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SUMMARY
Amit Kukreja and guest Sam provided live coverage and analysis of a packed earnings session featuring major technology, AI, and cloud infrastructure companies, set against a backdrop of escalating Middle East tensions and volatile market conditions. The episode highlighted significant earnings beats and misses, strategic partnerships—most notably IREN's deal with Nvidia—and the broader implications for the AI infrastructure sector and investor sentiment.
MAIN POINTS
- Geopolitical tensions rise with reports of Iranian attacks and U.S. military involvement, contributing to oil price volatility and market unease.
- Market rotation observed as semiconductor stocks decline and software names rally, with Nvidia and Microsoft showing relative strength.
- Preview of after-hours earnings for companies like Indie Semiconductor, IREN, Cororeweave, Rocket Lab, Soundhound, and others.
- Market closes with semiconductors red, software green, and Tesla surging late in the session; anticipation builds for a flood of earnings releases.
- Initial earnings results show mixed performance: Coursera beats on revenue and profit, Trade Desk and Mercado Libre miss on EPS, Airbnb beats on revenue but misses on EPS, and Soundhound reports a double miss.
- Rocket Lab delivers a double beat with strong revenue and EPS growth, while Open Door and Redcat report significant EPS misses.
- Cororeweave beats on revenue but posts a larger-than-expected loss, affirming strong bookings and data center demand.
- AOI and Toast both report double misses, leading to sharp stock declines; Rocket Lab highlights major contract wins and improved margins.
- Coinbase posts a massive EPS miss and declining revenue, while Affirm surprises with a profitable quarter and strong year-over-year growth.
- Lyft's earnings show mixed results with a beat on revenue but a decline in active riders; MP Materials posts a significant EPS and revenue beat.
- Cloudflare reports a double beat but sees its stock drop, possibly due to high expectations and recent price run-up.
- DraftKings and Monster Beverage both report positive earnings, while several SaaS and AI infrastructure names experience volatility.
- Texas Roadhouse posts strong restaurant sales growth, while NuScale Power (SMR) reports a sharp revenue decline and net loss.
- Airbnb raises full-year revenue guidance, citing World Cup demand, but shares fall on a tax-related EPS miss; Rocket Lab announces a partnership with Anduril for hypersonics tech.
- HubSpot beats on both EPS and revenue but offers a cautious guide; Mercado Libre's margins decline, leading to a selloff despite strong revenue growth.
- Microchip Technology and other hardware names report solid beats; Cloudflare and other AI infrastructure stocks continue to slide.
- Coinbase's earnings call focuses on the sustainability of non-transaction revenue as crypto trading volumes soften.
- IREN posts a large revenue miss but a strong EPS beat; market reaction is muted as investors await news of a major deal.
- IREN and Nvidia announce a strategic partnership for up to 5 gigawatts of AI infrastructure, with Nvidia securing the right to invest up to $2.1 billion at a $70 strike price.
- Nvidia's investment terms are seen as a strong endorsement, potentially providing IREN with a valuation floor and alleviating dilution concerns.
- Mass layoffs are announced across major tech and telecom companies, highlighting the disruptive impact of AI and automation on the workforce.
- Coreweave reports a record revenue backlog nearing $100 billion, significant power expansion, and a strong position in the AI cloud market despite a heavy debt load.
- Market participants debate the relative merits and execution of NeoCloud providers like IREN, Coreweave, and Nebius, noting similarities in business models but differences in partnerships and financial health.
- IREN's earnings call details the Nvidia partnership, global expansion plans, and a transition from Bitcoin mining to AI cloud services, with a focus on rapid capacity deployment and customer diversification.
- Coreweave and other AI infrastructure stocks experience sharp after-hours declines, possibly triggered by comments on financing, supply constraints, or macroeconomic concerns.
- Market volatility intensifies as geopolitical headlines and earnings reactions drive rapid swings in high-beta tech and AI names.
- Jensen Huang appears on CNBC to discuss Nvidia's investments in U.S. manufacturing and the broader impact of AI on job creation and infrastructure.
- President Trump issues a statement on U.S. naval actions in the Strait of Hormuz, reinforcing ongoing geopolitical uncertainty and its effect on oil and equity markets.
DETAILED ANALYSIS
The session opened with heightened geopolitical anxiety as reports surfaced of Iranian drone activity and U.S. military responses in the Middle East. These developments contributed to a spike in oil prices, which had dipped below $90 earlier in the day but rebounded sharply amid the uncertainty. The S&P 500 traded lower, with the volatility index (VIX) remaining subdued despite the barrage of negative headlines, suggesting that market participants were not yet pricing in a major escalation.
Sector rotation was a central theme, with semiconductor stocks broadly declining while software names rallied. Nvidia and Microsoft provided some stability, but the rotation was viewed with skepticism, as it appeared to be driven more by short-term positioning than by a fundamental shift in investor preference. The discussion noted that such rotations can be fleeting and may reverse quickly if macro conditions or sector narratives change.
As the market closed, attention shifted to a deluge of earnings reports from a diverse set of companies spanning AI infrastructure, cloud computing, fintech, and consumer technology. The initial wave of results was mixed: Coursera beat expectations on both revenue and profit, while Trade Desk and Mercado Libre missed on EPS. Airbnb posted a revenue beat but missed on EPS due to tax-related charges, and Soundhound suffered a double miss.
These early results set the tone for a volatile after-hours session.
Rocket Lab emerged as a standout, delivering a double beat on revenue and EPS, with year-over-year revenue growth exceeding 60%. The company also announced a record backlog and a multi-launch agreement with a confidential customer, as well as a new partnership with Anduril to develop hypersonic technology for defense applications. These developments underscored Rocket Lab's growing relevance in the commercial and defense space sectors.
In contrast, several companies reported disappointing results. Open Door and Redcat both missed EPS expectations by wide margins, while AOI and Toast posted double misses, leading to steep after-hours declines. Coinbase reported a staggering 3,000% EPS miss and a 31% drop in revenue, reflecting the challenges of operating in a volatile crypto market.
The call for Coinbase focused on the sustainability of non-transaction revenue streams, such as subscriptions and staking, as trading volumes remained subdued.
Affirm provided a rare bright spot among fintech names, posting a profitable quarter with EPS up 3,000% year-over-year and revenue growth of 33%. This marked a significant turnaround for a company that had struggled to achieve profitability in prior periods. Lyft's results were mixed, with a revenue beat offset by a decline in active riders and rides, raising concerns about the company's ability to sustain growth in a competitive market.
Cloudflare, despite delivering a double beat on EPS and revenue, saw its stock drop sharply after hours. The decline was attributed to high expectations and a recent run-up in the share price, as well as broader market jitters affecting high-multiple tech stocks. The reaction mirrored that of Fastly, another CDN provider that had experienced a steep post-earnings selloff.
Texas Roadhouse and Monster Beverage demonstrated resilience, posting strong sales and earnings growth in the restaurant and beverage sectors, respectively. NuScale Power (SMR), however, reported a dramatic revenue decline and net loss, highlighting the challenges facing newer entrants in the energy and infrastructure space.
A major highlight of the evening was the announcement of a strategic partnership between IREN and Nvidia. The deal involves up to 5 gigawatts of AI infrastructure, with Nvidia securing the right to invest up to $2.1 billion at a $70 strike price. This arrangement was interpreted as a significant endorsement of IREN's capabilities and a potential valuation floor, alleviating concerns about future dilution.
The partnership also includes a $3.4 billion, five-year AI cloud contract for Nvidia's internal workloads, representing a critical step in IREN's transition from Bitcoin mining to AI cloud services.
The IREN earnings call provided further detail on the company's global expansion plans, including new sites in Europe and the Asia-Pacific region. The company emphasized its ability to rapidly deploy capacity, with all operational infrastructure fully contracted and demand consistently outstripping supply. The acquisition of Morantis, a cloud infrastructure management firm, was highlighted as a key move to enhance delivery capabilities and customer support, particularly for enterprise clients.
Coreweave, another major player in the AI infrastructure space, reported a record revenue backlog nearing $100 billion and significant power expansion, positioning itself as a leader in the NeoCloud sector. However, the company remains heavily leveraged, with a debt-to-equity ratio of 3:1, and its stock experienced a sharp after-hours decline. The selloff appeared to be triggered by comments on financing strategies, supply constraints, or broader macroeconomic concerns, which also affected other NeoCloud names like Nebius and IREN.
The broader market environment was further complicated by a wave of mass layoffs across major tech and telecom companies, including Verizon, Coinbase, Upwork, Bill Holdings, and Cloudflare. These announcements underscored the disruptive impact of AI and automation on the workforce, even as industry leaders like Nvidia's Jensen Huang argued that AI would ultimately create more jobs than it displaces. Huang's appearance on CNBC focused on the transformative potential of AI infrastructure, U.S. manufacturing, and the need to revitalize the energy grid, but his optimism was juxtaposed with the reality of widespread job cuts.
Geopolitical tensions remained a persistent overhang, with President Trump issuing a statement on U.S. naval actions in the Strait of Hormuz and reiterating the ongoing ceasefire. Oil prices fluctuated in response to these developments, and the S&P 500 faced renewed selling pressure. The uncertainty made it difficult for high-beta tech and AI stocks to sustain after-hours gains, with many reversing earlier pumps as the session progressed.
In summary, the episode captured the frenetic pace of earnings season in the technology and AI sectors, set against a backdrop of geopolitical risk, sector rotation, and macroeconomic uncertainty. Strategic partnerships like IREN's deal with Nvidia signal the growing importance of AI infrastructure, but investor sentiment remains fragile amid concerns about execution, financing, and the broader market outlook. The session concluded with a look ahead to continued volatility and the potential for further rotation as investors digest the latest round of earnings and geopolitical headlines.
LINKS
- Amit Kukreja's official Twitter/X account for market commentary and updates.
- Amit's Deep Dives Substack for in-depth stock and market analysis.