AI Earnings Fuel Tech Rally as Microsoft Leads Surge; Healthcare, Consumer Stocks Under Pressure

Mumbai, July 31: U.S.-listed stocks witnessed sharp company-specific moves on Thursday as quarterly earnings, AI investment trends, regulatory developments and merger activity drove investor sentiment. Microsoft led the gains with a 15% rally after robust Azure growth and an upbeat outlook, while semiconductor and cloud-related stocks also advanced on strong AI demand. In contrast, Meta, Altria, Capricor and Roblox declined following earnings misses, weaker guidance or regulatory setbacks, highlighting a session marked by significant stock-specific volatility.

Microsoft Surges 15% as Azure Growth, AI Demand and Strong Guidance Lift Investor Confidence

Microsoft reported a strong fiscal fourth-quarter 2026 performance, with revenue rising 18% year over year to $90 billion, while non-GAAP earnings climbed 23% to $4.74 per share, comfortably beating market expectations. The performance was driven by sustained demand for cloud and artificial intelligence services, with Microsoft Cloud revenue increasing 27% to $59.3 billion.

Azure and other cloud services revenue surged 43%, accelerating from the previous quarter, while Commercial Remaining Performance Obligation jumped 84% to $678 billion, reflecting robust enterprise demand. The company also highlighted rapid adoption of Microsoft 365 Copilot, which surpassed 30 million paid seats, and reaffirmed aggressive AI infrastructure expansion despite elevated capital spending. Looking ahead, Microsoft forecast first-quarter fiscal 2027 revenue of $89.85-$90.95 billion, above analysts’ expectations, and expects capital expenditure to exceed $50 billion as it continues investing in AI capacity.

The upbeat earnings and stronger-than-expected outlook sparked a sharp rally in Microsoft shares. The stock surged 15.5% to close at $451.10 on July 30 after touching an intraday high of $458.69, marking one of its strongest single-day gains in years as investors welcomed accelerating Azure growth, resilient enterprise demand and confidence in Microsoft’s AI-led expansion.

Meta Slides 8% After EPS Miss and Softer Revenue Outlook

Meta Platforms reported mixed second-quarter 2026 results, with revenue rising to $60.8 billion, beating estimates, while earnings per share of $6.18 missed Wall Street expectations of $7.14. The earnings shortfall was primarily due to $2.4 billion in legal contingency charges and $1.2 billion in severance costs. The company also issued third-quarter revenue guidance of $61-$64 billion, with the midpoint falling below analysts’ forecasts.

Meta raised the lower end of its 2026 capital expenditure guidance to $135-$145 billion from $125-$145 billion, underscoring continued heavy AI infrastructure spending. Investors reacted negatively to the earnings miss and softer outlook, sending Meta shares down nearly 8% to close at $539.03, after falling about 9% in premarket trading, despite stronger-than-expected advertising revenue and continued investments in AI and data centres.

Amazon Climbs 4% After Strong Q2 Results as AWS Growth Accelerates

Amazon shares rose 3.9% on July 30 after the company reported stronger-than-expected second-quarter 2026 results, driven by robust cloud and AI demand. Earnings per share surged to $5.75, far exceeding analysts’ expectations of $1.82, while revenue increased to $200.6 billion, topping forecasts of $197 billion. Amazon Web Services (AWS) revenue climbed 36.7% to $42.2 billion, marking its fastest growth in 18 quarters, while the company’s AI and chip businesses each surpassed $25 billion in annualised revenue run rates.

Despite free cash flow turning negative as AI investments accelerated, investors welcomed the strong cloud performance. Amazon shares closed 3.9% higher at $235.50, before jumping nearly 9% in after-hours trading following the earnings release and upbeat AI commentary.

Qualcomm Falls Nearly 3% Despite Revenue Beat Amid Smartphone Market Weakness

Qualcomm reported mixed fiscal third-quarter 2026 results, posting earnings per share of $2.21, in line with expectations, while revenue of $9.9 billion exceeded analysts’ estimates of $9.6 billion. The company delivered stronger-than-expected handset, automotive and semiconductor sales, but cautioned that weakness in the global smartphone market continues to weigh on near-term growth.

Qualcomm expects non-handset revenue, including its AI data centre business, to grow more than 60% in fiscal 2027 as it accelerates diversification beyond smartphones. Despite the solid results, investors remained concerned about slowing handset demand, sending Qualcomm shares down 2.6% to close at $144.48, after falling nearly 6% in premarket trading following the earnings announcement.

Lam Research Jumps 18% on Record Results and Strong AI-Driven Outlook

Lam Research reported a record fiscal fourth quarter, with revenue rising 15.1% sequentially to $6.72 billion and GAAP net income increasing to $2.28 billion, or $1.81 per share, driven by robust demand for semiconductor manufacturing equipment amid accelerating AI investments. Gross margin improved to 51.7%, while operating margin expanded to 37.4%.

The company also issued stronger-than-expected guidance, forecasting September-quarter revenue of about $8.1 billion and earnings of approximately $2.15 per share. Investors welcomed the results and upbeat outlook, sending Lam Research shares soaring nearly 18% to close at $297.72 on July 30.

Micron Surges 18% on Samsung’s Memory Shortage Warning

Micron Technology shares jumped more than 18% on July 30 after Samsung Electronics warned that global memory chip shortages could persist through 2028, reinforcing expectations of sustained pricing strength for AI-driven memory products.

Samsung also reported a sharp surge in semiconductor profits and said it had secured long-term supply agreements with major data centre customers, signalling robust demand for high-bandwidth memory (HBM) used in artificial intelligence applications.

The upbeat industry outlook boosted confidence in Micron’s earnings prospects and cash generation. The stock closed 18.4% higher at $874.66, significantly outperforming the broader technology sector and the S&P 500.

Sandisk Jumps 26% as AI-Driven Memory Boom and Supply Constraints Fuel Rally

Sandisk shares surged nearly 26% on July 30 as investors bet on sustained growth in the NAND flash memory market, driven by accelerating artificial intelligence infrastructure spending and tightening industry supply. The rally was supported by forecasts that AI data centres will account for 44% of global NAND flash demand in 2026 and 51% in 2027, while industry leaders, including Samsung and SK Hynix, warned that memory shortages could persist for years as production shifts toward high-bandwidth memory (HBM) for AI workloads. Analysts also expect limited NAND capacity expansion, with reduced wafer starts and lengthy production lead times supporting stronger pricing. Sandisk is expected to benefit through long-term supply agreements with variable pricing that capture future price increases.

Investor sentiment was further boosted after the Situational Awareness hedge fund completed the liquidation of its Sandisk holdings, removing a key source of selling pressure. The stock closed 26% higher, extending a remarkable rally that has seen shares gain more than 2,300% over the past year as AI-driven storage demand continues to strengthen.

AMD Surges 13% as Microsoft’s AI Momentum Revives Data Centre Optimism

Advanced Micro Devices (AMD) shares jumped 13% on July 30 as renewed optimism around artificial intelligence infrastructure lifted AI-chip stocks following Microsoft’s stronger-than-expected cloud results. Investors viewed Microsoft’s accelerating Azure growth as a positive signal for AI hardware demand, helping the Philadelphia Semiconductor Index rebound after a five-session decline.

Sentiment was further supported by AMD’s strategic partnership with Core Scientific, which will provide the chipmaker with more than 500 megawatts of AI-ready data centre capacity from 2027, with potential expansion to 2.5 gigawatts. The agreement is expected to strengthen AMD’s ability to deploy AI accelerators and address growing infrastructure demand from enterprise and cloud customers.

Reflecting the improved outlook for AI spending and data centre expansion, AMD shares closed 13% higher at $485.39, significantly outperforming the broader technology sector.

Mastercard Rises 2.5% After Q2 Earnings Beat on Strong Consumer Spending

Mastercard shares rose 2.5% on July 30 after the payments giant reported stronger-than-expected second-quarter 2026 results, supported by resilient consumer spending and robust international transaction volumes. Revenue increased 14% year over year to $9.3 billion, beating analysts’ estimates of $9.06 billion, while adjusted earnings per share of $5.04 exceeded the consensus forecast of $4.77.

Cross-border payment volume grew 12%, purchase volume rose 10%, and revenue from value-added services, including cybersecurity and digital authentication, climbed 20%. Mastercard also returned $5.7 billion to shareholders through share repurchases and dividends during the quarter. The upbeat results and continued growth in higher-margin services helped Mastercard shares close 2.5% higher at $579.20.

Bristol Myers Gains 3% After Strong Q2 Results and Higher 2026 Outlook

Bristol Myers Squibb shares rose 2.8% on July 30 after the drugmaker reported stronger-than-expected second-quarter 2026 results and raised its full-year guidance. Adjusted earnings per share climbed to $2.04, comfortably ahead of analysts’ estimates of $1.61, while revenue increased to $12.97 billion, surpassing expectations of $11.71 billion.

Growth was driven by the company’s Growth Portfolio, whose revenue rose 15% to $7.6 billion, led by medicines including Opdivo Qvantig, Reblozyl, Camzyos, Breyanzi and Opdualag. Reflecting the strong performance, Bristol Myers raised its 2026 revenue forecast to $49.5-$50.0 billion and increased adjusted EPS guidance to $6.75-$7.00, both above previous guidance and Wall Street estimates. The upbeat results lifted investor confidence, sending the stock 2.8% higher to $64.86.

Altria Drops 9% After Earnings Miss as Premium Cigarette Demand Weakens

Altria Group shares fell 9.3% on July 30 after the tobacco giant reported second-quarter adjusted earnings of $1.48 per share, missing analysts’ expectations of $1.50. Revenue, excluding excise taxes, rose 1.2% year over year to $5.36 billion, but weaker demand for premium products weighed on results.

Shipment volumes for Marlboro cigarettes declined 7.4%, while On! nicotine pouch shipments fell 4.2% amid intensifying competition. In contrast, discount cigarette shipments surged 67.3% as inflation and higher living costs pushed consumers toward lower-priced brands. Although Altria slightly raised the lower end of its 2026 earnings guidance to $5.61-$5.72 per share, investors focused on weakening pricing power and softer premium demand, sending the stock sharply lower.

Cabot Falls 4% After Announcing CEO Transition

Cabot Corporation shares fell 3.6% on July 30 after the specialty chemicals company announced that CEO Sean Keohane will retire on September 30, 2026, ending nearly 25 years with the company and a decade as chief executive.

Erica McLaughlin, the current Chief Financial Officer and Head of Corporate Strategy, will succeed him as CEO from October 1, while Keohane will remain as an adviser through year-end to ensure a smooth transition. The company has also begun searching for a new CFO following McLaughlin’s promotion.

Tech Stocks Diverge as Roblox and Coinbase Disappoint, Reddit Delivers Strong Growth

Technology stocks saw mixed reactions on July 30 as earnings and outlooks drove sharp share price moves. Roblox shares fell nearly 3% in regular trading and more than 11% after hours after the gaming platform reported second-quarter bookings of $1.56 billion, missing estimates, while daily active users reached 123 million, below expectations of 128.7 million. Although revenue rose 36% year over year to $1.47 billion and free cash flow surged 66% to $294 million, investors were disappointed by weaker monetisation and third-quarter bookings guidance of $1.58-$1.65 billion, well below Wall Street forecasts.

Coinbase also came under pressure after reporting second-quarter revenue of $1.22 billion, missing analysts’ expectations of around $1.3 billion, while posting a GAAP net loss of $359.5 million. Softer cryptocurrency trading volumes weighed on transaction revenue, although its subscription and services business remained resilient, generating $555 million, supported by strong stablecoin and derivatives activity. Coinbase shares fell more than 5% in after-hours trading following the results.

In contrast, Reddit delivered another strong quarter, with revenue surging 61% year over year to $805 million, while daily active users increased 18% to 130.3 million and weekly active users crossed 514 million. Net income more than doubled to $253 million, and the company projected third-quarter revenue of $860-$870 million, reflecting continued momentum in advertising and user growth. Reddit shares were little changed following the announcement.

Rivian, First Solar Gain After Earnings Reinforce Outlook

Rivian Automotive shares rose after the EV maker reported second-quarter results that beat estimates, posting an adjusted loss of 47 cents per share on $1.66 billion in revenue. The company narrowed its full-year adjusted EBITDA loss guidance, reduced planned capital expenditure, reaffirmed its 65,000-70,000 vehicle delivery target, and maintained a $5.3 billion cash balance.

First Solar also advanced after reaffirming its 2026 guidance. Although second-quarter net sales slipped 4% to $1.06 billion, net income rose 23% to $423 million ($3.92 per share), while adjusted EBITDA increased to $644 million. The company also reported record module sales, surpassed 100 GW in cumulative shipments, and ended the quarter with a 45.1 GW contracted backlog through 2030.

Restaurant Stocks React Mixed as Starbucks and Yum! Shine, AB InBev Slips

Restaurant and consumer stocks traded mixed after quarterly earnings, with Starbucks and Yum! Brands delivering strong results, while Anheuser-Busch InBev (AB InBev) declined despite beating expectations.

Starbucks shares rose after the coffee chain reported fiscal fourth-quarter adjusted earnings of 85 cents per share, topping estimates, while revenue of $9.32 billion also exceeded forecasts. Comparable store sales growth of 7.9% beat expectations, prompting the company to raise its full-year outlook for both sales growth and earnings. Management said its turnaround strategy under CEO Brian Niccol is gaining momentum, supported by improving store operations and stronger customer demand.

Yum! Brands also posted better-than-expected second-quarter earnings, with adjusted EPS of $1.62 surpassing estimates. Growth was driven by Taco Bell, where same-store sales increased 7%, while worldwide same-store sales rose 3% and digital sales neared $9 billion. However, ongoing weakness at Pizza Hut, where system sales declined 2%, continued to weigh on overall performance.

In contrast, AB InBev shares fell even after the brewer reported better-than-expected quarterly earnings and revenue, as investors were disappointed the company maintained, rather than raised, its full-year EBITDA growth guidance of 4%-8% following the strong results.

M&A Activity Accelerates as ICE, Nscale and Nuclea Announce Strategic Deals

Merger and acquisition activity remained robust on July 30, with companies across financial services, artificial intelligence and nuclear energy announcing strategic transactions.

Intercontinental Exchange (ICE) agreed to acquire electronic bond trading platform MarketAxess Holdings in a $5.7 billion all-cash deal, offering $167 per share, a 33% premium to the previous close. The acquisition will strengthen ICE’s fixed-income franchise by combining bond trading, pricing analytics and post-trade services. ICE also reported adjusted second-quarter earnings of $1.90 per share, beating analysts’ estimates. Investors welcomed the developments, with MarketAxess shares surging nearly 30%, while ICE shares edged higher after the earnings beat and acquisition announcement.

In the AI infrastructure space, British neocloud provider Nscale agreed to acquire AI software startup Anyscale for $1.65 billion, adding AI workload management and orchestration capabilities to strengthen its end-to-end AI computing platform. As both companies are privately held, there was no public market share reaction.

Meanwhile, Nuclea Energy announced plans to go public through a merger with Mangoceuticals (NASDAQ: MGRX), under which Nuclea shareholders will own 96% of the combined company. Investors reacted negatively to the reverse merger, sending Mangoceuticals shares plunging 46.9% during the trading session.

Jersey Mike’s Debuts on NYSE, Shares End Nearly 6% Below IPO Price

Jersey Mike’s made its public market debut on July 30, with shares falling 6% to close at $21.63, below the IPO price of $23. The sandwich chain raised $913 million by offering more than 43 million shares, valuing the company at $7.3 billion. Backed by Blackstone and the Abu Dhabi Investment Authority, Jersey Mike’s trades under the ticker JMKE on the New York Stock Exchange.

Despite the weak debut, the company highlighted strong growth, with 2025 systemwide sales rising 13% to $4.3 billion and same-store sales increasing for nearly 20 consecutive years. The franchisor, which operates about 3,300 stores, plans significant expansion, targeting 15,000 locations globally over the long term.

Reformation Ends Flat in NYSE Debut After $211 Million IPO

Sustainable fashion retailer Reformation made its New York Stock Exchange debut on July 30, with shares closing nearly unchanged at $15.07, slightly above the IPO price of $15. The company raised $210.9 million by offering 14.06 million shares under the ticker REF. CEO Hali Borenstein said Reformation is “ready to scale,” with expansion plans focused on opening more stores, accelerating e-commerce, broadening product categories and growing internationally. The retailer reported 20 consecutive quarters of double-digit revenue growth, generated $507.1 million in 2025 revenue, and operates 70 stores across North America and Europe, supported by more than 1 million active customers.

Healthcare Stocks Diverge on FDA Setbacks, Regulatory Scrutiny and Drug Approval

Healthcare stocks saw sharp moves on July 30 as regulatory developments drove investor sentiment. Capricor Therapeutics plunged 50% after an independent U.S. FDA advisory panel voted 9-3 against the effectiveness data supporting deramiocel, its experimental therapy for a heart condition associated with Duchenne muscular dystrophy. Panel members cited insufficient evidence of meaningful cardiac benefit, missing data and concerns over post-study changes to key analyses. The FDA is expected to issue its final decision by August 22.

Hims & Hers Health gained 8.2% despite the U.S. Federal Trade Commission (FTC) filing a lawsuit alleging the telehealth company improperly shared sensitive health data with advertising platforms and engaged in deceptive billing practices. The company rejected the allegations and said it would vigorously defend its data privacy and billing practices, while investors assessed the potential regulatory impact.

Meanwhile, Outlook Therapeutics rose 4% as investors continued to evaluate the commercial prospects of its recently approved LYTENAVA for wet age-related macular degeneration. The company expects 12 years of U.S. exclusivity for the therapy in an estimated $8.5 billion market, although concerns over future financing and potential shareholder dilution continued to weigh on sentiment.

The session underscored that artificial intelligence remains the dominant driver of equity performance, rewarding companies delivering strong cloud, semiconductor and infrastructure growth while punishing those with weaker execution or cautious outlooks. At the same time, earnings quality, regulatory decisions and strategic acquisitions continued to shape investor sentiment, resulting in pronounced stock-specific moves across technology, healthcare, consumer and industrial sectors.

Source

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