectations across a broader range of sectors.” S&P 500 firms are on track to post a 29% surge in second-quarter earnings per share, among the highest on record outside of post-crises recovery years, according to data compiled by Bloomberg Intelligence. And yet, the S&P 500 has gone nowhere since the season began in mid-July, weighed down by the largely underwhelming response to big tech. On the other hand, European stocks are seeing the boost from strong results as they have a lower concentration of tech heavyweights. The Stoxx 600 has advanced 1.3%, and briefly hit a record, as its members posted a 19% surge in profits, according to Barclays Plc data, after earnings barely rose in the past two years. “We had reduced our exposure to the US and rotated partially to Europe prior to the earnings season,” said Amelie Derambure, a senior multi-asset portfolio manager at Amundi SA. “We weren’t comfortable with the weight and concentration on the broad AI theme, but we were expecting Europe to deliver on demanding expectations in terms of earnings — and it did.” Tech Divergence That skepticism about AI has shown up in the reaction to Big Tech results this season. Shares of Facebook owner Meta sank 8% after it gave a disappointing quarterly revenue forecast and reported the lowest free cash flow in years, a sign of ballooning expenses for AI bets. On the other hand, Microsoft soared 16% to add nearly half a trillion dollars in market value, the most by any stock in a single day. The catalyst: The fastest cloud growth in four years and indications that the company would hold the line on new capital spending this year. Amazon.com Inc. shares jumped 15% after the company reported upbeat cloud-computing revenue, easing concerns about the payoff from huge expenditure on AI. “At some point, investors are going to get weary of all the spending by the hyperscalers,” said Bob Lang, founder and chief options analyst at Explosive Options. “It should come as no surprise to see a firm rewarded for backing away.” Global stocks in the AI supply chain as well as those that enable and adopt the tech also appear to be back in favor. A UBS Group AG basket of so called AI winners rallied 11% in the past two sessions after a slate of reassuring earnings reports. The gauge, which includes the likes of Sandisk Corp., ASML Holding NV and Taiwan Semiconductor Manufacturing Co., had sold off in July on worries about ballooning valuations. Earnings Optimism One bright spot is a strong showing from sectors beyond technology. Financial, energy and healthcare are among the standouts in both the US and Europe in terms of the number of companies beating analyst estimates for the second quarter, data compiled by BI show. Profit expectations are still rising, both in the US and Europe, underscoring optimism around economic growth and easing inflation despite lingering concerns around geopolitics. Companies on both sides of the Atlantic have boosted guidance at one of the strongest rates in recent years, Barclays strategists said. US earnings revisions — the number of analysts raising their estimates minus those cutting them — have also seen net upgrades for 15 weeks in a row, the longest streak since 2022, according to a Citigroup Inc. index. In Europe too, the highest number of analysts have boosted expectations since 2021. For some investors, that resilience is providing hope that the worst reaction to earnings may be over. “Good earnings were not good enough initially for many,” said Ken Mahoney, chief executive officer of Mahoney Asset Management. “Now that we have gotten past a lot of these earnings and seen some pretty significant corrections in individual names, we are watching to see if they can stabilize and find some higher lows.” --With assistance from Julien Ponthus, Matt Clinch and Subrat Patnaik. Most Read from Bloomberg Businessweek Tokenmaxxing Is Dead. Now Comes the Belt Tightening Trump’s Arctic Mining Deal Signals a New Era of State Capitalism How a Few Hundred Dollars Could Manipulate Election Prediction Markets Why Wall Street Is Getting Angry The Menopause Gold Rush Is Failing Women ©2026 Bloomberg L.P.

By Purvi Agarwal July 31 (Reuters) - European shares closed lower on Friday, but posted monthly gains as strong corporate earnings buoyed markets helping them weather a month of Middle East hostilities and artificial ‌intelligence-related jitters. The pan-European STOXX 600 index inched down 0.1% at 649.19 points. The index hit its ‌highest level on record earlier in the session but gave back those gains. On Friday, Universal Music Group slumped 25.4%, marking its biggest one-day loss ​on record, after its first-half results. The STOXX 600 media index lost 5.5%. Technology stocks rose 0.3%, but pared some gains from earlier in the session. This week, quarterly earnings from U.S. Big Tech painted a mixed picture as Microsoft surged after signs its AI investments were paying off, while Meta was punished as its free cash flow saw a ‌drop due to its spending plans. Concerns that ⁠hefty spending on AI buildouts and their returns not materializing at the pace markets expected have raised scrutiny of valuations in the sector, leaving it vulnerable to wild swings. UBS ⁠analysts said in a note they estimate operating cash flow at hyperscalers will be overtaken by their cash capex, raising the risk of AI spending in 2028 coming in below 2027 levels - a negative for semiconductors. "We remain constructive on the AI ​growth story, ​but believe investors should manage concentration risk by broadening their ​exposure to defensive tech stocks," they said. Energy stocks ‌added 1.2%, the biggest jump among sectors helped by an uptick in oil prices. The sector is the biggest percentage gainer on the STOXX 600. Hostilities in the Middle East escalated this month, with Brent crude topping $90 a barrel earlier in the week. However, robust corporate earnings helped offset the impact from these, helping the STOXX 600 notch both weekly and monthly gains. This week, U.S. Federal Reserve chief Kevin Warsh said policymakers were committed to bringing inflation ‌down, after a divided central bank left interest rates on ​hold, leaving markets with little clarity on the next likely move. The Euro ​zone inflation ticked up in July, bolstering the ​chances of another rate hike from the European Central Bank in 2026, after it ‌raised the benchmark rates by 25 basis-point at its ​June meeting. Meanwhile, earnings were in ​full swing in Europe. Teleperformance jumped 13.2% after the outsourcing firm confirmed its 2026 targets. Puma's shares fell about 2.5% as investors were disappointed that it did not upgrade its outlook following a narrower-than-expected second-quarter ​operating loss. Credit Agricole gained 2.6% after ‌posting better-than-expected second-quarter earnings. IG Group dropped 14.4% after it agreed to acquire U.S. daily fantasy sports and ​prediction markets operator Underdog for up to $1.3 billion. (Reporting by Purvi Agarwal and Avinash P in ​Bengaluru; Editing by Mrigank Dhaniwala, Vijay Kishore and Shailesh Kuber)

Microsoft's fiscal Q4 earnings now serve as a referendum on whether the entire $700 billion AI investment cycle remains intact. Satya Nadella guiding for 30 to 40 percent capex growth could reframe the global semiconductor selloff as a valuation reset rather than a bust. Microsoft's capital spending decisions influence production schedules for chipmakers spanning five continents, from Nvidia to ASML. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today. The AI trade has spent the past several weeks unraveling, but the selling has spread far beyond Silicon Valley. Chip designers in the U.S., foundries in Taiwan, memory manufacturers in South Korea, equipment suppliers in Europe, materials companies in Japan, and advanced packaging firms across Southeast Asia have all moved lower together. That broad decline reflects something bigger than one disappointing earnings report -- it highlights how tightly connected the global AI supply chain has become. Investors now have one event that could determine whether this downturn marks the start of a semiconductor bust or simply a pause before the next leg higher: Microsoft's (NASDAQ:MSFT) fiscal fourth-quarter earnings release. Microsoft's June quarter carries more weight than a typical earnings report because it closes the company's fiscal year. More importantly, management's guidance will offer one of the first detailed roadmaps for AI infrastructure spending during the first half of calendar 2027. Here's what investors will be watching in Microsoft's earnings release and conference call: Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today. The reason is simple. Microsoft sits near the center of the AI economy. Its capital spending determines demand for Nvidia's (NASDAQ:NVDA) AI accelerators, Advanced Micro Devices' (NASDAQ:AMD) CPUs, networking equipment from Broadcom (NASDAQ:AVGO) and Marvell Technology (NASDAQ:MRVL), high-bandwidth memory from SK hynix (NASDAQ:SKHY) and Micron Technology (NASDAQ:MU), optical components from Coherent (NASDAQ:COHR), advanced packaging at Taiwan Semiconductor Manufacturing (NYSE:TSM), and semiconductor manufacturing equipment from ASML Holdings (NASDAQ:ASML) and Applied Materials (NASDAQ:AMAT). That makes Microsoft's capital budget one of the most closely watched figures in global technology investing. Many semiconductor stocks have retreated not because demand has collapsed, but because investors questioned whether hyperscale cloud providers could continue increasing spending after two years of record investment. According to Microsoft's prior earnings release, capital expenditures have already climbed at one of the fastest rates in company history as it races to build AI data centers. If management now projects another 30% to 40% increase in AI infrastructure spending while reiterating that customer demand still exceeds available capacity, the recent decline may look less like the beginning of a semiconductor downturn and more like a temporary risk-off reset. Ironically, that's exactly what many investors may have overlooked. The AI supply chain isn't weakening because one company missed expectations. Instead, fears have centered on financing conditions, elevated valuations, and whether cloud providers would eventually slow spending after committing hundreds of billions of dollars to AI infrastructure. Microsoft has the opportunity to answer that question today. 24/7 Wall St. A single Capex number that could make or break the trillion-dollar AI trade. Microsoft isn't just reporting earnings—it's deciding the future of the global chip industry. © 24/7 Wall St. One surprising lesson from this earnings season is how dependent the global semiconductor industry has become on a handful of cloud companies. Microsoft's capital spending doesn't just influence its own growth -- it helps determine production schedules for factories spanning five continents. If CEO Satya Nadella confirms AI demand remains constrained by available capacity rather than weakening customer interest, suppliers throughout the chain could regain investor confidence. If Microsoft instead signals that spending is leveling off, the pressure could extend from Nvidia to Taiwan Semiconductor, SK hynix, ASML, Tokyo Electron, and dozens of smaller suppliers. Granted, that level of concentration creates risk. A single management team's investment decisions now influence billions of dollars in manufacturing plans across multiple countries. Yet that's also the reality of today's AI economy. In short, Microsoft's earnings are about much more than Azure growth or quarterly profits. They're a referendum on whether the AI investment cycle remains intact. Management's guidance will provide the clearest evidence yet on whether hyperscale AI spending is still expanding fast enough to support the industry's next growth phase. If capital expenditures continue rising by roughly 30% to 40% and management says demand still exceeds available computing capacity, the semiconductor selloff may prove to be a valuation reset rather than the end of the AI boom. Ultimately, one capital spending figure from Microsoft now has the power to influence chipmakers across the United States, Taiwan, South Korea, Japan, Europe, and Southeast Asia. That's an extraordinary level of concentration -- and for investors, it's exactly why today's earnings report could become the most important AI event of the quarter. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.

Lam Research Corporation LRCX is likely to beat earnings estimates when it releases fourth-quarter fiscal 2026 results on July 29. The company expects revenues of $6.6 billion (+/- $400 million) for the quarter. The Zacks Consensus Estimate is pegged at $6.67 billion, indicating 29% growth from the figure reported in the year-ago quarter. Lam Research expects earnings of $1.65 (+/- 15 cents) per share for the fourth quarter. The consensus mark for fourth-quarter earnings has been revised upward by a penny to $1.69 per share over the past 30 days, implying a 27% year-over-year increase. Image Source: Zacks Investment Research Lam Research has an impressive earnings surprise history. In the last reported quarter, it delivered an earnings surprise of 8.09%. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7.90%. Lam Research Corporation price-eps-surprise | Lam Research Corporation Quote Our proven model predicts an earnings beat for Lam Research this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is exactly the case here. Earnings ESP of LRCX: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.71) and the Zacks Consensus Estimate ($1.69), is +1.38%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Lam Research’s Zacks Rank: LRCX presently sports a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. Lam Research has been riding on the wave of a strong rebound in the semiconductor industry, driven by the surging demand for memory and advanced AI applications. The rise in spending on artificial intelligence (AI) and machine learning, particularly with the growing influence of Generative AI, is likely to have provided a significant boost to the company's performance in the fiscal fourth quarter. The increasing need for advanced AI-centric chips has become a key growth catalyst. Heightened DRAM spending, especially in response to demand for high-bandwidth memory, is likely to have played in Lam Research's favor. The company's momentum in 3D DRAM and advanced packaging technologies is also expected to have added to its strong performance. At the same time, ongoing technological advancements are pushing NAND spending higher, which is likely to contribute to LRCX’s quarterly results. Lam Research’s focus on expanding semiconductor fabrication capabilities, along with its heavy investment in research and development, positions it well in a competitive landscape. Its innovation through Semiverse solutions, particularly in high-aspect-ratio memory hole etch for NAND, is likely to have fueled this progress. LRCX’s strategic investments in cutting-edge technologies are anticipated to have bolstered its performance in the foundry and logic segment, while the increasing adoption of 3D architectures is expected to have supported growth in its etch and deposition services. The company’s robust suite of tools, which enable foundry logic inflections, is likely to have secured strong customer traction. With the accelerating deployment of 5G and the Internet of Things (IoT), Lam Research’s semiconductor and memory solutions remain in high demand, reinforcing its market position in the fiscal fourth quarter. All these factors are likely to have driven growth in system revenues. The Zacks Consensus Estimate for fourth-quarter systems revenues is pegged at $4.55 billion, implying year-over-year growth of 32%, underscoring Lam Research’s continued strength in the evolving tech landscape. The consensus mark for the Customer Support segment’s fourth-quarter revenues is pegged at $2.13 billion, indicating a year-over-year increase of 23%. Lam Research shares have surged 90.1% year-to-date, outperforming the Zacks Electronics – Semiconductors industry, which has risen 35.2%. Compared with peers, the stock has outpaced ASML Holding ASML and KLA Corporation KLAC but underperformed Applied Materials AMAT. Shares of ASML Holding, KLAC and Applied Materials have soared 68.5%, 80% and 123.9%, respectively. Image Source: Zacks Investment Research Let us look at the value Lam Research offers investors at current levels. Currently, LRCX is trading at a premium, with a forward 12-month P/E of 39.78X compared with the industry’s 30.20X. Image Source: Zacks Investment Research Compared with semiconductor giants, the stock trades at a higher multiple than ASML Holding and Applied Materials, but at a lower multiple than KLA Corporation. At present, ASML Holding, Applied Materials and KLA Corporation have forward 12-month P/E of 36.82X, 37.22X and 42.48X, respectively. Lam Research sits at the center of the AI chip manufacturing ecosystem. Instead of designing chips, it supplies the manufacturing equipment that companies like Taiwan Semiconductor Manufacturing and Samsung use to produce advanced semiconductors. This position gives Lam Research direct exposure to one of the strongest investment themes today — AI infrastructure. The company is benefiting from rising demand for advanced packaging technologies, high-bandwidth memory (HBM) and next-generation chip architectures, all of which require increasingly sophisticated etch and deposition equipment. Lam Research is also strengthening its technology portfolio. Its ALTUS ALD system improves chip manufacturing efficiency through molybdenum-based deposition, while the Aether platform helps customers build denser and more powerful chips. As AI processors become more complex, these technologies become increasingly valuable. Management expects advanced packaging revenues to grow by more than 50% in 2026 after strong growth in 2025. New manufacturing technologies such as backside power distribution and dry-resist processing should provide additional growth opportunities over the next several years. Lam Research has already started seeing the benefits. The company’s revenues have remained above $5 billion for four consecutive quarters, indicating healthy demand from leading semiconductor manufacturers. Lam Research remains a high-quality AI infrastructure play with strong growth prospects. The AI infrastructure buildout remains in its early stages, advanced packaging demand continues to grow, and LRCX's leadership in etch and deposition gives it a competitive advantage that should be difficult to replicate. Lam Research’s innovation and operational efficiency provide a solid foundation for future growth. Considering these factors, accumulating LRCX stock appears to be the most prudent strategy for investors. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lam Research Corporation (LRCX) : Free Stock Analysis Report KLA Corporation (KLAC) : Free Stock Analysis Report ASML Holding N.V. (ASML) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research