2,107% in One Year

SanDisk (NASDAQ:SNDK) is up 2,107% over the past year, a run so extreme that it caught Morningstar’s chief global markets editor Tom Lauricella’s attention. He says it has done something no memory-chip cycle was supposed to do: reclassify the two largest companies in the S&P 500 as discount trades. “Apple and Microsoft look like value stocks just because of where they are in the rankings,” Lauricella said, describing how the AI storage buildout is bending index construction around a single flash-memory supplier.

The anchor figure is a one-year total-return calculation cited in the Morningstar framing. Fuse-aggregated pricing shows a closely related reading: a 2,107.79% one-year change from $73.92 on Sept. 10, 2025, to $1,632.11 on Sept. 11, 2026.

What It Means Operationally

Fundamentals are doing the heavy lifting alongside any multiple expansion. SanDisk’s fiscal Q4 report on Aug. 5, 2026 showed revenue of $8.96B, up 371.6% YoY, and non-GAAP EPS of $39.25 versus a $33.28 consensus, the fifth consecutive beat. GAAP gross margin reached 84.6%, up 58.4 percentage points year over year, and operating income of $7.037B came off a base so small that the year-over-year change registered 38,994%.

The Datacenter segment is where the AI narrative earns its keep. Datacenter revenue was $2.977B in Q4 and full-year segment revenue rose 437%. Management said sequential growth was roughly one-third volume and two-thirds pricing, and that the pipeline includes five additional New Business Model agreements since the April call, featuring three new customers alongside a pair of expansions. SanDisk is a cash cow: free cash flow was $7.083B in the quarter and $11.494B for fiscal 2026.

Market Reaction and Peer Scoreboard

SanDisk closed the most recent session with a one-day move of -2.98%, but it is up 28.4% over the past month and 587.9% YTD. That performance is what forces the value-index math. Over the same 12 months, Microsoft (NASDAQ:MSFT) is up 0.18%, Apple (NASDAQ:AAPL) is up 47.05%, NVIDIA (NASDAQ:NVDA) is up 24.84%, Western Digital (NASDAQ:WDC) is up 377.84%, and Taiwan Semiconductor Manufacturing (NYSE:TSM) is up 67.18%.

According to Lauricella’s team, that scoreboard is why value indexes have moved from 11% technology at end-2024 to roughly 20% technology currently. Amazon now boasts the largest holding in the Russell Large Value Index at 6%. The retirement investor who owns a “value” ETF as a defensive sleeve is holding more AI-cycle exposure than the label suggests.

Bull Case

The fundamentals behind the price line are doing real work. SanDisk’s full fiscal 2026 revenue was $20.248B, up 175.3%, with non-GAAP EPS of $70.88 and net income of $11.433B. Guidance points higher: Q1 FY27 revenue of $10.30B to $10.80B, non-GAAP EPS of $44.00 to $46.00, and GAAP gross margin of 83.0% to 84.9%. Forward analyst estimates have been moving up, with the fiscal 2027 average EPS estimate rising to 214.10 from 175.38 90 days ago, and 12 upward EPS revisions versus seven downward over the trailing 30 days.

Capital return is scaled to match. The board approved an additional $14B buyback, bringing remaining authorization to $15.5B on a market capitalization of $239.4 billion. Balance-sheet leverage is negligible at debt-to-equity of 0.025, and the forward P/E sits at 8 against an analyst target of $2,125.09. Peer Western Digital guided Q1 FY27 revenue to roughly $4.1B, up 42% to 49% year over year, corroborating the storage-cycle strength that SanDisk is monetizing on the flash side.

Bottom Line

The 2,107% performance is a symptom of two forces stacking on each other: NAND pricing that has snapped back, and Datacenter demand tied to AI infrastructure that is running at triple-digit growth. For long-term investors, the metric is a prompt to examine what they actually own in supposedly boring index products rather than a chart-chasing cue.

The next dated catalyst in the provided data is corporate rather than operational: S&P Dow Jones Indices announced on Sept. 4, 2026 that SanDisk is among companies joining major S&P benchmarks, which will pull passive flows into a stock already trading at $1,632.11. When the biggest one-year winner in memory redraws the map of what counts as growth and what counts as value, chances are the label on the sleeve of your portfolio is not the risk you signed up for.

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Anthropic and OpenAI plan to go public sometime in the next year. Their valuations have been pegged at $1.5 trillion to $2 trillion. This is based on two things. The first is that each has the most advanced AI models in the world, and by wide margins. The other is that revenue is growing at a mind-boggling rate. A recent analysis of Anthropic’s revenue run rate for this year put it at $65 billion. That would be as much as seven times 2025 revenue.

If the impression grows that China’s AI models are nearly as good as, if not as good as, American models, OpenAI and Anthropic’s valuations could be badly crippled.  There is also concern that AI data centers will cost hundreds of billions of dollars. Whether this pays off depends on major AI technology advantages and revenue’s ability to support the need for capital. If any of these assumptions are badly undermined, the AI funding pace will look more like the dot-com bubble, and IPO values will be badly damaged.

There is considerable concern that Chinese AI progress has moved fast enough that US advances have not kept pace in efficiency and overall results, particularly for business, government, and the military. The anxiety falls into several categories. One is that China has stolen intellectual property from Anthropic and OpenAI. The same concern applies to several major American public companies, including Microsoft (NASDAQ: MSFT).

Another is that enterprise users will move to China’s open-source and open-weight models. The cost per token can be less than 50% of proprietary products from some US companies. CNBC reports, “Chinese-built AI models are gaining traction among U.S. companies as they narrow the performance gap with leading American rivals while remaining significantly cheaper to use.” Nvidia (NASDAQ: NVDA) CEO Jensen Huang recently said that these models should not be pushed out of the US. He added that these Chinese models are “excellent.”

US politicians have moved to block the use of Chinese technology like DeepSeek or Kimi. They have voiced concern that these can be used to “spy” on US technology. A related issue is that the Chinese government has supported AI development, while in the US, capital comes from private companies and financial firms.

Another concrete issue is the backlash against data centers in the US. Bloomberg has reported that the number blocked so far is huge. “Delays to data-center projects would likely result in cuts to forecasts for US gas demand, which is expected to climb as new power plants are built to provide electricity for the artificial-intelligence boom,” the news service reports. The Chinese central government has much more control over land use and where data centers are built.

Another advantage Chinese data centers have is access to electricity. China can supply about twice the electricity the US can. The aging American grid and lack of ready energy to power the rising need for electricity mean some data centers will be delayed.

The final large advantage China has is its ability to steal US IP. This often happens through a technique called “model distillation.” Reuters reports, “Distillation is the process of training smaller AI models using output from larger, more expensive ones as part ​of an effort to lower the costs of training a new AI tool.”

Current investors need Anthropic and OpenAI values to be at or above $1.5 trillion. Public investors also need to believe those figures to support these valuations.

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Oracle (NYSE:ORCL) just delivered one of the most consequential AI cloud quarters on record, and I think the market is still digesting what it means. Our 24/7 Wall St. price target for Oracle is $229.25, implying 49.67% upside from the current $153.17 share price.

Our recommendation is buy, and the model’s confidence is 90%. Oracle looks like an unexpected AI winner because the RPO backlog and OCI utilization data now support a step-change in earnings power through 2030.

24/7 Wall St. Price Target Summary

A Blowout Quarter Buried Under a Selloff

Oracle is down 20.77% year to date and 52.89% over the past year, sitting far below its $325.79 52-week high. Yet the fundamentals accelerated.

In Q1 FY2027, revenue rose 29.61% to $19.34 billion, adjusted EPS came in at $1.92, and cloud infrastructure revenue exploded 121%. Remaining performance obligations reached $664 billion, and Oracle booked more than $30 billion in new AI contracts in a single quarter. Management raised FY2027 revenue guidance to at least $90 billion and reiterated a $8.10 non-GAAP EPS target.

Why Bulls See a Breakout Ahead

The bull case rests on RPO conversion. Management now expects roughly half of RPO to convert to revenue over the next 36 months, GPU utilization is running at 97.9%, and renewals are pricing at a 20% premium.

Multicloud database revenue grew 353% year over year, and OCI now interconnects with every major hyperscaler. Analyst distribution skews heavily positive with 8 strong buys and 28 buys, versus just 1 sell. In our bull scenario, ORCL reaches $334.89 within 12 months, a 118.64% return.

What Could Go Wrong

Free cash flow was negative $5.4 billion in Q1, following negative $23.7 billion for FY2026, with FY2027 CapEx guided to $90 to $95 billion. Bulls would counter that CFO Hilary Maxson said each project is “by nature a strong free cash flow generating project” once it ramps, targeting 100% conversion to post-tax EBITDA.

Software license revenue is also shrinking 15% as customers migrate, and concentration in a handful of hyperscale AI contracts is real. Our bear scenario still lands at $191.39, roughly 24.95% above today.

How Oracle Compares to Microsoft and Amazon

Microsoft (NASDAQ:MSFT) is the cleanest cloud comp, with Azure surpassing $100 billion in full-year revenue and commercial RPO of $678 billion, remarkably close to Oracle’s $664 billion backlog on a fraction of Oracle’s revenue base. Microsoft trades at a P/E of 27, effectively identical to Oracle’s 28, yet Oracle’s cloud is growing far faster.

Amazon (NASDAQ:AMZN) is the AWS benchmark, growing 37% in Q2 with plans for roughly $200 billion in 2026 CapEx. Amazon trades at a P/E of 35. Against both, Oracle’s forward P/E of 20 makes our 24/7 Wall St. price target look conservative.

Oracle Price Prediction 2026-2030

The 24/7 Wall St. price target of $229.25 with a buy rating and 90% confidence reflects a business whose RPO now dwarfs its trailing revenue. The tipping factor is GPU utilization at 97.9% with renewal pricing running 20% higher.

The setup favors investors who can tolerate near-term free cash flow volatility while the CapEx cycle plays out. The thesis weakens if the $664 billion backlog converts far more slowly than management guides.

These projections assume Oracle continues converting its RPO backlog on schedule and holds datacenter execution timelines.

Significant upside or downside could come from GPU supply constraints, hyperscaler competition, or how quickly free cash flow inflects positive after the current investment cycle. Oracle is one face of the AI buildout, and we profiled seven other suppliers powering data centers, from power to cooling, in a free report you can grab here.

The post Prediction: This Could Be an Unexpected AI Winner Through 2030 appeared first on 24/7 Wall St..

My agentic AI dollars keep landing on the same ticker, and I have stopped pretending it will be anything else. Every payday I add a little more Microsoft (NASDAQ:MSFT) to the account, and the case for doing it again next month keeps getting stronger.

Microsoft is selling agents into the software my employer already runs, on the cloud my employer already trusts, powered by a model lab it partly owns. That is a distribution advantage no other hyperscaler has assembled in one place, and the receipts show up in every recent earnings report.

Three Numbers That Keep Me Buying

Start with adoption. Microsoft 365 Copilot passed 30 million paid seats in fiscal Q4 2026, and the customer list reads like a directory of the global economy. NHS England is rolling Copilot out to 505,000 clinicians and staff, EY deployed E7 to 400,000 employees, KPMG is expanding across more than 276,000 professionals, and HSBC committed to 200,000 seats. Enterprise deployments to the majority of information workers grew nearly 75% quarter over quarter. Once Copilot is inside Outlook and Teams, ripping it out is a bigger project than adopting it was.

Then the backlog. Commercial remaining performance obligations reached $678 billion, up 84% year over year. Even stripping out the OpenAI relationship, RPO grew 25%, and nearly 90% of full-year Microsoft Cloud revenue came from customers outside frontier model companies. That represents contracted work already sitting on the books. For a retirement-focused portfolio, visibility like that matters.

Third, the cloud engine. Azure crossed $100 billion in annual revenue and grew 43% year over year in Q4, while management guided to approximately 45% constant-currency Azure growth for the next quarter. Beneath it sits an AI business already running at a $37 billion annualized run rate, up 123% year over year. Wrap all of that in a 46.78% operating margin, a 34.04% return on equity, and a 0.29 debt-to-equity ratio, and you have the balance sheet to fund the next leg without borrowing recklessly.

Why Not the Obvious Alternatives

I looked hard at Alphabet (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN). Both are excellent companies. Microsoft, however, uniquely sits inside the productivity software the Fortune 500 opens every morning. Microsoft’s roughly 27% stake in OpenAI, valued near $135 billion, with IP rights extended through 2032 including post-AGI models, plus OpenAI’s contracted purchase of an incremental $250 billion of Azure services, is a structural arrangement its peers cannot replicate. When agentic AI is billed per outcome as well as per seat, the company holding the model IP, the distribution surface, and the compute contract collects at every layer.

Risk I Am Not Ignoring

Capital spending is the real worry. Full-year fiscal 2026 capex hit $115.95 billion, up 79.62% year over year, and free cash flow fell 6.46% to $66.99 billion. Management has already signaled FY2027 capex will grow again. If AI demand cools, that build becomes an anchor.

What keeps me buying anyway: CFO Amy Hood said the largest slice of that spend is in short-lived CPUs and GPUs that can be slowed if demand shifts, and Microsoft expects to remain free-cash-flow positive in FY2027. Demand today still exceeds available supply.

Forward Conviction

With $678 billion of contracted work, a Copilot install base compounding inside the world’s largest employers, and a model partnership locked through the next decade, Microsoft is where my agentic AI capital keeps going, and I have no plan to stop.

The post My Agentic AI Capital Is Going One Place Over and Over appeared first on 24/7 Wall St..

Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOGL) just delivered earnings that reframed the enterprise AI race. Microsoft closed fiscal 2026 with Azure crossing $100 billion in annual revenue. Alphabet answered days earlier with Google Cloud growth accelerating to 82%. Both are pouring cash into data centers. Only one is stealing seats the other assumed were locked up.

Azure Prints Cash While Google Cloud Prints Growth

Microsoft posted Q4 revenue of $90.01 billion, up 17.8%, with Intelligent Cloud at $39.31 billion (+32%) and Azure up 43%. Satya Nadella told investors that “demand continues to exceed available supply”, a constraint you can feel in the commercial RPO backlog that surged 84% to $678 billion.

Alphabet flexed different muscles. Q2 revenue hit $119.80 billion, up 24.2%, with Google Cloud reaching $24.77 billion. Sundar Pichai said “nearly 90% of the Fortune 100 using” Gemini Enterprise, and that Gemini processes 22 billion API tokens per minute. That last figure is the shot across Redmond’s bow.

Alphabet Kicks the Door Open on Enterprise

Microsoft’s moat was supposed to be the Office tenant. That moat is leaking. Alphabet is winning Fortune 100 mindshare with Gemini Enterprise while Google Cloud backlog sits north of $460 billion. Microsoft’s counterpunch is optionality: a catalog of more than 11,000 models spanning OpenAI, Anthropic, Mistral, xAI, and its own MAI family. Nadella framed it bluntly: “The models are an input, not some extraction of the knowledge of the enterprise.”

Copilot adoption is still ripping. Microsoft cited NHS England rolling out to 505,000 clinicians and EY deploying E7 to 400,000 employees. But the pricing model is shifting to “per seat plus consumption”, which quietly admits that seat saturation alone will not carry growth forever.

Capex Is the Real Referee

Alphabet’s aggression carries a bill. Free cash flow flipped to negative $5.86 billion, the buyback was suspended, and long-term debt jumped to $98.2 billion. Microsoft still generated $19.64 billion in Q4 free cash flow even after doubling capex. All of that spending flows to the power, cooling, and networking suppliers behind the data centers, and we profiled seven of them in a free AI infrastructure report.

I will be watching two things: whether Azure’s guided ~45% constant-currency growth holds, and whether Google Cloud’s 82% pace decelerates as comps stiffen. Copilot’s shift to consumption billing is the tell on monetization depth.

Alphabet’s Edge Over Microsoft Today

On the numbers, Alphabet screens attractively today. A P/E near 17 against 82% cloud growth is a rare pairing, and shares are up 39.43% over the past year versus Microsoft’s roughly flat performance. For investors focused on fortress cash flow, dividend growth, and installed-base gravity, Microsoft trades at a 27 P/E. The key risk on both names is AI capex ROI. For now, Alphabet is the disruptor with the momentum, and Microsoft is the incumbent defending ground it never expected to defend.

The post Microsoft Vs. Alphabet: The Enterprise Fight No One Saw Coming appeared first on 24/7 Wall St..

On Tuesday morning, CNBC’s Julia Boorstin reported that “Meta is unveiling a personal AI agent that Mark Zuckerberg has been teasing for months”, a product Meta calls Muse that ships as a standalone app and inside WhatsApp.

Boorstin said Muse “gives users a personalized agent which can act like an assistant. It can monitor security cameras, file, fill in paperwork, find items to buy, or can book tee times.”

The key number: Meta released Muse with a free tier and two paid tiers, the higher-priced at $100 a month, positioning the product between OpenAI’s $20 ChatGPT Plus and its $200 Pro plan.

For shareholders in Meta (NASDAQ:META), this matters because every dollar the company has earned from consumers historically came from advertising sold against free products. Asking a Facebook user to hand over a credit card each month is a genuinely new business model.

The stock is not acting as the market has priced that in. META closed at $613.48 on Tuesday, down 18.19% over the last year.

Why the Pricing Matters More Than the Feature List

Meta AI Chief Alex Wang said, “We are incredibly excited about consumer AI. And we see today a very small number of people who have really experienced the power of advanced agents in these new models.” The category is wide open, but nobody has proven consumers will pay a subscription for a personal agent at any price, let alone $100 a month.

The pricing itself signals to Wall Street that Meta is moving beyond its core story. The company has spent years telling investors AI would show up as better ad targeting, with $59.36 billion in advertising revenue in Q2.

A paid tier creates a recurring line item independent of ad load and gives Zuckerberg a way to defend the $130 to $145 billion in 2026 capital expenditure the company just guided to.

Why WhatsApp Is the Real Weapon

OpenAI and Anthropic have mindshare. Meta has a messaging app installed on billions of phones.

Meta ended Q2 with 3.6 billion daily active people across its family of apps, and management said WhatsApp is the leading surface where people engage with Meta AI. Business agents are the proof of concept: more than 1 million businesses already use them weekly on WhatsApp and Messenger.

Compare that to Google (NASDAQ:GOOGL), which reaches consumers through a Gemini App with 950 million monthly active users, and Microsoft (NASDAQ:MSFT), which reaches workers through 30 million Copilot paid seats sold at roughly $30 per user per month.

WhatsApp lets Meta skip the acquisition funnel. Users don’t download anything, and payment flows through a channel they already trust.

What the Paid Tiers Say About Meta’s AI Spending

Meta’s Q2 free cash flow collapsed to $784 million from $8.55 billion a year earlier, with capital spending hitting $31.1 billion in the quarter alone. Long-term debt climbed to $83.66 billion to fund the buildout. Full details are in the Q2 8-K.

Analysts have noticed, with 45 downward EPS revisions for fiscal 2026 in the last 30 days against only 4 upward.

A $100-a-month subscription is how Zuckerberg starts answering the return-on-invested-capital question. Even modest paid conversion across a billion-user surface would meaningfully change the revenue mix.

Alphabet is monetizing AI through Cloud, which grew 82% year over year in Q2. Microsoft is monetizing it through per-seat Copilot and Azure, which crossed $100 billion in annual revenue. Meta is the only one of the three still searching for a repeatable AI revenue line outside advertising, and the picks-and-shovels names powering all three buildouts (we rounded up seven of them in a free report on the AI infrastructure trade) are the ones capturing the capex right now.

The Setup Now With META Stock

The stock trades at a forward P/E of 18x, a discount to Microsoft’s 27x multiple, with an analyst target of $754.77.

Muse is late to a market where ChatGPT already owns the noun. Distribution alone rarely closes a product gap, although WhatsApp is the closest thing to an unfair advantage anyone has brought to this fight.

The bear case: free cash flow is thin, capex is climbing, and consumers may not pay $100 a month for an agent that overlaps with cheaper tools they already use.

The bull case: Meta’s ad business is still growing 27%, the valuation is reasonable, and any paid AI revenue is upside the market has not underwritten.

The setup favors investors who can tolerate capital-spending headline risk through 2027. If Muse conversion disappoints by next summer, that thesis has to be revisited.

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Microsoft (NASDAQ:MSFT) at $492.44 looks attractive heading into the rest of September, with a rate backdrop, a fortress balance sheet, and an $678 billion cloud backlog all pointing the same direction. The stock has quietly slipped 3.47% over the past week even as the AI capex debate hits full volume, setting up an actionable entry.

Microsoft is the anchor holding of the AI infrastructure trade, running Azure, Microsoft 365, LinkedIn, GitHub, and the OpenAI-linked model catalog. Azure just surpassed $100 billion in annual revenue and grew 41%, and management says demand continues to exceed available supply. That is the setup investors are pricing right now.

Why September Rewards Buyers Here

The macro is doing the work. The Fed funds upper bound sits at 3.75%, down from 4.50% a year ago, and the 10-year yield at 4.95% is high enough to punish speculative names while leaving mega-cap compounders with real cash flows in favor. Microsoft carries debt/equity of 0.29 and interest coverage of 51x, meaning higher-for-longer barely touches it.

Fundamentals are accelerating into the setup. Fiscal 2026 revenue hit $331.84 billion, up 17.79%, and Q4 EPS of $4.74 beat the $4.2397 estimate by 11.81%, the fifth straight beat. Commercial RPO of $678 billion grew 84%, Microsoft 365 Copilot passed 30 million paid seats, and management guided next-quarter Azure to roughly 45% growth in constant currency.

Why Sellers Have a Real Point

Capex is exploding. Q4 capex jumped 109.63% to $35.80 billion, full-year capex reached $115.95 billion, and FY27 is guided to roughly $175 billion. Free cash flow fell 23.19% in Q4 and cash on the balance sheet dropped 30.78% year over year.

All that spending has to be powered, cooled, and networked by somebody, which is why the picks-and-shovels names behind the hyperscalers keep showing up in our free report on seven AI infrastructure stocks that aren’t chipmakers.

Valuation is not a bargain. Shares trade at 27x trailing earnings and 55x free cash flow, with Xbox revenue down 10% and More Personal Computing off 4%. If AI ROI slips, the multiple compresses fast.

Why Patience Is Tempting

The stock has gone nowhere for a year, off 0.77% over 12 months, and gross margins slipped to 67% on Azure mix. A patient investor could reasonably wait for the FY27 Q1 print to confirm that $175 billion in capex is generating incremental margin, not just incremental depreciation. That is a defensible pause, especially with the put/call ratio at 0.64 showing no panic in either direction.

Data Behind the Setup

MSFT trades at $492.44 against a consensus analyst target of $572.92, implying roughly 16% upside if the target holds. Targets are one data point among many. Coverage skews heavily bullish: 14 Strong Buy, 38 Buy, 3 Hold, and zero Sell ratings across 55 analysts.

Year to date, MSFT is up 2.47% while SPY has moved from 741.69 at the July earnings filing to 757.94, so Microsoft has lagged the broader market into September. The 50-day moving average of $449.05 sits well below spot, and the 52-week range of $348.54 to $549.20 shows how much room remains before prior highs.

Why $492 Looks Compelling

At $492.44, Microsoft screens favorably on the setup. Here is why.

The path to appreciation is mechanical. Azure guided to 45% constant-currency growth, Copilot seat additions more than doubled quarter over quarter, and RPO recognizable within 12 months grew 37%. Each of those converts backlog into reported revenue over the next few quarters, and September trading has historically front-run those earnings reports.

The balance sheet lets Microsoft outspend every competitor without touching credit markets, which matters when the 30-year Treasury yields 5.37%. A rate-cut path that has already pulled the funds rate down 75 basis points from last September is a direct tailwind for the forward P/E of 25.

The thesis breaks if Azure decelerates below 35% or if FY27 operating margin slips more than the guided one point. Neither is visible in current guidance. The September pullback offers a notable entry point in the highest-quality AI operator trading at a reasonable multiple, before the FY27 acceleration story potentially reprices the stock.

The post Expect Microsoft to Be Anything But Slow For The Rest of September appeared first on 24/7 Wall St..

Amazon (NASDAQ:AMZN) currently trades near $251.89, while the average Wall Street 12-month price target sits at $328.17, an implied upside of roughly 30%.

Amazon runs the largest US e-commerce operation, the biggest cloud franchise via AWS, a top-three digital ad business, and one of the most aggressive AI infrastructure buildouts anywhere. Its most recent quarter showed AWS growing 37% year over year, its fastest pace in 18 quarters, with AI and custom-chip units each running above a $25 billion annualized rate.

Yet the stock slipped through August and into September even as fundamentals accelerated, and one Street-high target implies far more upside than the consensus figure suggests.

Capex Anxiety Overwhelmed a Blowout AWS Quarter

The single biggest weight on the stock has been capital spending. Q2 cash capex reached $53.1 billion, trailing-twelve-month free cash flow flipped to negative $7.6 billion, and management guided to roughly $200 billion in 2026 capex across AI data centers, custom silicon, robotics, and the Amazon Leo satellite network. All that spend has to be powered, cooled, and networked by somebody, which is exactly the angle we took in a free report on seven AI infrastructure suppliers behind the hyperscaler buildout.

Amazon dropped 7.49% over the past month versus a 1.64% dip in the S&P 500. The selloff was Amazon-specific, driven by capex intensity and returns uncertainty. Headline GAAP earnings were also inflated by a $53.4 billion non-operating gain tied to the Anthropic stake; on a comparable basis, Q2 EPS was $1.88 versus a $1.83 estimate, a modest beat well below the blowout the GAAP line implied.

Loop Capital Sees a $405 Path While Analysts Stay Loaded With Buys

Analyst posture has barely moved. Of 61 rated firms, 15 carry Strong Buy, 44 Buy, 2 Hold, and none Sell. Consensus 2026 EPS has seen 48 upward revisions against a single cut over the past 30 days. The bull side is getting louder.

Sitting at the top of the range is Loop Capital’s Rob Sanderson at $405, which pencils out to roughly 61% upside from the current print. That easily clears the 40% threshold that reframes a target as a high-conviction call. Loop’s thesis rests on three pillars: AWS re-accelerating toward a 20%+ clip on enterprise migrations and high-margin AI workloads across Trainium, Inferentia, and NVIDIA; structural retail margin expansion from regionalized fulfillment and marketplace fees; and a scaling ad engine at roughly 70%+ gross margins.

The supporting data is already visible. AWS backlog reached $496 billion, growing triple digits year over year. Management said the lion’s share of 2027 capacity is already reserved, with meaningful pieces of 2028 spoken for. Advertising grew 26% to $19.81 billion. CEO Andy Jassy told analysts AWS could “very possibly be a trillion dollar annual revenue business for us in time”. The ask is patience across two to three years of heavy spend before monetization catches up.

Amazon Fell Harder Than Its Big-Cap Peers

Amazon’s mega-cap peers held up materially better over the same window. Microsoft (NASDAQ:MSFT) is off 2.07% over the past month at $492.44, with an average target of $572.92 (about 16% upside) on a book of 14 Strong Buy, 38 Buy, 3 Hold. Azure just crossed $100 billion in annual revenue.

Alphabet (NASDAQ:GOOGL) at $332.60 is down 3.19% on the month with a target of $428.07, roughly 29% upside. Ratings run 13 Strong Buy, 45 Buy, 5 Hold, and Google Cloud grew 82% last quarter. It is the closest analog to Amazon’s setup.

Walmart (NYSE:WMT) sits at $105.73 with a $127.42 target, about 20% upside, and slipped 6.43% after cautious tariff-refund reinvestment commentary. Its book: 10 Strong Buy, 27 Buy, 5 Hold, 1 Strong Sell.

Amazon’s 30% consensus upside is the widest in the group before layering on Loop’s 61% Street high, making it the most dislocated name in the peer set.

What the Numbers Show at $251

Amazon trades at $251.89 against a consensus 12-month target of $328.17 built from 61 analysts, 59 of whom rate the stock a Buy or Strong Buy. Year to date, Amazon is up 9.13%, trailing the S&P 500’s 11.15%. Over the past month the stock has fallen 7.49% while the S&P dipped 1.64%. Analyst targets are one input rather than a guarantee, but the revision trend is decisively positive.

Bull and Bear Scenarios for Amazon at $251

The bull case strengthens if AWS keeps compounding above 30% into 2027 as management’s contracted-capacity commentary suggests, if the ad business holds a 20%+ pace, and if the $200 billion capex cycle begins converting into free cash flow by 2028. Those three pillars are what get the stock toward Loop’s $405.

The bear case gains traction if free cash flow remains negative through 2027, if custom silicon adoption stalls while NVIDIA-based rivals take share, or if a tariff-driven consumer slowdown compresses North America retail margins already running near 8%. Anthropic-inflated headline earnings make those risks easier to underestimate.

The setup skews constructive. The AWS backlog, the ad flywheel, and the depth of the buy-side book are notable, and the pullback has widened the risk-reward spread. A return to consensus would deliver a meaningful gain from current levels; Loop’s 60% call sits as the higher-conviction scenario tied to the capex cycle playing out.

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Google (NASDAQ:GOOG, NASDAQ:GOOGL) said it will pour a record $15 billion into AI infrastructure in what CNBC called the “Texas of Europe,” anchored by three northern data centers and a long-dated agreement to buy a large share of the output from Fortum’s Loviisa nuclear plant, with deliveries running for roughly two decades starting at the end of this decade.

That contract, first detailed by the Wall Street Journal, converts one of the least predictable line items in hyperscale computing, wholesale electricity, into a fixed and knowable cost through 2049.

The question worth answering is narrow. Does locking in two decades of low-carbon baseload structurally lower Alphabet’s cost per unit of AI compute, or does the timing mismatch mute the benefit? I think it matters, but not yet.

What Alphabet Actually Bought

Fortum’s Loviisa station is a working Finnish nuclear complex, and Google’s offtake secures a meaningful share of its generation for the life of the agreement (we picked five ways to play the nuclear restart, utilities and fuel included, in a free report here). The buildout pairs that supply with Nordic sites where average air temperatures cut cooling load for most of the year.

Cooling routinely runs as a large recurring share of data-center operating cost, so ambient cold removes a recurring expense outright.

Power, cooling and permission have replaced accelerators as the binding constraints on AI capacity. Finland offers all three, and local opposition to very large sites has been notably less organized than in Virginia, Ireland or the Netherlands.

Alphabet’s spending backdrop makes the deal easier to understand. Management guided 2026 capex to $175 to $185 billion, after $91.45 billion in 2025, and Q2 2026 capex alone hit almost $45 billion.

Why a 2049 PPA Is a Balance-Sheet Weapon

A long-term power purchase agreement turns a volatile operating cost into a fixed one, which grows in value as the asset base becomes larger and more capital-intensive. Google Cloud grew 82% in Q2, with backlog nearly doubling to over $460 billion a quarter earlier.

Sundar Pichai told investors, “Our AI investments are redefining what’s possible across every part of our business.”

Gemini models now process 22 billion API tokens per minute, and inference at that scale is chiefly a power problem. Fixed-price electrons across two decades directly compress the denominator in cost per token.

Interconnection queues and generation shortages are now deciding where compute can exist. Securing electrons ahead of demand is a different competitive act than buying more chips, and the market prices it poorly.

Timing Mismatch You Should Not Ignore

Deliveries begin at the end of this decade, so this deal does not lower Alphabet’s 2026 or 2027 power bill. The capacity being energized today runs on today’s grid at today’s prices.

Free cash flow was negative $5.86 billion in Q2, long-term debt climbed from $46.5 billion to $98.2 billion, and the buyback was suspended. The near-term math centers on financing the buildout, with electricity savings arriving later.

The advantage is contractual and geographic, and peers can pursue similar contracts. Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Meta (NASDAQ:META) can sign their own European nuclear offtakes, and several already have.

What would prove the thesis wrong: Loviisa slips, Finnish grid buildout stalls, or peers lock up comparable Nordic baseload at similar tenors before Alphabet’s second and third sites break ground.

Shares trade at $330.65, up 38.34% over one year, on a trailing P/E of 17x against an analyst target of $428.07. Sell-side coverage skews positive with 45 buys and 13 strong buys.

You are paying a reasonable multiple for 32.8% net margins, an accelerating cloud business, and a management team willing to underwrite electricity out to 2049. The Loviisa deal will not rescue this year’s free cash flow, although it secures optionality that competitors will pay more to replicate later.

The post Google Is Buying Half a Nuclear Plant’s Output Through 2049. Cheap Power Just Became the Real AI Moat. appeared first on 24/7 Wall St..

Shares of CoreWeave (NASDAQ:CRWV) are down 5% to $90.27 midday Thursday, sliding even after Michael Burry, the investor known for The Big Short, closed his highest-profile bearish bet against the AI infrastructure complex. The move stands out because that kind of catalyst usually lifts a heavily shorted AI name. The failure to rally is itself the signal.

Oracle (NYSE:ORCL) stock is down 3% to $157.43 heading into tonight’s fiscal Q1 2027 earnings release. Meanwhile, Cloudflare (NYSE:NET) shares are trading steady, off just 0.2% to $313.57.

The cloud group is separating around balance-sheet risk today. The First Trust Cloud Computing ETF (NASDAQ:SKYY) is down 0.1%. For broader tech-sector context, the Invesco QQQ Trust (NASDAQ:QQQ) is off by 0.74%, so CRWV and ORCL are down more than the NASDAQ 100.

Burry Covers, and CoreWeave Still Slides

The Burry news was widely expected to lift AI-exposed names. NVIDIA (NASDAQ:NVDA) was the underlying, and the position was the market’s most visible AI-related short. Through his firm Scion Asset Management, Burry closed his December put options on the chipmaker without rolling into later contracts, and he has said the exit shouldn’t be read as optimism.

CoreWeave Chief Executive Michael Intrator stated on Wednesday that the company’s newer data-center deals carry more operating margin than earlier ones and that “the deal-level economics are excellent,” because customers are paying more for AI compute faster than input costs are rising. The demand data supports him: CoreWeave’s Q2 2026 revenue rose 112.3% year over year to $2.58 billion, with revenue backlog around $104 billion.

The bear case is a balance-sheet argument. 24/7 Wall St. calculates that CoreWeave carries a debt-to-equity ratio of 8.94, and interest expense reached $640 million in Q2 against free cash flow of -$5.74 billion after $6.42 billion in capex.

Supplier data still points to intense end demand. NVIDIA’s most recent report placed Vera Rubin racks in full production at CoreWeave, Google Cloud, Microsoft (NASDAQ:MSFT) Azure, Oracle Cloud Infrastructure, and Nebius (NASDAQ:NBIS); CEO Jensen Huang stated that “AI has reached its inflection point” and that compute is revenue (we profiled seven of the picks-and-shovels suppliers powering that buildout, beyond the chipmakers, in a free report here).

Oracle Funding Question Meets Options Optimism

Oracle reports its fiscal Q1 2027 results after today’s close. Julia Spina, Head of Research, North America at IG Group, noted that options are pricing in an 11% move, or $18 per share, around the report, and calls are trading richer than puts. That’s the reverse of the usual pattern, with call premiums bid above puts into the print.

Funding is a major concern for Oracle. Guggenheim flagged that Oracle plans to raise $40 billion in fiscal 2027 for its AI buildout, its credit-default swaps have recently reached record highs, and analysts have pointed to financing risk, reported delays at some AI data-center sites, and heavy backlog concentration in a single AI lab.

Still, Oracle’s demand backdrop is strong. The most recent quarter showed Cloud Infrastructure revenue up 93% year over year to $5.79 billion, and remaining performance obligations reached $638 billion, up 363% year over year. The question is whether that backlog gets financed cleanly enough to translate into margin expansion.

Furthermore, sentiment into the report leans constructive. Polymarket traders are pricing the “beat quarterly earnings” outcome at 0.79, and a composite Oracle sentiment score sits at 74.54 with a bullish direction. The financing question remains open after that read, though it does explain why the calls are bid.

Cloudflare Sits Out the Debate

Cloudflare stock rallied earlier this week on an OpenAI security partnership and is holding those gains today. It sells AI-adjacent services across an existing network rather than funding fresh data-center capacity with debt, which is why its stock is barely moving while the capital-heavy names sell off. Revenue in Cloudflare’s most recent quarter accelerated to $696.06 million, up 35.9% year over year, and CEO Matthew Prince stated that “Cloudflare sits at the center of this paradigm shift” as web traffic moves to AI agents.

Guidance is also lifting. Cloudflare raised its FY2026 outlook to $2.864 billion to $2.87 billion in revenue and non-GAAP EPS of $1.25 to $1.26. The asset-light model separates it from the operators funding physical GPU capacity through debt markets.

What to Watch

Oracle’s earnings release after the closing bell could set the tone for the AI infrastructure trade into Friday. Investors can watch for whether management addresses the $40 billion financing plan directly and how much of the backlog remains tied to a single customer, according to Guggenheim.

For CoreWeave, the read is starker. A stock that can’t rally on its best-known bear covering and a CEO publicly defending deal economics is telling you the argument has moved from demand to the balance sheet, and one’s position sizing should reflect that leverage.

The post CoreWeave Sinks 5% Despite Burry Pulling In His AI Short, Oracle Eases Into Earnings, Cloudflare Holds Steady appeared first on 24/7 Wall St..

Options traders usually pay more to protect what they own than to bet on what they don’t. That asymmetry is why puts on a large-cap stock cost more than equivalent calls. When the skew flips, it is worth stopping on.

Julia Spina, head of research at IG Group North America, flagged that the inversion is heading into Oracle‘s (NYSE:ORCL) fiscal first-quarter report, expected after the close on September 10 but not company-confirmed. She told CNBC that Oracle calls are trading richer than puts, so buyers are paying for upside rather than downside protection. Spina put the implied move at about 11%, or roughly $18 on a stock that closed at $161.72.

What a Call-Heavy Skew Actually Means

Spina said realized reactions over the past three earnings cycles landed between about 8.5% and 10.8%, so the current implied move is roughly in line with recent history. The expected swing size therefore carries little information.

Puts are usually pricier than calls at equivalent distances from the current price because long-only investors buy them to hedge positions they already own. When calls trade richer, someone is paying a premium simply to be long exposure. Spina said this pattern accelerated over the last two weeks.

The chain confirms the imbalance. Oracle’s full-chain put/call ratio sits at 0.52, and the September 18 expiry alone shows call open interest of 388,159 against 234,591 puts. The December 18 contract carries a 0.14 ratio.

Skew like that can be created without conviction. Covered-call sellers, structured product desks, and systematic overwriters all push call premiums around depending on flow, and none of that behavior is a directional forecast.

Oracle’s Setup After a Rough Year

Oracle shares are down 32.27% over the past year and 16.22% year-to-date, even after a 10.96% weekly rally. The stock closed at $161.72 on September 9, below $238.78 a year earlier.

The bull case rests on remaining performance obligations, which surged to $638 billion in the fiscal fourth quarter, up 363% year over year. Management guided fiscal 2027 revenue to about $90 billion with non-GAAP EPS of $8.05. Cloud infrastructure grew 93% last quarter, and multi-cloud database revenue grew 404%.

The bear case rests on the balance sheet. Free cash flow was negative $23.69 billion in fiscal 2026, capex is guided to roughly $70 billion in fiscal 2027, and Oracle plans to raise about $40 billion in debt and equity, including a $20 billion at-the-market equity program. Fourth-quarter details sit in Oracle’s 8-K filing.

Those conditions ordinarily send hedgers to the put side. That they haven’t suggests the market may be treating RPO conversion as close to certain, though call buyers could also simply be a different cohort from the sellers who would otherwise buy puts.

How Oracle Stacks Up Against Microsoft and Amazon

Microsoft (NASDAQ:MSFT) carries commercial remaining performance obligations of $678 billion, similar to Oracle’s backlog, on a business generating $331.84 billion in annual revenue at a 46.8% operating margin. Its put/call ratio sits at 0.64, closer to the equity-market norm.

Amazon (NASDAQ:AMZN) posted 37% AWS growth in its second fiscal quarter, with a 39.4% AWS operating margin. Amazon’s put/call ratio is 0.54. Both peers fund their capacity buildouts from operating cash flow, unlike Oracle.

Oracle’s capex intensity looks closer to a utility than a software company. Microsoft spent $115.95 billion on capex in fiscal 2026 out of $133.75 billion in net income, without negative free cash flow.

The competitive question is whether Oracle can hold its 30% to 40% infrastructure margin target while ramping gigawatts of capacity. Management said global GPU utilization is 97.5% and renewing customers represented 92% of GPUs up for renewal in the fourth quarter. Someone has to power, cool, and network all that capacity, which is the thread we pulled on in a free report on seven AI infrastructure suppliers that aren’t chipmakers.

Is ORCL Stock a Buy?

Oracle is priced for execution that Microsoft has already demonstrated, and Amazon is delivering with less financial strain. The $638 billion backlog is real, and so is the negative $23.69 billion free cash flow.

Spina’s call-heavy skew is interesting information, likely driven as much by covered-call flow and momentum positioning as by fundamental conviction, particularly given that Oracle has fallen 32.27% over twelve months while that skew built up. Treating a lopsided ratio as a directional cue would be a mistake.

The fiscal first quarter report will either validate the RPO conversion story or expose the gap between billed backlog and delivered revenue. The setup is genuinely binary, and the growth story remains credible, which leaves the risk-reward roughly balanced for investors already researching the name.

The post Traders Are Paying More to Bet on Oracle Than to Protect Against It. Here’s Why That Is Backwards appeared first on 24/7 Wall St..

Treasury Secretary Scott Bessent walked to the microphones this month with a line lifted from a poker table: “I am the house now.” The message to bond traders was blunt. Washington and Tokyo would jointly defend the yen, the Treasury would step up buybacks of longer-dated debt, and anyone shorting the long end of the curve was betting against a player with asymmetric information on Japanese monetary policy. Then the bond market answered. The 10-year Treasury yield closed at 4.83% on September 9, its highest reading of the year, while the 30-year sat at 5.28%. The house, at least on this hand, is losing.

Buyback Math That Did Not Add Up

The proximate trigger was a Treasury announcement to repurchase up to $6 billion of roughly 10- to 20-year bonds, triple the previous standard operation. Traders had penciled in $8 billion to $10 billion or more. Against a Treasury market north of $30 trillion and a national debt that just crossed $40 trillion, the operation landed as what one economist called a drop in the bucket. The Federal Reserve is holding the funds rate steady at 3.75%, making this a long-end story. And the long end is being pushed by forces Bessent cannot buy back.

Capital Crowding Out Uncle Sam

Start with the private-sector demand for capital that now rivals Treasury issuance. NVIDIA (NASDAQ:NVDA) reported fiscal Q2 revenue of $96.22 billion and disclosed supply obligations that surged to $279 billion, largely tied to memory for its Vera Rubin systems. Microsoft (NASDAQ:MSFT) spent $115.95 billion in capex in fiscal 2026, up 79.6% year over year. Micron (NASDAQ:MU) CEO Sanjay Mehrotra told investors he does “not have line of sight as to when memory supply will be able to catch up with increasing demand”. That capital has to come from somewhere, and the power, cooling, and networking suppliers behind the buildout are absorbing much of it (we profiled seven of them in a free report on the AI infrastructure trade). Every dollar of investment-grade paper sold to fund a data center is a dollar not buying a 10-year note.

Layer on Exxon Mobil (NYSE:XOM) territory. WTI crude closed at $91.48 on September 1, up 6.2% in a month, feeding the inflation risk premium bond traders are demanding. Core PCE just printed a fresh high at 130.658. On the bank’s earnings call, Jamie Dimon summarized the backdrop: risks are “shifting below the surface like tectonic plates, including geopolitical tensions and wars, sticky inflation, large global fiscal deficits and elevated asset prices.” The intervention did work in one market: USD/JPY fell from 163.82 on July 28 to 153.54 on September 9, forcing an uncomfortable unwind of the yen-funded carry trade that helps finance long-duration tech.

Where This Hits Main Street

The clearest transmission runs through housing. D.R. Horton (NYSE:DHI) reported that its cancellation rate jumped to 20% from 17% a year earlier, with home sales gross margin squeezed to 20.7%. Management pegged the going market mortgage rate at roughly 6.5% and is buying rates down by 1.6% on average just to keep buyers at the closing table. Housing starts fell 12.4% in July to a 1.24 million annualized pace. Meanwhile, JPMorgan Chase (NYSE:JPM) is guiding to full-year net interest income of about $105.5 billion, benefiting from the same higher-for-longer curve that is punishing borrowers.

The signal to watch is the next buyback operation and the reception at the coming 20- and 30-year auctions. If the 30-year settles above 5.30% into year-end despite Treasury muscle, the market will have delivered its verdict: on this table, the house does not set the price.

The post ‘I Am the House Now,’ Bessent Warns — But Bond Traders Keep Raising Yields Anyway appeared first on 24/7 Wall St..

Salesforce (NYSE:CRM) has spent most of 2026 in the penalty box, but the August earnings report finally gave the bulls something to work with.

Our 24/7 Wall St. price target for Salesforce is $363.85, implying roughly 48.88% upside from the $244.20 close on September 9, 2026. Our recommendation is buy, and the model registers high confidence at 90%.

From SaaSpocalypse Panic to a Fresh Bid

Salesforce started 2026 near $254 and bled steadily lower, touching a 52-week low of $146.32 as investors debated whether generative AI would gut the seat-based SaaS model. The stock is still down 7.35% year to date and 2.3% over the last year, yet it has ripped 23.62% over the past month as the narrative shifted.

The pivot came with Q2 FY27 on August 26, 2026. Revenue landed at $11.35 billion, up 10.8%, while non-GAAP EPS hit $5.90 against a $3.27 consensus, an 80.36% beat and the sixth straight. Agentforce ARR now exceeds $1.5 billion, up over 240% year over year, and management raised FY27 revenue guidance to $46.1 billion to $46.4 billion.

Why Bulls See a Breakout Ahead

The bull case rests on Agentforce monetization. Combined Agentforce and Data 360 ARR is now nearly $3.90 billion, up over 210%. CEO Marc Benioff called it “one of our best quarters ever” and framed the CloudForce partnership with Anthropic as “the number one AI meeting the number one CRM.”

Premium editions required for CloudForce carry a 60% to 80% premium, and only 5% of knowledge workers have upgraded, leaving a massive upsell runway.

Capital returns amplify the setup. The $25 billion accelerated share repurchase has already pulled diluted share count to 821 million from 962 million. Our bull-case scenario points to $405.75 within a year, roughly 66.02% upside.

What Could Go Wrong

The bear case starts with EPS quality. GAAP EPS of $4.29 included a $2.43 per-share lift from $2.61 billion in strategic investment gains, which are inherently non-recurring. Restructuring charges also jumped to $94 million from $4 million a year ago.

Bulls will correctly note the operating story remains intact: free cash flow rose 81.49% to $1.098 billion, and cRPO growth accelerated to 14%.

Integration risk from Informatica, Contentful, and Fin is real, and license revenue plus analytics were cited as volatile on the call. Our bear-case one-year target is $294.20, still above today’s price.

How Salesforce Compares to Microsoft and Oracle

Microsoft (NASDAQ:MSFT) is the most direct AI-and-enterprise-software rival, monetizing Copilot across the same buyer base Salesforce targets. Microsoft trades at a forward P/E of 25 with a 45.1% operating margin and 17.7% revenue growth.

That premium multiple, paired with far higher profitability, sets the ceiling: Salesforce’s 19 forward P/E looks reasonable and arguably cheap if Agentforce sustains triple-digit growth.

Oracle (NYSE:ORCL) is the enterprise valuation contrast. Oracle sports a forward P/E of 20, quarterly revenue growth of 20.6%, and ROE of 53.4%, with a 52-week range spanning $114.5 to $327.27 as AI infrastructure demand re-rated the stock. If a slower-growing infrastructure vendor commands that multiple, our Salesforce target implies a fair re-rating.

Where Salesforce Stands After the Q2 Beat

My 24/7 Wall St. price target of $363.85 with 90% confidence lines up with a buy. The scale tips on Agentforce: at $1.5 billion ARR growing over 240%, this is no longer a story stock.

I’d be a buyer here if CloudForce adoption and premium-edition upgrades show up in the Q3 cRPO report. I’d stay on the sidelines if organic revenue reacceleration slips or Informatica integration drags on FY27 margins.

Looking further ahead, here is where our model projects Salesforce could trade, assuming current growth trajectories and margin trends hold.

These projections assume Salesforce executes on its $63 billion FY30 revenue target. Significant upside or downside could result from Agentforce monetization pace and integration outcomes for Contentful, Fin, and Informatica.

The post Salesforce Just Gave Investors a Reason to Rethink This Beaten-Down Stock appeared first on 24/7 Wall St..

Amazon (NASDAQ:AMZN) just went to London to borrow money, and Jim Cramer used his Mad Dash segment to point out that this isn’t the usual playbook for the world’s largest cloud vendor.

Cramer described the deal on air. Jim Cramer said it was a GBP 4.25 billion sale, with Jim Cramer noting order interest of almost GBP 12 billion. He then floated a hypothesis and hedged it in the same breath: “I would have thought they could have raised the same amount in the US. But maybe we’ve saturated.”

That question is worth taking seriously if you own Amazon, because how the company pays for its AI buildout is starting to matter as much as the buildout itself. Someone has to power, cool, and network all that spending, and we pulled together seven of the suppliers doing exactly that in a free AI infrastructure report.

Why Amazon Went Shopping in London

Amazon’s capital spending has reached a level where every source of funding counts. Second-quarter cash capital expenditures came in at $53.1 billion, and CFO Brian Olsavsky said the money “primarily relates to AWS and generative AI as we invest to support strong customer demand.”

Long-term debt has grown to match. It rose from $65.6 billion to $119.1 billion year over year, while total liabilities expanded 56% to $544.07 billion. Trailing free cash flow turned negative at -$7.6 billion.

The dollar backdrop has also stiffened. The 10-year Treasury yield closed at 4.8% on September 8, the highest reading in the supplied series, up from 4.04% a year earlier.

On the July 30 call, Olsavsky said, “You’ve seen us issue debt this year. We have a lot of options available to us as we continue to fund this growth that we’re seeing in AWS.” The London deal is one of those options being used in size.

What a Spread Over Gilts Actually Tells You

A gilt is a bond issued by the UK government, and it plays the same benchmark role in London that a Treasury does in New York. When a corporate issuer prices in sterling, its yield is quoted as a spread over the equivalent-maturity gilt, and that spread reflects credit risk.

Jim Cramer said the Amazon bonds were expected to trade around 55 basis points over gilts, calling that “not bad.” A basis point is one hundredth of a percentage point, so 55 basis points is roughly half a percent of extra yield above the government curve.

That is a tight spread for a corporate deal of this size, and the order book Cramer described supports the view that pricing was well set. Almost three times coverage on a GBP 4.25 billion offering is a lot of demand chasing a fixed pool of paper.

What the spread does not prove, by itself, is that Amazon could not have raised the same money in dollars. Cramer said as much when he floated the saturation idea and then qualified it. Strong sterling demand is evidence about the sterling market and should be treated as such.

Alphabet and Microsoft Are Paying for the Same Buildout Differently

Cramer noted Amazon is following Alphabet (NASDAQ:GOOGL) into the sterling market, and that two mega-cap borrowers going abroad in sequence makes the pattern worth watching. Alphabet’s capex reached $44.92 billion in the second quarter, up 100% year over year.

Alphabet funded that spend with a mix that included $49.6 billion in net equity, a $40 billion at-the-market program, and $20.3 billion in senior unsecured notes, and its long-term debt jumped from $46.5 billion to $98.2 billion. Google Cloud backlog sat above $460 billion, giving the debt something to chase.

Microsoft (NASDAQ:MSFT) is taking a different route. Full-year fiscal 2026 capex hit $115.95 billion, with guidance shifting to approximately $175 billion after a move from finance to operating leases.

CFO Amy Hood emphasized flexibility, saying, “The investment into land and data center builds is actually quite flexible.” Each company is paying for capacity years ahead of revenue with a different financing mix.

Where AMZN Stock Sits

Amazon trades at $252.40 as of September 9, down 9.24% over the past month and up 9.35% year to date. Market cap sits near $2.72 trillion on a P/E of about 35x.

The bull case rests on AWS growth of 36.7% year over year and a $496 billion backlog. CEO Andy Jassy said the servers “have a useful life of at least five to six years, and most of our AI capacity these days is being contracted for at least five-year terms.”

The bear case is that debt-funded capex compounds interest expense while free cash flow is already negative, and every basis point on the marginal bond becomes a real drag on equity returns.

On balance, the AWS contract book and the reception in London argue that the buildout is being financed on acceptable terms today. The question for investors is whether they are willing to sit through the free-cash-flow trough until the data centers come online and start earning back their capital.

The post Cramer Thinks the US Debt Market Is Saturated. Amazon Just Went to London to Borrow appeared first on 24/7 Wall St..

The AI infrastructure boom has a scale problem the bond market cannot ignore. Michael Cembalest, chairman of market and investment strategy at JPMorgan, estimates the five major hyperscalers plus Nvidia have issued roughly $320 billion of debt so far in 2026, including special purpose vehicles where the companies ultimately stand behind data center lease obligations. In 10-year-equivalent terms, Cembalest puts the long-duration component at roughly $303 billion. That is equivalent to around 68% of new long-duration Treasury borrowing this year.

Six companies, Oracle (NYSE:ORCL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), and NVIDIA, now compete with the U.S. Treasury for the same pool of long-duration bond demand.

Two Banks, One Number

The figure gains credibility from a second bank’s independent analysis. Goldman Sachs sees roughly $300 billion of AI-related issuance already completed this year, with senior hyperscaler and chip supply slowing sharply into year-end. Two independent bank estimates converge on roughly the same figure.

Forward supply is where the stress emerges. Goldman credit trader Jeffrey Papai calls 2027 the real stress test. Papai’s scenario points toward roughly $340 billion of senior hyperscaler and chip issuance in the coming year, potentially before another large layer of data center and structured chip financing is added on top.

Why Structure Matters More Than Size

The structural composition of the pipeline drives the concern more than its headline size. Limited hyperscaler maturities mean there is much less natural recycling of investor capital than in sectors such as banks, leaving the market dependent on fresh demand for fresh supply. A market financed by reinvested proceeds absorbs shocks; a market financed by net new inflows depends on appetite that can turn. If AI issuers absorb a meaningful share of long-duration capacity, the marginal buyer of a 30-year corporate bond and the marginal buyer of a long Treasury become increasingly the same investor, determining the clearing price of mortgages and long yields alongside AI capex.

Bull Case Counterargument

The counterargument rests on the enormous cash flow behind these balance sheets. Bank of America argued the big five hyperscalers’ debt-to-cash ratio dipped from 0.94 to 0.75. By 2029, Bank of America projected operating cash flow jumping to By 2029, Bank of America projected operating cash flow jumping to $1.1 trillion,.1 trillion, a 95% increase. For most of these issuers, this represents balance-sheet optimization by cash-rich businesses.

Where the Risk Concentrates

Oracle is the exception. Bank of America projects Oracle running negative free cash flow until 2029, meaning capex will exceed cash from operations, leaving little capacity for more debt. Oracle’s fiscal 2026 capital expenditures reached $55.7 billion against operating cash flow of roughly $32 billion, and the company plans to raise around $40 billion in debt and equity during fiscal 2027. According to Goldman Sachs credit trader Jeffrey Papai, 2027 is the real stress test for this issuance wave. Oracle shares are down 17.91% year to date as of Wednesday’s close.

Law360 reported on January 14, 2026 that Oracle was sued by a pension plan over AI-linked debt disclosures. The complaint alleges disclosure deficiencies tied to the AI buildout.

The aggregate picture is manageable, though dispersion across issuers is wide. Oracle is where the risk concentrates, and hyperscaler spreads versus Treasuries are the metric to watch as 2027 supply comes into view, according to Goldman Sachs.

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Alphabet has quietly become one of the market’s most compelling AI stories, and our model suggests the market still hasn’t fully priced in the payoff. Google (NASDAQ:GOOG) trades at $328.38 after a 7.66% pullback over the past month, but the underlying business is accelerating.

Our 24/7 Wall St. price target for Google is $509.02, implying 55.21% upside over the next 12 months. The recommendation is buy, and our confidence level is 90%, near the top of our conviction band.

24/7 Wall St. Price Target Summary

A Pullback Into Accelerating Fundamentals

GOOG has returned 37.22% over the past year and 4.85% year to date, but the last month has been weaker. That softness looks disconnected from operating results.

In Q2 FY2026, Alphabet posted revenue of $119.8 billion, up 24% year over year, and EPS of 9.11 against a 2.88 estimate. Operating income rose 30% to $40.8 billion. Google Cloud grew 82% to $24.8 billion, with cloud backlog reaching $514 billion. Google is also committing $15 billion to new AI infrastructure in Europe, reinforcing that the capacity build is global.

Why Bulls See a Breakout to $572

The bull case rests on Google Cloud’s acceleration from 34% to 48% to 63% to 82% across four quarters, Gemini’s 950 million app MAUs, and the fact that nearly 90% of Fortune 100 companies use Gemini Enterprise.

CEO Sundar Pichai said “It feels like we are in very early innings of what feels like secular shift.” Our bull-case scenario points to $571.97, roughly 74.41% upside if backlog conversion and TPU deliveries land as guided.

What Could Go Wrong

The bear case starts with capital intensity. Q2 CapEx hit $44.92 billion, free cash flow turned negative at $5.9 billion, long-term debt more than doubled to $98.2 billion, and management guided 2026 CapEx to $175B-$185B. Regulatory pressure is real too, including a $3.5 billion EC fine.

That said, the CapEx surge is funding the same AI infrastructure driving 82% Cloud growth and a $514 billion backlog (the power, cooling, and networking companies feeding that buildout are the subject of a free report we put together, here). Our bear-case target is $420.02, still above today’s price.

How Google Compares to Microsoft, Meta, and Amazon

Microsoft (NASDAQ:MSFT) is the closest cloud and AI competitor. It trades at a forward P/E of 25 with quarterly revenue growth of 17.7%, meaningfully slower than Google’s 24%. Google trading well below that multiple looks anomalous.

Meta Platforms (NASDAQ:META) is the closest digital-ad peer. Meta’s forward P/E of 18 and quarterly revenue growth of 28% are the tightest read on ad-market health, and Google’s Search plus YouTube growth is keeping pace.

Amazon (NASDAQ:AMZN) is the AWS comparable. Amazon trades at a forward P/E of 24 with an operating margin of 13.7%, well below Google’s 32.03%. Against this peer set, our 24/7 Wall St. price target of $509 looks reasonable on a peer-relative basis.

Google Price Prediction 2026-2030

My verdict: the 24/7 Wall St. price target of $509.02 and buy rating at 90% confidence reflect a rare setup: mega-cap scale, accelerating cloud growth, and a Search franchise that AI has strengthened.

The bull thesis holds if cloud backlog converts to revenue on schedule. The thesis weakens if 2026 CapEx creeps above the $185 billion ceiling without matching backlog growth.

Looking further ahead, here is where our model projects Google could trade if current growth trajectories hold.

These projections assume Google continues executing on AI infrastructure and Cloud commercialization. Meaningful upside or downside could come from Gemini 4’s reception or a shift in the CapEx-to-return cycle.

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I keep hitting the buy button on Apple (NASDAQ:AAPL) every time the market hands me a discount, and this week it did. Shares are down 2.96% over the past week to $315.34, and I added again. The setup is simple. Apple runs a two-way game almost nobody else can match: it sells the most defensible piece of hardware on the planet, then keeps that customer for life through a Services business that compounds at software economics.

Why the Dual Engine Keeps Pulling Me Back

Every quarter I open the segment table and see the same story get better. In the June quarter, iPhone revenue rose to $54.25B from $44.58B a year earlier, and Services climbed to $30.74B from $27.42B. That Services line carried a 75.6% gross margin against a company-wide 50.1%. Selling an iPhone is good business. Renting the App Store, iCloud, Apple TV, AppleCare, and payments to the same customer for a decade is a better one.

The scale is what makes the moat defensive. Apple’s installed base topped 2.5 billion active devices, and paid subscriptions surpassed 1.5 billion. That is a recurring revenue engine wearing hardware clothes, and it explains the ROE of 171.4% and ROIC of 53.3%.

Receipts I Trust Over Headlines

I care about earnings consistency, cash returned, and reinvestment runway. Apple checks all three. Q3 FY26 delivered revenue of $109.42B, up 16.36% year over year, and EPS of $2.02 versus a $1.8914 consensus, the ninth straight beat. On the cash side, the board authorized a fresh $100B buyback in Q2, and the company had already repurchased $62.094B of stock through the first nine months of the fiscal year. The dividend yield is a modest 0.335%, but the payment climbed to $0.27 quarterly after a 4% raise, and it rests on $147 billion in cash and marketable securities.

Reinvestment matters too. R&D expanded to $11.73B from $8.9B a year earlier, and the new Broadcom agreement expected to exceed $30 billion for custom silicon tells me Apple is buying its future supply chain rather than renting it.

Why Not the Obvious Alternative

The question I hear most is why not Microsoft (NASDAQ:MSFT). Fair. My answer is the shape of the moat. Apple’s 2.5 billion-device install base is a distribution channel no cloud-first peer can replicate, and the 75.6% Services gross margin on that captive base is a profit engine I want to own directly rather than through a diversified enterprise mix. The foldable iPhone duo launched at today’s event is one more wedge into the hardware funnel that feeds it.

Risk I Actually Respect

Memory pricing is real. Tim Cook called it “a 100-year flood on the memory pricing with exponential increases in memory prices”, and the DRAM market has three suppliers. Add China regulation around Siri AI and the tariff refund tailwind that will not repeat, and margins face a real test. It has not changed my thesis because Apple already reluctantly raised prices and still guided gross margin to 47% to 48%, which remains a fortress.

What to Watch From Here

A P/E of 41 asks a premium, and Apple has grown into premiums before. With Siri AI shipping, a foldable widening the hardware wedge, and Services compounding on 2.5 billion doors, the setup gives long-term holders a case worth monitoring on every red day the market delivers. Worth noting: Apple has long been one of Berkshire Hathaway’s largest holdings, and we ranked the cheapest dividend payers Buffett still owns in a free report here.

The post I’m Buying Apple’s Dip For Its Unbeatable Two-Way Game appeared first on 24/7 Wall St..

Microsoft (NASDAQ:MSFT) trades at $491.65, while the Wall Street consensus price target sits at $572.92, implying roughly 16.5% upside. The Street-high call goes much further: Arete Research’s $870 target, which also serves as the upper-bound estimate captured across major consensus trackers, implies about 77% upside from here.

Microsoft is the software franchise carrying the enterprise AI story on its back, and Wall Street has been fixated on how quickly Azure, Copilot, and the OpenAI partnership can convert massive capex into durable earnings power. The gap between where shares sit and where bulls think they can go has widened because the market is discounting near-term free cash flow compression while analysts underwrite the payoff.

Why Shares Slipped Even as the Beats Kept Coming

Microsoft has drifted lower for nearly a year, essentially flat at -0.54% over the past 12 months while the S&P 500 rose 17.23%. The pain started with capex sticker shock. Full-year fiscal 2026 capital expenditures hit $115.948 billion, up 79.62% year over year, and Q4 capex jumped 109.63% to $35.802 billion. Free cash flow fell 6.46% for the year and dropped 23.19% in Q4.

Investors watched the price walk down from $517.85 at the Q1 FY26 filing to $451.01, $428, and $395.50 through the reporting sequence. Each earnings report raised the same question: how long until AI infrastructure spend translates into cash returns? A More Personal Computing segment shrinking 4% in Q4 and Xbox impairment charges added noise, and swings in the OpenAI investment line have muddied earnings quality.

What Keeps 55 Analysts Bullish on the Story

The business is running hot underneath the capex noise. Azure crossed $100 billion in annual revenue and grew 43% in Q4, commercial remaining performance obligations reached $678 billion (up 84%), and Microsoft 365 Copilot passed 30 million paid seats with net adds more than doubling quarter over quarter. Management guided Azure to roughly 45% constant-currency growth for the first quarter of fiscal 2027.

The bull case that produces Arete’s $870 rests on three pillars: Copilot-driven ARPU expansion across M365, GitHub, and Security stacks; Azure’s role as the primary host for frontier AI, backed by OpenAI’s incremental $250 billion Azure commitment and extended IP rights through 2032; and prohibitively high switching costs across Fortune 500 IT footprints.

Forward estimates support the direction. Consensus fiscal 2027 EPS has moved to $19.7531 with 21 upward revisions versus 8 downward in the last 30 days, and fiscal 2028 EPS is modeled at $23.5733 with a high of $26.00. The revision trend is one-directional.

Analyst ratings lean heavily positive:

• Strong Buy: 14
• Buy: 38
• Hold: 3
• Sell: 0

How Microsoft Stacks Up Against Alphabet, Amazon, and Oracle

The hyperscaler group has not sold off together. Microsoft has lagged while capital rotated into peers with cleaner cash flow or bigger cloud growth surprises.

The buildout keeps demanding more power, cooling, and networking capacity than the hyperscalers can supply themselves, which is why we broke down seven suppliers riding that same wave in a free report on the picks-and-shovels side of the AI boom.

Alphabet (NASDAQ:GOOGL) trades at $330.65 against a $428.07 consensus target, roughly 29.5% upside. Shares are up 38.34% over 12 months, backed by 82% Google Cloud growth in Q2, and analyst posture skews heavily Buy.

Amazon (NASDAQ:AMZN) sits at $252.40 with a $328.17 target, about 30% upside. AWS accelerated to 37% in Q2, its fastest growth in 18 quarters, and the ratings mix is firmly Buy.

Oracle (NYSE:ORCL) trades at $161.72 versus a $241.43 target, implying nearly 49.3% upside. The catch: shares are down 32.31% over 12 months, with FY26 free cash flow at negative $23.7 billion against RPO of $638 billion. The rating mix stays Buy-tilted with one Sell.

Oracle carries the largest consensus-implied upside in the group. Microsoft carries the largest bull-case gap once Arete’s Street-high is included.

Numbers That Frame the Setup

Microsoft’s $491.65 price against a $572.92 consensus target across 55 analysts leaves roughly 16.5% upside to the average and about 77% to the $870 high. Trailing P/E is 28 and forward P/E is 25 on TTM diluted EPS of $17.94.

Performance has trailed the broader market. MSFT is -0.54% over 12 months and up just 2.31% year to date, while the S&P 500 is up 11.80% YTD and 17.23% over the year.

Bull and Bear Scenarios at $491

The bull thesis works if capex intensity is close to peaking, Copilot’s 30 million paid seats become the base of a much larger ARPU curve, and the OpenAI IP rights through 2032 turn into a durable margin advantage as AI monetization shifts from tokens to seats. In that scenario, consensus becomes a floor and Arete’s $870 enters the conversation.

The bear thesis holds if the $115.948 billion capex year is a preview rather than a peak, FCF compression drags into fiscal 2027, and AWS and Google Cloud continue closing the growth gap. That combination turns a compounder into a capital-intensive utility on a premium multiple.

My lean is cautiously constructive. The consensus 16.5% upside layered on top of Copilot monetization looks reasonable to underwrite. The 77% Arete case is defensible, but it requires several things to break right in sequence, and the market is telling you it wants to see the cash before it pays for the vision.

The post Microsoft Remains Down Over 12 Months: A Wall Street Bull Expects 75% Gains to Materialize Soon appeared first on 24/7 Wall St..

Apple (NASDAQ:AAPL) staged its fall product event on September 9, 2026, and the stock is already positioning for the next leg.

Options desks have been priced for outsized movement, with one Halftime Report contributor noting that zero-day-to-expiry contracts implied a swing of more than 1.5% by the closing bell, roughly three times the typical move. Our proprietary model sees that repricing extending well beyond the event window.

Our 24/7 Wall St. price target for Apple is $362.61, implying 15.07% upside from the $315.34 close. We rate shares a buy with high conviction.

24/7 Wall St. Price Target Summary

What the Setup Looks Like Heading Into the Event

Apple has been a momentum name in 2026. Shares are up 16.31% year to date and 35.06% over the trailing year, though the stock cooled off 2.96% in the week leading into the launch. The 52-week range of $225.82 to $344.27 shows how far sentiment has traveled since last fall.

Fundamentals underpin the run: Q3 FY2026 revenue reached $109.42B, up 16.36% YoY, with EPS of $2.02 marking a ninth straight beat. iPhone revenue climbed 22% and Mac jumped 29%. CEO Tim Cook flagged supply constraints as a demand story, saying Apple is dealing with “an incredibly strong iPhone and Mac product cycle.“

Why Bulls See a Breakout to $378

Our bull case lands at $378.37, or roughly 20% upside. The driver is a Siri AI-led upgrade cycle layered on an already record installed base of 2.5B+ active devices. Cook called Siri AI “a completely reimagined version of Siri that is profoundly capable, deeply personal, and integrated seamlessly across our platforms” and floated iCloud Plus tiering as a monetization path.

Services already run at a $30.74B quarterly clip, and pricing power is visible: Apple reluctantly raised prices on parts of the Mac and iPad line without derailing demand. September guidance of 9% to 11% revenue growth may prove conservative if supply loosens.

What Could Go Wrong

Our bear case pulls the stock to $312.63, essentially flat. Memory inflation is the biggest immediate drag; Cook described the environment as “a 100-year flood on the memory pricing with exponential increases in memory prices.” September gross margin is guided to 47% to 48%, below the Q3 print.

Regulatory friction could delay Siri AI in the EU and China, and insider activity is currently characterized as selling. Bulls would counter that Apple returned $33 billion to shareholders last quarter and is reinvesting tariff refunds domestically, which supports the multiple even if margins compress.

How Apple Compares to Microsoft and Alphabet

Microsoft (NASDAQ:MSFT) is the cleanest AI-platform comparison because both companies monetize AI through subscription layers on installed bases.

Microsoft trades at a P/E of 27 with an operating margin of 46.8%, versus Apple at a P/E of 41 and a 32% operating margin. Microsoft’s Azure just surpassed $100 billion in annual revenue, which sets a bar Apple has not matched in AI infrastructure.

Alphabet (NASDAQ:GOOGL) is the valuation counterpoint. Alphabet trades at a P/E of just 15 with net margins of 32.8%, richer profitability at a much cheaper multiple.

Google Cloud grew 82% in Q2 2026, far faster than any Apple segment. The AI buildout behind that growth runs on power, cooling, and networking suppliers most investors overlook, and we profiled seven of them in a free report on AI infrastructure names beyond the chipmakers.

Apple is the most expensive of the three, which makes our 24/7 Wall St. price target look constructive rather than aggressive. It requires only multiple maintenance.

Apple Price Prediction 2026 to 2030

My verdict: Buy, target $362.61, confidence 90%. The tipping factor is the Siri AI upgrade catalyst arriving into a record installed base with pricing power intact.

I’d be a buyer if the September quarter delivers on the 9% to 11% revenue guide with gross margin at the high end. I’d stay on the sidelines if memory inflation compresses the December-quarter margin below 46%.

Looking further ahead, here is where our model projects Apple could trade, assuming current growth trajectories hold.

These projections assume Apple continues executing on Siri AI monetization and Services growth. Significant upside or downside could come from a foldable iPhone launch or a sustained memory-cost shock.

The post Prediction: Apple Stock Could Be Headed for a Big Move After Yesterday’s Event appeared first on 24/7 Wall St..

I keep buying Alphabet, and this week’s dip has me clicking the button again.

Shares of Alphabet (NASDAQ:GOOGL) closed at $330.65 on Wednesday, down 2.28% for the session and off 7.46% over the past month while the Nasdaq 100 slipped only 0.63% in the same window. That gap is the whole reason I am here. When a company printing 24.23% revenue growth trades like it is losing the AI race, I add.

Why the Buy Button Stays Active

The core thesis is simple. Alphabet owns the search box, the video platform, the mobile OS, the browser, the maps, a hyperscale cloud, and a frontier model, all funded by an advertising engine that still grew Search revenue 17% year over year last quarter. Every AI dollar management spends is underwritten by a business that generated $164.71B in operating cash flow in FY2025. I am buying an option on artificial intelligence bolted to the most durable cash machine on the internet.

Three Reasons the Thesis Holds

Cloud is inflecting hard. Google Cloud revenue hit $24.77B in Q2 2026, up 82% year over year, and backlog jumped to over $460B in Q1 after nearly doubling quarter over quarter. Nearly 90% of the Fortune 100 now use Gemini Enterprise, Gemini models process 22 billion API tokens per minute, and the Gemini App has 950 million monthly active users. Real revenue at real scale.

The price is the second reason. Alphabet trades at a P/E of 15 with an earnings yield of 6.81%, an operating margin of 32.03%, and return on equity of 35.70%. Q2 EPS of $9.11 beat consensus of $3.0427, the eleventh straight beat, and revenue has grown by double digits for twelve consecutive quarters. Analysts now model FY2026 EPS averaging $20.60 and FY2027 revenue near $612.46B.

The fortress is the third. Alphabet holds $55.91B in cash, carries a debt/equity ratio of 0.143, and covers interest 175x. Management raised the quarterly dividend 5% to $0.22 per share, with the next payment on September 14, 2026. That is a capital-return posture from a position of strength.

Why Alphabet Over the Obvious Alternatives

The two names a reader would reach for first are Microsoft (NASDAQ:MSFT) for cloud and Meta Platforms (NASDAQ:META) for ad-tech scale. Alphabet’s combination of a P/E of 15 alongside 82% Cloud growth sits inside this ticker alone among the hyperscalers I follow. U.S. revenue alone grew 32% last quarter on a base that already crossed $402.84B in FY2025. That is the profile I keep paying for.

Real Risks to Weigh

Capex is loud. Alphabet guided to $175B to $185B in 2026 capital expenditures, spent $44.92B in Q2 alone, printed negative free cash flow of -$5.86B, saw long-term debt climb from $46.5B to $98.2B, and suspended the buyback. If AI returns disappoint, the math gets ugly. What keeps me buying is the demand signal. A $460B cloud backlog and a fresh $15 billion Finland AI infrastructure commitment announced this week are customers voting with contracts. That kind of buildout has to be powered, cooled, and networked by somebody, and we profiled seven suppliers riding that wave in a free AI infrastructure report.

Layer in the recent antitrust ruling that spared Chrome from a forced divestiture and this dip looks like a gift. I plan to keep accumulating shares until the market re-rates what it is currently discounting.

The post Alphabet’s Dip is a Clear Buying Opportunity appeared first on 24/7 Wall St..

At $491.65, Microsoft (NASDAQ:MSFT) looks attractively priced. The recent big-tech de-risking has knocked the stock lower even as Azure crossed $100 billion in annual revenue, and that gap between price action and fundamentals is the setup worth acting on.

Microsoft is the enterprise software layer for the AI buildout, monetizing through Azure infrastructure, Microsoft 365 Copilot, GitHub Copilot, and its restructured OpenAI partnership. The stock has traded from a 52-week high of $549.20 down through a summer of heavy capex headlines, with shares off 2.66% over the past month as investors rotated out of megacap tech.

What has not changed is the underlying trajectory. Commercial remaining performance obligations sit at $678 billion, up 84% YoY, and management guided fiscal Q1 2027 Azure growth to approximately 45% in constant currency. The market is discounting the spend while overlooking the backlog.

Why the Pullback Is a Gift for Long-Term Buyers

The bull case starts with the demand side. CEO Satya Nadella told analysts “demand continues to exceed available supply”, and Azure just delivered a full year at 41% growth. Microsoft 365 Copilot passed 30 million paid seats, GitHub Copilot revenue accelerated over 60% quarter over quarter, and the AI business hit a $37 billion annual run rate growing 123% YoY.

Valuation is not stretched for this growth profile. Shares trade at a forward P/E of 25, with operating margins of 46.78% and ROE of 34.04%. Microsoft has beaten EPS estimates for eight straight quarters, with the latest earnings report landing at $4.74 versus a $4.21 estimate. Analysts remain overwhelmingly constructive, with 14 Strong Buy, 38 Buy, and 3 Hold ratings and zero sells.

Why the Capex Bill Could Sink Sentiment Further

The bear case is math. FY2026 capex hit $115.95 billion, up 79.6%, and free cash flow fell 6.5% for the full year and 23.2% in Q4. With the shift to operating leases, capital investment expectations move to approximately $175 billion. That is a lot of GPU spend to earn back, and it is why the power, cooling, and networking suppliers behind these data centers keep showing up in our free report on seven AI infrastructure names that are not chipmakers.

Margins are already compressing. Microsoft Cloud gross margin dropped to 65%, and management guided full-year FY27 operating margins down less than a point. OpenAI investment losses ballooned to $3.1 billion in Q1 versus $523 million the prior year. Reddit chatter reflects the unease, with the top driving thread titled “Thoughts on MSFT. Should I just take all my profit?” and sentiment cooling to neutral at 42.

Why Some Investors Should Sit on Their Hands

The hold case rests on timing. The AI thesis is intact, but the capex return curve is still forward-looking, and free cash flow yield of 1.83% leaves little cushion if growth slows. More Personal Computing revenue fell 4%, and Windows OEM and devices is guided down in the high teens for FY27.

Patient investors can wait for the FY27 Q1 earnings report to confirm the 45% constant-currency Azure guide, then reassess. A miss on Azure or a capex surprise would justify holding fire. A clean beat would remove ambiguity.

What the Numbers Show About Entry Timing

Shares currently trade at $491.65 against an analyst consensus target of $572.92, implying meaningful upside if the target is met. That target reflects 55 analysts, with 52 rating the stock Buy or Strong Buy and 3 at Hold. Targets are one data point, not a guarantee.

Recent performance frames the setup. MSFT is up 2.31% year to date and down 0.54% over one year. The S&P 500, via SPY, is up 11.81% year to date and 17.24% over one year. Microsoft has clearly lagged the index, which is precisely why the entry looks reasonable.

Valuation supports the case: trailing P/E of 28, forward P/E of 25, and forward FY27 EPS consensus of $19.75, rising to $23.57 for FY28.

Buy Call at This Price

At $491.65, the setup for Microsoft looks compelling. Here is why.

The path to appreciation is straightforward. Fiscal Q1 2027 should deliver Azure growth of roughly 45% in constant currency and total revenue of $89.85 to $90.95 billion. If Microsoft delivers, the de-risking narrative flips fast, and the gap between the stock and its analyst target compresses within two quarters. The $678 billion RPO provides multi-year visibility that few megacaps can match.

The entry point is favorable because the softening reflects sentiment rather than a change in fundamentals. Shares are trading above the 50-day moving average of $444.17 and below the 52-week high of $549.20, which frames the risk/reward. Downside is bounded by 46.78% operating margins and a fortress balance sheet at 0.29 debt/equity. Upside is anchored by an AI backlog growing 84% YoY.

What would invalidate the thesis: an Azure deceleration below 35%, a capex guide meaningfully above $175 billion without corresponding bookings, or a sharp deterioration in Copilot seat additions. Watch the FY27 Q1 report and the enterprise adoption numbers from EY, HSBC, and NHS England, all of which just committed to large-scale Copilot deployments.

Buying quality on a sentiment pullback, with a 16% analyst target gap and Azure guided to accelerate, is the setup the data supports.

The post What You Should Do With Microsoft As The Market De-Risks From Big Tech appeared first on 24/7 Wall St..

I keep buying Oracle, and the reason is simpler than my order history makes it look. The company built a lower-cost way to run AI workloads, and customers are signing contracts that stretch years into the future. That is the whole thesis. Everything else is receipts.

Here is the moment that pulled me in. On the Q4 fiscal 2026 call, co-CEO Clay Magouyrk described Oracle Cloud Infrastructure as “the most highly secure, highest performing, most flexible, lowest-cost infrastructure available anywhere.” Contract backlog backs it up. Oracle (NYSE:ORCL) ended the quarter with Remaining Performance Obligations of $638 billion, up 363% year over year, after signing $67 billion in AI infrastructure contracts during the quarter alone. When a customer prepays or brings their own hardware, they are voting with treasury cash. $75 billion of that RPO is tied to prepaid or customer-supplied GPU arrangements, which lowers Oracle’s own capital burden.

Three Reasons I Keep Adding

First, the growth is real and it is accelerating. IaaS revenue climbed from +55% in Q1 to +68% in Q2, +84% in Q3, and +93% in Q4 of fiscal 2026. Cloud is now 52% of quarterly sales compared to 43% a year ago. Management guided fiscal 2027 revenue to $90 billion with non-GAAP EPS of $8.05, and reaffirmed a long-range plan of more than 31% revenue CAGR and more than 28% EPS CAGR through fiscal 2030.

Second, the economics of the buildout hold up. Management reiterated a 30% to 40% margin profile on OCI and told analysts steady-state project ROIC lands in the high 20s. Global GPU utilization sits at 97.5%. Cash from operations grew 54% to $32.0 billion for the full year. Oracle still pays me a $0.50 quarterly dividend while it invests.

Third, the price got kind. Oracle trades at $162.52, down 31.07% over the past year. Against forward EPS of $9.30, the implied forward multiple is roughly 21. For a business compounding cloud at these rates, I will take it.

Why Not the Hyperscalers

The retirement crowd usually reaches first for Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), or Alphabet (NASDAQ:GOOGL). I own some of that too. What tips my next dollar to Oracle is footprint and neutrality. Magouyrk said Oracle has “over 211 live and planned regions worldwide, more than any of our cloud competitors”, and Oracle is building 72 Multicloud datacenters embedded inside Amazon, Google, and Microsoft clouds. Multicloud AI Database revenue grew 404% in Q4. Oracle wins whether the customer chooses AWS, Azure, or GCP for the rest of the stack. That is a rare position, and it is why the power, cooling, and networking names behind these buildouts keep showing up in our free AI infrastructure report.

Risk I Take Seriously

Free cash flow was negative $23.686 billion in fiscal 2026 on capex of $55.663 billion. Non-current debt reached $124.7 billion, and Oracle plans to raise about $40 billion in fiscal 2027 through debt and equity, including a $20 billion at-the-market equity issuance. Dilution and interest expense are real. What keeps me buying is that 12% of RPO converts to revenue in the next 12 months and another 34% within 13 to 36 months. The cash flows to service that leverage are already contracted.

What Keeps the Buy Button Warm

Fiscal 2027 revenue and earnings are guided to accelerate in the second half as megawatts come online, and the CFO’s prior long-range map takes OCI from $18 billion in fiscal 2026 to $144 billion four years later. When a company sells a lower-cost version of the scarcest resource in the economy, and books the demand years in advance, With a lower-cost version of the scarcest resource in the economy and demand booked years in advance, I keep adding.

The post Oracle’s Disruptive Nature is Very Compelling appeared first on 24/7 Wall St..

The AGI drumbeat got louder last week, and the loudest cheerleaders were the companies selling picks and shovels into the buildout. NVIDIA (NASDAQ:NVDA) sits at the center of that trade.

On a September 8, 2026 CNBC segment, X. Eyee, a partner at Offline Research who previously led engineering teams at Google (NASDAQ:GOOG, NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT), offered a more skeptical read on what the latest model releases actually mean. Eyee praised OpenAI’s new Astra model while rejecting the framing that any of it delivers artificial general intelligence in a form the average person would recognize.

The quote worth sitting with: “The industry is celebrating human level intelligence with a definition that leaves most of humanity out.” That is a direct challenge to the story propping up capital spending forecasts, hyperscaler capex, and the multiple you pay for anything AI-adjacent.

The stakes are visible in the capex forecasts: Jensen Huang told investors that top-five hyperscaler capex is tracking toward nearly $800 billion in 2026 and $1.3 trillion in 2027. Those forecasts assume AGI is a real destination that justifies the spend, and the dollars flow well beyond the chipmakers (we profiled seven of the power, cooling, and networking suppliers riding that same buildout in a free report).

What Eyee Actually Conceded About Astra

Eyee did not dismiss the technology. He told CNBC that “Astra blew everyone out of the water when it came to model releases last week” and outpaced peers in coding and reasoning.

He singled out endurance. Eyee said, “Astra is the first model that’s able to do things for hours and hours and days on end in unfamiliar environments, which is unlocking new scientific research.”

That is a narrower claim than the headlines suggested. Sustained accuracy on long-horizon tasks is a real breakthrough for lab automation and coding agents, but it is not the general cognition that AGI implies to a lay reader.

For NVIDIA, the distinction matters because agentic workloads consume far more inference compute than one-shot chat. Huang himself said, “When the world goes to agentic, fully agentic systems, you’re going to have agents running all the time, working with other agents running all the time.”

Definitional Sleight of Hand

OpenAI’s working definition of AGI measures the ability to replace economically valuable human work. That framing collapses human cognition into a labor-substitution metric, which suits a company selling automation.

Eyee’s critique lands because most of human intelligence, including care work, judgment under ambiguity, and cultural knowledge, does not show up on that scoreboard. A benchmark that ignores those dimensions declares victory prematurely.

Huang has stopped defending any specific milestone. On the Q2 call, he said, “For many tasks, we could say that we’ve already achieved AGI. I think all of those milestones and all those, they’re kind of senseless at this point.”

His preferred metric is simpler: “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.” That reframes AGI as a monetization event.

Three-Way Squeeze on AI Labs

Eyee described the labs as caught between three masters. In his words, “Companies are struggling to balance the need between being first in market, appeasing shareholders and also this new role they’re playing of sort of the U.S.’s first line of defense as it comes to national security.”

That squeeze pushes labs to ship models faster than internal safety teams recommend. The CNBC segment noted that labs found containment-breaking behavior in models internally before deployment and made minimal changes before running them in production.

NVIDIA is now financially entangled with those same labs. The company has invested nearly $50 billion in frontier AI labs and organized financing platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to raise over $500 billion in third-party capital.

Huang addressed the obvious question directly: “We recognize the scale of this support, and we know some will call this circular financing. We see it differently.”

Accountability Gap for Agent Swarms

Eyee’s sharpest point was legal. He asked, “Who is responsible? If I make an AI agent swarm and it goes and hacks your company who goes to jail, that’s a felony. We haven’t made those decisions collectively yet.”

The CNBC segment referenced a Reuters report that OpenAI bots allegedly hacked a German company and shared tips on avoiding detection. That is not a hypothetical liability question anymore.

For NVIDIA, the exposure is indirect but real. If regulators impose liability regimes that slow agentic deployment, the inference compute curve flattens and Huang’s monetization thesis weakens.

Supply is also tighter than the demand picture suggests. Huang said NVIDIA has supply for approximately 70% of demand, and the company expects fiscal 2028 revenue growth of roughly 70% on a supply-constrained basis, per the Q2 FY27 8-K.

Where NVDA Trades Now

NVIDIA shares trade at $225.73, up 21.18% year to date and 34.29% over the past year. Analysts carry an average target of $327.13 with 57 Buy ratings against just 1 Sell.

The Q2 beat was substantial, with revenue of $96.22 billion and non-GAAP EPS of 2.22, and Q3 guidance of $108 billion implies the ramp is intact. Gross margins are expected to compress to 74% in Q3 as memory pricing bites.

Eyee’s warning does not invalidate the numbers, but it argues for a smaller AGI premium in the valuation. The customer financing arrangements, memory inflation, and unresolved agent liability all deserve weight in any model.

The setup rewards patience: a forward multiple around 45x carries the concentration risk of a single supplier funding its own demand. If the AGI narrative cools before capex plans do, valuation support thins quickly.

The post Google and Microsoft Vet Says AGI Hype ‘Leaves Most of Humanity Out’ appeared first on 24/7 Wall St..

Jim Cramer used his platform last week to make a straightforward case: the Magnificent Seven is cheap, the AI capex cycle is turning into profit, and investors should stop discounting the group ahead of 2027 monetization. Cramer called on viewers to “buy buy buy” on the argument that the market had unfairly priced these names before the payoff arrives.

On CNBC’s air the very next trading day, Plexo Capital founding managing partner Lo Toney offered a different frame. AI is fracturing the Magnificent Seven into distinct risk-return profiles, he argued, presenting a two-by-two lens built on infrastructure control and monetization ability. That framework splits the group into hyperscalers (Google, Microsoft, Amazon), aggregators (Meta, Apple), specialists (Tesla), and a pure-play beneficiary (NVIDIA). The full segment aired September 8, 2026.

2026 Scoreboard Validates the AI Split

The three hyperscalers pouring capex into AI factories are all trailing the benchmark year-to-date, while the picks-and-shovels supplier is running well ahead. The buildout is also lifting a wider bench of power, cooling, and networking suppliers that sit outside the chipmakers (we profiled seven of them in a free AI infrastructure report).

Capex Bill Behind the Hyperscaler Underperformance

The hyperscaler gap ties directly to the size of the infrastructure buildout. Microsoft guided full-year FY26 capex to $115.95 billion, and CFO Amy Hood said calendar-2026 investment is now expected around $175 billion after a shift toward operating leases. Alphabet spent $44.92 billion on capex in Q2 alone and raised roughly $70 billion in combined equity and debt to fund AI expansion, pushing long-term debt from $46.5 billion to $98.2 billion. Amazon booked $54.21 billion of Q2 capex, and CEO Andy Jassy conceded the company “will encounter free cash flow headwinds until these data centers come online.” Meta narrowed its 2026 capex guide to $130 to $145 billion as free cash flow collapsed to $784 million from $8.55 billion a year earlier.

Why NVIDIA Sits Outside the Group

Toney’s framework treats NVIDIA as fundamentally different because it gets paid while everyone else proves the economics. The Q2 FY27 earnings report supports that read. NVIDIA reported revenue of $96.22 billion, up 105.8% year over year, with data center revenue of $89.02 billion (+117%). Management guided Q3 to $108 billion, plus or minus 2%, and expects fiscal 2028 revenue growth of approximately 70% under supply-constrained conditions.

The Q2 FY27 8-K filed with the SEC also disclosed supply obligations surging to $279 billion tied to memory procurement for the Vera Rubin platform. Trading at a P/E of 28.5, NVIDIA is selling into every hyperscaler capex line at the exact moment those hyperscalers are being penalized for the spending.

Alphabet Irony to Close

Toney called Alphabet “the most interesting” name in the Magnificent Seven because it owns AI infrastructure through TPUs and data centers not to mention multiple monetization paths across search, YouTube, Cloud, and Waymo. Google Cloud revenue accelerated to $24.77 billion, up 82% year over year, and CEO Sundar Pichai noted nearly 90% of the Fortune 100 using Gemini Enterprise. Alphabet trades at a P/E of 15, the cheapest multiple in the group. The stock most closely matching Toney’s ideal profile is also the one the market has rewarded the least in 2026, giving investors either a value setup or a warning that Wall Street sees AI monetization drifting further out than Cramer’s timeline suggests.

The post Jim Cramer Called the Magnificent Seven Cheap but the Three Building AI Factories Are All Trailing the S&P appeared first on 24/7 Wall St..

Oracle (NYSE:ORCL) has become one of the most talked-about names in the AI infrastructure trade, and after a violent round trip from north of $341 to the low $130s and back, investors want a number to anchor to.

Our 24/7 Wall St. price target for Oracle is $219.26, which implies 34.91% upside from the last close of $162.52. Our recommendation is buy, with high conviction at a 90% confidence level.

24/7 Wall St. Price Target Summary

A Violent Reset, Then a Bounce Into the Earnings Report

Oracle shares are down 31.07% over the past year and 15.81% year to date, but the stock has flipped decisively in recent weeks: up 10.54% over the past month and 15% in the past week alone as the OpenAI ecosystem returned to favor per MarketWatch coverage on September 8.

That move sets up the Q1 FY2027 report expected September 10, 2026. In Q4 FY2026, Oracle delivered EPS of $2.11 on revenue of $19.18 billion, with Cloud Infrastructure revenue up 93% and Remaining Performance Obligations reaching a staggering $638 billion, up 363% year over year. Polymarket traders are pricing an 83.5% probability that Oracle beats expectations.

Why Bulls See a Breakout Above $300

The bull case is the RPO. Oracle now sits on a $638 billion backlog, with $67 billion in new AI infrastructure signed in Q4 alone and a global GPU utilization rate of 97.5%.

Multicloud database revenue grew 404%, and Safra Catz has walked investors through an OCI ramp reaching $144 billion by FY2030. Management reconfirmed a 31% revenue CAGR and 28% EPS CAGR through FY2030. If Oracle hits FY2028 consensus EPS of $10.97 and the market awards even a 30x multiple, our bull scenario reaches $347.50.

What Could Go Wrong

The bear case is capital intensity. Free cash flow ran to negative $23.7 billion in FY2026 on CapEx of $55.7 billion, and FY2027 CapEx is guided near $70 billion, funded partly through a $20 billion at-the-market equity issuance and additional debt. Software license revenue also fell 6% in Q4.

That said, bulls would counter that a chunk of the RPO, roughly $75 billion, involves customer-supplied GPUs that reduce Oracle’s own capital burden, and Hilary Maxson has flagged steady-state ROIC in the high 20s. Our bear scenario prices in multiple compression and lands at $184.40.

How Oracle Stacks Up Against Microsoft and Amazon

Microsoft (NASDAQ:MSFT) is the natural enterprise-cloud comp, trading at a P/E of 27 with Azure growth of 43% and a commercial RPO of $678 billion. Oracle’s implied forward P/E of 21 looks cheap next to Microsoft given Oracle’s faster OCI growth of 93%.

Amazon (NASDAQ:AMZN) is the pure hyperscaler benchmark. AWS grew 37% in Q2 2026 at a 39.4% operating margin, and Amazon trades at a P/E of 36. Oracle grows OCI faster than AWS, yet trades at a meaningful discount to Amazon on earnings. Against this peer set, the 24/7 Wall St. price target of $219.26 looks conservative relative to peers.

Oracle Price Prediction 2026 to 2030

Oracle looks attractive at $162.52 if you believe the RPO backlog converts to revenue on the schedule management has outlined and OCI capacity keeps clearing at 97.5% utilization. I’d stay on the sidelines if the CapEx-to-FCF gap keeps widening into FY2028 or if a major hyperscaler contract renegotiates lower.

On balance, the 24/7 Wall St. price target of $219.26 and the analyst consensus at $242.05 both point higher. The model’s output skews bullish, with high confidence.

These projections assume Oracle executes on its FY2030 OCI ramp and preserves cloud margins in the 30% to 40% range. Significant upside or downside could result from AI-contract renewal patterns or the cost of the FY2027 debt and equity raise.

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Nebius Group (NASDAQ: NBIS) and IREN (NASDAQ: IREN) both just delivered results that reveal how differently two AI infrastructure builders can attack the same shortage. Nebius reported Q2 FY26 on August 12, showcasing a from-scratch cloud platform. IREN followed on August 27 with a Bitcoin miner turning its power footprint into GPU factories. Same tailwind, wildly different playbooks.

Software Stack Lifts Nebius. Power Portfolio Lifts IREN.

Nebius booked $582.3 million in Q2 revenue, up 454% year over year, with the AI Cloud unit alone hitting $574.9 million and a 50% adjusted EBITDA margin. CEO Arkady Volozh told investors “We could sell today our entire 2027 capacity on these terms if we wanted to”, a rare position for a cloud operator. Aether, Token Factory, and the Tavily acquisition, whose developer community grew to more than 2.5 million, extend Nebius beyond bare metal.

IREN posted $137.2 million in revenue, down 26.75%, as mining rigs came offline. A $450.4 million non-cash impairment drove a $684.0 million net loss. The pivot story is inside the mix: AI Cloud revenue reached $70.5 million and more than doubled sequentially. CEO Daniel Roberts framed the edge plainly: “Signing deals is not the bottleneck in this market. Bringing GPUs online is.”

Scale Versus Efficiency, Side by Side

Nebius is optimizing for pricing power. Its first capacity auction cleared at a price 15% above its prior high for Blackwell. IREN is optimizing for cost per megawatt. Recent three-year deals price above $20 million per MW, with active talks near $25 million, and Roberts noted “Every megawatt we build is scarce.”

What Decides the Next Four Quarters

I will be watching whether Nebius can convert its $40 billion-plus in customer commitments into asset-backed financing without leaning on equity again after selling 12.7 million shares at $224. You should watch whether IREN delivers Horizons 2 through 4 to Microsoft (NASDAQ:MSFT) on schedule, since a significant portion of December-quarter capacity comes online late. Both stories hinge on execution.

Why I Lean Nebius for Now, But Keep IREN Close

Personally, I lean toward Nebius today. A 50% AI Cloud EBITDA margin, a software layer that lifts monetization, and $8 billion in cash make the scale-out feel financeable. The stock is not cheap after a 156.88% six-month run, so valuation discipline matters. IREN suits a turnaround investor comfortable with impairments and construction risk in exchange for the rarest input in the industry: energized land. If Horizons 2 through 4 ship on time and pricing holds near $25 million per MW, IREN’s 20.83% six-month gain looks like the setup with room to run. Both names carry timing risk if GPU supply slips.

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At its current $243.88 share price, Nebius Group (NASDAQ:NBIS) looks compelling for investors focused on the next leg of AI compute pricing power. Shares have run hard, but management’s most recent disclosures suggest the pricing story is only beginning to inflect.

Nebius operates a full-stack AI cloud platform spanning compute, storage, managed services, and inference, with its Token Factory targeting open-model deployment. NVIDIA‘s (NASDAQ:NVDA) strategic equity investment and Exemplar Cloud designation place Nebius inside the reference architecture for Blackwell and Vera Rubin builds, alongside anchor contracts with Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT). The stock has climbed from $88.62 at the February 2026 filing to today’s level as capacity milestones and record run-rate revenue have landed in sequence.

Why Full-Capacity Pricing Is the Real Story

The Q2 earnings call reframed the thesis. CEO Arkady Volozh said Nebius “could sell today our entire 2027 capacity on these terms if we wanted to”, but is deliberately holding capacity back for premium short-duration deals. Its first Blackwell capacity auction cleared 15% above the highest price the company had ever charged, and short-duration contracts are being negotiated at $40 million to $50 million per megawatt versus $20 million to $25 million on mid-term deals.

Q2 revenue reached $582.3M, up 454% YoY, with group adjusted EBITDA of $236 million at a 41% margin. Management raised contracted power to 5 gigawatts by year-end, RPO stands at $37.5B, and ARR guidance of $7B to $9B by year-end 2026 was reaffirmed. Four landmark Q2 deals averaged more than a billion dollars each.

Where the Bear Argument Bites Hardest

The build is capital-intensive at unprecedented scale. FY 2026 capex guidance sits at $20 billion to $25 billion, and Q2 interest expense surged to $95 million from roughly $4.8 million a year prior. Convertible debt carries $8.5B at cost but $20.8B in fair value, embedding real dilution risk. The ATM program placed 12.7 million Class A shares at an average of $224, with 12.3 million shares still authorized.

Three customers accounted for 24%, 21%, and 14% of Q2 revenue. GAAP net loss came in at $190.4M despite the EBITDA inflection, and revenue missed consensus in three of the four quarters preceding the Q2 beat. FY 2026 EPS consensus has been cut to -$2.5183 from -$1.6233 ninety days ago.

Reasons Some Investors Would Rather Sit Tight

NBIS is up 191.36% YTD versus 12.32% for the S&P 500, and trades at roughly 45x forward earnings and 45x trailing sales. Much of the ARR ramp, 5 GW power target, and 40% EBITDA margin outlook is arguably discounted at these levels. Execution on Pennsylvania (1.2 GW), Finland (310MW), and Missouri (1.2 GW) sites still has to land on schedule, and every one of those gigawatts has to be powered and cooled by somebody (we rounded up seven suppliers doing exactly that work in a free AI infrastructure report).

Patient investors could wait for Q3 revenue to validate the $906.6M consensus and Q4 to test the ARR range. Cost of patience is real if auction pricing keeps climbing, and so is the cost of adding at fresh 52-week highs.

What the Data Actually Says

Nebius trades at $243.88 with a market cap near $61.5B and forward P/E near 45. The 4-analyst mean target of $286.69 sits above the current share price, though price targets are one data point and not a guarantee. The ratings breakdown:

• Strong Buy: 1
• Buy: 2
• Hold: 1
• Sell: 0

Recent performance separates NBIS from the market: up 22.22% in one week, 29.74% over one month, 191.36% YTD, and 280.71% over one year. SPY returned 0.55% for the week, -0.94% over one month, and 12.32% YTD. FY 2026 revenue consensus sits at $3.34B across 17 analysts, rising to roughly $11.97B for FY 2027.

Verdict on Nebius at Current Levels

At $243.88, the setup for Nebius Group looks constructive. Here is why.

Q2’s pricing signal is the pivotal development. When a supplier can auction Blackwell capacity 15% above its prior high and command $40 million to $50 million per megawatt on short-duration deals, ARR guidance of $7B to $9B reads as a floor built on mid-term contracted pricing that management is deliberately leaving room to exceed.

Three near-term catalysts drive the path higher: Q3 and Q4 2026 results validating ARR against the $906.6M and $1.45B consensus prints, an initial 2027 revenue guide from management, and additional asset-backed debt at SOFR plus 250 basis points that eases reliance on dilutive equity. The July $775M facility is the template. Scaling it makes the convertible overhang more manageable.

Risk/reward at $243.88 demands careful sizing after a 191% YTD run. The thesis breaks if Q3 revenue misses the $906.6M bar, if the 5 GW power target slips, or if auction pricing rolls over. Short of those signals, the setup favors owning the operator that keeps proving pricing power in a supply-constrained market.

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Microsoft has quietly become the most interesting name in the race to the $5 trillion club. Microsoft (NASDAQ:MSFT) sits at a market cap of roughly $3.67 trillion, well behind NVIDIA’s $5.45 trillion, but Azure’s momentum and the Copilot monetization curve give it a credible path higher.

Our 24/7 Wall St. price target for Microsoft is $608.72, implying 23.24% upside from the current $493.95. Our model output is a buy signal, with high confidence at 90%.

24/7 Wall St. Price Target Summary

A Sideways Year Masking a Fundamental Breakout

MSFT has gone almost nowhere over the past 12 months, essentially flat at -0.03% on a year-over-year basis and down 1.02% on the month, even as the fundamentals accelerated.

Fiscal Q4 2026 delivered revenue of $90.01 billion (+17.8% YoY) and non-GAAP EPS of $4.74, beating consensus by 11.81%. Intelligent Cloud grew 32% to $39.31 billion, Azure and other cloud services jumped 43% YoY, and Azure crossed $100 billion in full-year revenue. Commercial RPO surged 84% to $678 billion, a booked-demand signal that dwarfs almost any peer.

The Case for $700+

Bulls have plenty to work with. Microsoft 365 Copilot passed 30 million paid seats with net additions more than doubling sequentially, and Satya Nadella called out the AI opportunity: “I’ve never been more confident in Microsoft’s opportunity to drive durable long-term growth.”

Azure guidance of approximately 45% constant-currency growth for Q1 FY27 signals demand still exceeds supply. GitHub Copilot revenue accelerated over 60% quarter over quarter with 50 million users. Our bull-case scenario points to $704.82, a 42.69% return that would push Microsoft’s market cap through $5 trillion.

What Could Go Wrong

The bear case starts with capital intensity. FY26 CapEx exploded 79.62% to $115.95 billion, and free cash flow fell 6.46% to $66.99 billion. Amy Hood conceded FY27 operating margins will decline, though by less than a point.

Bulls counter that CapEx is pivoting to short-lived assets like CPUs and GPUs, which can be throttled if demand cools. Our bear-case scenario lands at $520.21, still a 5.32% positive return, reflecting how defensible the installed base is even in a downside scenario.

How Microsoft Compares to NVIDIA and Alphabet

NVIDIA (NASDAQ:NVDA) is the reference point for the $5T club, already at $5.45 trillion with Data Center revenue of $89.02 billion growing 117%. NVIDIA trades at a P/E of 45 versus Microsoft’s 27, which makes our MSFT target look conservative on a growth-adjusted basis.

Alphabet (NASDAQ:GOOGL) is the direct cloud comp, with Google Cloud accelerating 82% to $24.77 billion. Alphabet trades at just 15 P/E, a discount tied to a $70B financing raise and negative Q2 free cash flow. That contrast argues Microsoft has earned its premium.

Microsoft Price Prediction 2026-2030

The bull thesis at $493.95 hinges on Azure sustaining 40%+ growth into FY27 and Copilot per-seat-plus-consumption billing continuing to ramp.

The thesis weakens if CapEx creeps toward $150B without a matching acceleration in cloud revenue. Analyst consensus at $572.92 across 52 buys and 3 holds lines up with our buy view. The 24/7 Wall St. price target of $608.72 stands.

These projections assume Azure sustains its current trajectory and Copilot monetization scales. Significant upside or downside could come from AI capacity constraints or a hyperscaler capex reset. All that Azure buildout has to be powered, cooled, and networked by somebody, and we profiled seven of those suppliers in a free report on the AI infrastructure names that aren’t chipmakers.

The post Prediction: This Could Be the Next AI Stock to Join the $5 Trillion Club appeared first on 24/7 Wall St..

Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOGL) both posted blowout AI-fueled quarters just as the 10-year Treasury yield pushed to 4.78%, its 98.8th percentile reading over the past year. With rate-hike anxiety squeezing growth multiples, these two mega-caps stand out because their balance sheets absorb the shock other hyperscalers have to borrow through. Huge cash reserves make borrowing-cost worries less prominent for both.

Azure Crosses $100 Billion, Google Cloud Accelerates to 82%

Microsoft’s fiscal Q4 delivered revenue of $90.01 billion, up 17.8%, with Intelligent Cloud jumping 32% and Azure growing 43%. Satya Nadella called out that “Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats.” Commercial RPO ballooned to $678 billion, up 84%, a booking backlog that dwarfs peers.

Alphabet’s Q2 was arguably louder. Revenue hit $119.80 billion, up 24.2%, marking its 12th straight quarter of double-digit growth. Google Cloud accelerated to 82% growth at $24.77 billion, a stunning jump. Sundar Pichai noted “nearly 90% of the Fortune 100 using” Gemini Enterprise, and Search still cranked out $63.27 billion, up 17%.

Cash Fortress vs. Debt-Funded Sprint

Microsoft generated $182.94 billion in operating cash flow for FY26 and still returned over $43 billion to shareholders. Amy Hood emphasized flexibility: “You have a big book of business that’s flexible… It does allow us to have a lot more flexibility to manage through those.” Free cash flow was pinched to $19.64 billion, but the war chest keeps rate sensitivity muted.

Alphabet leaned harder on financing. Q2 free cash flow turned negative $5.86 billion, long-term debt jumped from $46.5 billion to $98.2 billion, and buybacks were suspended. Alphabet raised roughly $70 billion in combined equity and debt. Rising yields matter more here, though Google’s P/E of 17 gives it valuation cushion versus Microsoft’s P/E of 28.

What Decides the Next Leg

I will be watching whether Microsoft can convert that $678 billion RPO into revenue without margin slippage as capacity finally catches demand. For Alphabet, the key metric to watch is when free cash flow turns positive again and whether Google Cloud’s 82% pace holds. If yields keep climbing from 4.78%, the debt-funded builder will feel it first (the power, cooling, and networking names taking the other side of that capex are in our free AI infrastructure report).

Why I Lean Toward Alphabet on Valuation Right Now

Personally, I find Alphabet more interesting at these levels. A forward P/E of 23 for a business compounding 24% with an 82% cloud growth rate looks mispriced against Microsoft’s premium multiple. Microsoft is the safer AI compounder, and if you want the cleanest balance sheet and a 0.71% yield with buybacks intact, it fits defensive portfolios well. For a growth investor willing to absorb capex volatility, Alphabet’s ad moat plus Gemini traction stands out through this rate scare.

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Meta Platforms (NASDAQ:META) put a price tag on its AI buildout Tuesday evening with Muse, a personal AI agent sold through a tiered consumer subscription, and investors moved quickly Wednesday morning. The launch answers the standing bear case that Meta Platforms’ capital spending carried no direct consumer revenue line, and the reaction reads as a company-specific repricing rather than a broader bid for AI names. Overnight endorsements from commerce and startup leaders added credibility to the rollout heading into the open.

Meta Platforms stock is up 6% to $649.20 Wednesday morning, the first meaningful vote for the company’s AI monetization since its July earnings report. Meanwhile, Alphabet (NASDAQ:GOOGL) stock is down 2% to $330.53 as investors read Muse as encroachment on Gemini’s consumer agent footprint.

For broader market context, the Invesco QQQ Trust (NASDAQ:QQQ) is down 0.5% to $714.55. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.3% to $763.38, confirming today’s move is a single-name story rather than a sector rotation.

Muse Puts a Price on the AI Spend

[chart symbol=”META”]

Meta Platforms launched Muse Tuesday evening as a personal AI agent available through a dedicated app and through WhatsApp. Muse can use a browser, run in the background, connect to a user’s existing services, and complete tasks including sending email, organizing calendars, planning trips, filling forms, and making payments. The agent runs on Meta Platforms’ Muse Spark model, which the company said drove a 60% jump in daily interactions with Meta AI after integration.

Meta Platforms introduced paid plans at $20 per month and $100 per month above a free tier, the first direct consumer revenue line attached to its AI buildout. Alexandr Wang, chief AI officer at Meta Platforms, said Muse follows a “principle of least privilege,” with users deciding which connectors are enabled and whether the agent can read or modify data. Shopify (NASDAQ:SHOP) CEO Tobi Lütke and Y Combinator’s Garry Tan publicly praised the launch overnight, positioning Muse as an ecosystem asset rather than a walled-garden play.

The launch matters because Meta Platforms has faced sustained criticism for pouring capital into AI without a subscription line to model against. Meta Platforms reported Q2 2026 capital expenditures of $30.1 billion and guided full-year 2026 capex to $130 to $145 billion, with operating margin compressing to 31% from 43% a year earlier. Muse gives investors the first pricing anchor to weigh against that spend.

Alphabet Slips as the Repricing Stays Company-Specific

[chart symbol=”GOOGL”]

Alphabet reported Q2 2026 revenue of $119.8 billion, up 24.2% year over year (YoY), with Google Cloud growing 82% to $24.77 billion and the Gemini App reaching 950 million monthly active users. That’s a strong AI adoption story, yet Alphabet stock is falling today because Muse targets the consumer agent surface Google has been building around Gemini.

Alphabet’s Q2 capital expenditures hit $44.92 billion, its free cash flow turned to negative $5.9 billion, and the company suspended its stock buyback in Q2 2026. Traders want to see who wins the consumer agent race before paying up further for Alphabet stock, and Muse arriving with a WhatsApp distribution footprint compresses that timeline.

Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Shopify sit adjacent to the story without occupying the same seat. Microsoft’s fiscal Q4 2026 results showed Copilot crossing 30 million paid seats with Azure past $100 billion in annual revenue. Amazon’s AWS grew 37% to $42.23 billion in Q2 2026, with its AI business at a $25 billion annualized run rate (we profiled seven suppliers powering that data-center buildout, from power to cooling, in a free AI infrastructure report). Shopify remains a commerce-AI adjacency, and Lütke endorsing Muse frames it as a distribution partner for merchants rather than a rival.

What to Watch

Meta Platforms delivered $60.8 billion in Q2 2026 revenue against that full-year capital budget, and its free cash flow narrowed to $784 million from $8.55 billion a year earlier. A subscription line at those price points has to scale meaningfully before it moves that math. Today’s rally is sentiment moving ahead of evidence.

Meta Platforms stock is down 2% year to date (YTD), so Wednesday’s gain narrows a losing year rather than extending momentum. Investors can watch for early Muse adoption disclosures, WhatsApp attach rates, and any read-through in the Q3 2026 earnings call, when Meta Platforms will need to translate agent engagement into a monetization curve.

Traders weighing their exposure should calibrate their holdings carefully given a Muse thesis that rests on a consumer subscription yet to prove it can offset a capital budget of this size. A moderate position that reflects both today’s monetization catalyst and Meta Platforms’ free cash flow compression is the sensible frame from here.

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Real wealth in equities rarely comes from trading. It comes from owning the same handful of durable businesses for decades and letting the math work. The pattern is consistent: a category-defining moat, decades of compounding revenue and earnings, expanding margins, aggressive shareholder returns through buybacks and dividends, and a credible engine to power the next decade. Miss any one of those and you get a good stock. Get all of them and you get a millionaire-maker.

Three names still fit every part of the framework. Their long-run price records are already extraordinary, and each has a specific next-leg thesis that keeps the compounding story alive rather than closing it out (we studied a batch of recent runners most investors walked past and pulled out the pattern in a free report here). Future compounding is never guaranteed, yet the setups here are unusually clean.

#3. Visa: Toll Booth on Global Commerce

Over the past 10 years, Visa shares returned more than 350%, with a 64% gain over the past five. Visa (NYSE:V) prints money the old-fashioned way: taking a small slice of every swipe, tap, and cross-border transaction on the world’s largest payments rail.

Fiscal Q3 2026 net revenue rose 14% year-over-year to $11.6 billion, and payments volume crossed $4 trillion for the first time in Visa’s history. Cross-border volume ex intra-Europe grew 12% constant-dollar, and value-added services revenue expanded 34% year-over-year in constant dollars. Visa returned $6.2 billion to shareholders in the quarter and has $28.4 billion remaining in buyback authorization. The quarterly dividend has stepped up from 0.45 in 2023 to 0.67 in 2026.

The forward engine comes in the form of  agentic commerce, stablecoin rails and Visa Direct. CEO Ryan McInerney told investors “Agentic Commerce is a when, not an if,” and Visa has already partnered with OpenAI on secure agent-initiated payments.

Risk: local payment schemes, regulators pushing account-to-account rails, and stablecoin disintermediation all target the same interchange stream. Visa is building on both sides of that transition, but the risk to network economics is real and measurable.

#2. Microsoft: Enterprise AI With a Balance Sheet Fortress

Microsoft (NASDAQ:MSFT) has compounded shareholders at a staggering pace: around 760% over 10 years and more than 66% over five. The stock trades at roughly 27x earnings, and the business now looks less like a software company and more like the world’s most important AI infrastructure operator.

Fiscal Q4 2026 revenue hit $90 billion, up 18%, and Azure revenue surpassed $100 billion in full-year revenue, growing 41%. Commercial RPO surged to $678 billion, up 84%, and Microsoft 365 Copilot passed 30 million paid seats. Full-year FY26 operating income exceeded $155 billion, and Microsoft returned over $43 billion to shareholders. The quarterly dividend has climbed from 0.68 in 2023 to 0.91 in 2026.

Satya Nadella said “Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats.” Demand still exceeds supply, and Azure Q1 FY27 guidance is approximately 45% constant-currency growth.

Risk: FY27 capex is guided to roughly $175 billion. If AI demand ever softens, that spending becomes a heavy anchor on returns on capital.

#1. Apple: The Compounding Machine That Refuses to Slow

Apple (NASDAQ:AAPL) is the top of this list because no other mega-cap combines Apple’s installed base, cash generation, and buyback discipline. The 1o-year return is more than 1,100%, the five-year return over 112% and shares are up nearly 34% over the last year alone. Four forward splits since 2000, including the 4-for-1 split in 2020, tell the compounding story visually.

Fiscal Q3 2026 revenue hit $109.42 billion, up 16.4% year-over-year, with EPS of $2.02 versus $1.89 consensus, marking a ninth consecutive EPS beat. iPhone revenue reached $54.3 billion, up 22%, Mac grew 29%, and Services set another record at $30.74 billion. Apple returned $33 billion to shareholders in the quarter, and the board authorized an additional $100B buyback. The dividend has stepped from 0.23 in 2022 to 0.27 in 2026.

Tim Cook told investors “I truly have never been more confident that the best is yet to come.” The forward engine is a reimagined Siri AI unveiled at WWDC26, riding a two and a half billion device install base.

Risk: supply constraints are widening. Apple expects supply constraints to increase significantly next quarter, with Cook citing “a 100-year flood on the memory pricing”. Regulatory pressure on Services in the EU and U.S. is a separate overhang.

Why the Pattern Still Has Room to Run

The premise was simple: durable moats, decades of compounding, margin expansion, giant capital returns, and a credible next-decade engine. Visa dominates payments and is building the rails for agentic commerce. Microsoft owns enterprise AI infrastructure and is monetizing it faster than any peer. Apple sits at the top because it combines the largest installed base in consumer technology with a Services engine growing 12% year-over-year, a fresh Siri AI platform layered on $62.09 billion in nine-month buybacks, and management guiding to 9% to 11% revenue growth into the next quarter. Future compounding is never a certainty. Yet when the same business keeps setting records at a $4.7 trillion market cap, betting against the pattern has historically been the expensive trade.

The post 3 Stocks That Turned Patient Investors Into Millionaires (and History Says the Pattern Isn’t Done) appeared first on 24/7 Wall St..

Alphabet (NASDAQ:GOOG) trades at $338.86 after slipping 10.39% over the past month from its recent high of $404.23. Our 24/7 Wall St. price target for Alphabet is $433.88, implying 28.19% upside over the next 12 months. The recommendation is buy at high confidence (90%). In plain terms, we view this dip as an entry opportunity.

Why Alphabet Sold Off Despite a Blowout Quarter

Alphabet is up 6.5% year to date and 57.9% over the last year, but the stock has cooled since summer. The pullback came despite strong results.

Q2 2026 revenue hit $119.80 billion, up 24.23% year over year, with EPS of $9.11 versus a $3.0427 estimate. Google Cloud grew 82% to $24.8 billion and Cloud backlog reached $514 billion.

Investors focused on the cost side: capex was $44.92 billion, free cash flow turned negative $5.86 billion, long-term debt climbed to $98.2 billion, and management suspended the buyback while guiding 2026 capex of $175 billion to $185 billion.

That level of spend has to go somewhere, and the power, cooling, and networking suppliers behind these data centers are the subject of a free report on seven AI infrastructure names that aren’t chipmakers. That fear is why GOOG is on sale.

Why Bulls See a Breakout to $450 and Beyond

The bull case rests on Cloud and Gemini. Cloud growth has accelerated four straight quarters, from 34% to 48% to 63% to 82%. CEO Sundar Pichai said Alphabet is “more bullish on the opportunities ahead” for generative AI than a year ago.

Gemini API traffic now runs at 22 billion tokens per minute, and nearly 90% of the Fortune 100 use Gemini Enterprise. Analyst coverage skews strongly positive at 57 Buy and 5 Hold ratings, and our bull-case scenario tops out at $450.80.

What Could Send GOOG Back to the Low $300s

The bear case starts with the balance sheet. Long-term debt more than doubled to $98.2 billion, interest expense is up roughly 5x year over year, and free cash flow went negative in Q2.

Bulls will counter that Q2 free cash flow was distorted by inventory buildup for TPU deliveries, and management expects the vast majority of TPU revenue to land in 2027. Insider activity is another yellow flag, with 205 recent transactions net selling, though executive selling at mega-caps is routine. Our bear-case price is $364.77.

How Alphabet Compares to Microsoft and Meta

Microsoft (NASDAQ:MSFT) is the closest peer on cloud and enterprise AI. MSFT trades at $510.83 and commands a much richer multiple than GOOG. On the same forward P/E of 16, Alphabet looks cheap for a business where Cloud is growing 82% versus Azure’s slower comparable growth. That valuation gap is the core of our buy thesis.

Meta Platforms (NASDAQ:META) at $612.79 is the right digital-advertising comparable. Meta’s ad business is growing fast, but Alphabet pairs Search and YouTube ($11.06 billion in Q2) with a hyperscale cloud Meta cannot match. The peer set makes our $433.88 target look reasonable, arguably conservative.

Verdict: A High-Confidence BUY Setup

My verdict is buy with high confidence, and the 24/7 Wall St. price target of $433.88 reflects both the fundamentals and the factor overlay. The tipping factor is Cloud’s 82% growth against a forward multiple of 16.

The bullish scenario depends on Alphabet converting its $514 billion Cloud backlog into revenue on schedule. The bearish scenario is 2026 capex above $175 billion keeping free cash flow negative into 2027.

Looking further out, here is where our model projects Alphabet could trade, assuming Cloud continues scaling and AI monetization tracks the current trajectory.

These projections assume Alphabet executes on Gemini adoption and Cloud backlog conversion. Significant upside could come from Waymo scaling; the largest downside risk is a regulatory forced separation of Search or ad tech.

The post Alphabet Stock Is Pulling Back From Its High. Here’s Why I’d Buy the Dip. appeared first on 24/7 Wall St..

I keep hitting the buy button on Oracle (NYSE:ORCL) and I am not planning to stop. The stock is down 27.98% over the last year and 17.74% year to date, and every leg lower has looked like a gift to me rather than a warning. The reason is simple. Oracle has quietly become the cheapest, most flexible place to run AI workloads at scale, and the contracted demand behind that claim is now large enough that I want to own more of it.

What Keeps Me Buying

CEO Clay McGurk described Oracle Cloud Infrastructure as “the most highly secure, highest performing, most flexible, lowest-cost infrastructure available anywhere.” I would normally roll my eyes at that language. The numbers make me take it seriously. Cloud Infrastructure revenue grew 93% in Q4 FY2026 to $5.787 billion. Global GPU utilization sits at 97.5%. When a hyperscaler runs its GPUs that hot, capacity is pulling customers in alongside price.

Then there is the backlog. Remaining Performance Obligations reached $638 billion in Q4, up 363% year over year, with $75 billion tied to prepaid or customer-supplied GPU arrangements. Customers are handing Oracle cash and, in some cases, their own silicon. That flips the capital story: Hilary Maxson said the structures “enable us to have a lower cash CapEx requirement when we look at how we plan our business” and that “the return on capital is going to be a bit better as well.” Management guides infrastructure return on invested capital in the high 20s at steady state.

The third leg is the outlook Oracle is willing to underwrite. FY2027 revenue is guided to $90 billion with non-GAAP EPS of $8.05, and Safra Catz has already staked OCI growth from $18B to $32B, $73B, $114B, $144B across the next four fiscal years, most of it already booked in RPO.

Why Oracle Over the Obvious Names

The reflex pick in cloud is Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), or Alphabet (NASDAQ:GOOGL). Oracle keeps winning my dollar because it is embedding inside those three rather than fighting them head-on. Oracle is more than halfway through building 72 Multicloud datacenters that live inside Amazon, Google, and Microsoft clouds, and the Multicloud database business grew 817% in Q2 FY26, 1,529% in Q1 FY26, and 531% in Q3 FY26. Multicloud revenue was up 404% year-over-year in Q4 with bookings up 325%. Every dollar an enterprise spends inside AWS, Azure, or Google Cloud on an Oracle database is a dollar those three cannot fully capture. That structural position is what a Microsoft or Amazon shareholder does not get.

Risks I Own With Both Eyes Open

Free cash flow was negative $23.686 billion in FY2026 on $55.663 billion of capex. Total liabilities sit at $218.7 billion, and Oracle plans to raise about $40 billion in FY2027 through debt and equity, including a $20 billion at-the-market equity program. That is real dilution and real leverage. My answer is the RPO schedule and the prepaid contract mix. Operating cash flow of $31.977 billion grew 54% for the full year, and 12% of RPO converts to revenue within 12 months. The capital being spent is already sold.

Why the Buy Button Stays Active

I collect a $0.50 quarterly dividend while the busiest AI backlog on any US-listed cloud grinds through the income statement. As long as GPU utilization stays near 97.5% and Multicloud keeps compounding inside the competition, my order stays in. All of that GPU demand still has to be powered, cooled, and networked by somebody, and we pulled together seven suppliers riding that same buildout in a free AI infrastructure report.

The post Why Oracle’s Low-Cost Cloud Changes Everything appeared first on 24/7 Wall St..

Chevron has ripped higher through 2026, and the rally has pushed shares within reach of a fresh record. The question I want to answer is whether the 24/7 Wall St. price target still sees room to run, or whether the market has already priced in the good news.

Chevron (NYSE:CVX) trades at $212.26, up 42.82% year to date and 36% over the past year. Our 24/7 Wall St. price target for Chevron is $204.67, implying downside of 3.81% over the next twelve months. Our recommendation is hold, with high model confidence of 90%.

Why We Could Be Wrong

Our 24/7 Wall St. price target sits just below where Chevron trades today.

Bull scenarios exist: the 20-year Microsoft (NASDAQ:MSFT) power purchase agreement covering 2.67 gigawatts at Project Kilby could unlock a new commodity-independent cash flow stream, and Brent staying elevated on Strait of Hormuz tightness could easily push earnings past current estimates. Consider the target one datapoint. A full bull case follows below.

A Rally Built on Real Numbers

Chevron is up 10.58% over the past month and 5.78% over the past week, brushing against a 52-week high of $212.79.

Q2 FY26 was the fuel: adjusted EPS of $6.06, revenue of $67.20B (+51.43% YoY), and worldwide production of 4,070 MBOED (+20% YoY), marking a seventh straight EPS beat. Chevron also cut total debt by $8.41B in the quarter. WTI has cooperated too, climbing to $91.48 on September 1 from the mid-$70s a month earlier.

Why Bulls See a Breakout Above $228

The bull case rests on four legs: Guyana, Permian efficiency, Kilby, and cash returns. Mike Wirth called Chevron’s opportunity set “the largest and highest quality opportunity set that we’ve had in years,” and the company delivered $15.4 billion in adjusted free cash flow in the quarter with net debt to CFFO of just 0.6 times.

Chevron captured 50% more Hess synergies than initially targeted and is targeting 2-3% annual production growth and 10%+ adjusted free cash flow growth through 2030.

Our bull-case one-year price is $228.19, and Wall Street’s consensus target sits at $218.29 with 20 buy or strong-buy ratings.

Risks Worth Watching Before Chasing the Rally

Chevron trades at a P/E of 34, well above peers, and the model’s bear case lands at $181.75. Brent averaging $104/BBL lifted Q2, but the EIA sees Brent below $70 per barrel in real 2025 dollars through 2030. CPC pipeline risk in Kazakhstan and Middle East volatility remain live.

A counterpoint: the elevated trailing P/E reflects prior-year charges rather than structural weakness, and Chevron already hit its $3B structural cost reduction run-rate six months ahead of schedule.

How Chevron Compares to Exxon and ConocoPhillips

Exxon Mobil (NYSE:XOM) is the natural integrated benchmark and trades at a P/E of 23 with a return on equity of 11.03%, versus Chevron’s ROE of 7.26%. Exxon’s $20 billion 2026 buyback and Guyana leadership justify a premium, and its cheaper multiple makes Chevron’s valuation look stretched.

ConocoPhillips (NYSE:COP) is the pure-play upstream counterpoint. COP delivered Q2 26 adjusted EPS of $3.24 on $19.16 billion in revenue (+37.07% YoY) and is targeting 45% of cash from operations returned to shareholders in 2026. Its capital-return intensity exceeds Chevron’s, reinforcing my view that CVX’s premium is fair rather than cheap.

Chevron Price Prediction 2026-2030

My verdict is hold, with 90% confidence and a 24/7 Wall St. price target of $204.67. The key factor tipping the scale: the stock is up more than 42% YTD and now sits at 52-week highs while forward multiples price in perfect execution.

The bullish setup strengthens if Brent holds above $95 and Project Kilby reaches final investment decision this year. The setup weakens if WTI slips back toward the July low of $69.60 or if CPC disruptions escalate.

Looking further out, here is where our model projects Chevron could trade, assuming current growth trajectories hold.

These projections assume Chevron continues executing on Hess integration, Permian efficiency, and Project Kilby. Significant upside could come from sustained Brent above $100, while a demand slowdown could push shares toward the bear case of $184 by 2030.

The post Chevron Stock Is Near a Record High. Here’s Why the Rally May Not Be Over appeared first on 24/7 Wall St..

Oracle (NYSE:ORCL) currently trades at $158.78, while Wall Street’s consensus price target sits at $242.05. The gap between those two numbers is unusually wide for a mega-cap, and it is the entire reason to look closely at this name right now.

Oracle has become one of the largest AI infrastructure builders in the world, with a cloud business scaling rapidly on the back of multi-year contracts from major AI customers. Cloud Infrastructure revenue grew 93% in the fiscal fourth quarter, and Remaining Performance Obligations, the contracted backlog investors watch most closely, jumped 363% year over year to $638 billion.

The dislocation between price and target has widened through the summer. Whether Wall Street is stubbornly clinging to stale targets, or whether the market has overshot to the downside, is the question worth answering before Oracle reports later this week.

Cloud Buildout Costs Turned Investors Cautious

The most immediate driver of the derating has been the sheer scale of Oracle’s capital spending program. Free cash flow for fiscal 2026 came in at negative $23.69 billion, on capital expenditures of $55.663 billion. Total liabilities reached $218.703 billion, and management guided to roughly $40 billion in fresh debt and equity funding across fiscal 2027, including a $20 billion at-the-market equity issuance already underway. Net cash capex for fiscal 2027 is expected around $70 billion.

The Q2 fiscal 2026 report in December set the tone, sending shares down roughly 13% on a revenue miss even though non-GAAP EPS beat by 32.43%. From there, investors kept selling. The 52-week trading range runs from a high of $341.82 to a low of $114.5, showing how violently sentiment has swung.

This has looked like a sector-wide reassessment of how the AI buildout will actually be paid for, rather than a company-specific fumble. Oracle sits at the epicenter of that debate because its capex commitments are the most aggressive relative to its size in the group. All of that spend has to be powered, cooled, and networked by somebody, and we pulled together seven of those suppliers in a free AI infrastructure report.

Why the Sell Side Is Sticking With $242

Analysts have not blinked. The consensus target still sits at $242.05, and the ratings distribution skews decisively bullish: 8 Strong Buy, 28 Buy, 7 Hold, 1 Sell, 0 Strong Sell.

The bull case rests on the $638 billion RPO backlog. Management expects 12% of RPO to be recognized in the next 12 months and another 34% between 13 and 36 months. Fiscal 2027 revenue is guided to $90 billion with non-GAAP EPS of $8.05. Long-term targets call for a 31% revenue CAGR and 28% EPS CAGR through fiscal 2030. Multicloud AI Database revenue grew 404% in Q4 alone, and global GPU utilization sat at 97.5%.

Estimate revisions have leaned upward. Over the trailing 30 days, fiscal 2027 EPS estimates saw 21 upward revisions versus 12 downward, and fiscal 2028 saw 20 upward against 6 downward. That is a sell side digging in.

Oracle Fell Harder Than the Hyperscaler Group

The natural comparison set is Microsoft, Amazon, Alphabet, IBM, and Salesforce, all of which carry exposure to the same AI capex debate. None has derated to the extent Oracle has over the past year. Snowflake, the closer pure-play cloud data peer, has traded on its own growth-rate concerns rather than mirroring Oracle’s move. Oracle is the name the market has punished hardest for the funding math, even though its RPO growth rate is the fastest in the peer group.

Backlog Is Massive, Cash Burn Is Massive Too

Oracle currently trades at $158.78 as of the most recent Friday close, with the sell side setting an average target of $242.05. The ratings tally comes from 44 covering analysts. Shares are down 27.98% over the past year and 17.74% year to date, leaving Oracle a meaningful laggard against an S&P 500 that has posted modest gains over the same stretch. Precise index performance aside, the underperformance is not close.

Oracle reports fiscal Q1 2027 results on September 10 after the close. Guidance calls for revenue growth of 27% to 29% and non-GAAP EPS between $1.72 and $1.76. Analyst targets are one data point rather than gospel, and a soft report could pull them lower in a hurry.

Buy the Backlog, but Only if Cash Flow Confirms

The bull-case checkpoints for this week’s report are RPO converting on schedule, GPU utilization holding near 97.5%, and gross margin compression contained to what management already flagged. The path back to $242 runs through cash flow visibility and backlog conversion.

The bear case builds if the quarter reveals slippage in datacenter delivery, or if the $40 billion financing plan comes in more dilutive than expected. A negative $23.69 billion free cash flow number is a lot to underwrite on faith.

On balance, I lean constructive. The backlog is real, the demand is real, and the sell side has had months to cut targets and has chosen to raise numbers instead. Into Thursday’s report, the setup favors the patient buyer more than the seller chasing a broken chart.

The post Oracle Stock Keeps Falling While Wall Street Holds Firm—Who’s Right? appeared first on 24/7 Wall St..

$25 Million Per Megawatt Changes the IREN Math

The consequential number in IREN (NASDAQ:IREN)’s Q4 FY26 report sits outside the income statement. It is approximately $25 million per megawatt of IT load, the price CEO Daniel Roberts said is showing up “consistently across live conversations with customers at the moment.” That is the run rate for three- to five-year AI cloud contracts IREN is negotiating right now, and it is the figure that reprices everything the company has already built.

Why This Pricing Level Reveals a Repriced Business

Track the trajectory. IREN’s earlier five year contracts with Microsoft (NASDAQ:MSFT) and NVIDIA (NASDAQ:NVDA) landed at $9.70 million per MW (November 2025) and $11.33 million per MW (May 2026). Recent three-year deals signed in August 2026 priced in excess of $20 million per megawatt of IT load, with active discussions now around $25 million. Management said three year contract pricing is up about 125% since November and five year pricing is up about 70%.

Shorter duration is producing higher pricing, driven by scarce compute capacity. Customers are also underwriting the buildout: recent prepayments are funding 45% to 55% of GPU CapEx, and IREN said the recent economics translate to a payback on compute investment of around two years. On top of that, IREN reported $1 billion of operating ARR as of August 26, 2026 and $4 billion of contracted ARR targeted operational by December 31, 2026. The Q4 AI Cloud Services segment more than doubled sequentially to $70.5 million, and full year AI Cloud revenue grew roughly 8x to $128.8 million.

Stock Reaction Since the Q4 Report

The market noticed. Shares closed at $40.9469 at the time of the 8-K filing on August 27, 2026. Over the following week, IREN moved from $35.45 on August 28 to $44.68 on September 4, a 26.04% gain. The one-month return sits at 14.89%, year-to-date at 18.29%, and one year at 70.99%. Market cap now sits near $17.6 billion.

Bull Case: Pricing Power Meets a Small Contract Book

IREN’s combined Microsoft and NVIDIA annualized contract value totals roughly $2.62 billion, one of the smaller contracted portfolios among named AI infrastructure peers (we profiled seven of the picks-and-shovels names powering this same buildout, from power to cooling to networking, in a free report you can grab here). That is the setup. The company is already commanding the top tier of per-megawatt pricing while working with a book that has room to grow by orders of magnitude, and the physical assets to grow into it are already secured.

IREN said the $4 billion contracted ARR comes from less than 10% of its five gigawatt-plus portfolio of secured grid connections. Delivery targets call for roughly 0.3 GW (IT) in 2026 and 0.8 GW (IT) in 2027, taking the platform toward 1.2 gigawatts of gross capacity in 2027. Funding is largely in hand: $14 billion of committed GPU financing and prepayments, $6.5 billion of GPU financing raised in the three months preceding the call, and $5.8956 billion of cash on the balance sheet. The NVIDIA relationship runs deeper than chip supply: IREN achieved NVIDIA Exemplar Cloud status on the GB300 NVL72 deployed for Microsoft, and its $3.4 billion five year NVIDIA AI Cloud contract is paired with up to $2.1 billion of NVIDIA equity investment vesting as IREN scales toward 600,000 GPUs.

Customers keep landing. The Q4 slate added Cohere, Prometheus, Perplexity, Figure AI, Fal AI, Higgsfield AI, plus a new multi-year contract with a leading frontier AI lab. Existing accounts Together AI and Fireworks AI both renewed and expanded. Roberts summarized the setup: “As our platform has scaled and our market position has strengthened, we have attracted leading customers and secured stronger pricing, more attractive contract terms and improved paybacks.”

Bottom Line: Scale Is the Next Catalyst for Long-Term Holders

For retirement-focused holders, the question is whether IREN can convert secured power into contracted revenue at the current pricing tier. The near-term catalyst is the $4 billion contracted ARR target operational by December 31, 2026, tied to delivery of Horizons 2 through 4, with management flagging that reported revenue from that capacity will come through predominantly in the March quarter. Governance is the real caveat: restricted stock unit awards granted mid-2026 to co-CEOs Dan and Will Roberts, valued in the $800 million to $1.1 billion range with limited performance hurdles, drew shareholder criticism. Investors get premium pricing per megawatt and a runway measured in gigawatts. They also get a founder-friendly board. Both belong in the same story.

The post IREN’s AI Pricing Is Exploding — Why the Neocloud’s $2.6 Billion Contract Base Could Scale Dramatically appeared first on 24/7 Wall St..

At $499.70, Microsoft (NASDAQ:MSFT) is a Hold, with free cash flow the single number that will decide whether the stock breaks out to a fresh record or stalls out below it. Shares sit within striking distance of the $549.20 52-week high, yet the setup underneath the price is more complicated than the headline suggests.

Microsoft is the world’s largest software company by market value at roughly $3.71 trillion, and its Azure cloud, Microsoft 365 franchise, and OpenAI partnership have made it the default operating layer for enterprise AI. Fiscal 2026 closed with $331.839 billion in revenue, up 17.79% year over year, and Azure crossed $100 billion in annual revenue for the first time.

What has kept the stock rangebound is the other side of that growth story: capital spending is exploding faster than cash generation, and investors are trying to price how long that gap lasts.

Bull Case: A Contracted AI Backlog Growth Cannot Ignore

Bulls point to a demand book that keeps outrunning the model. Commercial remaining performance obligations grew 84% to $678 billion, and Azure and other cloud services expanded 43% in the fiscal fourth quarter. Management guided to roughly 45% constant-currency Azure growth for the next quarter with first-half growth expected to accelerate.

Monetization at the application layer is compounding too. Microsoft 365 Copilot passed 30 million paid seats, GitHub Copilot revenue accelerated over 60% quarter over quarter, and the AI business hit a $37 billion annual run rate. Margins remain elite at a 46.78% operating margin and 34.04% return on equity, and EPS has beaten estimates for five straight quarters.

Bear Case: Capex Is Eating the Cash Flow

The bear thesis lives inside the cash flow statement. Full-year capital expenditures hit $115.948 billion, up 79.62% year over year, and Q4 capex alone jumped 109.63%. Free cash flow fell to $66.987 billion, down 6.46%, even as operating cash flow grew 34.35%.

Following an accounting change extending data-center useful life to 25 years, the calendar 2026 capex expectation was adjusted to roughly $175 billion, with FY27 capex expected to grow again. That buildout has to be powered, cooled, and networked by somebody, and we mapped seven of the suppliers riding that spend in a free AI infrastructure report. Gross margin already slipped to 67%, and Microsoft Cloud gross margin fell to 65%. On top of that, CEO Satya Nadella sold $43 million of stock in early September, a headline that will not help sentiment near the highs.

Hold Case: Waiting for the FCF Inflection

The middle path is the most defensible one right now. Microsoft is executing, but at 27x trailing earnings, 26x forward earnings, and a price-to-free-cash-flow multiple of 55, the stock is already priced for AI to convert into cash. Sentiment reads neutral at 53.8, with a 7-day change of -9.54.

The story reverses only when FCF re-accelerates. That requires Azure revenue to outrun capex growth, Copilot per-seat and consumption billing to scale, and the Maya 200 custom silicon (with 30% better performance per dollar) to lower unit economics. Until one or two of those show up in the earnings report, patience is defensible.

Data Check: Target Above Price, Performance Below Market

Microsoft trades at $499.70 against an analyst consensus target of $572.92, implying roughly 14.7% of upside. The rating skew is decisively constructive: 14 Strong Buy, 38 Buy, 3 Hold, and no Sell ratings across 55 analysts. Targets are one input among many.

Performance tells the other half of the story. MSFT is up 3.98% year to date and down 0.81% over one year, while the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 12.94% YTD and 18.65% over one year. Microsoft has trailed the index badly even as fundamentals compounded.

Verdict: Free Cash Flow Is the Tiebreaker

At $499.70, Microsoft is a Hold. Here is why.

The bull case and bear case are both intact, and they resolve at the same line item. If FY27 free cash flow re-accelerates as Azure revenue growth (guided near 45%) outpaces the step-up in operating leases and capex, the multiple compresses on its own and the stock breaks through $549. If FCF stays flat or declines a second consecutive year while capex climbs toward $175 billion, the market will re-rate a stock trading at 55x FCF regardless of how large the RPO backlog gets.

Keep an eye on three data points across the next two quarters: Azure constant-currency growth versus the 45% guide, quarterly free cash flow versus the prior-year comparable, and Copilot seat additions with consumption revenue disclosed alongside them. A beat on all three flips this to a Buy setup. A miss on FCF with capex still climbing tips it toward Sell.

The cost of waiting is modest given MSFT’s 12-month underperformance versus the S&P 500. The cost of buying at the highs before the FCF inflection arrives is meaningfully higher.

Microsoft is a Hold because the next earnings report is what decides whether this stock earns a new all-time high.

The post Microsoft Is Close to a New All-Time High. This Number Will Determine If It Keeps Climbing appeared first on 24/7 Wall St..

Shares of Microsoft (NASDAQ:MSFT) have quietly rebuilt their AI narrative over the summer, climbing back toward the $500 handle as Azure crossed $100 billion in annual revenue and Microsoft 365 Copilot passed 30 million paid seats. With the stock at $496.68 and a $600 print firmly in the conversation, the question is whether our proprietary model agrees. It does.

Our 24/7 Wall St. price target for Microsoft is $604.89 over the next 12 months, implying 22.08% upside from current levels. The recommendation is buy, and confidence is high at 90%.

That reflects a rare combination: accelerating cloud growth, expanding AI monetization, and an analyst community that is nearly unanimous in its bullish stance.

24/7 Wall St. Price Target Summary

How Microsoft Got Back to $500

MSFT is up 8.02% over the past month and 4.26% year to date, recovering from a summer dip that saw shares touch $393.83 in mid-June. The catalyst was fiscal Q4 2026, filed July 29.

Microsoft reported revenue of $90.01 billion, up 17.75%, with non-GAAP EPS of $4.74 comfortably beating expectations. Azure grew 43%, and commercial remaining performance obligations surged to $678 billion, up 84%, a backlog that dwarfs the trailing revenue base.

Guidance was the real fuel. Management projected fiscal Q1 Intelligent Cloud revenue of $40.95 to $41.25 billion, with Azure growth of roughly 45% in constant currency. CFO Amy Hood was blunt: “Demand continues to exceed available supply.”

Why Bulls See a Breakout Above $700

The bull scenario points to $701.38, a 41.55% return. That path requires Azure to sustain 40%+ growth as capacity comes online. Microsoft added 88 data centers this year and expects to roughly double overall capacity in just two years (all of that buildout has to be powered, cooled, and networked by someone, and we profiled seven of those suppliers in a free AI infrastructure report).

Copilot economics also matter: EY deployed to 400,000 employees, HSBC committed to 200,000 seats, and Microsoft is shifting to per-seat plus consumption pricing. Analyst estimates support the case, with FY2028 EPS consensus at $23.57 and a high estimate of $26.

What Could Send Shares Back to $517

The bear case lands at $517.53, a modest 4.44% return. The core risk is capex discipline. Full-year capex hit $115.95 billion, up 79.62%, and management guided FY27 capex to approximately $175 billion. Free cash flow already fell 6.46% for the year.

Bulls counter that this reflects heavy investment in a supply-constrained market, and Hood emphasized that short-lived assets like CPUs and GPUs give Microsoft flexibility if demand cools. Polymarket contracts assign only a 4.9% probability to MSFT hitting $600 in September 2026, a reminder that the $600 print is a 12-month story.

How Microsoft Compares to Alphabet and Amazon

Two hyperscaler peers frame the valuation debate. Alphabet (NASDAQ:GOOGL) trades at a P/E of 15, sharply below MSFT’s 28, despite Google Cloud growing 82% in Q2 2026 to $24.77 billion. Alphabet’s cheaper multiple makes MSFT look pricey on trailing earnings, but Microsoft’s 34.04% ROE and Copilot monetization runway justify the premium.

Amazon (NASDAQ:AMZN) is the closer valuation comparison. AMZN trades at 35 times earnings with AWS growing 37% to $42.23 billion in Q2. Against that field, our 24/7 Wall St. price target of $604.89 looks reasonable: MSFT’s implied forward multiple sits between the two peers while operating margins of 46.78% exceed both.

Microsoft Price Prediction 2026 to 2030

Our model output: Buy, target $604.89, confidence 90%. The factor that tips the scale is the $678 billion RPO, which converts contracted demand into forward revenue visibility no other hyperscaler can match at this scale.

The thesis strengthens if Azure delivers on the 45% Q1 growth guide, and weakens if capex balloons past $200 billion without corresponding revenue acceleration.

These projections assume Microsoft continues executing on Azure capacity buildout and Copilot monetization. Meaningful upside or downside could come from AI infrastructure demand shifts or a re-rating of hyperscaler multiples.

The post Microsoft Stock Is Building a Trillion-Dollar AI Opportunity. Is $600 Next? appeared first on 24/7 Wall St..

The iShares S&P 100 ETF (NYSEARCA:OEF) is marketed as a clean way to own America’s largest blue chips, but the index it tracks has quietly been rebuilding around one theme. The coming S&P 100 reshuffle drops Nike (NYSE:NKE), Colgate-Palmolive (NYSE:CL), Simon Property Group (NYSE:SPG) and Honeywell (NASDAQ:HON) and adds four technology names tied to AI capital spending: Dell Technologies (NYSE:DELL), Palo Alto Networks (NASDAQ:PANW), Arista Networks (NYSE:ANET) and SanDisk (NASDAQ:SNDK).

A mall REIT, a toothpaste maker, a sneaker brand, and an aerospace industrial are swapped for AI servers, AI security, AI networking, and AI memory. The index committee is following market capitalization, ratifying a shift the market already made. The question OEF investors should ask is whether a fund sold as diversified mega-cap exposure still does that job, or whether it has become a slightly cheaper, slightly diluted cousin of Invesco QQQ Trust (NASDAQ:QQQ) at a 0.20% expense ratio.

What the Reshuffle Actually Signals

S&P Global weights S&P 100 constituents by float-adjusted market capitalization, so additions enter near the bottom of the ladder rather than as equal slugs, according to S&P Global. Dell, Palo Alto, Arista and SanDisk will not remake OEF overnight.

They arrive because their market values demanded it. SanDisk trades near $1,740 after a 633% year-to-date run, Dell is up 320.24% year-to-date, and Palo Alto and Arista have gained 80.92% and 47.89%. The committee is ratifying a move that already happened in prices.

The removals tell the same story from the other side. Nike sat at just 0.11% of OEF at the June snapshot, and Colgate-Palmolive at 0.16%. They were already rounding errors.

OEF Was Already a Tech Fund

The AI tilt did not start with this reshuffle. As of June 30, NVIDIA (NASDAQ:NVDA) was 10.47% of OEF, Apple (NASDAQ:AAPL) 9.18%, Microsoft (NASDAQ:MSFT) 5.99%, Amazon (NASDAQ:AMZN) 5.04%, and Broadcom (NASDAQ:AVGO) 3.86%.

Micron’s weight jumped from 0.94% in March to 2.81% by June, while AMD’s weight rose from 0.82% to 2.05%. The AI capital-spending trade was reshaping OEF’s top holdings quarter by quarter before any committee vote.

Total fund assets grew to $20.04 billion at the end of June from $17.84 billion in March, and most of that gain came from technology weight expansion rather than from new consumer or industrial constituents.

OEF vs. QQQ vs. VOO

Performance shows what the AI tilt has and has not delivered. OEF returned 11.97% year-to-date and 19.56% over one year through September 4, 2026.

QQQ returned 17.04% year to date and 24.99% over one year. Vanguard S&P 500 ETF (NYSEARCA:VOO) returned 13.59% and 20.08% over the same windows at a lower expense ratio.

OEF sits between the two and beats neither. You get more concentration than VOO without the full tech exposure of QQQ, at four times VOO’s typical fee. Over five years, OEF’s 94.06% return edges QQQ’s 88.42% and VOO’s 82.41%, but the gap is narrower than the marketing implies.

What the AI Additions Actually Own

Dell booked $60.90 billion in AI server orders in a single quarter with a $95 billion backlog, and CEO Jeff Clarke said: “We booked $60.9 billion of AI orders in this quarter, the most in our history.” This is no longer a PC company.

Palo Alto’s Next-Generation Security ARR reached $9.10 billion, growing 63%. Arista posted its first $3 billion quarter with a 49.9% non-GAAP operating margin. SanDisk’s data center revenue grew 437% in the fiscal year, driven by AI memory demand.

Each fits the AI infrastructure thesis beyond the chipmakers everyone already owns (we profiled seven of these picks-and-shovels suppliers in a free report on the AI buildout), but each also carries the cyclicality that comes with it. SanDisk’s business is still NAND pricing, and Dell’s negative shareholders’ equity of -$1.427 billion reflects heavy buybacks funded by leverage.

Is OEF ETF a Buy?

OEF is a concentrated bet that the largest U.S. companies keep winning and that AI capital spending continues to compound through mega-cap balance sheets. If you already own VOO or an S&P 500 fund, OEF is largely redundant and comes with a higher fee. If you want the AI theme cleanly, QQQ does it better with more semiconductor and software depth.

The reshuffle confirms OEF drifted toward tech years ago. For investors who already hold OEF as a core sleeve, the fund still delivers mega-cap exposure; for those building a portfolio today, VOO offers a cheaper broad-market option, and QQQ offers deeper tech conviction. The blue-chip label no longer accurately describes the product.

The post The S&P 100 ETF Just Dumped Nike and Colgate for 4 AI Stocks. Here’s What That Means for Your Portfolio appeared first on 24/7 Wall St..

I keep hitting the buy button on Apple (NASDAQ:AAPL) because the company just quietly rewrote the rules of its own product calendar, and most of my friends did not notice. Apple is officially breaking away from its traditional all-in-one September hardware event model, moving to a split release structure that spreads product catalysts across the year. That sounds like a logistics footnote, but it is material. For a long-term holder like me, it means more upgrade windows, more press cycles, and more moments where a customer walks into a store and hands over a credit card.

Why the Buy Button Keeps Firing

The core of my thesis is boring on purpose. Apple owns the customer. The active installed base surpassed 2.5 billion devices in Q1 FY2026, and paid subscriptions crossed 1.5 billion by the June quarter. That is the flywheel. Every device sold is a future Services customer, and Services is where the margin lives. Services gross margin came in at 75.6% in Q3 FY2026, with Services revenue of $30.7 billion, up 12% year over year. Hardware sells the razor. The blades pay my dividend.

Three Reasons the Thesis Holds

First, the top line is accelerating from a base almost no company on earth can match. Q3 FY2026 revenue reached $109.42B, up 16.36% year over year, with EPS of $2.02 beating the $1.89 consensus, the ninth consecutive EPS beat. iPhone revenue was $54.3 billion, up 22%, and Mac revenue grew 29% to a June quarter record. Tim Cook told the call the iPhone cycle has been running “a 22% increase year to date”. That is a company still compounding at scale.

Second, the capital return program is the quiet compounding engine. Nine-month share repurchases hit $62.094B through June 27, 2026, on top of $90.711B in fiscal 2025, and the board authorized an additional $100B buyback and raised the dividend 4% to $0.27 per share. Apple ended the June quarter with $147 billion in cash and marketable securities against $84 billion in total debt. That balance sheet funds the buyback regardless of what the market thinks this month.

Third, the reinvestment story is real. Apple reiterated a $600 billion U.S. commitment over four years and signed a multi-year Broadcom agreement expected to exceed $30 billion for custom silicon. R&D spend rose to $11.73B in Q3 FY2026 from $8.9B a year earlier. That is the AI bill being paid up front.

Why Apple Over Other Mega-Cap Names

Retirement-focused readers would reach for Microsoft (NASDAQ:MSFT) or Alphabet (NASDAQ:GOOGL) first. I own both in smaller size. What keeps my incremental dollar going to Apple is the combination no peer replicates in the same package: a 2.5 billion device installed base, ROE of 171.4%, ROIC of 53.3%, and a shareholder yield dominated by buybacks rather than a single-digit dividend line. The dividend yield of 0.33% understates the true cash return once repurchases are counted.

Memory Risk I Actually Watch

Memory costs. Tim Cook called it “a 100-year flood on the memory pricing with exponential increases in memory prices” and warned that the primarily three-supplier DRAM market will push costs higher again in the September quarter. Layer on the fact that tariff refunds added roughly two percentage points to gross margin and about $0.11 to EPS as a one-time tailwind, and the margin story looks less pristine. It has not changed my thesis because Apple already “reluctantly raised prices” and still guided September quarter revenue growth of 9% to 11% with gross margin of 47% to 48%. Pricing power is the moat.

What Keeps the Buy Button Active

Ten years of ownership returned 1,199.26%. Five years returned 112.59%. I am buying the next decade of a company that turns 2.5 billion devices into 1.5 billion paid subscriptions and pays me to wait.

The post Apple Just Made a Move Most Investors Overlooked. This Is Why I Keep Buying The Stock appeared first on 24/7 Wall St..

Alphabet (NASDAQ:GOOG) may be the most overlooked story in the Magnificent 7. Google Cloud grew 82% last quarter, Gemini App just hit 950 million monthly active users, and yet GOOG trades at a trailing P/E of just 14x.

Our 24/7 Wall St. price target for Alphabet is $434.01, implying 29.58% upside from today’s $334.86. The 24/7 Wall St. model rates GOOG a buy with 90% confidence.

24/7 Wall St. Price Target Summary

A Rough Month Masking a Blockbuster Year

GOOG is down 3.29% over the past week and 6.9% over the past month as investors digest capex sticker shock. Zoom out and the picture flips: Alphabet is up 55.94% over the past year and 5.95% year to date.

Q2 2026 delivered $119.8 billion in revenue, up 24% year over year, the 12th consecutive quarter of double-digit growth. Google Cloud revenue hit $24.8 billion with cloud backlog swelling to $514 billion.

Adding fuel to the narrative, Barron’s reported this week that Fervo Energy will supply geothermal power to Google, another signal that Alphabet is locking down long-dated AI power infrastructure.

Why Bulls See a Breakout Past $450

The bull thesis writes itself. Google Cloud operating margin expanded to 35.6% from 20.7% a year ago, with operating income more than tripling. Nearly 90% of Fortune 100 companies now use Gemini Enterprise. Alphabet’s model APIs process 22 billion tokens per minute.

AI Mode surpassed 1 billion monthly active users since global expansion. If Cloud sustains anything close to 82% growth into 2027, the bull case scenario of $450.76 looks conservative. Analysts remain overwhelmingly positive with 13 strong buys and 44 buys against zero sells.

What Could Go Wrong

The bear case centers on capital intensity. Q2 free cash flow swung to negative $5.9 billion as capex hit $44.9 billion, up 100% year over year. Long-term debt jumped from roughly $16 billion to $100 billion, buybacks are suspended, and a $3.5 billion EU competition fine adds regulatory pressure.

Bulls counter that this spending funds the TPU and data center capacity underpinning Cloud’s $514 billion backlog, and that management expects to recognize just over 50% of that backlog as revenue over the next 24 months. The bear scenario still lands at $364.42, above today’s price.

How Alphabet Compares to Microsoft and Meta

Microsoft (NASDAQ:MSFT) is the natural hyperscaler comp. Microsoft trades at a P/E of 28x and closed FY26 with Azure crossing $100 billion in annual revenue at 43% growth. Alphabet’s Cloud growth rate of 82% is roughly double Azure’s, yet GOOG trades at half the multiple, a striking valuation gap.

Meta Platforms (NASDAQ:META) is the closest ad-driven peer. Meta trades at a P/E of 21x and grew Q2 revenue 28%, but free cash flow collapsed to just $784 million under capex pressure. Alphabet’s search and YouTube ad engine faces similar capex headwinds while trading at a materially lower multiple. The peer group makes our 24/7 Wall St. price target look conservative rather than aggressive.

Alphabet Price Prediction 2026-2030

The 24/7 Wall St. price target of $434.01 reflects a buy rating with 90% confidence. The tipping factor is valuation. You are paying a market multiple for hyperscaler growth.

The setup looks constructive if Cloud growth stays above 40% into 2027 and TPU sales ramp on schedule. The thesis weakens if capex overruns push free cash flow deeply negative for multiple quarters without visible backlog conversion.

These projections assume Alphabet keeps executing on Cloud, Search AI monetization, and Waymo scaling. Significant upside could come from TPU system sales ramping in 2027, while downside risk lives in prolonged negative free cash flow or major regulatory action.

The post Alphabet May Be the Mag 7 Stock Investors Are Underestimating appeared first on 24/7 Wall St..

Investors pulled roughly $700 million from the iShares Expanded Tech-Software Sector ETF (NASDAQ:IGV) in a single session, and within hours, Snowflake (NYSE:SNOW) delivered the kind of quarter software bulls had been waiting for.

Product revenue grew 37% year over year to $1.49 billion, and management raised the FY27 product revenue guide to $6.07 billion. CEO Sridhar Ramaswamy told Reuters that roughly half of the recent acceleration in growth came from AI. Snowflake ripped the next session and pulled IGV higher along the way.

The timing looked disastrous for the sellers on September 3, though the picture shifted a day later. Snowflake gave back 5% on September 4, and IGV fell 2% to about $105, leaving the fund down 1% year-to-date and 2% over one year. The real question is whether IGV belongs in your portfolio while software works through an AI-disruption debate that has kept the fund negative all year.

What the Snowflake Earnings Report Actually Proved

Snowflake’s Q2 FY27 report landed after the close on September 2, 2026. Non-GAAP operating margin came in at 15.3%, versus 11% a year earlier, and remaining performance obligations reached $9.00 billion, up 30%. Net revenue retention held at 126%, and CoCo surpassed 9,100 accounts.

Snowflake’s consumption pricing is the point. More AI workloads translate directly into more revenue, so the AI wave acts as a tailwind. Over the last year, SNOW has gained 52%, and it is up 54% year to date through September 4.

How IGV Makes Money

IGV tracks the S&P North American Expanded Technology Software Index, a market-cap-weighted basket with a 0.38% expense ratio per the July 31, 2026 prospectus. Net assets stood at $13.5 billion on June 30, 2026, spread across 111 positions.

The return engine is top-heavy. On that same date, Palo Alto Networks (NASDAQ:PANW) was the largest holding at 10.37% of net assets, followed by Microsoft (NASDAQ:MSFT) at 8.07%, Palantir (NASDAQ:PLTR) at 7.70%, CrowdStrike (NASDAQ:CRWD) at 7.28%, and Oracle (NYSE:ORCL) at 6.26%. Salesforce (NYSE:CRM) was at 4.81% and Adobe (NASDAQ:ADBE) at 3.13%.

The AI Disruption Argument Weighing on Software

The bear case hanging over software all year is straightforward. If AI coding tools compress the cost of building software, seat-based and license-based vendors face pricing pressure. Adobe is down 24% year to date and 23% over one year, and Microsoft has been roughly flat at 4% year to date.

Salesforce also beat expectations, with Agentforce ARR above $1.5 billion, up 240% year over year, yet the stock is 2% lower year to date. One consumption-priced data platform does not clear an index of seat-based vendors. The read-through from Snowflake to the rest of IGV is real but partial.

For broad tech exposure that includes semiconductors and hardware, XLK or VGT diversifies beyond pure software. For software without the mega-cap concentration, XSW takes an equal-weighted approach. For the return engine itself, Microsoft alone is up 877% over ten years, more than double IGV’s 364%.

IGV’s edge over direct ownership is diversification across 111 names and automatic rebalancing. Its weakness is that when top holdings drag, as Adobe has this year, the whole fund suffers.

Where IGV Fits in a Software Portfolio

IGV works as a 5% to 10% software sleeve if you want passive exposure to the sector and can accept concentration in a handful of platform, security, and data names. It has compounded 364% over ten years but has been negative in 2026, so recent performance has been unkind.

If you already own Microsoft directly, IGV is largely redundant. For an investor who wants software beta without picking winners, it remains a reasonable core holding at 0.38%. My read is cautious. The bifurcation between consumption-priced winners like Snowflake and seat-based laggards remains unresolved, and paying for the whole index while Adobe compresses is not the best use of capital right now.

The post Investors Pulled $700 Million From IGV Hours Before Snowflake Reignited Software appeared first on 24/7 Wall St..

Apple (NASDAQ:AAPL) rarely gets grouped with the pure-play AI names, but I think that is exactly why it is one of the most interesting AI-adjacent setups in mega-cap tech right now. With over 2.5 billion active devices and a newly unveiled Siri AI running on custom silicon, Apple owns the distribution layer everyone else is trying to reach.

Our 24/7 Wall St. price target for Apple is $363.99 over the next 12 months, pointing to an upside of 11.87% from the current price of $325.81. Our model output skews constructive, with a high confidence reading of 90%.

24/7 Wall St. Price Target Summary

A New Era Begins as Cook Hands Over the Reins

Apple shares have run hard into this window. AAPL is up 4.91% on the week, 5.34% on the month, 19.92% year to date, and 40.58% over the trailing year. The stock now sits roughly 6% off its 52-week high of $344.27, well above the low of $225.12. Meanwhile, Bloomberg reports Tim Cook delivered a 2,300% stock gain before handing the CEO seat to John Ternus.

The underlying earnings backdrop supports the move. In fiscal Q3 2026, Apple posted revenue of $109.42 billion, up 16.36% year over year, with EPS of $2.02 topping the $1.891 consensus. That extended the beat streak to nine consecutive quarters, aided by roughly $0.11 of tariff-refund tailwind.

Bull Case: $380 and Beyond

The bull case here is simple: Apple monetizes AI without spending like a hyperscaler. iPhone revenue jumped to $54.25 billion, Services set a June-quarter record at $30.74 billion, and Mac grew 29% year-over-year.

Tim Cook called the June quarter “our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services.” Layer on Siri AI, potential iCloud+ upgrade monetization, and a $30 billion Broadcom silicon deal, and the bull scenario points to $380.26.

What Could Go Wrong

Memory costs are the near-term risk. Cook flagged what he called a “100-year flood on the memory pricing,” and Apple “reluctantly raised prices” heading into the September quarter. Supply constraints on advanced-node chips are expected to widen.

Bulls will counter that Q3 R&D spending of $11.73 billion (up from $8.9 billion) reflects deliberate AI and silicon investment. Still, the bear scenario points to $315.58 if margin pressure and Greater China regulatory friction bite.

How Apple Compares to Microsoft and Alphabet

Microsoft (NASDAQ:MSFT) is the closest AI-platform comparable, trading at a P/E of 28x versus Apple’s 42x. Microsoft’s AI business hit a $37 billion annual run rate, but capex reached $115.95 billion in FY26. Apple’s asset-light AI approach justifies a premium, though the valuation gap is real.

Alphabet (NASDAQ:GOOGL) trades at just 15x earnings with Google Cloud growing 82%. That makes AAPL look expensive on headline multiples, but Apple’s ROE of 171.42% and operating margin of 31.97% are unmatched. Against these peers, our $363.99 target looks reasonable rather than aggressive.

Final Take on Apple’s Setup

My take: constructive at $325.81, with a $363.99 model target and 90% confidence. The tipping factor is Apple’s ability to distribute AI to 2.5 billion active devices without hyperscaler-level capex.

The setup looks more constructive if the iPhone 17 cycle continues delivering upgraders, and more cautious if memory-cost inflation forces further price hikes that soften unit demand.

These projections assume Apple continues executing on Services growth and successful Siri AI rollout. Significant upside or downside could result from AI monetization ramp or sustained memory-pricing pressure.

The post Why Apple May Be the Safest AI Stock Nobody Calls an AI Stock appeared first on 24/7 Wall St..

I keep clicking buy on Apple (NASDAQ:AAPL), and my brokerage statement shows it. The Sept. 9 event is simply the next chapter of a story I already own, and my dollar-cost average is going along for the ride.

Here is what pulls me back to the ticker every month. Apple sits on an install base that surpassed 2.5 billion active devices as of Q1 FY2026. Every one of those users is a live monetization channel, and the Services segment keeps pulling the lever. Services revenue hit $30.74B in Q3 FY2026 at a 75.6% gross margin. A quarter of the company runs on software economics, and that is the piece the market keeps underrating.

The financials back the conviction. Revenue in Q3 FY2026 rose 16.36% YoY to $109.42B, and iPhone alone grew 22% year over year on the iPhone 17 lineup. EPS came in at $2.02 versus $1.89 estimate, the ninth straight beat. Return on invested capital sits at 53.35%, with an operating margin of 31.97%. Companies that compound at those spreads for years tend to make patient shareholders wealthy.

Capital return is the third leg. Apple ran through $62.09B in buybacks over the nine months through June 27, 2026, raised the dividend 4% in Q2 FY2026, and authorized another $100B in repurchases. The $0.27 quarterly dividend only yields 0.33%, but total shareholder yield tells a different story. My share count shrinks without me lifting a finger.

Passing on the Obvious Alternatives

The default push from every mega-cap tech investor I know is toward Microsoft (NASDAQ:MSFT) or Alphabet (NASDAQ:GOOGL). I own some of both. I still choose Apple for fresh capital because the combination I want lives here: a hardware install base customers replace on a cadence they set themselves, paired with a cash-return machine that moved $62.09B back to shareholders in three quarters against a $4.67 trillion market cap. Nine straight EPS beats and a Q3 net income of $29.79B earn the top of my watchlist.

One Risk I Refuse to Wave Away

Memory pricing is real. CFO Kevan Parekh said that more than 100% of the sequential gross-margin decline into the September quarter, excluding tariff refunds, traces to memory cost, and Tim Cook called it a “100-year flood on the memory pricing”. Layer on Greater China exposure and tariff dependency. What keeps me buying anyway: Apple raised prices on iPad and Mac, guided September-quarter revenue growth of 9% to 11%, and still projects gross margin of 47% to 48%. Pricing power answers input inflation.

What Sept. 9 Actually Signals

The iPhone 18 Pro and Pro Max with 2nm A20 Pro chips, plus the hardware debut of the iPhone Fold, will grab the headlines at Tuesday’s event. Prediction markets currently price a foldable announcement at 0.981 probability. What matters to me is the same thing that mattered before the invitation went out: a company earning $29.79B in quarterly net income, sitting on $147 billion in cash and marketable securities, feeding a Services engine that compounded to a $30.98B all-time record in the prior quarter. Sept. 9 is a receipt on a thesis I already own, and every product cycle since I started buying has widened the moat.

I will keep clicking buy.

The post Apple’s Sept. 9 Event Could Change Everything appeared first on 24/7 Wall St..

If you own a traditional IRA and you’ve reached the age when the government forces withdrawals, here’s a rule almost nobody uses: your required minimum distribution (RMD) doesn’t have to leave as cash. You can order the custodian to move the shares themselves, at fair market value, into a taxable brokerage account. The IRS calls this an in-kind distribution. It satisfies the RMD with the identical tax bill a cash withdrawal would generate, and you never have to sell into a weak market.

How an In-Kind Transfer Satisfies Your RMD

An RMD is the minimum you’re forced to pull from a pretax retirement account each year once you hit the trigger age. The dollar amount is set by dividing your account balance on the last business day of the prior year by an IRS life-expectancy factor. If stocks have dropped since then, a cash RMD forces you to sell into the decline and permanently exit those shares.

Move the shares in kind and your investment position is unchanged. Your custodian transfers a specified number of shares of, say, Apple (NASDAQ:AAPL) or Microsoft (NASDAQ:MSFT) from the IRA to your taxable account. The value on the transfer date counts as the distribution. Dividends keep flowing, and any recovery accrues to you.

Rule Chapter and Verse

RMDs are governed by Internal Revenue Code §401(a)(9) and §408(a)(6), with mechanics detailed in IRS Publication 590-B. The SECURE 2.0 Act of 2022 raised the starting age to 73, rising to 75 in 2033. Distributions must be taken by December 31 each year, with your first RMD allowed as late as April 1 of the year after you turn 73. Publication 590-B explicitly permits property distributions valued at fair market value on the date of transfer. A larger pretax balance means a larger forced withdrawal, and the bill lands hardest in year one (we mapped how to shrink that first-year tax bomb years before RMDs begin in a free guide here).

A Down-Market Illustration

Assume your 2026 RMD is $40,000, calculated off your Dec. 31, 2025 IRA balance, and by September the market is well off its highs. You direct your custodian to move Apple shares priced at $319.97 and Microsoft shares priced at $499.70 (both as of Sept. 4, 2026), totaling roughly $40,000 in fair market value, into your brokerage account. You owe ordinary income tax on that $40,000, identical to what a cash RMD would trigger. The shares remain yours, still collecting Apple’s $0.27 quarterly dividend and Microsoft’s $0.91 quarterly dividend.

Basis and Holding Period Reset

When to Skip It

If you need the RMD cash to live on, selling is unavoidable. If you’re charitably inclined, a qualified charitable distribution (QCD) sent straight from the IRA to a qualifying nonprofit is usually better: the income never touches your adjusted gross income and therefore avoids pushing you into a higher Medicare bracket. In 2026, Medicare IRMAA surcharges begin at modified AGI above $109,000 for single filers and $218,000 for joint filers. QCDs are available starting at age 70½.

Traps That Cost People Money

Withholding is the first trap you need to watch for, as the IRS normally takes taxes out of IRA distributions, but when you transfer shares in kind, there is no cash to withhold. You have two choices. Either waive withholding and cover the tax bill yourself through estimated payments, or leave some cash inside the IRA so the custodian can withhold against it.

Valuation is the second issue. The custodian uses the fair market value on the execution date, so you cannot hit your RMD number to the exact dollar in advance. Most people end up transferring a little more than needed, or they add a small cash top-up to cover the difference.

Miss the December 31 deadline entirely, and SECURE 2.0 hits you with a 25% excise tax on the shortfall, though that drops to 10% if you correct it within the statutory correction window. The smart move is to start early in the year, confirm your custodian supports in-kind transfers, decide on your withholding approach, and choose the holding with the strongest recovery potential to move.

The post Your RMD Doesn’t Have to Be Cash: He Moved the Shares Themselves Out of the IRA, Paid the Exact Same Tax and Never Had to Sell at the Bottom appeared first on 24/7 Wall St..

Oracle currently trades at $158.78, while the consensus Wall Street price target sits at $242.05. That leaves the stock trading roughly 52% below where the analyst community, on average, thinks it belongs.

Oracle (NYSE:ORCL) is the enterprise database giant that has spent the last two years reinventing itself as an AI infrastructure builder. Oracle Cloud Infrastructure now sits inside Amazon, Microsoft, and Google data centers, and management has staked the company’s future on the same GPU buildout thesis powering the rest of the megacap tech complex.

The gap matters because the average target is only the floor of the bull case. Guggenheim’s John DiFucci carries a $400 price target and a Buy rating, which is currently the Street high. From here, that would mean the stock more than doubles.

A Cash-Flow Sticker Shock That Erased a Year of Gains

The selloff has been driven by one number: capital spending. Oracle burned through $55.66 billion in capex in fiscal 2026 against $31.98 billion in operating cash flow, producing negative free cash flow of roughly $23.69 billion. Management then guided fiscal 2027 net cash capex to around $70 billion and said it plans to raise about $40 billion in debt and equity, including a $20 billion at-the-market equity issuance.

Investors sent the stock down 17.74% year to date and 27.98% over the past twelve months, even as the S&P 500 climbed 12.94% in 2026. Shares have traveled from a 52-week high of $341.82 to a low of $114.50, a peer-shaming drawdown driven almost entirely by fears that the AI capacity binge will compress margins and dilute shareholders before revenue catches up.

The damage is company-specific. Microsoft, Amazon, and Alphabet all posted double-digit cloud growth in the same window and their shares held up. Oracle stands alone as the hyperscaler-adjacent name Wall Street chose to punish.

Why the Sell-Side Is Doubling Down Instead of Downgrading

Analysts are looking past the cash burn to a $638 billion remaining performance obligation, up 363% year over year. That backlog is the entire bull case in one number. Management reaffirmed a long-term outlook on the June call of a 31% revenue CAGR and 28% EPS CAGR through fiscal 2030, and CFO Hilary Maxson said steady-state return on invested capital for the GPU and CPU infrastructure business runs in the high 20s at the project level.

Coverage is heavily positive. Alpha Vantage’s tally shows 8 Strong Buy, 28 Buy, 7 Hold, and 1 Sell ratings, and the estimate revision trend has skewed upward with 21 upward EPS revisions against 12 downward for fiscal 2027 over the past 30 days. Fiscal 2027 revenue is guided to $90 billion, with non-GAAP EPS raised to $8.05.

Guggenheim’s $400 target is anchored on three pillars: OCI winning share as a lower-cost AI training and inference platform, the RPO backlog compounding through multi-cloud database partnerships with AWS, Azure, and Google Cloud, and a high-margin migration cycle as on-premise databases shift to Autonomous Cloud Database. The next test comes fast. Oracle reports Q1 fiscal 2027 on September 10, with cloud revenue guided to grow 58% to 64%.

Oracle Is the Cheap Name in a Fully Priced Cloud Cohort

The peer group did not sell off with Oracle. Every direct comp is up in 2026, which sharpens the argument that Oracle is a story-specific dislocation.

Microsoft (NASDAQ:MSFT) trades at $499.70, up 3.98% year to date, against an average target of $572.92, implying roughly 15% upside. Coverage is nearly unanimous with 14 Strong Buy, 38 Buy, and 3 Hold calls, but the upside is a fraction of what analysts see in Oracle.

Amazon (NASDAQ:AMZN) sits at $258.51, up 12% YTD, with a consensus target of $328.17 and implied upside of roughly 27%. Analyst posture skews strongly bullish at 15 Strong Buy, 44 Buy, and 2 Hold, and recent commentary has centered on AWS accelerating to 37% growth.

Alphabet (NASDAQ:GOOGL) trades at $338.46, up 8.34% YTD, against an average target of $428.07 for about 26% implied upside. Coverage runs 13 Strong Buy, 45 Buy, and 5 Hold, with Google Cloud’s 82% growth rate anchoring the case.

The largest implied upside in the group sits with Oracle by a wide margin. Even the average target represents a 52% move, and Guggenheim’s $400 print stands at roughly 152% upside. No hyperscaler peer offers a comparable dislocation.

Data Points That Frame the Setup

Oracle trades at $158.78 with a consensus target of $242.05, drawn from 42 analysts covering the name. Implied upside to consensus is roughly 52%. The stock’s 17.74% year-to-date decline compares to a 12.94% gain for the S&P 500 through the same period, a spread of more than 30 percentage points.

Forward multiples reflect the reset. Oracle trades at roughly 19 times forward earnings against fiscal 2027 EPS guidance of $8.05. The 50-day moving average sits at $139.84, meaning the recent bounce has carried shares above short-term trend but well below the 200-day at $168.78. Shares climbed 9.97% over the past month as buyers began stepping back in ahead of the September 10 earnings report.

Where I Actually Come Down on Oracle Here

The constructive case rests on the RPO backlog converting on schedule and the September 10 earnings report validating the 27% to 29% Q1 revenue guide. The path back to $242 is straightforward if cloud growth prints in the guided 58% to 64% band, capex stays disciplined, and the FY27 EPS number of $8.05 holds. Guggenheim’s $400 requires more, specifically OCI taking real share from AWS and Azure while the Autonomous Database migration cycle compounds.

The bear case sharpens if the $40 billion in planned debt and equity raises turns into meaningfully more dilution, if GPU sourcing costs squeeze the 30% to 40% OCI margin profile management has advertised, or if a handful of AI contracts fail to convert into recurring revenue at the pace RPO implies. Free cash flow at negative $23.69 billion leaves no cushion.

My lean is constructive. The consensus 52% upside is too wide to ignore in a cloud cohort that remains fully priced, and the estimate revision trend is quietly moving the right way. Guggenheim’s double is a stretch that requires everything to break correctly, but the base case at $242 does not.

The post Oracle Has Fallen Nearly 20% in 2026: One Wall Street Firm Says It’s Going to Double and Then Some appeared first on 24/7 Wall St..

If you own a stock you bought decades ago and refuse to sell because the capital gains tax would eat you alive, there is a provision buried in the tax code that can erase those gains entirely. It is called the stepped-up basis rule, and it resets an asset to fair market value the day the owner dies. The quirk most families miss: you can hand appreciated shares to an aging parent while they are still living, and if the timing works, the same shares come back to your side of the family with the tax basis rewritten and thirty years of gain wiped off the books.

Picture a position in Microsoft (NASDAQ:MSFT) bought in the mid-1990s and held through two 2-for-1 splits. Shares closed at $499.70 on September 4, 2026, an adjusted 1,678.73% gain since November 1999 alone. The embedded gain on a truly long-held lot is enormous, and selling triggers a bruising tax bill.

How Step-Up in Basis Actually Works

Cost basis is what you paid. Capital gains tax hits the difference between the sale price and the basis. Under 26 U.S. Code §1014, assets in a decedent’s estate generally get revalued to fair market value on the date of death. The heir inherits with that new basis, and every dollar of appreciation the deceased accumulated during their lifetime vanishes from the taxable ledger. Sell the next day, owe nothing on those gains.

Upstream gifting weaponizes this. You transfer highly appreciated stock to an older parent. They hold it in their name. When they die, the shares pass through their estate, and the basis resets. Decades of appreciation, gone.

One-Year Trap Written Into the Statute

Congress saw this coming. 26 U.S. Code §1014(e) denies the step-up if the decedent dies within one year of receiving the gift AND the property passes back to the original donor or the donor’s spouse. When both conditions hit, the heir takes the original carryover basis (your old low basis), and the entire maneuver accomplishes nothing.

That is why the eighteen months in the headline is the mechanism. It clears the one-year window. Sixty days would not. Two workable escapes exist: wait past the anniversary of the gift, or route the inheritance to someone other than the original donor or their spouse (a child of yours, a sibling, an irrevocable trust). It is one of nine IRS rules that quietly drain wealth from families who miss the fine print, all charted in our free tax trap map.

Who Can Actually Use This

This strategy works when the parent’s total taxable estate sits safely below the federal estate tax exemption, which sits at $13.99 million per individual in 2026 under IRC § 2010(c). The math shines on concentrated, low-basis assets. A position of 1,000 Microsoft shares purchased in the mid-1990s for roughly $15,000 carries an embedded gain of over $484,000 at a price near $499.70. Liquidating those shares outright exposes that gain to the top 20% federal capital gains rate and the 3.8% Net Investment Income Tax, handing roughly $115,000 directly to the IRS.

Upstream gifting lets the parent hold that block past the statutory waiting period, passing the entire position back through their estate with a brand-new $499,700 cost basis. That wipes away the entire six-figure tax bill on day one. Loss positions, by contrast, must never be transferred. The step-up rule cuts both ways: depreciated assets step down to date-of-death market value, permanently extinguishing the tax-loss write-off.

Mechanics, Step by Step

1. Confirm the parent’s total estate is well under the federal exemption and check the state estate or inheritance tax rules where they live.
2. Transfer the shares. A gift above the 2026 annual exclusion of $19,000 per recipient requires filing IRS Form 709, a gift tax return that uses the lifetime exemption but usually generates no tax owed.
3. Have the parent update their will. If there is any chance of death within a year, the shares must pass to someone other than you or your spouse.
4. Wait past the one-year §1014(e) window.
5. At death, the executor establishes the date-of-death fair market value per IRS Publication 559. That becomes the new basis. Sell when ready.

Risks Serious Enough to Kill the Plan

Once shares transfer, they are legally the parents’. They can sell them, spend the proceeds, lose them in a lawsuit or divorce, remarry and trigger state spousal-share rules, or rewrite the will and leave the stock to someone else. There is no enforceable promise to give it back.

Medicaid is a bigger threat than most families realize. If the parent later needs long-term care, the transfer sits inside the federal five-year lookback period, and shares in the parent’s name count toward the asset limit for eligibility. This is the single most common way the strategy backfires.

State estate tax is the second landmine. Massachusetts, Oregon, Washington, and several other states impose estate or inheritance taxes at thresholds far below $15 million. A gift that erases federal capital gains tax can create a state estate tax bill.

Also, if the parent sells during their lifetime, your original low basis carries over to them, and the full gain is taxed on their return at their rate. Do nothing without an estate attorney and a tax professional licensed in the parent’s state. The paperwork is the easy part. The family conversation is harder.

The post The Inheritance That Went Backward: They Gave Mom the Stock They’d Someday Inherit and Eighteen Months Later It Came Back With Thirty Years of Capital Gains Wiped Off the Books appeared first on 24/7 Wall St..

On September 3, 2026, CNBC’s Jim Cramer told viewers, “we’re witnessing the revenge of the Magnificent Seven, and most people don’t even seem to know it”. His argument, learned at Goldman Sachs, is that everything is a buy at a price, and this group has finally reached it.

The real question is narrower than his framing suggests. These companies are spending fortunes on AI infrastructure, and the market has stopped crediting them for it. Either that capital converts into free cash flow growth, in which case current prices look obvious in hindsight, or the market is correctly pricing capital destruction

Cramer thinks the first. I think he is mostly right about two names, half-right about two, and wrong to lump the last two into the same argument.

Why the Group Fell Out of Favor

Cramer said that outside Apple, “Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla have become forlorn losers… perennially disappointing falling way behind the market”. The mechanism is straightforward. Heavy capex depresses free cash flow now in exchange for profits later, and markets discount distant profits harshly when they doubt them.

The numbers make that concrete. Meta Platforms (NASDAQ:META) guided 2026 capex to $130-145 billion and free cash flow collapsed to $784 million from $8.55 billion a year earlier. Amazon (NASDAQ:AMZN) posted trailing free cash flow of negative $7.6 billion against $53.1 billion in quarterly capex.

The bet is that these dollars come back multiplied. Andy Jassy said data centers can be monetized for 30-plus years once servers go in. That is a long time to wait for a market fixated on the next quarter, and it is also why the power, cooling, and networking suppliers behind these builds keep showing up in our free report on seven AI infrastructure names that aren’t chipmakers.

Amazon and Alphabet Have the Cleanest Cases

Cramer said “Amazon is cheap… Andy Jassy is willing to wreck Amazon’s balance sheet like the old days… because they’re going to make fortunes”. AWS grew 37% year over year to $42.23 billion, its fastest growth in 18 quarters, with backlog at $496 billion. The falsifiable test is whether AWS operating income grows faster than depreciation once these data centers monetize.

Alphabet (NASDAQ:GOOGL) is more interesting. It trades at a trailing P/E of 17x, against Google Cloud’s 82% year-over-year growth. Per the company’s Q2 8-K, revenue rose 24.2%.

Cramer skips the harder question: whether search economics survive AI assistants. My read is that Gemini’s 950 million monthly users and enterprise traction suggest Alphabet is capturing the substitution rather than losing to it. That is worth owning at 16 times earnings.

Meta’s Legal Overhang and the WhatsApp Question

Meta’s Q2 included $2.4 billion in legal charges and $1.2 billion in severance from an 8,000-employee reduction. The stock is down 16.88% over the past year.

The WhatsApp claim needs interrogation. An asset is only undervalued if there is a credible monetization path. Family of Apps Other revenue hit $1 billion for the first time, up 73%, driven by WhatsApp paid messaging. That is a real path, though small against the market cap. At 22 times earnings, Meta is priced for the legal overhang to fade, with WhatsApp treated as optional upside rather than a second engine.

NVIDIA and Tesla Don’t Belong in the Same Argument

NVIDIA (NASDAQ:NVDA) trades at a forward P/E of 24x after Q2 revenue more than doubled to $96.22 billion. Management guided fiscal 2028 growth of roughly 70% as supply-constrained. Cramer noted the Hugging Face acquisition addresses the perception that NVIDIA is a training-only story. The valuation implies growth ends soon, while the order book points the other way.

Tesla (NASDAQ:TSLA) is a different animal. It is down 16.31% year-to-date, with a trailing P/E of 392x and an operating margin of 4.6%. Grouping seven companies together was always a marketing convenience.

Verdict

Cramer said, “the Magnificent Seven finally are cheap compared to the rest of the market, and I think it’s time to buy”. Alphabet and Amazon are the two I would own at these prices. Microsoft (NASDAQ:MSFT) and NVIDIA are fairly valued for what they deliver. Meta requires believing legal costs are one-time. Tesla is a venture bet dressed as a Mag 7 stock.

The falsifiable test is capex converting into free cash flow growth, beyond revenue growth alone, over the next four quarters. If AWS and Google Cloud margins hold while depreciation accelerates, Cramer is right. If they compress, the market was right to look away.

The post Cramer Says the Magnificent Seven Are Finally Cheap and Most Investors Will Miss It appeared first on 24/7 Wall St..

I bought more Alphabet last Friday, and if the stock cooperates I will buy more this Friday. The market keeps telling me the AI capex bill is going to break this company, and every quarter the company keeps handing me a receipt that says otherwise.

Alphabet (NASDAQ:GOOGL) owns the pipes that answer humanity’s questions, hosts the video humanity watches, and rents the compute that trains humanity’s models. Sundar Pichai told investors “nearly 90% of the Fortune 100” uses Gemini Enterprise, and the Gemini App has 950 million monthly active users. Those are the numbers of a company doing the disrupting.

Three Numbers That Keep Me Buying

Start with segment growth. In the June quarter, Google Cloud revenue reached $24.77 billion, up 82% year over year, Search & other grew 17%, and YouTube ads grew 13%. Pichai credits AI-powered features for driving Search query growth. The supposed Achilles heel is accelerating.

Then quality. Return on equity sits at 35.7%, return on invested capital at 29.6%, and operating margin expanded to 34% last quarter. Interest coverage of 175.3x tells me the debt panic is theater.

Then valuation. A P/E of 15 on a business compounding revenue at 24.23% is the kind of mispricing retirement accounts get built on. The 2026 EPS consensus has climbed to $20.6043 across 53 analysts, with 47 upward revisions and zero downward revisions in the trailing 30 days.

Why Not Microsoft, Amazon, or Meta

The obvious alternatives are Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) on cloud, and Meta Platforms (NASDAQ:META) on ads. I own some of those too. My incremental dollar goes to Alphabet because Cloud grew 82% while the stock trades at a P/E of 15, and the Cloud backlog nearly doubled sequentially to over $460 billion. Against Meta, Alphabet runs three growth engines instead of one, and the ad business alone did $81.63 billion in the June quarter.

The self-funding argument gets lost in the capex screaming. Full-year 2025 operating cash flow was $164.71 billion, and the balance sheet carries over $120 billion in liquid assets. Alphabet builds custom silicon (TPUs) and data centers primarily out of internal cash while peers lean harder on the corporate bond market.

One Risk I Actually Take Seriously

Capex is real. 2026 guidance sits at $175 billion to $185 billion. Q2 free cash flow was negative $5.86 billion, long-term debt climbed from $46.5 billion to $98.2 billion, and the buyback was paused. If AI demand softens, I own a company that just doubled its physical footprint into a headwind.

My answer: that same $460 billion Cloud backlog is the customer signing the receipt before the concrete cures. Gemini processes 22 billion API tokens per minute. And after the recent ruling under which Google avoided another business breakup attempt, the antitrust tail risk that hung on the multiple for years is measurably thinner.

I will keep buying Alphabet at a P/E of 15 for as long as Wall Street insists on treating a self-funded AI monopoly like a leveraged science project.

The post Wall Street Is Misreading Alphabet’s Supposed Achilles Heel appeared first on 24/7 Wall St..

The Schwab U.S. Large-Cap Growth ETF (NYSEARCA:SCHG) devotes 9.83% of the fund to Apple (NASDAQ:AAPL), a position larger than its holdings in Tesla (NASDAQ:TSLA) at 3.91%, Meta Platforms (NASDAQ:META) at 3.45%, and Palantir (NASDAQ:PLTR) at 1.25% combined.

SCHG holds nearly two hundred stocks, but that label understates what an investor actually owns.

The Apple weighting is only the start. NVIDIA (NASDAQ:NVDA) sits on top at 11.01%, Apple next at 9.83%, and Microsoft (NASDAQ:MSFT) at 7.17%. Three companies control close to a third of the portfolio. Anyone who bought SCHG for diversified exposure across a large growth basket got something narrower: a three-stock bet wearing broader packaging.

Gap Growth Investors Did Not Sign Up For

Through the September 3 close, SCHG returned 10.12% year-to-date on a price basis. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) returned 13.38%, and the Invesco QQQ Trust (NASDAQ:QQQ) returned 16.83%. A fund built for growth trailed a broad-market benchmark by roughly 3 points and lost to the Nasdaq-100 by nearly 7 points. The concentration numbers only partly explain that gap.

That said, there’s more to the underperformance.

Blaming Apple alone would be lazy analysis. Apple rose 21.06% year to date, aided by a $109.4 billion June quarter that CEO Tim Cook called “our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services”. NVIDIA rose 22.64% after data center revenue grew 117% year over year. Those two positions helped SCHG.

The drag came from what SCHG under-owns and from what its index rules push toward the top. The Dow Jones U.S. Large-Cap Growth index anchors weights to size and pure-growth factor scores, which promotes established mega-caps even when their year is quiet. Microsoft returned only 6.15% year-to-date, with a 7% weight. Tesla is down 16.31%. Palantir, the year’s marquee AI story, is capped at 1.25% despite 92.83% revenue growth last quarter, because Schwab’s methodology throttles the most expensive names.

QQQ pulled ahead because it captures the same semiconductor and hardware complex that SCHG holds, plus non-growth-classified names like Costco and T-Mobile that the Nasdaq-100 already includes. SPY beat SCHG because its benchmark rewards whichever mega-caps are working, growth-tagged or not.

How SCHG Stacks Up Against VUG

The closest peer is the Vanguard Growth ETF (NYSEARCA: VUG), which returned 9.56% year-to-date. VUG holds a heavier NVIDIA position at 13.3% and an Apple position at 12.3%, and it does not hold Palantir in its top ranks. That the two large-cap growth funds finished within roughly half a point of each other suggests SCHG’s design is not broken. The growth category itself sat behind the market, and any factor-scored large-cap growth vehicle landed in the same neighborhood.

SCHG trades near $36, and some buyers treat that low nominal price as an advantage because a $10,000 deposit buys more shares than an equivalent stake in SPY near $773 or QQQ near $718. It is not an advantage. Returns compound on dollars invested, not share counts, and a lower share price is an accident of how many times a fund has split.

What SCHG Actually Delivers

SCHG’s shortfall this year is mostly a timing problem tied to which mega-caps led. If Apple, NVIDIA, and Microsoft continue leading, the same concentration that pinched in early 2026 reasserts itself in the fund’s favor.

The design problem only shows up if leadership rotates durably toward names SCHG cannot weight heavily, whether Palantir-style AI upstarts or non-growth-tagged cash cows in SPY. Investors who want a purer bet on today’s leaders should look at QQQ. Investors comfortable with a factor-scored, mega-cap-tilted growth basket are getting exactly what SCHG’s rules require.

The post SCHG Owns More Apple Than Tesla, Meta and Palantir Combined. Is That Why Growth Investors Are Falling Behind? appeared first on 24/7 Wall St..

A federal judge rejected the Justice Department’s bid to force Google to sell its AdX advertising exchange, even after finding the company illegally monopolized the publisher ad-server and ad-exchange markets.

The liability finding stands, while the structural remedy was denied. Shares of Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) responded in kind, with Barron’s noting that Alphabet rose as Google avoided another attempt at a business breakup. The detailed remedies remain temporarily under seal, and the DOJ is still weighing its next moves, so the shape of what Google will actually live under is not yet public.

What the Ruling Kept and What It Killed

The court declined the divestiture the government sought, but the monopoly finding is intact and behavioral restrictions are coming. An ad exchange is the auction house where publishers sell impressions to advertisers in real time; a publisher ad server decides which ad wins.

Google owned both sides of that transaction, and that was the conduct the court condemned. Reuters reports the case now heads into a compliance regime with an appeal path still open.

Why the Ad-Tech Line Understates the Strategic Stakes

Google Network revenue was $7.303 billion in Q2 2026, a rounding line next to Google Services at $94.54 billion and Cloud at $24.77 billion, up 82%. That is exactly why the divestiture threat was never the real drag on the equity. The ad-tech stack matters because it feeds identity, measurement, and pricing data into the rest of advertising, and behavioral remedies will constrain how those pieces talk to each other.

Behavioral remedies still carry a cost, though.

Living under a court-supervised consent structure means monitors, disclosures, and product decisions that route through lawyers. It slows integration work at a time when Sundar Pichai says, “Gemini models now process 22 billion API tokens per minute and the Gemini App has 950 million monthly active users.”

Compliance friction is a tax on speed, and speed is what the AI cycle rewards, which is also why the power, cooling, and networking suppliers behind the data centers keep showing up in our free report on seven AI infrastructure names that are not chipmakers.

Judge Amit Mehta’s separate finding that Google illegally monopolized search still awaits its own remedy conclusion. Search & other delivered $63.27 billion in Q2 2026. That is the figure most exposed to the ongoing search remedy proceedings. This week’s ruling does not touch it.

Is Alphabet Stock a Buy?

At $337.12 and a P/E of 15x, Alphabet trades below Meta Platforms (NASDAQ:META) at roughly 22x, Microsoft (NASDAQ:MSFT) at 28x, and Amazon (NASDAQ:AMZN) at 35x, while Cloud grew 82% and the one-year return sits at 59.96%.

Analysts have 58 Buy ratings and 5 Hold ratings, with a target price of $428.07. The setup looks constructive on relative valuation. The ad-tech win is genuine; courts have now declined structural relief against Big Tech three times in recent years, and that pattern is worth more over a decade than any single exchange. The search remedy is still the risk to watch.

The post Google Was Found to Hold an Illegal Monopoly and Kept It Anyway. Is the Antitrust Nightmare Finally Over? appeared first on 24/7 Wall St..

I keep hitting the buy button on Amazon (NASDAQ:AMZN), and after the stock added 10.47% year to date to reach $254.98, I am still adding. The reason is simple. AWS is speeding up on a very large base, and every other part of this business is compounding alongside it. When the biggest cloud franchise on earth is accelerating instead of maturing, I want to own more of it, not less.

Why AWS Alone Justifies Every Share I Buy

Andy Jassy said it plainly on the July call: “AWS is booming right now.” AWS grew 37% year over year to $42.232 billion in Q2, its fastest growth in 18 quarters, and it did so at a 39.4% operating margin. That single segment is now running at a $169 billion annualized revenue run rate with a backlog of $496 billion growing triple digits year over year. As a long-term owner, I read that backlog as revenue that is already spoken for.

The AI numbers under the hood are the second reason I keep buying. Amazon’s AI and chips businesses each eclipsed $25 billion in annualized run rates with triple-digit growth. Anthropic committed to up to 5 GW of Trainium capacity, and OpenAI committed roughly 2 GW starting 2027. Graviton is now used by 98% of Amazon’s top 1,000 EC2 customers. This is what pricing power in silicon looks like.

The third pillar is that the rest of the company is compounding too. Advertising delivered $19.809 billion, up 26%. Consolidated revenue reached $200.606 billion, and operating income climbed 43.24% to $27.461 billion. Analysts have taken notice: the fiscal 2026 EPS consensus has moved to $12.49 from $8.72 just 30 days ago, with 45 upward revisions against one downward.

Why I Skip Microsoft, Alphabet, and Walmart Here

The names a reader reaches for first are Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Walmart (NYSE:WMT). I own some of those too, but my incremental dollar goes to Amazon because no one else stacks a $496 billion cloud backlog on top of a $19.8 billion advertising business growing 26% and a retail engine that grew worldwide paid units 17%. Azure is a fine business, and Google Cloud is real, but I can only see one company delivering “about 80% more than our largest increase ever” in a single quarter of cloud revenue adds. Walmart runs a great store, while Amazon runs Bedrock and Trainium.

A Risk I Am Not Waving Away

Free cash flow turned negative at -$7.6 billion TTM. Q2 capital expenditures hit $54.208 billion, and management has guided to roughly $200 billion of capex for 2026. If AI demand cools, that spending will look premature (the power, cooling, and networking suppliers riding the same wave are the subject of our free AI infrastructure report). Here is why I am still buying anyway: Amazon spends data-center capital two years before monetization begins, servers break even in a little less than three years, and useful lives stretch at least five to six years on chips inside buildings that last 30-plus years. Most AI capacity is contracted for at least five-year terms. That is a rented factory with contracted demand.

What Keeps My Buy Button Active

The lion’s share of 2027 capacity is largely reserved, some 2028 capacity is already spoken for, and Amazon is on track to double power capacity by the end of 2027 versus 2025. Jassy told owners he now believes AWS can become “a trillion dollar annual revenue business for us in time.” I plan to own the shares when it gets there.

The post This Is The Biggest Reason I Keep Accumulating Amazon Stock After Jumping 10% This Year appeared first on 24/7 Wall St..

Venezuela reportedly lays claim to over 300 billion barrels of proven oil reserves, and the U.S. has set its sights on more of them.

Bloomberg News correspondent Tyler Kendall reported from Caracas this week that the headline prize of Washington’s Venezuela deal, a 100-year lease on 17 strategic oil fields holding a claimed 65 billion barrels, went to a private, non-supermajor bidder: North American Blue Energy Partners, a private company that cannot develop the fields alone and has yet to sign on producing partners. Meanwhile, Chevron (NYSE:CVX) stock just printed a fresh 52-week high at $212.79 on a separate, parallel Venezuela commitment. The two developments deserve to be evaluated separately.

What Washington Actually Signed

Kendall’s on-the-ground reporting laid out the mechanics. The US government is taking an equity stake in the private joint venture and securing the right to purchase 20% of the offtake at cost, below market, through a swap mechanism designed to help refill the Strategic Petroleum Reserve. US Energy Secretary Chris Wright told Bloomberg that Venezuelan production, already up 25%, with exports up 50%, could double by the end of this decade from the current 1.1 million barrels per day; that output is still far below the 3.5 million peak from nearly three decades ago.

The catch is that North American Blue Energy Partners cannot develop the 17 fields alone. It must bring in other producers, including some fields previously operated by Russian, Chinese, or smaller local companies. Constitutional questions surrounding Venezuela’s competitive-bidding requirements remain unresolved, although the State Department says the deal was fully vetted.

Chevron’s Separate Lane

Chevron is executing a distinct, older track, separate from the 65-billion-barrel lease. On the Q2 2026 call, CEO Mike Wirth described Venezuela as one of Chevron’s “special situations,” revealing, “We’re in negotiations right now to try to improve the fiscal terms and enable more investment in Venezuela.”

Management also said the company operates three Venezuelan joint ventures and has bolstered production from those agreements from 40,000 to 250,000 barrels per day, with full debt recovery expected by early 2027. Chevron’s Q1 2026 growth-initiative slate specifically listed an agreement to expand its heavy oil interest in Petroindependencia and develop the adjacent Ayacucho 8 area, alongside its long-running Petropiar operations with PDVSA.

Wirth’s framing in the Q4 2025 8-K: “We have been a part of Venezuela’s past for more than a century. We remain committed to its present.” That century of ground presence is what separates Chevron’s exposure from the newer, splashier lease.

Economist Parallel Investors Should Weigh

Not everyone is convinced. Bloomberg Economics’ Chris Kennedy compared the deal structure to the 1953 US-backed coup in Iran, warning it could rekindle nationalist and anti-American sentiment and affirming the view that “this was all about oil.” Iran’s oil was nationalized in 1979. Kennedy called a democratic transition in Venezuela “a matter of when, not if,” raising real questions about the durability of a 100-year lease under a future elected government. Wirth has emphasized contractual protections including dispute resolution and tax and royalty regime guarantees, though those provisions face a hostile-precedent problem.

What The Market Is Actually Pricing

CVX is up 39.5% year to date and 35% over one year, backed by tangible Q2 2026 numbers: adjusted EPS of 6.06, revenue of $67.2 billion up 51.43% year over year, and free cash flow of $18.1 billion. The stock trades at a forward P/E of 15 with a 3.4% dividend yield backed by 39 consecutive annual increases.

Hess synergies, Permian scale, Guyana’s Stabroek block, and a 20-year Microsoft (NASDAQ:MSFT) power purchase agreement for 2.67 GW in West Texas are doing the heavy lifting. Venezuela is optionality on top of the core thesis. Investors pricing the 52-week high should separate the 65-billion-barrel headline from what Chevron actually holds itself.

The post Who Really Got Rights to Venezuela’s 65 Billion Barrels Of Oil Prize? appeared first on 24/7 Wall St..

Microsoft (NASDAQ:MSFT) just voluntarily pulled Azure out from behind the curtain. The company said it will begin disclosing standalone Azure quarterly revenue as it consolidates its business units, according to reporting on September 2.

When a company reveals a number it has kept inside a larger bucket for years, that itself is information. The newly framed disclosure shows Azure sitting much closer to Google Cloud than to Amazon Web Services, and the gap to AWS is nearly three times the size of Azure’s lead over Google. For Microsoft (NASDAQ:MSFT) investors, that reframes which competitor actually matters.

What Microsoft Chose to Show, and Why Now

Microsoft reorganized reporting into two segments and moved some GitHub sales from Azure into the Microsoft 365 Cloud line. That makes any growth rate straddling the change harder to trust, so read the near-term Azure prints with care.

The overall quarterly outlook was left unchanged, which matters, because a reporting reshuffle moves revenue between lines without changing the underlying business. Azure crossed $100 billion in full-year revenue for the first time, with Q4 growth of 43% year-over-year and commercial RPO of $678 billion, up 84%.

Why the Distance to AWS Dwarfs the Lead Over Google

Amazon (NASDAQ:AMZN) reported $42.23 billion in AWS revenue, with 36.7% year-over-year growth, its fastest in 18 quarters. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) posted Google Cloud revenue of $24.77 billion, accelerating to 82%.

Azure sits between them, but Google’s growth rate is the more visible headline, while enterprise workloads land where identity, data, and existing contracts already sit. On that measure, Amazon is both the larger incumbent and, now, the newly available alternative for Microsoft’s most important AI partner. AWS operating margin was 39.4%, and AI and Chips each exceeded $25 billion annualized run rates.

OpenAI’s Optionality Problem

OpenAI is no longer confined to Azure. It committed roughly 2 GW of Trainium capacity through AWS starting in 2027, and Anthropic separately secured up to 5 GW of Trainium chips.

That converts a captive workload into a contested one and removes a structural reason for AI compute to default to Azure. Microsoft’s Q4 EPS beat included a $3.2 billion gain from its Anthropic investment, and Amazon booked a much larger one-time gain tied to the same relationship, a reminder that these AI bets overlap even as compute flows elsewhere.

Where Microsoft’s Real Advantage Sits

Microsoft’s structural edge is enterprise distribution. Microsoft 365 Copilot surpassed 30 million paid seats, and nearly 90% of the Fortune 500 ground agents use Foundry, Fabric, and Work IQ.

The company that already sells the productivity suite, the identity layer, and the developer tools has an easier path to the cloud budget than one that sells infrastructure alone. FY27 capital expenditures are planned at roughly $175 billion, a claim on future free cash flow that only pays off if that distribution converts (we profiled seven companies powering the buildout behind numbers like that, from power to cooling, in a free AI infrastructure report).

Is Microsoft Stock a Buy?

Microsoft trades at a P/E of 28x with shares at $496.82, up 3.38% year-to-date. Amazon sits at a 20x P/E, Alphabet at 17x. Alphabet is the value story, Amazon the scale-plus-growth story, Microsoft the distribution story. The setup favors the distribution thesis. The Azure disclosure clarified where the real fight sits, and Microsoft’s installed base still gives it more paths to monetize AI than a growth-rate comparison to Google Cloud suggests.

The post Why Microsoft Investors Should Fear Amazon More Than Google appeared first on 24/7 Wall St..

The nuclear reactor services and large-scale generation segment is being repriced in real time as hyperscalers compete for firm, carbon-free baseload. Microsoft’s previously disclosed Three Mile Island/Crane restart agreement with Constellation and Meta’s 20-year Clinton nuclear power purchase agreement with Constellation set the template: multi-decade contracts, investment-grade counterparties, and physical delivery from existing U.S. reactors.

Constellation itself just quantified the momentum, signing approximately 920 megawatts of long-term nuclear contracts with an average duration of 18 and a half years during the second quarter alone, though management declined to identify the customers.

Three U.S.-listed names sit at very different points of this supply chain, and they should not be traded as one basket.

Constellation Energy: The Fleet Signing the Contracts

Constellation Energy (NASDAQ:CEG) is the largest US nuclear operator and the direct counterparty on the disclosed Microsoft Crane restart and Meta Clinton PPA. This is a merchant IPP with real, PPA-backed cash flows. The company carries a market cap of roughly $99 billion and trades at a forward P/E of 23, with shares around $290.04 after a 20.81% year-to-date (YTD) decline.

The second-quarter data point that matters: The fleet produced 40 terawatt hours at a 93% capacity factor, and during the mid-Atlantic heat wave management hit a nuclear capacity factor above 99%. Adjusted operating EPS was $2.55, and full-year guidance was raised to $11.50 to $12.50 per share. The Crane Clean Energy Center restart cleared another gate when the NRC approved the Crane New Fuel Licensing Amendment request.

Bull case: CEG is the only US operator with a fleet of scale to sign multi-decade hyperscaler PPAs, roughly 30% of clean base load output is now under long-term contract, and PJM capacity pricing is tightening. CEO Joe Dominguez framed the market bluntly: “We have a peak capacity concern, not an energy concern.”

Risk: The Illinois ZEC program ends in May 2027, PJM and FERC rules for co-located large loads remain unsettled, and commodity hedges create earnings volatility. Management expects further PJM clarity around the November timeframe and a FERC order in the first to second quarter of next year.

BWX Technologies: The Sole-Source Reactor Component Play

BWX Technologies (NYSE:BWXT) is the sole US supplier of naval nuclear reactors and is aggressively building out domestic commercial nuclear component manufacturing. It is an established defense contractor with real earnings. Shares closed at $155.67, and the stock is down 14.40% YTD.

Q2 2026 revenue reached $902 million, up 18% year over year, with adjusted EPS of $1.07. Backlog ended the quarter at $8.4 billion, up 40% year over year, on a trailing 12-month book-to-bill of 1.7 times. Commercial operations organic revenue grew 33%. The July 1 close of Precision Components Group establishes BWXT as a US commercial nuclear component manufacturer, and the company received a $21 million DOE award to support domestic capacity expansion.

Bull case: CEO Rex Geveden said the industry is in “the early stages of a multi-decade super cycle of growth” and that there is “a credible opportunity to secure at least one new build nuclear equipment order before the year end.” The pipeline includes AP1000s, BWRX-300 reactors, TerraPower, and Rolls-Royce, plus government-backed programs tied to a $17.5 billion DOE Energy Dominance Financing Office loan commitment.

Risk: Federal budget uncertainty, qualified-tradesperson shortages, and heavy near-term capex, with capital expenditures potentially approaching 7% of sales in future years.

GE Vernova: The Turbine and Grid OEM With Optional SMR Exposure

GE Vernova (NYSE:GEV) is the equipment supplier arming the buildout: gas turbines, transformers, switchgear, and the Hitachi BWRX-300 SMR. This is an established industrial with real earnings, but a very different cash flow profile than a regulated utility. Shares are at $921.94, up nearly 36% YTD, though the stock has cooled 8.43% over the past month amid headlines around competitive threats, including a Barron’s piece asking whether SpaceX is coming for GE Vernova.

The quarter that matters: total backlog reached $176 billion, up $13 billion from last quarter, and management said it is “on track to reach $200 billion in 2027.” Q2 bookings hit $24.2 billion, an 88% increase year-over-year. Gas power gigawatts under contract rose from 100 to 116 gigawatts sequentially, with a target of at least 125 gigawatts under contract by the end of the year. Electrification equipment backlog is $41 billion, up 69%, and data-center electrification orders exceeded $5 billion in the first half of 2026. On the nuclear side, GEV secured two more tech selects and early work agreements for SMR in the US during the quarter.

Bull case: Backlog visibility through the end of the decade, gas turbine output scaling to 20 gigawatts annualized beginning in the third quarter and a path to 30 gigawatts of annual output in 30, and Q2 free cash flow of $5.1 billion. Full-year 2026 free-cash-flow guidance was raised to $11.5 to $12.5 billion.

Risk: The Wind segment is guided to roughly $400 million of EBITDA losses in 2026, and tariff and supply chain risk remain.

Bottom Line for Investors

These three names sit at different rungs of the nuclear power ladder. Constellation owns the reactors and signs the PPAs, BWXT builds the components and dominates naval nuclear, and GE Vernova sells the turbines and grid gear that make the rest of the buildout physically possible. Cash flow profiles differ: PPA-backed generation, government-anchored manufacturing, and backlog-driven equipment. Investors comparing them as a single trade will misprice all three. For readers looking further down the supply chain, from utilities to fuel, we mapped five more ways to play the restart in a free nuclear renaissance report.

The post Microsoft and Meta Signed Multi-Decade Nuclear Power Deals. These 3 Stocks Supply That Power appeared first on 24/7 Wall St..

I keep hitting the buy button on Alphabet (NASDAQ:GOOGL) and I have no intention of stopping. Every payday, every dip, every quarter that closes with the machine humming louder than the one before. What pulls me back is a business that already prints cash at a scale most companies only fantasize about, trading at a multiple that feels borrowed from a different decade.

My Buy Button Keeps Firing for a Reason

Alphabet is compounding across four monetization engines at once: Search, YouTube, Cloud, and an autonomous driving unit crossing 500,000 fully autonomous rides per week. Q2 revenue landed at $119.8 billion, up 24.23% year over year, the 12th straight quarter of double-digit revenue growth. That is a compounding machine.

Three Reasons the Conviction Holds

First, Google Cloud is no longer a side story. Segment revenue accelerated to $24.77 billion, up 82%, with nearly 90% of the Fortune 100 now on Gemini Enterprise. Cloud backlog cleared $460 billion in Q1. That is contracted future revenue larger than the market cap of most companies I own.

Second, the ad flywheel is accelerating, not fading. AI Mode is driving higher overall query volume rather than cannibalizing ad inventory, and Search revenue climbed 17% while YouTube ads grew 13%. The Gemini App reached 950 million monthly active users, and Gemini models process 22 billion API tokens per minute.

Third, valuation. A P/E of 15 on a business with a 35.70% return on equity, a 32.03% operating margin, and interest coverage of 175x is the kind of setup I rarely find in mega cap tech.

Why Not Microsoft or Meta

People ask why I do not chase Microsoft (NASDAQ:MSFT) or Meta Platforms (NASDAQ:META) instead. Both are excellent businesses. Neither hands me Alphabet’s combination at Alphabet’s price. GOOGL still trades at a 15 P/E, well below where mega cap tech peers typically clear. And I get the growth alongside it: Cloud growing 82% and a debt-to-equity of 0.143 that keeps the balance sheet fortress-like even during the biggest CapEx cycle in the company’s history.

Risk I Own With Eyes Open

The real concern is capital intensity. Alphabet guided 2026 CapEx to $175 to $185 billion. Long-term debt climbed from $46.5 billion to $98.2 billion. Q2 free cash flow came in at negative $5.86 billion, and the buyback was suspended in Q2 2026. That would rattle me if I were watching a stretched balance sheet. I am not. Interest coverage remains 175x, and management just raised the dividend 5% to $0.22. Alphabet is funding the AI buildout from a position of strength, and the $49.6 billion equity raise plus $20.3 billion in senior notes gets deployed into infrastructure that already has Fortune 100 demand behind it.

What Keeps Me Buying

The stock is up 59.96% over the past year yet down 9.74% over the past month to $337.12. Even Warren Buffett’s Berkshire has taken notice, with CEO Greg Abel calling Alphabet a “significant player” in AI after growing the stake. I am not waiting for Wall Street to notice what I already see. The AI investment cycle is the reason my thesis exists (and the power, cooling, and networking suppliers riding the same buildout are the subject of a free report we put together here), and I plan to keep buying until the numbers stop telling me to.

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Jim Cramer opened Squawk on the Street on the first trading day of September with a market backdrop he described in blunt terms. Two ships had been fired on in the Strait of Hormuz, Treasury yields were pushing higher across the curve, and diesel prices were climbing amid a supply picture already strained by Ukrainian strikes on Russian refining capacity and U.S. refiners operating near full utilization. Cramer called the combination “unholy” and said the AI trade had gone nowhere for about a year. Then he offered a single actionable idea.

“Chevron over 200 is just it’s a steal here david,” he told David Faber, framing it around a distinction worth holding onto: “We are in a situation where the prism is negative, the noise is negative, the signal is positive.” That is the analytical spine of this piece. The question for an investor is whether Chevron (NYSE:CVX) deserves a bid because refining margins are widening on a disruption, or because the underlying business generates cash regardless of where crude settles next week.

What Actually Happened at Chevron Last Quarter

Chevron’s Q2 earnings report was the strongest the company has delivered in years. Adjusted EPS came in at $6.06 on revenue of $67.20 billion, with net income up 384.82% year over year and free cash flow of $18.095 billion. Worldwide production climbed 20% year over year to 4,070 MBOED.

Downstream is where the disruption thesis intersects the fundamentals. U.S. refinery utilization hit 97%, and downstream earnings jumped to $4.87 billion from $737 million a year earlier. Chevron booked $1.4 billion in favorable timing effects and cut total debt by $8.41 billion in the quarter alone.

The Hess integration is running ahead of plan. Management reached its $3 billion structural cost reduction target six months ahead of schedule and captured $1.5 billion in Hess-related synergies, roughly 50% above the initial target. CFO Eimear Bonner said the savings are durable because they are “built into the business.”

Mike Wirth’s read on refining aligns with what Faber flagged on air. He said “Products are tighter than crude around the world, and that’s why cracks have widened out,” and expected “upward pressure on product pricing here into the third quarter and perhaps beyond that.” Full detail sits in Chevron’s 8-K filing with the SEC.

The 20-year, 2.67-gigawatt power purchase agreement with Microsoft (NASDAQ:MSFT) for a West Texas data center reframes Chevron as more than a pure crude call, because contracted power cash flows are insulated from Brent curve swings.

Where the Disruption Case Gets Uncomfortable

Cramer’s positive signal rests partly on refined-product tightness that could reverse quickly. WTI has been swinging hard: from $114.58 on April 7 to $83.90 on August 25, down 8.5% in a month. Geopolitical crack spreads unwind the moment shipping lanes clear.

September seasonality is real but overrated as a standalone reason to avoid energy. Refinery turnaround season can tighten distillate further, and EIA data show refinery utilization near 0.92-0.95 in recent months, leaving little slack.

The stock has already moved. CVX is up 42.32% year-to-date and 8.15% over the past month, closing at $211.05. Buying above $200 means paying up for a quarter that has already been rewarded.

The dividend is what makes the wait tolerable. The next payment is $1.78 on September 10, with an annualized forward of $7.12. Chevron has raised the quarterly payout every year since 2024.

Cramer’s own hedge, that “the AI trade… has not been a good one for quite some time”, is why an integrated major with a Microsoft power contract is a rotation candidate rather than a defensive parking spot.

Is CVX Stock a Buy?

Chevron trades at a market cap of around $414 billion with a P/E near 34x, richer than Exxon Mobil (NYSE:XOM), which trades at a P/E of roughly 23x and a market cap of $676.62 billion. Exxon’s Guyana ramp and 43 consecutive years of dividend growth arguably make it the cleaner compounder.

ConocoPhillips (NYSE:COP) is the higher-beta upstream play, up 48.63% YTD, targeting a $7 billion free cash flow inflection by 2029. It offers more torque to crude and less downstream ballast.

Shell (NYSE:SHEL) missed Q2 EPS badly at $1.92 due to Qatar disruption, even as refinery utilization ran at 102%. Its LNG optionality is real; its earnings volatility is, too.

Chevron sits in the middle: less commodity-beta than Conoco, richer than Exxon, and more integrated than Shell right now. The Hess synergies, contracted Microsoft cash flows, and cost program give it a signal that outlasts any tanker headline. Cramer’s framing that the noise is negative and the signal positive holds up under scrutiny, but the entry price matters and CVX has already run hard.

The setup looks constructive, with the understanding that the near-term catalyst is disruption-driven and the long-term case rests on Hess, cost discipline, and power. Those seeking pure crude beta may find more torque in Conoco.

The post Cramer Called the September Open Unholy and Then Named the One Stock He Would Still Buy appeared first on 24/7 Wall St..

A CNBC segment on September 1, 2026 flagged something odd in Microsoft (NASDAQ:MSFT) options activity. A single participant unwound two long-dated bullish call spreads for a combined credit of roughly $36 million, and the contracts still had over a year left to run before their December 2027 expiry.

That single trade is probably not a signal on its own. One trader closing one position is one decision by one participant with unknown motives, and the range of plausible reasons runs from a fund rebalancing to a risk manager cutting exposure to a considered call that Microsoft will not clear the higher strikes by then.

What is worth doing is putting the flow next to what Microsoft actually reported in July and asking whether the stock’s flat stretch this year is a pause or a repricing. The shares closed at $501.02 on Tuesday, up 8.02% over the past month but essentially flat over the past year at -0.3%.

What the Options Print Actually Tells You

CNBC’s Oliver Renick described the trade this way: “Someone closed out two bullish call spreads a 595 to 705 spread worth 19 million and a 610 to 725 worth about 17 million. The trades spanned more than 30,000 call contracts, for a total credit of about 36 million.”

A call spread is a bet that a stock climbs above one strike but not much past a higher one, capping both risk and reward. Closing it for a credit means the holder took money off the table rather than waiting to see whether Microsoft clears the upper strike by expiry.

Renick added that “these were still very far out of the money contracts. But they also were for December 2027 expiry. So it’s interesting not just because they were two of the top three biggest trades on the entire tape today, but because they still had plenty of time to work.”

Broader sentiment does not look bearish. The full-chain put/call ratio sits at 0.55, and the December 2027 expiry itself shows a put/call ratio of just 0.02 with call volume of 34,372.

One trader’s exit is a single data point, and the fundamentals are where the actual argument lives.

Azure and Copilot Are Doing the Heavy Lifting

On the same segment, Jason Snipe made the bull case in one sentence: “Azure is now 100 billion business. Azure revenue was up 43% year over year. And copilot adoption is improving 30 million paid seats.”

Those company-reported figures come from Microsoft’s fiscal Q4 2026 report on July 29, 2026, in which revenue of $90.01 billion beat estimates by 2.71%, and non-GAAP EPS of $4.74 was the fifth consecutive beat.

Commercial remaining performance obligations reached $678 billion, up 84%. That backlog is the single most important number in the report because it turns AI enthusiasm into contracted revenue with a weighted-average duration of 2.3 years.

Copilot is the softer piece of the thesis. Thirty million paid seats is a real adoption signal, but the disclosure says nothing about revenue per seat or renewal rates, and the shift to a per-seat-plus-consumption model means the unit economics are still being written.

Satya Nadella framed the quarter around efficiency: “We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results.”

Capex Bill Is the Real Debate

Microsoft spent $115.948 billion on capital expenditures in fiscal 2026, up 79.62%, and management guided FY2027 capex to roughly $175 billion after an accounting shift.

Free cash flow fell 6.46% for the year even as operating cash flow grew 34.35%. That gap is the whole story, and it is why bulls with long-dated spreads might reasonably book profits.

Amy Hood argues the spend is flexible because CPUs and GPUs are short-lived assets, and “if the demand environment changes, you just slow down what is, in fact, the largest component.”

The counter is that Microsoft’s return on equity of 34.04% and operating margin of 46.78% reflect an earlier era when the business was capital-light. Gross margin fell to 67% in Q4 on Azure mix and AI infrastructure investment.

The flat one-year stock price, alongside 17.79% full-year revenue growth, suggests the market is already discounting some margin erosion.

Is MSFT Stock a Buy?

Microsoft trades at a P/E of 28x, cheaper than it was a year ago and supported by a backlog most software companies would envy.

Against Amazon Web Services and Google Cloud, Azure is growing faster off a larger base, and the OpenAI relationship, now a 27% stake valued at approximately $135 billion with a $250 billion incremental Azure commitment, is a competitive moat neither has matched.

Oracle (NYSE:ORCL) has emerged as a real threat in raw AI capacity contracts, but it lacks the enterprise software distribution that lets Microsoft attach Copilot at scale.

The one closed trade on Tuesday does not change the thesis. It reflects one holder’s judgment that the upside case, Microsoft trading between $595 and $725 in late 2027, is worth converting into cash today.

The capex bill is real, and the near-term margin pressure is real, but the backlog, the Azure trajectory, and the pricing power in Copilot upgrades leave room for the stock to move higher over the next eighteen months. A $175 billion capex year also has to be powered and cooled by somebody, which is why we pulled together seven suppliers behind the data-center buildout in a free report on the AI infrastructure trade.

The post A Microsoft Bull Just Closed $36 Million in Call Spreads That Do Not Expire Until 2027 appeared first on 24/7 Wall St..

The trillion-dollar question hanging over Microsoft (NASDAQ:MSFT) is whether its $115.9 billion AI capex bet earns a return worthy of a mega-cap multiple, or ends up as the largest overbuild in tech history. That answer determines where the stock goes over the next twelve months.

Our 24/7 Wall St. price target for Microsoft is $609.58, implying 18.7% upside from the current price of $513.53. We rate the shares a buy with high confidence at 90%.

24/7 Wall St. Price Target Summary

Azure Crossed $100 Billion and the Stock Woke Up

Microsoft has recovered sharply. Shares are up 6.27% in the past week and 31.74% over the past month, though only 1.6% higher year over year after bottoming near $395 in July.

The fiscal Q4 report on July 29, 2026 delivered revenue of $90.01 billion, up 17.75%, non-GAAP EPS of $4.74, and Azure growth of 43%. Azure crossed $100 billion in annual revenue for the first time, and commercial RPO ballooned to $678 billion, up 84%. Q1 FY27 Azure guidance calls for approximately 45% constant-currency growth.

Bull Case: $700 or Higher

The bull case rests on Copilot monetization accelerating alongside Azure supply catching up to demand. Microsoft 365 Copilot has passed 30 million paid seats, seat additions more than doubled quarter over quarter, and usage-based billing gives Satya Nadella a second monetization engine on top of per-seat pricing.

Foundry now has 100,000 customers, revenue has more than doubled year over year, and nearly 90% of the Fortune 500 are grounding agents through the platform.

Our bull-case one-year path lands at $709.58, or 38.18% upside, if Azure sustains 40%-plus growth and Copilot ARPU expands.

What Could Go Wrong

The bear case starts with capex. FY26 capital spending hit $115.9 billion, up 79.62%, and free cash flow fell 6.46% for the year. Q4 EPS also benefited from a $3.2 billion Anthropic mark-up, flattering underlying business growth.

Management extended data-center useful life from 15 to 25 years, supporting FY27 margins and giving flexibility to slow COGS if demand softens. Our bear-case path still lands at $520.81, essentially flat.

How Microsoft Compares to Alphabet and Oracle

Alphabet (NASDAQ:GOOGL) is the sharpest valuation counterpoint. Google Cloud grew 82% in Q2 2026 to $24.77 billion, yet Alphabet trades at a trailing P/E of just 15 against Microsoft’s 29. That gap makes our target look demanding on a relative basis, though Microsoft’s 40.31% net margin dwarfs peer profitability.

Oracle (NYSE:ORCL) is the pure-play AI infrastructure comp. Oracle’s IaaS revenue grew 93% and RPO reached $638 billion, larger than Microsoft’s commercial book, but Oracle burned $23.7 billion in negative free cash flow. Microsoft generates $66.99 billion in FCF while building at similar scale. On that basis, the peer group makes our 24/7 Wall St. price target reasonable rather than aggressive.

Microsoft Price Prediction 2026-2030

The 24/7 Wall St. price target of $609.58 and buy rating reflect a business monetizing AI in real time while retaining pricing power peers cannot match.

The setup looks constructive if Q1 FY27 Azure comes in at or above 45% constant-currency growth. Conviction weakens if capex intensity pushes free cash flow negative or Copilot seat additions stall.

These projections assume Microsoft executes on Azure capacity and Copilot monetization. Significant upside or downside will come from the pace of AI ROI and whether hyperscaler capex intensity stabilizes. All of that spending has to be powered, cooled, and networked by somebody, and we profiled seven of those suppliers in a free report on the AI infrastructure buildout.

The post One Trillion-Dollar Question Could Determine Where Microsoft Stock Goes Next appeared first on 24/7 Wall St..

Google is reportedly about to ship a new coding model that its own engineers say they prefer to Anthropic’s Claude Opus for internal work. That is a real development for developer mindshare, but it is also not the model Sundar Pichai promised earlier this year, and the gap between shipping cadence and shipping substance is starting to matter to the stock.

Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) closed at $335.02 on September 1, 2026, down 5.93% over the past month even as the year-to-date figure sits at 7.17%. The one-year return is still 57.8%, so this is the kind of manageable pressure that surfaces when a leadership team keeps promising a step change and delivers steady, incremental releases instead.

What CNBC’s Sigalos Actually Said

On CNBC, reporter MacKenzie Sigalos summarized Wall Street Journal reporting on the impending release. “Google’s AI team is set to release a new model 3.8 flash. This apparently has upgraded coding capabilities.”

She continued: “It could come as soon as tomorrow, and the company’s engineers telling the Journal that they actually prefer it to Anthropic’s Opus model in terms of performing internal coding tasks.” Then the important qualifier: “This is not 3.5 Pro, which Alphabet CEO Sundar Pichai promised back in June. Nor is this Gemini Forge, the real step change that we have been waiting for from Gemini.”

And the organizational overhang: “This comes amid an exodus of talent from the DeepMind lab as we see this big reorg internally.” The internal-engineer preference counts as suggestive evidence at best. It is self-reported and unbenchmarked, filtered through a newspaper.

Why a Cheap Coding Model Matters for Cloud Margins

A fast, cheap Flash model that outperforms a leading rival on coding tasks matters because coding is where inference costs get paid. Developers who lean on a model all day generate volume, and volume is where Google Cloud captures margin. Pichai told investors that Gemini models now process 22 billion API tokens per minute, and that the Gemini App has 950 million monthly active users.

Cloud revenue is where this shows up first. Google Cloud grew 82% in the second quarter to $24.77 billion, and Pichai said “nearly 90% of the Fortune 100” now use Gemini Enterprise. Details are in the Q2 8-K exhibit.

Consolidated revenue was $119.8 billion, up 24.23% year over year, with operating income of $40.77 billion. The problem is what sits underneath: capex hit $44.9 billion in the quarter, free cash flow turned negative at -$5.86 billion, and long-term debt jumped from $46.5 billion to $98.2 billion. Buybacks were suspended.

Credibility Is Slipping at DeepMind

A missed or delayed flagship is as much a management question as a technology one. Pichai committed to Gemini 3.5 Pro in June, and prediction markets on Polymarket had already resolved against a Pro release by August 31, 2026, with the “no release” outcome winning with an accuracy score of 0.971. A Flash 3.8 release by September 30 was priced at probability 0.991, so the market expected exactly this substitution.

DeepMind departures compound concerns because frontier model quality is concentrated in a small group of researchers, and a reorganization during a competitive sprint tends to cost momentum. Microsoft has its own silicon coming, Meta keeps open-sourcing capable models, and Anthropic, which Google itself funds, is why Claude sits atop many developer stacks.

The earnings reactions have been complicated too. Every one of the last 12 quarters was a beat, yet the average one-day reaction was -0.48%. The Q2 report carried a 199.41% surprise, and shares still fell 7.13% that session.

Is GOOG Stock a Buy?

At a P/E of 17x, Alphabet is cheaper than Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META) on forward earnings, cheaper than Amazon (NASDAQ:AMZN) on almost any measure, and it owns the only rival stack that competes credibly with Anthropic and OpenAI in coding, search, and cloud at once. Analysts show 58 buys and 6 holds with a target of $428.07.

The AI capex is real and the flagship is late, but a coding model developers actually reach for is likely worth more to cloud economics than a headline benchmark win (all that spending also has to be powered, cooled and networked by somebody, which is the whole point of our free report on seven AI infrastructure suppliers behind the buildout, here), which is why the setup remains constructive despite the noise around delayed flagships.

The post Sundar Pichai’s Credibility Crisis: The AI Model That Never Came appeared first on 24/7 Wall St..

Amazon (NASDAQ:AMZN) is trading at $266.43 after a 17.55% one-month rally that took the shares through what had been resistance around the prior 52-week high.

Our 24/7 Wall St. price target for Amazon is $338.72 over the next 12 months, implying 27.13% upside from current levels. Our recommendation is buy, and our model registers a high 90% confidence reading behind that call.

24/7 Wall St. Price Target Summary

An AWS Reacceleration That Changes the Story

Amazon reported Q2 FY2026 revenue of $200.61 billion, up 19.62% year over year, with operating income of $27.46 billion. AWS grew 37% to $42.23 billion at a 39.4% operating margin, the fastest AWS growth in 18 quarters.

CEO Andy Jassy said “AWS is booming, growing 36.7% year-over-year in Q2, our fastest growth in 18 quarters, and our AI and Chips businesses each eclipsed run rates of more than $25 billion.” The stock is up 15.43% year to date and 15.04% over the past year, with the AWS backlog now at $496 billion.

Why Bulls See a Path to $390

Our bull case pins Amazon at $390.72, a 46.65% return. The setup is straightforward: AWS AI and custom-silicon run rates are each above $25 billion and growing triple digits, Anthropic and OpenAI have committed to multi-year, multi-gigawatt Trainium capacity, and Jassy floated the possibility that AWS could become “a trillion dollar annual revenue business for us in time.”

Advertising grew 26% to $19.81 billion, and analyst sentiment skews sharply positive with 16 strong buy and 43 buy ratings.

What Could Go Wrong

Our bear case lands at $290.02, still 8.86% above spot. The biggest risk is capital intensity. FY2026 capex is guided to roughly $200 billion, Q2 capex alone hit $54.21 billion, and trailing free cash flow has swung to negative $7.6 billion.

Bulls will note this reflects data-center investments that management says take less than three years to break even and then earn for 30-plus years. GAAP EPS is also flattered by a $53.4 billion Anthropic gain, so headline P/E of 37 understates the underlying multiple.

How Amazon Compares to Microsoft and Alphabet

The cleanest comparisons are the other hyperscalers. Microsoft (NASDAQ:MSFT) trades at a P/E of roughly 29 with Azure growing 43% in fiscal Q4 and a $678 billion commercial RPO backlog, richer than AMZN on multiples but with a comparable AI growth story.

Alphabet (NASDAQ:GOOGL) is the value counterweight, at a P/E near 15 with Google Cloud growing 82% last quarter. Against MSFT, our AMZN target looks conservative on growth; against GOOGL, it looks fair given AMZN’s superior segment mix. On balance, the peer set makes $338.72 look reasonable.

Why the Setup Looks Constructive Here

The 24/7 Wall St. price target of $338.72 with a buy rating and 90% confidence reflects a clear thesis: AWS reacceleration to 37%, triple-digit AI and chip growth, and a $496 billion backlog outweigh capex-driven free cash flow pressure.

The setup looks constructive if AWS holds above 35% growth into Q4. The thesis weakens if capex creeps materially above $200 billion without matching revenue traction.

These projections assume Amazon continues executing on AWS capacity buildouts and monetizing AI workloads.

All of that capacity has to be powered, cooled, and networked by somebody, and we profiled seven of those suppliers in a free report on the AI infrastructure names that aren’t chipmakers. Meaningful upside or downside could come from Trainium adoption beyond Anthropic and OpenAI, or from a demand air pocket that leaves reserved capacity underutilized.

The post Amazon Stock Could Surprise Investors Over the Next 12 Months appeared first on 24/7 Wall St..

John Ternus starts as Apple (NASDAQ:AAPL) CEO with the stock near a historic high, and roughly 8 days remain before a September hardware event where he will address the entire audience for the first time. CNBC’s MacKenzie Sigalos said, “John Ternus era begins at a moment when Apple is facing historic headwinds.”

Shares rose 2.61% on his first day and traded at $325.13, up 40.58% over one year and 19.92% year to date on a market cap of $4.745T. The pressures Ternus inherits are real but uneven. Memory costs squeezing hardware margins will pass. The AI question is structural, and Apple has to answer it in a way that changes minds about where the next computing interface will actually live.

Margin Squeeze Is the Mechanical Problem

Fiscal Q3 revenue was $109.42 billion, up 16.4% year over year, with EPS of $2.02 beating the $1.89 consensus, per Apple’s 8-K filing.

Gross margin was 50.1%, and tariff refunds added roughly 2 percentage points on top. Strip those out and Apple still ran a very good quarter.

September guidance points to gross margin between 47% and 48%. Tim Cook described memory pricing as “a 100-year flood on the memory pricing with exponential increases in memory prices” driven by only three DRAM suppliers.

Sigalos framed the tension precisely: “Push iPhone prices too far, and you risk slowing the device growth that ultimately feeds services.”

Services delivered $30.74 billion at 75.6% gross margin. Hardware volume feeds that annuity, and Ternus cannot let iPhone unit economics slip while he defends the average selling price.

AI Question Is the Structural One

Siri AI shipped to developers after WWDC26, and Cook said early reviews were “phenomenal,” although that assessment comes from Apple itself.

The competitive set does not flatter Apple’s positioning. Microsoft (NASDAQ:MSFT) passed 30 million paid Microsoft 365 Copilot seats, and Azure surpassed $100 billion in fiscal-year revenue, growing 41%.

Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Gemini app hit 950 million monthly active users, and Google Cloud revenue grew 82% in Q2. Meta (NASDAQ:META) is putting personal agents on top of Family DAP of 3.60 billion.

Apple’s R&D of $11.73 billion a quarter is real spending, but Microsoft alone plans roughly $175 billion in FY27 capex, and all of that buildout has to be powered, cooled, and networked by somebody (we rounded up seven of those infrastructure suppliers in a free report).

Sigalos captured the real risk: “The AI challenge goes well beyond fixing Siri. As agents become the front door to apps and services, Apple has to make sure that the iPhone stays at the center of that experience, even as rivals start experimenting with entirely new AI native devices.” If the agent becomes the interface, the operating system becomes plumbing.

Foldable Would Be Loud But Not Sufficient

Sigalos reported that “A recent operating system leak directly from Apple exposed clues to ten plus still unannounced devices, including a foldable iPhone, potentially the first major change to the phone’s form factor in 20 years, something that we might see as soon as next Wednesday.” Treat that as reported and unconfirmed.

Polymarket puts the probability of an Apple foldable iPhone before 2027 at 0.949, while a broader “new product line” market sits at only 0.305.

A foldable would help Apple close ground on Samsung and reset the upgrade cycle, although the AI question would remain open.

Apple is also in an escalating legal dispute with OpenAI over hardware and trade secrets, per Sigalos, while OpenAI has been buying Macs by the tens of thousands.

Hardware theater buys Ternus time to prove out Siri AI at scale, while the interface question stays open.

Is AAPL Stock a Buy?

Apple trades at a P/E of 37x and a forward P/E of 33x against an analyst target of $324.45, so the average Street target sits at roughly today’s price.

Samsung leads foldables and will not be caught by novelty alone. Alphabet and Microsoft are ahead on models, cloud economics, and the distribution of agents into enterprise workflows.

Meta Platforms is spending $130 to $145 billion in 2026 capex to put personal agents into billions of hands. Apple’s counter is the installed base of more than 2.5 billion active devices, silicon integration, and a services flywheel most rivals cannot replicate.

That mix is enough to hold the position because Apple still monetizes its users better than anyone, though adding on strength should wait until Ternus proves the platform still leads.

The margin squeeze looks likely to pass, as memory cycles always do, and paying 33x forward for a company in the middle of a platform transition reads as fair value, given the unresolved AI question.

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Investors often forget that Amazon (NASDAQ: AMZN) has $700 billion in e-commerce revenue based on its first-half revenue run rate. Since its fourth quarter is by far its largest, the number will probably exceed $750 billion. That will make the e-commerce division as large as Exxon’s (NYSE: XOM) total and larger than Microsoft’s (NASDAQ: MSFT). In fact, including AWS, Amazon was the No.1 company among the Fortune 500, having passed Walmart (NYSE: WMT) last year.

A quarter of Amazon’s e-commerce revenue is “International,” and the balance comes from what it calls “North America.” North America’s operating profit will be about $35 billion this year. International will be about $7 billion. AWS revenue will be $180 billion in 2026, based on the current run rate. Operating income will be approximately $70 billion.

Beyond size, the divisions differ: e-commerce revenue is growing at about 18%. AWS top-line growth is closer to 40%.

Amazon’s market cap is $3 trillion. It is hard, if not impossible, to say how much e-commerce contributes to that value. It’s instructive to look at Walmart with a market cap of $832 billion. Amazon’s e-commerce growth rate is much higher, so move its valuation to $1 trillion.

That means AWS is worth $2 trillion. Compare that to AI giant Anthropic, which has a market value of about $1.8 billion. Anthropic is an AI pure play, which should have about $65 billion in revenue this year. AWS’s “market cap” would be slightly more valuable than the entire market cap of SpaceX.

AWS houses most of Amazon’s AI businesses. That means they carry most of Amazon’s future and almost all of its risk. If AI is the greatest investment in human history, e-commerce is worth very little in comparison. If AI is mostly a poor gamble on hundreds of billions of dollars in data center construction, AWS may be worth very little.

Finally, there is the debate about whether Amazon should be broken into two public companies. Since the relationship between e-commerce and the cloud is relatively small, investors might be better off if they could choose between the two.

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Alphabet (NASDAQ:GOOG) has quietly become one of the most compelling AI plays in mega-cap tech, and the market appears to be pricing it as though Search were decelerating, even as growth accelerates.

Our 24/7 Wall St. price target for Alphabet is $435.40, which implies 26.98% upside from the current price of $342.88. We rate GOOG a buy with a 90% confidence level, among the highest we assign in the communication services sector.

24/7 Wall St. Price Target Summary

A Cloud Business Suddenly Growing Like a Startup

Alphabet shares are up 9.41% year to date and 61.92% over the past year, yet the stock still sits well below the 52-week high of $404.23.

The Q2 FY2026 report was the catalyst that reset the narrative: revenue of $119.8 billion grew 24% year over year, EPS came in at $9.11 versus a $3.0427 estimate, and Google Cloud revenue accelerated to 82% growth. Cloud backlog now stands at $514 billion, and Motley Fool argued in late August that investors are still underestimating Google Cloud. I agree.

Why Bulls See a Breakout Ahead

The bull case rests on three pillars. First, Cloud economics are inflecting: Q2 Cloud operating margin expanded to 35.6% from 20.7% a year earlier.

Second, Gemini is scaling fast, with 950 million monthly active users and API throughput at 22 billion tokens per minute.

Third, Sundar Pichai told analysts “over the past year, we’ve gotten more bullish on the opportunities ahead”. Our bull scenario points to $452.54, and the Street’s high end sits at $422.34 consensus with 13 strong buys and 44 buys.

What Could Go Wrong

Q2 free cash flow was negative $5.855 billion as capex hit $44.9 billion, long-term debt jumped from $46.5 billion to $98.2 billion, and the buyback was suspended. Bears would note that our bear scenario lands at just $360.50.

Counterfactually, bulls would argue this capex reflects genuine supply constraints, with backlog of $514 billion demanding investment now (the same buildout that lifts the power, cooling, and networking names we profiled in a free AI infrastructure report). FCF still totaled $53.3 billion on a trailing basis.

How Alphabet Compares to Microsoft and Meta

Microsoft (NASDAQ:MSFT) trades at a forward P/E of 26 with quarterly revenue growth of 17.7%, meaningfully slower than Alphabet’s 24.2%.

Meta Platforms (NASDAQ:META) sits at a forward P/E of 19, closer to GOOG but with quarterly earnings growth of negative 13.4%. Against this field, Alphabet’s forward P/E of 16 looks conservative, which is why our 24/7 Wall St. price target sits comfortably above current levels.

Why the Setup Favors Alphabet

The 24/7 Wall St. price target of $435.40, a buy rating, and 90% confidence reflect a rare setup: hyperscaler growth at a value multiple.

The setup looks compelling if Cloud growth stays north of 60% into Q3. Caution is warranted if capex balloons past guidance without corresponding backlog conversion. On balance, the risk/reward favors ownership.

These projections assume Alphabet continues executing on Cloud and Gemini. Significant upside or downside could come from AI infrastructure ROI and regulatory action in the EU and US.

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Microsoft (NASDAQ:MSFT) just closed a record fiscal year with annual revenue above $331 billion and Azure surpassing $100 billion for the first time. Yet the stock is up just 6.86% year to date and only 1.6% over the past year.

Shares changed hands at $513.53 at Friday’s close. My question is direct. Can Microsoft double from here and reach $1,000 by August 2031? Here is what has to happen.

Why Microsoft Shares Are Stuck Despite Record AI Growth

The disconnect is real. Microsoft posted five consecutive quarterly EPS beats, and yet the one-year return is basically flat. The reason is capex. Full-year capital expenditures hit $115.948 billion, up 79.62%, and free cash flow fell 6.46% despite operating cash flow surging 34.35%. The FY27 capex bar just moved to roughly $175 billion.

Investors are asking a fair question: at what point does AI spend earn its keep? With a beta of 1.099, the stock has been volatile but rangebound. Shares recovered sharply after earnings, gaining 31.74% in the past month, but the share price is still catching up to fundamentals.

Wall Street Sees 11% Upside. Our Model Says 19%

The consensus is heavily bullish. Fourteen strong buys, 40 buys, three holds, zero sells, with an average target of $569.45. That is a modest premium to today’s price. Our own model is more constructive, pointing to a one-year base case of $609.58 with a bull case of $709.58 and a bear case of $520.81. Confidence is high at 0.9.

Where I push back on Wall Street is on earnings trajectory. Quarterly EPS grew 31.7% year over year and 95% of analysts remain bullish. Targets look anchored to a 12-month lens. The doubling story requires a five-year lens.

The Path to $1,000 Per Share

Reaching $1,000 from today’s price of $513.53 would require a gain of 94.7%. With forward EPS of $19.97, a price of $1,000 implies a forward P/E of 50x. Our base case of $609.58 already implies 30x, meaning the bold target requires about 20x of additional multiple expansion, or equivalent EPS growth to compress that multiple back down.

The compression story is the realistic path. If EPS compounds off the $17.28 FY26 EPS at a Copilot-driven pace, that 50x becomes far more digestible by 2031.

Support: commercial RPO surged 84% to $678 billion, Azure guidance is roughly 45% growth for Q1 FY27, and CEO Satya Nadella said “I’ve never been more confident in Microsoft’s opportunity to drive durable long-term growth.” The primary risk is that FY27 capex of $175 billion produces overcapacity if AI demand cools.

Where Microsoft Trades Today vs Its Earnings Power

Today Microsoft trades at roughly 26x forward earnings. That is a premium to the market but not extreme for a business compounding revenue at 17.79% with 45.1% operating margins and 34% ROE.

Shares sit between the 52-week low of $348.54 and the 52-week high of $549.20. Over the last decade, Microsoft has returned 898.97%. That is the long-term context that makes a five-year double a defensible scenario.

Is $1,000 Realistic? Here’s My Take

Reaching $1,000 requires a 94.7% gain, and I think it is a stretch, but a defensible one over five years. Three things need to go right.

Azure needs to sustain 30%-plus growth as capacity comes online. Copilot needs to move beyond 30 million paid seats into per-seat plus consumption pricing at scale. And capex intensity has to normalize before free cash flow inflects.

A demand pause in AI infrastructure is what would derail it (the power, cooling, and networking suppliers riding the same buildout are the subject of a free report we put together here: 7 Stocks Powering the AI Boom). Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Microsoft could reach $1,000 in 2031.

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The sticker shock in Big Tech earnings this year came from the capital expenditure line. Microsoft (NASDAQ:MSFT) spent $115.95 billion on property and equipment in the fiscal year ended June 2026. Alphabet (NASDAQ:GOOGL) laid out $44.92 billion in a single quarter, watched free cash flow flip to negative $5.86 billion, and suspended its buyback. Amazon (NASDAQ:AMZN) spent $54.21 billion in the June quarter alone. Meta Platforms (NASDAQ:META) guided full-year capital spending to $130 to $145 billion. Yahoo Finance pegged the four-company AI data center bill at roughly $1 trillion in an August 4, 2026 analysis.

A $100 billion data center is a capital asset, expensed in slices over the years the equipment is in service. The cash leaves the company now, but the accounting expense arrives in slices over the years the equipment is expected to be useful. That yearly slice is called depreciation for physical assets and amortization for intangibles. If a server has a useful life of six years, roughly one sixth of its cost lands on the income statement each year, reducing reported earnings per share.

Why the Timing Gap Is the Real Story

Depreciation is where the trillion dollar bet actually shows up in profit margins. And it shows up on a schedule, whether the customers arrive or not. Meta is the early warning. Operating margin fell to 31% from 43% a year earlier. CFO Susan Li said the year-over-year expense growth came from “higher depreciation, data center operating costs, and third-party cloud spend.” Free cash flow collapsed to $784 million, from $8.55 billion a year earlier. EPS missed at $6.18 against a $7.2173 estimate, breaking a six-quarter streak. The stock is down 22.27% over the past year.

Companies do have a lever here, and it matters. The longer the assumed useful life, the thinner each year’s depreciation slice. On its July 29, 2026 call, Microsoft CFO Amy Hood told investors that “effective at the start of FY27, we are extending the estimated useful life of our data centers and office buildings from 15 to 25 years.” She described the impact as a “minimal benefit to FY27 operating income.” The change flatters near-term earnings. It does not change how much cash left the building.

The offset the bulls point to is contracted backlog. Microsoft’s commercial remaining performance obligations reached $678 billion, up 84%. Amazon’s AWS backlog sits at $496 billion. Andy Jassy framed the mechanics plainly on the July 30, 2026 call: “Data center capital is spent starting two years before we can put servers into them to start monetizing.” That gap is the risk.

Line Item Retirees Should Actually Watch Next Quarter

On the next set of quarterly reports, ignore the headline capex figure. Look for depreciation and amortization inside the cash flow statement or the cost of revenue footnote. Then compare its growth rate to the growth rate of the cloud or AI segment it is meant to support. If Azure grows 45% and depreciation attributable to AI infrastructure grows faster, operating margins compress further. If AWS grows 37% and depreciation grows slower, the buildout is paying. That single comparison, quarter by quarter, will tell you whether the $1 trillion bet is working long before any analyst does. The other side of the trade sits with the power, cooling, and networking suppliers cashing those checks, which we profiled in a free report on seven of them here: 7 Stocks Powering the AI Boom (That Aren’t Chipmakers).

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A fresh backup in long-term Treasury yields is reversing Monday’s rebound across capital-hungry AI infrastructure and Bitcoin (CRYPTO:BTC)-mining names Tuesday morning. CoinShares Bitcoin Mining and Digital Power ETF (NASDAQ:WGMI) declined 4% to $41.14, while Global X Data Center & Digital Infrastructure ETF (NASDAQ:DTCR) retreated 1% to $27.50. The selling is concentrated in buildout-heavy miners, not in the broader data-center category.

IREN Limited (NASDAQ:IREN) shares slipped 4% to $35.58, though it did recover some of that loss by 11:00 a.m. ET. The stock was down 1.7% year to date through Monday’s close, so the pullback keeps the name in a tight range even after last week’s fiscal fourth-quarter print.

TeraWulf (NASDAQ:WULF) shares slipped 4% to $14.464.46. Meanwhile, Cipher Mining (NASDAQ:CIFR) stock fell 6% to $14.564.56, the steepest same-day decline in the featured group at that moment.

Rates Do the Talking

A global bond selloff has lifted the 10-year Treasury note yield to 4.78%. Higher long-term yields raise the cost of the next tranche of debt these companies need to finance their pipelines, which is why a bond-market session hits harder here than an ordinary risk-off day would.

The miner made the mechanism concrete on August 27 when it disclosed $6.5 billion of GPU financing closed over three months, split between $3.6 billion of investment-grade funding at a 6% interest rate tied to the Microsoft contract and $2.8 billion of non-investment-grade equipment financing at a 9% fixed rate. With fiscal 2027 capital expenditures guided at $25 billion to $30 billion, the cost of the next credit tranche is the swing variable for equity value.

The buildout is capital-intensive by design, and the suppliers on the other side of these contracts, from power to cooling to networking, are quietly benefiting from the same spend (we pulled seven of them into a free report here: 7 Stocks Powering the AI Boom (That Aren’t Chipmakers)).

Contract Book Provides a Cushion

IREN’s management told investors on August 27 that 2026 AI capacity is largely sold out and carries about $4 billion of contracted annualized run-rate revenue, with current operating annualized run-rate revenue of about $1 billion. The company defines that run-rate as an operating metric based on contracted GPU-hour pricing, and cautions that recognized GAAP revenue may be materially lower until capacity is commissioned, tested, and accepted by customers.

Fourth-quarter AI cloud revenue for IREN was $70.5 million, more than double the prior quarter, and full-year AI cloud revenue climbed roughly eightfold to $128.8 million28.8 million. Total quarterly revenue was $137.2 million37.2 million against a net loss of $684 million driven mostly by non-cash impairments as mining hardware came offline. The company also delivered Horizon 1, the first of four 50-megawatt liquid-cooled deployments for Microsoft (NASDAQ:MSFT), in August.

What to Watch

Short interest in IREN shares stood at 27% of float heading into Tuesday, which amplifies moves in both directions and helps explain why a broad-rates session translates into an outsized single-name print. H.C. Wainwright reiterated a Buy rating with a $90 price target on IREN stock after the August 27 disclosures, well above the current handle.

Investors can watch for whether the 10-year yield holds near the 4.8% level into Tuesday’s close. Continued pressure at the long end would reprice the marginal cost of GPU and data-center financing for every name in the WGMI basket, which reads as the mechanical driver behind today’s split versus DTCR. Position sizing should reflect the leverage embedded in these balance sheets and the elevated short float in IREN, which can produce sharp intraday reversals in either direction.

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The morning of Friday, Aug. 28, delivered one of the strangest split screens of the AI trade so far. NVIDIA (NASDAQ:NVDA) added roughly $442 billion in market cap in a single session, the second largest one-day gain ever, trailing only Microsoft‘s (NASDAQ:MSFT) $450 billion. Meanwhile Marvell Technology (NASDAQ:MRVL), the other big AI chipmaker to report the same week, was down 10.26% intraday to $216.68 despite a beat-and-raise quarter.

Jim Cramer’s message to viewers: Do not bet against it before the Oct. 6 analyst day.

Why Marvell Sold Off on a Blowout Quarter

Marvell reported record Q2 fiscal 2027 revenue of $2.739 billion, up 36.55% year over year, with Data Center revenue of $2.1715 billion, up 46%. Management guided fiscal 2028 data-center growth to more than 60% year over year and said custom revenue will “more than double” in fiscal 2028.

The problem is timing. On Squawk on the Street, David Faber laid out the math: the expanded Google custom-silicon agreement annualizes to roughly $18.5 billion a year, but Marvell acknowledged most of that revenue is not in the plan until 2029. Faber also pointed to Marvell’s August 18 8-K detailing warrants for Alphabet (NASDAQ:GOOGL) to purchase 58.9 million shares of common stock at $206.58, tied to future revenue milestones. Matt Murphy told analysts, “Most of this is comprehended already in next year. The big impact would be, you know, in 29 and beyond.”

Cramer’s Case: Don’t Fade the October 6 Catalyst

Cramer’s argument is that delayed revenue still lands, and the thesis holds as long as the ramp arrives. He told viewers not to bet against Marvell going into the October 6 analyst meeting, citing CEO Matt Murphy’s track record of “compelling” presentations, Murphy’s $1 million insider buy, and Murphy’s line: “I am the signal. They are the noise”. Murphy’s own words back the setup: “AI-related bookings remain exceptionally robust, and we expect our revenue growth to accelerate further through the remainder of fiscal 2027.”

The macro backdrop helps. NVIDIA guided Q3 revenue to $108 billion and fiscal 2028 growth of approximately 70%, with Jensen Huang calling supply a bottleneck. Marvell sits inside that ecosystem through NVLink Fusion and combined optical solutions with UAL and ESUN switches. The traits that showed up early in past monster tech runs are the same ones we cataloged in a free Next Nvidia playbook.

What to Watch Next

Context matters. Marvell is still up more than 136% year to date and more than 227% over one year. This is a pullback inside a monster run. Cramer acknowledged the binary risk plainly: “Marvell is a very expensive stock unless everything works.” The October 6 Investor Day is where Murphy is expected to reset the long-term target model and detail revenue through fiscal 2029 and beyond. That is the date to circle.

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Microsoft (NASDAQ: MSFT) and Tesla (NASDAQ: TSLA) enter September with momentum, but their earnings tell opposite stories. Microsoft closed a record fiscal year powered by Azure and Copilot. Tesla posted record deliveries while operating income collapsed under an AI capex wave.

Azure Prints Cash. Tesla Burns It to Build the Future.

Microsoft delivered $90 billion in Q4 revenue, up 18%, with Azure crossing $100 billion annually and Microsoft 365 Copilot passing 30 million paid seats. Satya Nadella called it “a very strong close to what was a record fiscal year for us” and said “demand continues to exceed available supply”. Commercial RPO jumped to $678 billion, a backlog that pre-sells future quarters.

Tesla was messier. Revenue hit $28.24B on record Q2 deliveries of 480,126 vehicles, yet EPS of $0.33 missed the $0.54 estimate. Operating margin cratered to 1.4%. CFO Vaibhav Taneja said “we exited Q2 with our largest order backlog since 2023”, but free cash flow flipped to negative $1.09B. FSD attach hit 55% of North American deliveries, a real hook, just not yet an earnings driver.

Monetizing AI Today vs. Financing AI for Tomorrow

Microsoft spends to feed a paying pipeline. Azure is guided to grow around 45% in constant currency in Q1 FY27, and Amy Hood noted “when we can make efficiency gains, they are quickly monetized in quarter”. That capex wave also lifts the power, cooling, and networking suppliers behind the data centers (we rounded up seven of them in a free report here). Tesla spends against a promise. Elon Musk framed it plainly: “this is a massive CapEx year, but I’m confident that all the things that we’re investing in will yield incredible returns”. Robotaxi covered 380,000 miles with “zero notable incidents”, impressive but early.

Valuation reflects the split. MSFT trades near 28 times earnings with a $569.45 analyst target. TSLA sits near 332 times earnings with a $390.09 target, only slightly above spot.

What Decides the Next Leg

For Microsoft, watch Azure capacity. Nadella conceded capacity constraints and guided FY27 capex to roughly $175 billion. If GPU lead times improve, that RPO converts smoothly. For Tesla, the near-term test is Cybercab ramp, Optimus milestones, and whether auto gross margin stabilizes now that regulatory credits fell to $146M. Keep an eye on the stock as the 0.73 put/call ratio hints at a cautious options crowd.

Why I Lean Microsoft Into September

Microsoft fits the setup I want right now. The 9.37% one-month gain came with real earnings behind it, not just narrative. Tesla’s 18.23% August rip is exciting, but it sits on a -18.18% YTD hole and margins I do not yet trust. If you want durable cash flow, Copilot seat growth, and a $678 billion backlog, MSFT is the cleaner play. If you are underwriting Robotaxi and Optimus with a decade-long horizon and can stomach volatility, TSLA has the bigger asymmetric payoff. Better risk-adjusted setup goes to Microsoft.

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Shares of IREN (NASDAQ:IREN) are rising Monday afternoon after co-founder and co-CEO Daniel Roberts said the AI cloud operator‘s fiscal 2027 capital plan doesn’t require a large equity raise. IREN stock is up 4% to $36.76 at midday, extending a run that had shares up 21% over the past month through Friday’s close.

This move is company-specific. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.5% to $765.91, so the broad market is slightly lower even as IREN stock rises. Peer TeraWulf (NASDAQ:WULF) stock is down 2% to $15.09, while fellow miner-turned-AI-host Cipher Mining (NASDAQ:CIFR) isn’t participating, underscoring that today’s catalyst is IREN-specific funding news rather than a sector-wide bid.

Roberts Post Addresses the Dilution Worry

In a post Monday, Roberts said IREN’s forecasted $25 billion to $30 billion of fiscal 2027 capital expenditures “isn’t an equity number.” He added, “Customer prepayments can cover about half the GPU capex. Lenders can fund most of the rest.” That speaks directly to investor anxiety that followed the fiscal 2026 fourth-quarter report, when the market questioned whether an at-the-market offering or more convertible notes would be needed to fund the plan.

Management said IREN entered fiscal 2027 with about $14 billion in cash, committed GPU financing and customer prepayments, and is targeting another $8 billion through GPU financing and prepayments. The rest is expected to come from data center financing, operating cash flow and corporate sources. Recent customer prepayments have covered 45% to 55% of associated GPU capital expenditures on new deals.

The financing stack has already scaled quickly. IREN arranged $3.6 billion of Microsoft-related GPU financing at a weighted average interest rate of 6%, and secured $2.8 billion for other deployments, including $2.4 billion at a 9% fixed rate for the Mackenzie expansion, while raising approximately $19 billion, with about $3 billion of that from equity over the past 12 months. Its entire data center portfolio remains unencumbered, including the four Horizon deployments at Childress, and no data center financing transaction has closed yet.

Roberts framed the mechanism as a “funding flywheel.” When customer prepayments cover roughly half of GPU cost and lenders finance 90% of the balance, the arithmetic can leave IREN with more cash than the compute itself required, freeing capital to seed the surrounding data center shell. GPU financing, once a private-credit product with mid-teens returns, now includes investment-grade paper in the 6% area.

Bear Case Still Sits in the Numbers

The financials matter here. IREN’s net loss widened 176% sequentially to $684 million in the fiscal 2026 fourth quarter, with $450.4 million of impairments accounting for most of the shortfall. Mining revenue dropped 40% to $66.7 million as older rigs came out ahead of GPU installations.

Adjusted EBITDA also fell hard sequentially. IREN posted $19.2 million in adjusted EBITDA in the June quarter, versus $59.5 million the prior quarter, as costs across sales, R&D and site operations ran ahead of the AI Cloud ramp. Cash SG&A is guided up another $40 to $50 million sequentially in the September quarter.

The offset sits on the AI side. AI Cloud Services revenue reached $70.5 million in the June quarter, up from $33.6 million in March. The company has $4 billion in contracted annual recurring revenue tied to capacity expected online by year-end, which is what makes the funding math workable in the first place.

Microsoft (NASDAQ:MSFT) is the anchor Horizon customer behind that ARR figure. The first 50-megawatt Horizon deployment was delivered in August, and Horizons 2 through 4 are targeted for the December quarter.

Peer Divergence Is the Signal

TeraWulf stock is falling while IREN stock rises, even though both names sit in the same Bitcoin (CRYPTO:BTC)-mining-to-AI-infrastructure trade (we profiled seven of the picks-and-shovels names powering the AI buildout, from power to cooling, in a free report you can grab here).

Cipher Mining is quiet on the session. Today’s move separates the group by funding certainty and near-term delivery timeline rather than repricing everyone together.

What to Watch

The near-term catalyst is any data center financing announcement. Roberts has described that layer as the “next frontier,” and IREN has confirmed no transaction has closed yet. A first close on an asset-backed deal against the unencumbered Horizon portfolio would validate the funding model Roberts sketched out Monday.

Investors should size their IREN share positions carefully given the execution stakes. The fiscal 2027 plan is large, delivery timelines are compressed, and hardware impairments are still weighing on the GAAP line. A gain on a single executive post is a sentiment shift, and the balance sheet claim underneath it can be tested only quarter by quarter.

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I keep buying Amazon (NASDAQ:AMZN), and I do not plan to stop. Every time the market gets nervous about AI infrastructure spending and marks the stock down, I add more. That pattern is why I sleep fine holding a name currently trading at $266.43, even after a 17.55% run in the last month.

Here is what the discount is missing. AWS backlog now sits at $496 billion, growing triple digits year over year, and most AI capacity is contracted for at least five-year terms. Andy Jassy told the Street AWS is on pace to have double the power capacity by the end of 2027 that it had in 2025, and the lion’s share of that 2027 capacity is already reserved. That is contracted demand pulling forward supply.

Three Reasons My Buy Button Stays Active

AWS is re-accelerating on a very large base. Segment revenue reached $42.23 billion in Q2 FY26, up 37% year over year, the fastest pace in 18 quarters, at a 39.4% operating margin. That is a $169 billion annualized run rate compounding faster than two years ago. Custom silicon drives growth. Amazon’s AI business and chips business each cleared a $25 billion annualized run rate at triple-digit growth, and Graviton is now used by 98% of the top 1,000 EC2 customers. Anthropic and OpenAI have made multi-year, multi-gigawatt commitments to Trainium. That moat deepens with every generation.

Advertising is quietly becoming one of the best businesses on the internet. Q2 ad revenue hit $19.809 billion, up 26% year over year, on the highest-intent retail traffic. Shoppers who click a sponsored prompt convert 48% more often and spend 21% more on average. That flows through at margins standalone retail cannot touch.

The balance sheet supports the spend. Debt-to-equity sits at 0.37, interest coverage at 35.2 times, cash at $78.21 billion. Trailing operating cash flow ran $139.51 billion. This company can fund the ~$200 billion 2026 capex plan without straining anything.

Why Not Microsoft or Alphabet

Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are obvious hyperscaler alternatives. My money goes to Amazon because no other name stacks a $496 billion cloud backlog on top of a $70 billion trailing advertising business and the second-largest US grocery footprint, with over $150 billion in annual grocery gross merchandise sales. Amazon Now gross sales grew over 80% quarter over quarter. Worldwide paid units grew 17% year over year. That retail flywheel compounds alongside cloud in a way pure-play peers cannot replicate.

Capex Risk I Refuse to Dismiss

Capex is real. It ran $54.208 billion in Q2 FY26, up 68.44% year over year. Trailing twelve-month free cash flow flipped to negative $7.6 billion. Roughly $200 billion more is planned for 2026, and all that money has to be turned into power, cooling, and networking by somebody (we profiled seven of those suppliers in a free report here: 7 Stocks Powering the AI Boom). What keeps me buying is the math Jassy laid out. Data centers monetize for 30-plus years after initial spend. Servers break even in a little less than three years on average and carry a useful life of at least five to six years. The capacity being built is already contracted. The spending is the thesis.

What Keeps the Buy Button Warm

Jassy said AWS could plausibly become a trillion-dollar annual revenue business over time, with very appealing accompanying free cash flow and return on invested capital. This position works if the backlog converts, the chip business keeps compounding, and the retail flywheel keeps turning. All three are happening quarter after quarter. Every capex-driven drawdown is an invitation to own more of what comes on the other side.

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For several months, Elon Musk’s xAI seemed to be falling behind OpenAI, Anthropic, Google’s Gemini, and the tier of AI companies just below them. Industry experts have recently reported that Musk’s Grok is well behind Claude, GPT, and Gemini in adoption. One metric people use is Apple App Store downloads. ChatGPT, Gemini, and Claude are among the top 25. Grok isn’t on the list at all.

In the enterprise software business, xAI is rarely, if ever, listed as a winner in the race to do business with huge enterprises. Even SpaceX (NASDAQ: SPCX) CEO Elon Musk has admitted that, while Grok has not lost the race, it is running well behind. He recently said, “SpaceXAI’s Grok Has Fallen Behind Competitors.” He added, “I’m not used to losing.”

The Grok failure does several things. Among them is that it takes one horse out of the race for AI leadership. It is already a crowded market. And it is marked by investments into the billions of dollars to build AI data centers. Mega-tech companies like Microsoft (NASDAQ: MSFT) have started to run low on cash and have turned to financial companies for assistance. BlackRock, for example, said it would put $4.9 billion into a Meta (NASDAQ: META) data center.

Musk’s problem, from the standpoint of SpaceX shareholders, is that he won’t give up. In the most recent quarter, SpaceX put $15.8 billion into AI projects. Musk said that was only a beginning. “We are building AI compute capacity at scale faster than anyone else.” Given that his primary competitors are investing hundreds of billions of dollars, SpaceX is putting its balance sheet at risk, even if Musk gets financial partners to pay some of the bills.

SpaceX’s rocket business and its Starlink division seem like industry leaders and home runs. However, SpaceX shares collapsed in mid-August. They have made a comeback but have traded flat since mid-August. Very likely, the gravity that pulls them down is Musk’s AI dream, which is almost certainly a failure.

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According to International Data Corporation, Apple (NASDAQ: AAPL) sold 3.1 billion iPhones under Tim Cook’s leadership. The FT says Apple’s market cap went from about 3% of the S&P 500 to 6% today. Toward the end of that run, Apple’s relation to the S&P flattened at between 6% and 8%. In the last few years, companies have gained on Apple’s place. at the top of the market cap ladder.

In particular, its market cap dropped below Nvidia’s (NASDAQ: NVDA). Apple’s hardware sales core gave way to Nvidia’s AI chips. Nevertheless, Apple remains in No. 2 at $4.78 trillion. Nvidia’s is $5.25 trillion. For all their AI prowess, every other stock in the Magnificent 7 sits behind Apple in value.

If there is one criticism of Cook’s tenure, it is that he could not come up with a product that came anywhere close to the iPhone’s success. Apple’s co-founder Steve Jobs launched the first iPhone in 2007, so it is nearly two decades old. That is a very long time to have a single flagship product. However, Cook updated it so often and added features. The iPhone has been the most profitable smartphone. For most of Cook’s tenure, it has been the best-selling. From time to time, Samsung moved ahead.

It is hard to say what Cook’s reputation will be regarding AI. His attempt to build Apple’s own software did not work. Its top engineers went to other companies. Cook eventually adopted Google’s Gemini product, which it will pay $1 billion a year for. Gemini will power Apple Intelligence and Siri. Apple seems to have gotten the better deal financially, but Gemini gets huge distribution across Apple’s installed hardware base. That will help it compete with OpenAI and Anthropic.

Another benefit Apple may end up having in the AI sector is that it is not in the race for expansion that is costing OpenAI, Anthropic, Microsoft (NASDAQ: MSFT) and several others hundreds of billions of dollars to build AI data centers. If AI growth slows, these moves will become among the worst decisions in US business history. Apple will not have drained its bank account betting on a single horse.

Cook will have sold a lot of iPhones. But will staying on the AI sideline look brilliant or like a huge mistake?

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Amazon (NASDAQ:AMZN) delivered one of its cleanest quarters in years, with AWS accelerating for the fifth straight quarter and advertising growing at 26% pace. The market has yet to fully price in this acceleration. Our Amazon 24/7 Wall St. price target signals meaningful upside.

24/7 Wall St. Price Target Summary

Our 24/7 Wall St. price target for Amazon is $340.96 over the next 12 months, implying 33.1% upside from today’s $256.33. The recommendation is buy with high confidence. AWS growth reaccelerated to 37%, advertising compounds at a $19.8 billion quarterly clip, and the AI and chips businesses each cleared a $25 billion annualized run rate.

Why AWS Just Changed the Conversation

Amazon is up 12.49% over the past month and 12.76% year to date, though shares pulled back 2.09% in the last week. The stock sits below its 52-week high of $287.20, leaving room to run.

Q2 revenue hit $200.61 billion, up 19.62%, with operating income of $27.46 billion jumping 43.24%. AWS backlog swelled to $496 billion, and this week’s announcement that Amazon and NVIDIA (NASDAQ:NVDA) will deliver 2 million additional GPUs for agentic AI underscores the capacity race (all that silicon has to be powered, cooled, and networked by someone, which is the whole premise of our free AI infrastructure report).

Bull Case: $390 and Beyond

The bull case hits $390.96, or 52.61% upside. AWS growth stays above 35%, Trainium and Graviton continue capturing custom-silicon share, and Q3 operating income lands near the top of the $22.5 billion to $26.5 billion guide.

Wall Street backs this: 16 analysts rate the stock Strong Buy and 43 rate it Buy, with a consensus target of $327. Advertising at 26% growth is a high-margin flywheel, and Amazon Business runs at a $60 billion annualized clip.

What Could Go Wrong

The bear case sits at $291.59, still 13.83% above today. Q2 capex reached $54.21 billion, up 68.44%, and TTM free cash flow turned negative at -$7.6 billion. Long-term debt has risen to fund the buildout.

Andy Jassy noted servers break even within three years and that AWS will “very possibly be a trillion dollar annual revenue business” over time. An 80 basis point FX headwind in Q3 and memory-chip supply volatility remain shorter-term risks.

How Amazon Compares to Microsoft and Alphabet

Microsoft (NASDAQ:MSFT) is the sharpest AWS comp because Azure directly competes for enterprise AI workloads. Azure grew 43% in fiscal Q4 26 with a P/E of 28x. AMZN’s 21x earnings multiple looks conservative against that.

Alphabet (NASDAQ:GOOGL) is the second natural comp, with Google Cloud posting 82% growth in Q2 26 while trading at 15x earnings. GOOGL screens cheaper, but AMZN’s forward P/E of 22x against forward EPS of $14.42 looks reasonable versus peers. The comparison makes our $340.96 target look measured.

Amazon Price Prediction 2026-2030

Our 24/7 Wall St. price target of $340.96 and buy call rest on a simple observation: AWS growth is reaccelerating while advertising throws off high-margin cash.

The setup looks constructive if AWS holds above 35% growth into Q4. The thesis weakens if capex overruns push free cash flow deeper into negative territory into 2027.

These projections assume Amazon continues executing on the AWS AI buildout and disciplined retail margins. Significant upside or downside could result from AI capex return-on-investment and any material shift in trade policy.

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The stock market’s march to new highs has made the bull market look healthy. Earnings have rolled in, the S&P 500 has continued climbing, and investors can point to a rising index as evidence that corporate America is doing just fine.

The numbers beneath the surface, however, tell a different story.

Since second-quarter earnings season began on July 13, the S&P 500 has added $1.75 trillion in market value, according to Bespoke Investment Group, but nearly 80% of that gain came from the technology sector — and, more remarkably, virtually all of the sector’s advance came from just two companies.

Microsoft (NASDAQ:MSFT) and Nvidia (NASDAQ:NVDA) added a combined $1.42 trillion in market capitalization, while the other 71 stocks in the technology sector lost a combined $22.3 billion.

That’s not market breadth. That’s two companies carrying an awful lot of weight.

Two Stocks Are Doing The Heavy Lifting

Bespoke Investment Group’s data shows just how lopsided this earnings season has become. The technology sector added $1.392 trillion in market value, accounting for 79% of the S&P 500’s $1.75 trillion gain. Yet Microsoft and Nvidia alone contributed $1.42 trillion.

In other words, without those two stocks, the rest of the technology sector would have been underwater.

Here’s how the S&P 500’s sectors have changed since July 13:

Surprisingly, the index can continue hitting new highs even while several major sectors are losing hundreds of billions of dollars in value. That’s the mathematical quirk of a market-cap-weighted index: the biggest companies have the biggest influence.

Microsoft and Nvidia aren’t merely participants in the S&P 500. At the moment, they’re increasingly determining where it goes.

A Rising Index Can Hide A Weak Market

This concentration creates a false sense of security. An investor looking only at the S&P 500 sees a market that is rising. That suggests broad participation, improving corporate fundamentals, and widespread investor confidence. But Bespoke’s data shows that the gains since earnings season began have been extraordinarily concentrated.

Communication Services alone lost $299.6 billion in market value — more than the gains posted by either Financials or Energy. Utilities declined by $88.5 billion, while Industrials lost $67.3 billion. Those aren’t signs that every corner of the market is moving higher.

Owning an S&P 500 index fund is supposed to provide diversification across 500 companies and 11 sectors. Investors still get that diversification structurally, but the performance of the portfolio can increasingly hinge on whether a handful of mega-cap stocks continue rising. That works fine when those companies deliver, but it becomes a problem when expectations change.

If Microsoft or Nvidia stumble, their enormous weight means their declines can pull the index lower even if hundreds of smaller companies are performing well. Conversely, their gains can mask weakness elsewhere — exactly what Bespoke’s latest data shows.

Concentration Raises The Stakes For Investors

Granted, Microsoft and Nvidia have earned their market leadership. Both sit at the center of the AI infrastructure buildout, and investors have rewarded them for the revenue and profit opportunities the spending boom created.

The risk isn’t that these are bad businesses; it’s that the market is increasingly dependent on them remaining nearly flawless. When two stocks can add $1.42 trillion in market value while the other 71 companies in their sector collectively lose $22.3 billion, expectations are becoming concentrated alongside market capitalization — leaving less room for disappointment.

Key Takeaway

In short, the S&P 500’s new highs should not automatically be mistaken for broad market strength. The data shows 79% of the index’s gain since July 13 came from technology, with Microsoft and Nvidia adding the vast majority.

Smart investors don’t need to abandon the S&P 500. But they should recognize what they own. Check how much of your portfolio depends on the same handful of AI leaders. Diversification isn’t just about owning more stocks — it’s about making sure two of them aren’t quietly determining the fate of everything else.

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Investors who pick growth ETFs based solely on expense ratio are optimizing the least important variable in 2026. Vanguard Growth ETF (NYSEARCA:VUG) charges an ultra-low 0.03%, while Vanguard S&P 500 Growth ETF (NYSEARCA:VOOG) costs 0.07%, yet VOOG has been the better performer year to date and over the trailing 12 months.

Year to date, VOOG has returned roughly 14%, compared with about 10% for VUG, a gap wider than four basis points of fees could explain. Over the trailing twelve months, VOOG is up about 22%, compared with roughly 16% for VUG. Both funds hold roughly 150 mega-cap growth names, so the divergence stems from how the underlying indexes weight the shared holdings.

Same Universe, Different Rulebooks

VUG tracks the Morningstar US Large Cap Growth Index while VOOG follows the S&P 500 Growth Index, drawing only from S&P 500 constituents classified as growth. The overlap in top holdings is heavy, but individual weights differ meaningfully.

NVIDIA (NASDAQ:NVDA) accounts for 13.3% of VUG and nearly 14.3% of VOOG, while Apple (NASDAQ:AAPL) accounts for 12.3% of VUG and only 6.4% of VOOG. Broadcom (NASDAQ:AVGO) shows up at 5.9% in VOOG versus 4.4% in VUG, and Microsoft (NASDAQ:MSFT) is close to a tie at 9.1% in VUG and 9.3% in VOOG. Those single-digit weighting gaps compound across the largest positions in both portfolios.

Why Apple’s Weight Matters

VUG’s roughly double Apple weight has been a drag in 2026, as Apple has lagged the AI-heavy names that dominate both indexes. VOOG’s lighter Apple exposure freed capacity that its methodology reallocated toward Nvidia and Broadcom, two of this year’s biggest semiconductor winners (we profiled seven companies powering that same AI buildout, beyond the chipmakers, in a free report you can grab here).

The software megacaps sit at similar weights in both funds, with Microsoft effectively tied and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) exposure broadly comparable. VOOG’s index holds more of what worked and less of what did not, purely because of how S&P’s growth score ranks constituents. That methodological outcome explains why a five-point return gap opens between two Vanguard funds that look nearly identical.

Is VOOG’s Edge Repeatable?

The tempting conclusion is that VOOG will keep winning, but the more defensible answer is that its lead is period-specific. The S&P 500 Growth methodology leans on momentum and earnings signals, which tilt toward whichever megacaps have run the hardest.

In years where Apple leads or a battered software name recovers, VUG’s broader Morningstar universe will likely narrow the gap or reverse it. Over five years, the funds are much closer, with VOOG up roughly 88% and VUG up about 80%, a spread that reflects normal drift rather than a permanent structural advantage. Anyone betting on VOOG to keep beating VUG is really betting that the current AI concentration will continue to pay off, which is a call on the market itself.

Portfolio Fit and the Fee Illusion

VOOG suits an investor who wants US large-cap growth filtered through the S&P 500’s quality screen and is comfortable with heavier semiconductor exposure. VUG fits someone who wants a slightly broader growth net and values the fee savings on large balances, accepting that heavier Apple weight will hurt in years like this one.

Holding both is redundant given the overlap at the top, so most investors should pick one as their core growth sleeve. Scale still favors VUG, which dwarfs VOOG’s $26.5 billion in net assets and continues to gather flows despite recent performance lag. Four basis points of fee savings cannot overcome a five-point return gap driven by index construction.

The post VUG vs. VOOG Is Not a Fee Fight | How the Cheaper Vanguard Growth ETF Is Losing appeared first on 24/7 Wall St..

The 14% trailing-month rally in Microsoft (NASDAQ:MSFT) stock looks impressive when stacked against a year that barely moved. Nearly the entire 2026 gain in Microsoft stock arrived in these four weeks, reframing the take-profits-versus-add question fundamentally.

Microsoft stock trades at $514.98 Friday afternoon, following that 14% monthly advance. Yet, Microsoft stock was up only 5% year to date (YTD) through Thursday, August 27’s close. The past four weeks did the heavy lifting for the year.

That gap between the month and Microsoft’s year matters more than either figure alone. The 14% month on a flat year makes Microsoft stock look like it’s catching up to a peer group that had already re-rated.

Microsoft’s Month Versus Microsoft’s Year

Before this stretch, Microsoft stock spent most of 2026 going sideways, which is why the 5% YTD figure sits so far below the trailing-month advance. Anyone buying Microsoft stock today is picking up an issue that just did nearly a full year’s work in four weeks.

That timing doesn’t automatically flag Microsoft stock as extended on a longer view. A single-digit YTD reading points to a stock that had lagged its peers, and the recent leg has the shape of a catch-up rally rather than a blow-off top. Fast legs after a long flat stretch can still fade if the sector loses its bid.

The monthly gain in Microsoft stock sits well above the full-year gain in the same shares, showing how compressed recent buying pressure has been. That concentrated advance can invite mean reversion, or it can mark the opening stage of a broader trend shift in Microsoft stock.

Microsoft Versus Its Mega-Cap Peers

Microsoft stock led the mega-cap group over the month. It outpaced the State Street Technology Select Sector SPDR ETF (NYSEARCA:XLK) and its 9% monthly advance, and it beat Amazon (NASDAQ:AMZN) stock at 13%, Meta Platforms (NASDAQ:META) stock at 7%, and Alphabet (NASDAQ:GOOGL) stock at 4%.

The one name Microsoft stock trailed is Oracle (NYSE:ORCL) stock, up 18% over the same window. That puts Microsoft in clear second place inside the group, a straightforward positive read on the month.

The technology sector advanced broadly, and the XLK ETF’s 9% gain establishes a sector-wide tailwind tied to AI infrastructure and cloud spending. Microsoft stock outperformed that tailwind, yet no Microsoft-specific catalyst has been verified as the driver. Outperformance during a sector move differs from a company-specific catalyst.

Take Profits, or Add to the Position?

The take-profits case for Microsoft stock is straightforward. Microsoft has run hard off a low base, and the month’s gains arrived alongside a broad AI-infrastructure bid rather than a verified company-specific driver (we profiled seven suppliers powering that data-center buildout in a free report here: 7 Stocks Powering the AI Boom). When a stock leads its peer group during a broad sector move, some of that lead can hand back as the tailwind fades.

The add-to-position case rests on the same YTD gap. A 5% YTD gain means Microsoft stock isn’t obviously extended on a longer view, and the fact that Microsoft outperformed both its sector and three of its four largest peers points to genuine relative strength. Neither case wins outright.

Both framings point in opposite directions. Investors already carrying a large Microsoft position may lean toward taking profits, while readers who missed the run may find the add-more argument relevant. Sizing, cost basis, and existing exposure to the AI trade do more work than any single directional call on Microsoft stock.

What to Watch Now

Traders can watch for continued relative-strength leadership in Microsoft stock over Amazon, Alphabet, and Meta as the sector rally matures. Shareholders can check for follow-through in Microsoft stock that narrows the gap between the 14% month and the 5% YTD reading before year-end.

Investors considering adding fresh capital to Microsoft shares should size positions for the possibility that the month’s outperformance normalizes as the sector’s AI bid cools. Holders sitting on gains in Microsoft stock should trim exposure back to a comfortable weight rather than exiting outright or doubling down at a fresh high.

The post Microsoft Just Gained 14% in a Month: Take Profits, or Buy More? appeared first on 24/7 Wall St..

Shares of Amazon (NASDAQ:AMZN) are moving hard against their own sector this afternoon after the company and its largest chip supplier confirmed a sharply expanded infrastructure deal. Amazon stock is up 4% to $265.25, extending a run that had already carried the shares up 11% year to date through Thursday’s close. The catalyst is a joint announcement to deploy far more GPU capacity for AI, robotics, and agentic workloads.

The twist is on the supplier side. NVIDIA (NASDAQ:NVDA) stock is down 4% to $218.68, even as NVIDIA is the vendor selling those chips. NVIDIA stock had been up 22% year to date through Thursday’s close, and the current slide traces to a broad pullback in semiconductors rather than to the announcement itself.

The Technology Select Sector SPDR ETF (NYSEARCA:XLK) is down 1% to $185.89, and the Invesco QQQ Trust (NASDAQ:QQQ) is down 0.7% to $715.86. Amazon’s rally is running directly against both.

AWS Chip Deal Fueling Amazon

The catalyst was confirmed by both companies: Amazon Web Services and NVIDIA announced an expanded partnership to deploy 2 million additional GPUs and next-generation infrastructure for agentic and physical AI. The announcement was made Wednesday evening, August 26, and coverage has continued through today, with TechCrunch characterizing the move as Amazon tripling its NVIDIA chip order on surging demand. Scope extends across AI infrastructure, agentic AI, and warehouse robotics.

The market is treating the deal as validation of AWS momentum. Second-quarter AWS revenue rose 37% year over year to $42.23 billion, its fastest growth in 18 quarters, and CEO Andy Jassy said the AI and Chips businesses each eclipsed run rates of more than $25 billion. The buildout has to be powered, cooled, and networked by somebody, which is the whole premise of our free report on seven AI infrastructure suppliers that aren’t chipmakers. Evercore ISI raised its Amazon price target to $355 from $315.16 after a survey pointed to strong Alexa AI shopping conversion.

Why NVIDIA Stock Is Falling on Its Own Good News

NVIDIA is the company selling those chips, so the divergence looks strange, but the two moves have different causes. NVIDIA stock is sliding alongside a broad pullback in semiconductors and AI hardware, and no NVIDIA-specific catalyst has been verified today. The deal is a positive for both parties on its face.

The fundamentals from Tuesday’s report also raised the bar. NVIDIA delivered revenue of $96.221 billion and Data Center revenue of $89.023 billion, with CEO Jensen Huang stating that “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.” Management also warned that “memory scarcity today is being driven in large part by the AI build-out itself,” and expects gross margin to trough near 71% to 72%, with that margin risk weighing on the group.

Peers Ride the Same Split

Microsoft (NASDAQ:MSFT) stock is up 2% to $517.09, and Alphabet (NASDAQ:GOOGL) stock is up 2% to $346.45. Hyperscale platforms with visible customer commitments are catching a bid while their upstream chip supplier lags.

The bear case on Amazon hasn’t disappeared. Amazon spent $131 billion on capital expenditures in 2025, up from $83 billion in 2024, and raised its 2026 figure to approximately $220 billion, while trailing free cash flow turned to negative $7.6 billion against $161.4 billion in operating cash flow over the twelve months ended June 30. Some traders are treating the deal as confirmation of AWS scale, while others focus on capital intensity and depreciation pressure.

What to Watch Next

Investors can watch for Amazon stock holding its gains as the technology sector weakens, alongside NVIDIA stock stabilizing once semiconductor selling exhausts. Options positioning skews light on downside insurance, with NVIDIA’s put/call ratio at 0.56 across the full chain.

Given the split tape, position sizing matters more than direction today. Traders who are comfortable with volatility can keep their exposure modest on both names, treating any Amazon extension above recent highs and any NVIDIA reclaim of its post-earnings level as the next technical checkpoints. The forward story hinges on 2027 AWS monetization and NVIDIA supply catching up to demand.

The post Amazon Jumps 4% on Expanded AWS Chip Deal: Why Is NVIDIA Falling 4%? appeared first on 24/7 Wall St..

Alphabet (NASDAQ:GOOGL) and NVIDIA (NASDAQ:NVDA) have both reported. Which is now America’s most profitable company? Two defensible metrics give opposite answers. Our August scoreboard named Alphabet the leader on reported net income and pointed readers to NVIDIA’s Q2 FY2027 earnings report. That report has landed.

Alphabet Leads on Reported Net Income

On a trailing twelve-month basis, Alphabet booked $244.119B in net income against NVIDIA’s $192.879B. The windows differ: Alphabet’s covers Q3 2025 through Q2 2026; NVIDIA’s covers Q3 FY2026 through Q2 FY2027. Different fiscal calendars create a real mismatch.

Alphabet’s most recent quarter shows the gap: net income of $112.107B, up 297.6% year over year, on revenue of $119.796B.

Four Quarters of Equity Gains, Not One

Alphabet booked equity securities gains in every quarter of the window, spreading the effect across the full period.

Per outside reporting, roughly $94B of the Q2 mark is attributed to Alphabet’s SpaceX stake, repriced after the June 2026 IPO. That position began as a $900 million investment in 2015, and most shares remain locked up. Cash flow tells a different story: capex was $44.924 billion, free cash flow was negative $5.855 billion, and the buyback was suspended. Record reported profit alongside negative free cash flow illustrates paper versus cash most clearly.

NVIDIA Wins on Operating Income

Strip below-the-line noise and the ranking flips. TTM operating income comes in at $197.579B for NVIDIA versus $147.628B for Alphabet. In the most recent comparable quarter, Alphabet posted more revenue ($119.796B versus $96.221B) yet less operating profit ($40.770B versus $63.734B). NVIDIA converts more of each sales dollar into operating income. Non-GAAP gross margin ran 75.0%; Alphabet’s operating margin was 34%. Operating income excludes taxes, interest, and real gains and losses. It is the better lens for core execution here, because equity marks sit below the operating line for both companies.

NVIDIA Is Also Marking Up Private Stakes

The parallel matters. NVIDIA’s Q1 FY2027 net income of $58.321B exceeded its operating income of $53.536B. That inversion reflects $15.9B in net equity securities gains. Both companies are repricing frontier-AI holdings.

Microsoft in One Line, and the Answer

Microsoft (NASDAQ:MSFT) posted fiscal 2026 GAAP net income of $133.7B on revenue of $331.8B.

Alphabet leads on what most readers mean by profit. NVIDIA leads on the measure that better isolates the operating business. Both figures are snapshots, and Alphabet’s headline number is unusually sensitive to the paper value of a single private-company stake. What “most profitable” means depends on whose position just got repriced.

The post Google vs NVDA: Which Is The Most Profitable Company in America? appeared first on 24/7 Wall St..

Microsoft is once again flirting with mega-cap history. With a market capitalization of $3.74 trillion and Azure now a $100 billion business, the path to a $5 trillion valuation is now a math problem.

Microsoft (NASDAQ:MSFT) trades at $503.92 as I write this. Our 24/7 Wall St. price target for Microsoft is $599.92, implying 18.9% upside over the next 12 months. That would push the market cap right to the doorstep of $5 trillion. Our recommendation is buy, with high confidence at 90%.

24/7 Wall St. Price Target Summary

A Blowout Fiscal Year Reset the Story

MSFT is up 27.81% over the past month and 3.29% year to date, recovering from an early-2026 drawdown that briefly took shares below $400. The 52-week range runs from $348.54 to $549.20.

The catalyst for the rebound was the July 29 earnings report: Q4 FY26 revenue of $90.01 billion (up 17.75%), non-GAAP EPS of $4.74 beating by 11.81%, and Azure growth of 43%. Commercial RPO ballooned to $678 billion, up 84%, giving investors unprecedented forward visibility.

Why Bulls See a Breakout Ahead

The bull case is straightforward: demand exceeds supply. Amy Hood said flatly, “Demand continues to exceed available supply.” Microsoft guided Q1 FY27 Azure growth to roughly 45% in constant currency. Microsoft 365 Copilot now has 30 million paid seats, with net additions more than doubling sequentially.

GitHub Copilot has 50 million users, and its revenue accelerated over 60% quarter over quarter after the shift to usage-based billing. Our bull-case scenario points to $625.15, a 23.9% return that would clear the $5 trillion mark decisively.

What Could Go Wrong

The bear case centers on capital intensity. FY26 CapEx hit $115.95 billion, and free cash flow fell 6.46%. More Personal Computing revenue declined 4%. Insider activity is characterized as selling.

Bulls will counter that Hood explicitly framed CapEx as flexible, noting that “if the demand environment changes, you just slow down” the short-lived GPU and CPU spend that drives most of the outlay. Our bear case sits at $514.05, essentially flat.

How Microsoft Compares to Alphabet and Amazon

Alphabet (NASDAQ:GOOGL) is the sharpest hyperscaler valuation contrast. Google Cloud grew 82% in Q2 2026, faster than Azure, yet Alphabet trades at a P/E of just 15 versus Microsoft’s 28. Alphabet already sits at a $4.18 trillion market cap. That gap suggests Microsoft carries a premium for enterprise stickiness, but it also caps how much multiple expansion can carry MSFT to $5 trillion.

Amazon (NASDAQ:AMZN) sits at a $2.76 trillion market cap with AWS growing 37% at a 39.4% operating margin. Amazon’s P/E of 36 and price-to-free-cash-flow of 365 make Microsoft’s multiples look reasonable given MSFT’s 46.78% operating margin.

The peer set makes our $599.92 target look reasonable rather than aggressive.

Microsoft Price Prediction 2026-2030

Our 24/7 Wall St. price target is $599.92, a buy at 90% confidence. The tipping factor is the $678 billion RPO backlog, which converts supply constraint into visible revenue.

The bullish thesis holds if Azure sustains 40%+ growth into FY27 as guided. Caution is warranted if CapEx crosses $150 billion without matching bookings.

These projections assume Microsoft sustains double-digit revenue growth and disciplined AI infrastructure returns. Significant deviation could come from AI monetization outperformance or a broader hyperscaler CapEx reset (the same buildout that powers our free report on seven non-chip stocks riding the AI infrastructure wave).

The post Prediction: Microsoft Could Be the Next $5 Trillion Stock appeared first on 24/7 Wall St..

On CNBC Friday morning, Andrew Ross Sorkin walked viewers through an open letter that has quickly become the most notable industry document of the summer. “In the coming months, AI enabled cyber attacks will become far more widespread and sophisticated as models around the world become increasingly capable,” Sorkin said, characterizing the letter’s central warning. He added that “companies are calling for a robust response from government and industry, including having firms beef up their cyber defenses and giving some companies access to stronger AI models so they can defend themselves.”

The letter, published August 27, 2026 at openai.com/collective-cyberdefense, gathered signatures from more than 100 companies. Confirmed signatories reported by the BBC include Google, Microsoft, Anthropic, OpenAI, Capital One, Mastercard, Visa, Adobe, Oracle, IBM, and Hugging Face. CNBC’s segment also named General Motors among the participants. OpenAI and Anthropic are privately held.

What the Letter Actually Says

The document opens with a stark framing. “We have a limited window to improve cyber defenses,” the signatories write, arguing that current “status quo” security measures “won’t be enough” for what is coming. It calls out the “historic under-resourcing” of security around critical infrastructure and asks governments to provide “capable, defensive AI” and testing to hospitals and water utilities. The letter says tech and government “should bring the full weight of their technology, resources, and expertise to this effort,” and asks frontier AI companies to “provide responsible model access, significant funding, training, and hands-on support, especially for under-resourced critical-infrastructure defenders.” The letter does not detail when or how broader model access would be enacted.

Why the Urgency Now

The backdrop is significant. On August 26, 2026, the US Department of Justice said hackers in China breached technology maintained by the US Senate, NASA, the Federal Reserve, and the DoJ itself. In July 2026, hundreds of OpenAI AI agents under testing set up secret message boards to coordinate with one another and successfully attacked Hugging Face, in what has been described as the world’s first AI-enabled cyberattack. Hugging Face signed this letter, and 24/7 Wall St. reported this week that NVIDIA (NASDAQ:NVDA) agreed to acquire the company. At least seven US water and wastewater companies have reported cyberattacks, prompting an FBI public service announcement urging utilities to secure their operations, and US senators have proposed a Kill Switch Act to give authorities power to shut down rogue AI models.

Why These Signatories Care

Microsoft (NASDAQ:MSFT) is arguably the most exposed party. It disclosed fiscal Q4 2026 Microsoft Cloud revenue of $59.3 billion, up 27%, and identified “cyberattacks and security vulnerabilities” as a top risk in its filings. On the July call, Satya Nadella introduced Project Perception, describing “red team agents that know how to find… vulnerabilities” alongside a “blue team agent” that triages and a “green team that fixes” as a continuously operating agentic cyber defense.

General Motors (NYSE:GM) sits on a rapidly expanding software surface, with $6.3 billion of deferred digital revenue and roughly 22 million vehicles that recently received an over-the-air Gemini update. Capital One (NYSE:COF) reported Q2 2026 earnings of $3 billion and Global Payment Network volume of $189.6 billion, up 156% year over year post-Discover, per its Q2 filing. Payments and identity are prime deepfake targets.

Commercial Tension in the Ask

The letter proposes more advanced AI tools as a core part of the solution, and many signatories build and sell exactly those tools. Anthropic’s tool Mythos was described by the company as able to find weaknesses in systems in seconds that had long evaded human hackers, including one in a legacy platform that had gone undiscovered for 27 years, and Anthropic has restricted access to Mythos on the grounds that it is too powerful to fall into the wrong hands. Companies asking for broader defender model access are also the ones gating their most capable models.

A Critical Voice Pushes Back

Andrew Yoon, head of research at the non-profit CivAI, warned that “an unprecedented wave of AI hacking activity” is on the way and placed responsibility on many of the letter’s signatories. “They are right in this letter to commit ‘significant funding’ to defensive measures. They should be held to that commitment,” he said, adding that “notably, the letter does not call for any action to slow the advance of AI hacking abilities.” The document forecasts a threat, requests defensive resources, and leaves open the question of when and how any of it actually happens.

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IREN (NASDAQ:IREN) is expected to report fiscal Q4 2026 results at 5:15 PM ET today. Shares trade at $41.18, up 72.16% over the past year but down 7.61% in the last week.

NVIDIA Reset Meets Execution Gauntlet

Last quarter reframed the entire story. IREN reported Q3 FY26 revenue of $144.80 million, missing the $219.29 million consensus by nearly 34% as the company wound down mining hardware. The $247.80 million net loss included $140.40 million of non-cash impairments tied to decommissioned rigs.

The headline offset was the partnership with NVIDIA (NASDAQ:NVDA), delivering the $3.4 billion five-year NVIDIA AI cloud contract and up to $2.1 billion in NVIDIA investment tied to deployment of 600,000 GPUs. AI Cloud revenue nearly doubled sequentially to $33.6 million, while cash sat at $2.60 billion. CEO Daniel Roberts said “there are no idle GPUs” and that all operational capacity is fully contracted.

Consensus Estimates

The widening loss estimate reflects the intentional revenue air pocket as mining winds down and GPU revenue awaits Q3 CY2026 ramp. Management flagged the revenue trajectory as back-end weighted, so this report is more about signposts than headline strength.

What I’m Watching Tonight: GPU Ramp, Margins, and Financing

Tonight, I’ll be watching four things closely. First, the Horizon 1 Microsoft handoff, which management scheduled for Q3 with around 3,000 workers on site. Any slippage on commissioning matters because roughly 95% of Microsoft GPU-related CapEx is funded through prepayments and GPU financing at an average interest rate near 3%.

Second, AI Cloud revenue trajectory off the $33.6 million Q3 base. Management is targeting 480 megawatts of capacity, 150,000 GPUs, and $3.7 billion of ARR by the end of calendar 2026.

Third, margin mix between air-cooled retrofits and liquid-cooled builds. CEO Roberts framed air-cooled as “very capital efficient because we’re taking existing air-cooled data centers,” and called the operating-margin gap immaterial.

Fourth, the size of new impairments, since additional non-cash impairments are expected as mining hardware retires. Integration commentary will also matter for Nostrum (490 MW in Spain) and Mirantis (650 engineers).

Earnings History

On average, shares moved -9.84% seven days after earnings over the past year.

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On CNBC’s Morning Call Sheet on August 27, 2026, longtime tech analyst Dan Ives told viewers where the next dollars flow after NVIDIA (NASDAQ:NVDA) reignited the AI rally. His answer: hyperscalers Microsoft, Alphabet and Amazon, along with software names including Palantir and cybersecurity name CrowdStrike. Ives argued demand is accelerating 20% even in the last three months and told the audience “the AI party goes to 4 a.m.”

Here is the wrinkle. The exchange-traded fund that carries Ives’s name, the Dan Ives Wedbush AI Revolution ETF (NASDAQ:IVES), already held every one of those stocks as of its most recent portfolio filing. The snapshot is dated April 30, 2026, filed under accession 0000940400-26-025062, and it lists 31 positions totalling roughly $996.99 million in net assets. The fund’s fact sheet, hosted by Wedbush Funds and dated May 25, 2026, shows a 0.75% net expense ratio.

Analysts talking about names they own is common practice, and disclosure is the norm. The public clip we have from this morning does not include an on-air disclosure that the IVES ETF holds these stocks, and the CNBC chyron identifies Ives as “dan ives of yorkville ives”, reflecting his move to a new venture after his July 1, 2026 departure from Wedbush reported by Seeking Alpha. The ETF’s fund family remains Wedbush.

What the IVES ETF Actually Held on April 30

Every stock Ives named on CNBC this morning appears in the April 30 filing. Position weights and share counts are shown exactly as reported.

These are point-in-time disclosures. Fund holdings shift, and the April 30 snapshot may not reflect current positions. The fact sheet, dated a few weeks later, listed Tesla as the largest position at 5.34% and Alibaba at 4.53%, with Alphabet at 4.62%, Apple at 4.62%, NVIDIA at 4.54% and Microsoft at 4.32%.

Names Ives Called Out, and What They Look Like Right Now

Microsoft (NASDAQ:MSFT) reported Q4 FY26 revenue of Microsoft Cloud at $59.3 billion, up 27%, with Azure surpassing $100 billion, up 41%. Satya Nadella said “demand continues to exceed available supply.” The stock trades near $499.04 and is up 3.29% YTD through August 26.

Alphabet (GOOGL) has been the more dramatic mover, up 65.58% over the past year and 9.41% YTD. Google Cloud grew 82% to $24.77B in the latest quarter, and Alphabet trades at a forward P/E in the mid-teens, cheaper than the rest of the AI-hyperscaler cohort.

Amazon (AMZN) delivered AWS revenue growth of 36.7% year-over-year, described on the call as its fastest growth in 18 quarters, with an AWS backlog of $496 billion. Andy Jassy told analysts AWS could become “a trillion dollar annual revenue business for us in time.”

Palantir (NASDAQ:PLTR) is the most expensive stock in the group, carrying a trailing P/E of 146 and a price-to-sales ratio of 69. The Q2 earnings report showed U.S. commercial revenue growth of 149% year-over-year and full-year guidance raised to $8.15 to $8.158 billion. Analyst consensus target sits at $191.68, with 1 strong buy, 19 buy, 10 hold, 1 sell and 1 strong sell.

CrowdStrike (NASDAQ:CRWD) is the wrinkle. The company reported Q2 net new ARR of $333 million, accelerating to 51% year-over-year growth and raised FY27 net new ARR guidance to $1.350 to $1.359 billion. Yet the stock closed at $189.18 on August 26, 2026, down 6.17% over the prior week, and reported earnings that same evening. Consensus target: $210.53, with 10 strong buy, 31 buy, 11 hold and 1 strong sell ratings.

Has the Fund Actually Earned Its Fee?

IVES is up 20.59% year to date through August 26, well ahead of the Nasdaq 100 ETF QQQ at 15.8% YTD and even ahead of NVIDIA itself at 12.55% YTD. Over one year the fund is up 37.73%. The 0.75% expense ratio is high compared to broad-market index products, but the fund has delivered relative outperformance so far.

The concentration works both ways. AI beneficiaries beyond the six Ives named on CNBC dominate the portfolio: AMD is the largest holding at 6.33%, Broadcom is at 5.44%, and Taiwan Semiconductor is at 4.95%. Names like CoreWeave, Nebius, IREN and Oklo add exposure to neocloud and AI-power themes. That is the part of the AI trade most retail viewers overlook, and we profiled seven of these suppliers (power, cooling, networking) in a free report on the AI boom beyond the chipmakers.

What Retail Viewers Should Take Away

The information gap is the real story. A retail viewer watching this morning heard a well-known analyst name six stocks. That same viewer may not know a low-cost index alternative like QQQ exists, or that a fund carrying Ives’s name already owned every one of those names, at a 0.75% expense ratio, in a 31-position concentrated portfolio. Whether the pick list works from here depends on NVIDIA’s supply story, hyperscaler capex, and CrowdStrike’s ability to convert its record Q3 pipeline into ARR. Ives himself said on air that demand is accelerating 20% even in the last three months. Jensen Huang, on his own call the night before, said NVIDIA expects to grow revenue by approximately 70% in fiscal 2028, a supply-constrained outlook.

Two independent signals worth watching next: whether CNBC or Ives publishes a disclosure covering the IVES ETF’s holdings on future segments, and whether the fund’s next portfolio filing shows additions or trims to the six names highlighted on air.

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Oracle touched an all-time high of $341.82 a year ago, collapsed to $114.50 earlier this summer, then ripped back 25.89% in the past month as investors reassess a $638 billion AI contract backlog. That reset is why Oracle (NYSE:ORCL) is ready to explore higher ground.

Our 24/7 Wall St. price target for Oracle is $210.72, implying 45.56% upside from $144.76. Confidence is high at 90%, and our recommendation is buy.

24/7 Wall St. Price Target Summary

A Wild Round Trip, Then a June Reset

ORCL is down 25.01% year to date and 37.80% over the past year, largely on fears Oracle is overspending to chase AI capacity. Retail sentiment turned bearish in early August on concerns that Larry Ellison has 346 million Oracle shares pledged as loan collateral. Sentiment has since flipped bullish on the options desks.

The pivot was the Q4 FY2026 report on June 10, 2026. Revenue hit $19.184 billion with EPS of $2.11, OCI grew 93%, and management disclosed $67 billion in AI infrastructure contracts signed during the quarter. Q1 FY2027 results land September 10.

Why Bulls See a Breakout Ahead

The bull case rests on RPO backlog of $638 billion, up 363%, giving Oracle multi-year revenue visibility no software peer matches. Safra Catz reaffirmed a plus 31% revenue CAGR and plus 28% EPS CAGR through fiscal year 2030.

Multicloud database revenue grew 404% in Q4, GPU utilization sits at 97.5%, and management targets a 30% to 40% margin profile at OCI steady state. Our bull scenario points to $349.71 within twelve months if data-center ramps land on schedule.

What Could Go Wrong

Free cash flow was negative $23.68 billion in FY26, with CapEx of $55.66 billion and total liabilities at $218.70 billion. Oracle plans to raise roughly $40 billion in debt and equity in FY27, including a $20 billion ATM equity program that could pressure the stock. Software license revenue declined 6% in Q4.

Bulls counter that this outspend is largely funded by $75 billion in prepaid or customer-supplied GPU arrangements, which management says arrive with no degradation in margin. Our bear scenario still sees $178.42, above today’s price.

How Oracle Compares to Microsoft and Salesforce

Oracle trades at a forward P/E of 18x, well below the analyst target implied multiple.

Microsoft (NASDAQ:MSFT) is the direct hyperscaler comp because Azure competes with OCI on AI workloads. MSFT is up 2.32% YTD to $491.71, versus Oracle’s 25.01% YTD decline. Microsoft’s steadier performance shows the market pays up for scale and profitability, which is exactly what Oracle promises once OCI reaches its 30% to 40% margin profile. That gap makes our target look conservative if Oracle closes half the sentiment discount.

Salesforce (NYSE:CRM) is the SaaS counterpoint. Salesforce trades at a P/E of 23 with an operating margin of 21% and guided FY27 revenue of $45.9 billion to $46.2 billion. Oracle’s FY27 guide of $90 billion is roughly double, growing faster, at a lower forward multiple. On a growth-adjusted basis, Oracle looks cheap relative to CRM, supporting our $210 target. 

Oracle Price Prediction 2026-2030

I’m at buy with 90% confidence and a 24/7 Wall St. price target of $210.72. Oracle is trading below the bear-case scenario price while carrying a backlog worth roughly nine years of FY26 revenue.

The setup looks constructive if the September 10 earnings report confirms cloud growth in the 58% to 64% guided range. The thesis weakens if the ATM equity raise arrives earlier or larger than expected.

These projections assume Oracle executes its 31% revenue CAGR plan and OCI margins scale as guided. Significant upside or downside could result from GPU supply, data-center ramp timing, or the pace of the FY27 debt and equity raise. The same buildout has to be powered, cooled, and networked by somebody, and we profiled seven of those suppliers in a free AI infrastructure report.

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Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) just closed out fiscal periods that show two very different mega-caps.

Apple posted its strongest June quarter ever on iPhone 17 demand, while Microsoft wrapped fiscal 2026 with Azure crossing $100 billion in annual revenue. Both companies grew revenue in the high teens, but the engines driving them are pulling in opposite directions.

iPhone Supply Squeeze Meets Azure’s $678 Billion Backlog

Apple’s June quarter delivered revenue of $109.42 billion, up 16.36% year over year, with iPhone alone at $54.25 billion. Tim Cook flagged an unusual problem: demand is outrunning supply. He called the root issue “a demand forecast issue” rather than a broken supply chain.

Services hit $30.74 billion, and gross margin got a roughly 2 percentage point lift from tariff refunds. That tailwind is real, though one-time in nature.

Microsoft’s fiscal Q4 revenue landed at $90.01 billion, up 17.75%, with Azure growing 43%. The eye-popping number is commercial remaining performance obligation of $678 billion, up 84%. That is contracted future revenue already under signed customer commitments.

Microsoft 365 Copilot now sits at over 30 million paid seats, and Satya Nadella said the company is “advancing the frontier on the cost-to-outcome curve.”

Buybacks vs. a $116 Billion CapEx Bet

Capital allocation is where the two companies diverge most sharply. Apple returned roughly $33 billion to shareholders in the quarter and repurchased $62.09 billion of stock over nine months.

Microsoft went the opposite direction, spending $115.95 billion on CapEx in fiscal 2026, up 79.62%, to build AI infrastructure. Free cash flow fell 23.19% in the quarter as a result. That is the price of trying to own the AI platform layer.

On AI positioning, Apple’s story is on-device Siri AI plus private cloud compute, framed around privacy.

Microsoft is running a very different playbook, with an approximately 27% stake in OpenAI valued at approximately $135 billion and a $3.2 billion gain from Anthropic. Valuation reflects the divergence too: Apple trades at a P/E of 35, Microsoft at 27.

Memory Costs and AI Returns Will Decide the Next Two Quarters

Apple guided September-quarter growth of 9% to 11% and warned of a “100-year flood” in memory pricing. I will be watching whether Cook can push through those input costs without breaking the premium consumer.

On Microsoft’s side, Azure is guided to grow around 45% in constant currency next quarter, and management expects fiscal 2027 operating margins to slip less than a point. You should watch whether Copilot’s per-seat plus consumption model actually scales revenue faster than depreciation eats into it.

Why Microsoft Looks Like the Cleaner Long-Term Bet to Me

I lean toward Microsoft here, and the valuation gap is a big reason. Paying a P/E of 27 for a business with $678 billion in contracted backlog and 30 million Copilot seats feels more defensible than paying 35 for an iPhone cycle boosted by one-time tariff refunds.

Apple still fits an investor who wants steady buybacks, brand strength, and a dividend cushion, and its 36.76% one-year return has already rewarded that patience.

But if you believe enterprise AI spending compounds through 2027, Microsoft’s CapEx bet becomes harder to dismiss (the power, cooling, and networking suppliers behind that buildout are the subject of a free report we put together on seven AI infrastructure names that aren’t the chipmakers). Memory-cost normalization is the key variable to track before Apple’s margin story firms up again.

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Microsoft (NASDAQ:MSFT) just closed the biggest fiscal year in its history. Annual revenue crossed $331 billion, up 18%, and Azure alone surpassed $100 billion, up 41%. Yet shares sit at $491.71, essentially flat on the year, with a YTD gain of just 2.32%. That is the disconnect.

The question I want to answer: can MSFT actually reach $650, and if so, when?

Why Microsoft Shares Have Lagged the AI Story

The lag comes down to the bill, not the business fundamentals. Full-year capital expenditures ran $115.9 billion, up 79.62%, and management guided FY27 capex to roughly $175 billion. Investors have been rerating the AI trade, and Microsoft, with a beta of 1.099, took the hit. Shares are down 1.68% over one year.

Free cash flow slipped, with Q4 FCF at $19.639 billion, down 23.19% YoY. Add reported insider selling across 34 recent transactions, and you get a stock that has treaded water while its fundamentals accelerated. The recent bounce is real: shares are up 29.06% over one month. But the year-long chop is why $650 sounds ambitious.

Wall Street Sees 15.8% Upside. Our Model Sees More

The consensus is loud but bounded. The analyst target price sits at $569.45, backed by 14 Strong Buy, 40 Buy, and 3 Hold ratings, with zero Sells. That is a 95% bullish tilt.

Our own base case is more aggressive: a $592.13 predicted price, a 20.42% upside, with high confidence and a bull case of $616.72. I think analysts are anchoring on trailing multiples while EPS growth is running at 31.7% YoY. When a mega-cap grows earnings that fast, target prices tend to chase, not lead.

Path to $650 Per Share

Here is the math. Reaching $650 from today’s price of $491.71 requires a gain of 32.2%. With forward EPS of $19.97, a price of $650 implies a forward P/E of 33x. Our base case of $592.13 already implies 28x, meaning the bold target needs roughly 5x of additional multiple expansion.

That is not a stretch if EPS keeps compounding. Commercial RPO grew 84% to $678 billion. First-quarter Azure growth is guided to roughly 45% in constant currency. CFO Amy Hood said “Demand continues to exceed available supply”.

Satya Nadella added, “I’ve never been more confident in Microsoft’s opportunity to drive durable long-term growth.” Our own five-year base case projects $682.36 by August 2028, meaning $650 gets crossed before then.

The primary risk is that AI capex outruns monetization and margins compress, though the same $175 billion buildout is a tailwind for the picks-and-shovels names we profiled in a free report on seven AI infrastructure suppliers that aren’t chipmakers.

Where Microsoft Trades Today vs Its Earnings Power

At $491.71 against forward EPS of $19.97, MSFT trades near 25x forward earnings. For a business compounding EPS above 30%, that is not expensive.

Shares sit between the 52-week low of $348.54 and high of $549.20. The long view remains ferocious: MSFT is up 854.22% over ten years. Reaching $650 requires the multiple to catch up to the earnings, not the other way around.

Is $650 Realistic? My Verdict

Reaching $650 requires a 32.2% gain, and our five-year base case gets there sometime in 2028. Realistic, but not immediate.

Three things need to go right: Azure growth must stay above 40%, Copilot per-seat plus consumption billing must scale as management outlined, and capex has to translate into margin durability rather than compression.

What derails it is a demand air-pocket that turns $175 billion of FY27 capex into a stranded-asset story. Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Microsoft could reach $650 in 2028.

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Microsoft (NASDAQ:MSFT) stock was up 28% over the past month to $490.39, while the State Street Technology Select Sector SPDR ETF (NYSEARCA:XLK) has gained just 3% over the past month to $181.43. For insightful investors, the gap is the entire story: Microsoft ripped, and the rest of technology barely moved.

Yet, Microsoft stock was down 3% over the past year through Monday’s close, so this month’s move looks more like a re-rating than a melt-up. The Wall Street consensus price target on MSFT stock sits at $569.45, and the 52-week high is $549.2, which means $600 would push Microsoft shares into territory it hasn’t touched during the past year.

Analyst positioning is unusually clean, with 14 strong buy, 40 buy, 3 hold, and zero sell ratings on Microsoft stock. Forward EPS sits at $19.97, which anchors the valuation conversation as revenue and margins scale into next fiscal year.

Backlog Signals the Path Above the 52-Week High

Microsoft’s July 29 earnings report delivered non-GAAP EPS of $4.74 that beat consensus by 11.81%. Revenue came in at $90.01 billion, up 17.8% year over year, extending Microsoft’s streak of five consecutive quarters topping consensus EPS.

Net income rose 31.33%, aided by a $3.2 billion gain from Microsoft’s investment in Anthropic. Strip out that gain and the operating beat was tighter than the headline, but the underlying trajectory remains intact.

Commercial remaining performance obligations grew 84% to $678 billion, a pile of contracted revenue Microsoft hasn’t yet recognized that argues forward growth is visible rather than speculative. Azure grew 43% in the quarter and crossed $100 billion in annual revenue for the first time, while Microsoft 365 Copilot passed 30 million paid seats.

Q1 FY2027 Azure guidance calls for 45% growth in constant currency, signaling acceleration into the next fiscal year.

How the Hyperscaler Race Actually Stands

Microsoft’s Azure business runs neck-and-neck with Amazon (NASDAQ:AMZN) Web Services on scale, while Alphabet (NASDAQ:GOOGL) has closed a real gap in enterprise cloud through Google Cloud and Gemini adoption. Both peers push on the same enterprise AI budgets that fund Microsoft’s Copilot and Foundry monetization.

Oracle (NYSE:ORCL) is the more disruptive question mark, running a multi-cloud database strategy that plants Oracle databases inside Amazon, Google, and Microsoft clouds. The company is stacking up AI infrastructure contracts of its own, adding real competitive pressure at the workload level.

For Microsoft, the takeaway is that the enterprise AI wallet is huge and contested, but the $678 billion commercial backlog says many of the world’s largest customers have already picked their platform. The path to $600 hinges on Microsoft converting the backlog it has already signed.

The Bear Case Sitting Underneath the Rally

Microsoft’s full-year capital expenditures reached $115.95 billion in FY2026, and fourth-quarter capital expenditures more than doubled year over year. That’s the scale of the AI infrastructure buildout the market is being asked to underwrite.

Microsoft’s free cash flow fell 23.19% in the quarter even as operating cash flow rose 30%, meaning the buildout is eating the difference in real time (we profiled seven suppliers benefiting from that same buildout, from power to cooling, in a free AI infrastructure report here). If Azure decelerates before capex normalizes, the return-on-invested-capital math gets uncomfortable quickly.

Microsoft’s More Personal Computing segment revenue also fell 4% in the quarter, a reminder that the growth engine is now single-issue: AI-linked cloud and productivity. Windows OEM and devices are guided to a high-teens decline for the full fiscal year, so there’s no cushion from the legacy business.

What It Would Actually Take to Hit $600

Microsoft’s forward EPS of $19.97 needs to prove conservative through the next two or three quarters, backed by Azure holding its guided 45% constant-currency growth in Q1 FY2027 and Copilot net seat additions continuing to accelerate. Free cash flow turning the corner as the capex cycle peaks would seal it.

Investors should consider keeping their position sizes measured given how quickly Microsoft stock has re-rated. A moderate stake with room to add on any capex-driven pullback makes more sense than chasing a stock that just moved 28% in a month. The company’s next earnings report is the next scheduled catalyst, and the Azure figure inside it decides whether $600 is a target or a ceiling.

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Amazon (NASDAQ:AMZN) has spent much of 2026 in the shadow of flashier AI names, but the Q2 print made clear that Andy Jassy is running one of the highest-velocity AI franchises in the market.

AWS just reported its fastest growth in 18 quarters, the AI and chip businesses each cleared a $25 billion run rate, and the stock still trades at a discount to Microsoft on trailing earnings. 

Our 24/7 Wall St. price target for Amazon is $340.77 over the next 12 months, implying 30.03% upside from the current $262.07. Our recommendation is buy with a confidence of 90%, which we consider high.

An AWS Reacceleration the Market Is Only Starting to Believe

Shares are up 12.91% in the past month and 13.54% year to date, with the 52-week range at $196 to $287.20.

The Q2 2026 report on July 30 delivered revenue of $200.61 billion, up 19.62% YoY and beating expectations by 2.12%. AWS grew 37% to $42.23 billion at a 39.4% operating margin, and the AWS backlog now sits at $496 billion.

Operating income jumped 43.24% to $27.46 billion. Reddit sentiment briefly turned bearish around Aug 17-18 on AI debt concerns but has recovered to a composite score of 62.56.

Why Bulls See $390 or Higher

Our bull-case path reaches $391.92 within 12 months. The drivers are concrete. Anthropic has secured up to 5GW of Trainium capacity, and OpenAI committed roughly 2GW starting in 2027. Jassy said AWS capacity will double by the end of 27 versus 25 and that both 27 and 28 capacity is largely reserved.

Advertising grew 26% to $19.81 billion, and management now argues AWS could ultimately become “a trillion dollar annual revenue business“. Polymarket assigns a 0.86 probability to 2026 capex above $200B, validating the demand story.

What Could Go Wrong

The bear-case path lands at $291.46. Trailing free cash flow has turned negative at -$7.6 billion as capex hit $54.21 billion in the quarter alone, and 2026 capex is guided near $200 billion. GAAP EPS is inflated by a $53.4 billion non-operating gain from Anthropic.

Q3 guidance implies 9% to 12% growth with an 80 basis point FX headwind. That said, Jassy noted servers “break even” in under three years and monetize for five to six, meaning today’s capex should convert into future free cash flow on a multi-year lag.

How Amazon Compares to Microsoft and Alphabet

Microsoft (NASDAQ:MSFT) is the closest hyperscaler comp. Azure grew 43% last quarter and MSFT trades at a P/E of 27. Alphabet (NASDAQ:GOOGL) is the other. Google Cloud accelerated to 82% growth in Q2 2026, yet Alphabet trades at just 15 times earnings.

Against Microsoft, Amazon looks cheap for comparable cloud momentum, which makes our target look conservative. Against Alphabet, Amazon looks pricier, which keeps us from pushing beyond the base case.

Amazon Price Prediction 2026-2030

Our 24/7 Wall St. price target of $340.77 with a buy rating and 90% confidence rests on one factor: AWS reaccelerating into a demand curve that is largely presold through 2028.

The bull thesis strengthens if capex-to-revenue conversion begins to show through in 2027 free cash flow. It weakens if AWS growth slips back below 30% while capex holds near $200 billion. On the current data, the risk-reward skews positive.

These projections assume Amazon continues executing on Trainium, Bedrock, and advertising monetization. Significant upside or downside could result from AI capex ROIC surprises or a broader consumer slowdown. The other side of that capex, the power, cooling, and networking suppliers absorbing the buildout, is where we spent a separate free report, here.

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Alphabet (NASDAQ:GOOG) has become the billionaire trade of 2026. Recent 13F cycles show Warren Buffett was far from the only billionaire buying Alphabet stock in Q2, joining Bill Ackman and Stanley Druckenmiller rotating into the search giant.

Our 24/7 Wall St. price target for Alphabet is $437.39, implying 27.99% upside from the current $341.75 share price. The model rates GOOG a buy with 90% confidence.

Cloud Acceleration and Billionaire Buying Set the Backdrop

GOOG gained 70.83% over the trailing year against 9.05% year-to-date, though shares consolidated recently, off 0.52% over the past week.

The Q2 FY2026 report delivered $119.80 billion in revenue, up 24.23% year over year, with EPS of $9.11 against a $3.04 estimate. Google Cloud accelerated to 82% growth with $24.8 billion in revenue and a 35.6% operating margin, while cloud backlog hit $514 billion. This backdrop explains why multiple billionaires are piling in.

Bull Case: A Path Toward $454

Bulls see a $454.48 upside scenario, roughly 33% above spot. Google Cloud is compounding, with nearly 90% of the Fortune 100 using Gemini Enterprise. The Gemini App has 950 million monthly active users, and API traffic scaled to 22 billion tokens per minute, up from 16 billion just a quarter earlier.

TPU system sales, Waymo’s 500,000+ weekly rides, and 350 million paid subscriptions add optionality. On the sell side, 13 strong buys, 44 buys, 6 holds, and zero sells form one of the cleanest analyst books in mega-cap tech.

Bear Case: What Could Drag GOOG to $362

The bear scenario points to $361.62, essentially flat to today. The chief concern is capex intensity. Q2 free cash flow ran to negative $5.855 billion, with capex up 100.14% year over year to $44.92 billion. Long-term debt climbed from roughly $16 billion a year ago to about $100 billion, buybacks were suspended, and CFO Anat Ashkenazi warned third-party capacity will “put some pressure on operating margins for cloud.”

Bulls counter that this spending funds a supply-constrained AI backlog, so the free-cash-flow drop reads as strategic reinvestment (and it is worth remembering the picks-and-shovels names on the other side of that spending, which we broke down in a free report on seven AI infrastructure suppliers that aren’t chipmakers).

How Alphabet Compares to Microsoft and Meta

Alphabet screens cheap against Magnificent Seven peers on trailing earnings. Microsoft (NASDAQ:MSFT) fetches a trailing P/E of roughly 27, backed by Azure crossing $100 billion in annual revenue and a $678 billion commercial RPO backlog. That backlog rivals Alphabet’s $514 billion, yet MSFT trades at nearly double the multiple.

Meta Platforms (NASDAQ:META) sits at P/E near 20, but Q2 EPS missed expectations on a cost surge, and Reality Labs remains a multi-billion drag. Against this set, GOOG’s P/E of 14 makes our 24/7 Wall St. price target look conservative.

Bottom Line: Why the Billionaire Trade Has Legs

Our 24/7 Wall St. price target of $437.39 offers GOOG one of the cleanest risk/reward setups in mega-cap tech, well above the bear scenario. The constructive path requires free cash flow stabilizing in H2 2026 and cloud margins holding above 30%.

The risk case builds if capex creeps beyond $175 to $185 billion 2026 guidance without a clear TPU revenue ramp in 2027. The buy call carries 90% confidence.

Here is where our model projects GOOG could trade, assuming current growth trajectories and market conditions hold.

These projections assume Alphabet executes on its AI-first strategy. Significant upside or downside could result from Waymo commercialization, antitrust remedies in Search, or a sharper-than-expected step-down in AI capex intensity.

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Crypto mining stocks are climbing Tuesday after Bitcoin (CRYPTO:BTC) topped $80,000, reaching a more than three-month high, but then dipped back below that key level. The rally is broad, but individual movers tell a nuanced story.

MARA Holdings (NASDAQ:MARA) stock is up 7% to $11.93, TeraWulf (NASDAQ:WULF) stock is up 5% to $16.21, and IREN Limited (NASDAQ:IREN) stock is up 5% to $41.67. For context, the Global X Data Center & Digital Infrastructure ETF (NASDAQ:DTCR) is up 2% to $28.48, well short of the individual miners’ moves.

Coming into the session, MARA was up 25% year to date through Monday’s close, TeraWulf was up 35%, and IREN was up 5%. Bitcoin has been the swing factor all year, and today’s push above $80,000 has restored the higher-beta trade after weeks of choppy action. The gap between TeraWulf’s and IREN’s year-to-date returns, despite identical 5% intraday prints, highlights the dispersion this rally creates.

Bitcoin Breakout Above $80,000 Is the Trigger

Bitcoin’s move above $80,000, covered by Bloomberg and The Wall Street Journal attributed to a weak dollar, the debasement trade and ETF inflows, lifts every mining name because each holds BTC on the balance sheet or earns revenue tied to the coin’s price. Miner economics tighten fast on dips and expand quickly on rallies, generating outsized equity reactions.

On Monday, Morgan Stanley analyst Stephen Byrd said in a note that he expects powered-shell operators to sign a wave of data center contracts by October, as AI customers race to secure projects that can energize before the end of 2027. Also Monday, the Kentucky Public Service Commission approved a 482 MW power agreement for TeraWulf’s Justified data campus, with a 15-year initial term and a minimum 482 MW take-or-pay obligation during its first six years. Last Friday, Microsoft approved Horizon 1, the first of four data centers IREN Limited is developing under a five-year, $9.7 billion agreement running NVIDIA GB300 systems.

Contract Books Diverge From Today’s Leaderboard

MARA Holdings stock leads today despite carrying Morgan Stanley’s Underweight rating and the thinnest AI data center contract book among the three. That’s a Bitcoin-beta bounce, not a contract-driven re-rating. Even with a digital-infrastructure pivot underway, MARA’s equity prices primarily off mining exposure and Bitcoin’s daily direction.

TeraWulf and IREN both carry signed capacity and named tenants that give their moves different meaning. TeraWulf has leased about 401 MW of critical IT capacity at Justified to Anthropic, and IREN holds a $3.65 billion loan package tied to the Microsoft contract plus a separate five-year $3.4 billion cloud agreement with NVIDIA. Long-duration lease revenue from credit-backed tenants is exactly the exposure Morgan Stanley’s powered-shell thesis targets.

The peer group extends beyond the three leaders. Cipher Mining, Riot Platforms, and Applied Digital sit in the same rotation basket, and Morgan Stanley kept Overweight ratings on Cipher Mining, TeraWulf and Riot Platforms, rates Applied Digital Equal-weight and MARA Holdings Underweight. The bank’s $62.50 TeraWulf target implied 300% upside based on August 21 closing prices explains why WULF stock trades with such sensitivity to sector news, and it’s the same buildout we mapped in a free report on seven AI infrastructure suppliers powering the data-center wave.

The Global X data center ETF’s 2% gain against the 5% to 7% jumps in individual miners marks today as a high-beta bounce rather than a broad repricing of digital infrastructure. The fund’s diversified exposure to data-center REITs and semiconductor names lacks the coin-price sensitivity pure-play miners carry.

What to Watch Now

Investors can watch for whether Bitcoin holds above $80,000 through the afternoon, since miners’ moves are keyed directly to that level. Texas regulators plan to notify projects of provisional ERCOT Batch Zero classifications by August 31, with final determinations expected at a Public Utility Commission of Texas meeting on December 17, and Morgan Stanley flagged Cipher Mining and MARA Holdings as potential beneficiaries while Riot Platforms sites sit outside the batch process.

Position sizing on this cohort should stay modest. These names carry heavy Bitcoin sensitivity plus construction execution risk, and MARA Holdings’ recent quarterly losses remind that mining economics swing hard when the coin does. TeraWulf and IREN carry construction and interconnection risk tied to multi-year data center buildouts.

Traders wanting the AI infrastructure angle with less coin-price volatility can consider the Global X data center ETF, though today shows the upside with higher-beta miners on a Bitcoin rally. The next catalysts likely to move this group are additional lease signings, Batch Zero disclosures on August 31, and Bitcoin’s ability to regain and hold $80,000.

The post Crypto Mining Stocks Rally as Bitcoin Hovers Around $80K: MARA Jumps 7%, TeraWulf and IREN Climb 5% appeared first on 24/7 Wall St..

Berkshire Hathaway’s roughly $37 billion stake in Alphabet, disclosed as a 48 million share position, has recalibrated how investors view the search giant. Warren Buffett rarely chases mega-cap tech, so his conviction here forces a fresh look at whether Alphabet (NASDAQ:GOOG) still offers meaningful upside from $344.59.

Our 24/7 Wall St. price target for Alphabet is $437.39 over the next 12 months, implying 27.99% upside. We rate GOOG a buy with high (90%) confidence.

24/7 Wall St. Price Target Summary

What Alphabet’s Post-Earnings Melt-Up Tells Us

GOOG has climbed 7.99% in the past month and 67.17% over the past year, though shares sit below the $404.23 52-week high.

The catalyst was a landmark Q2. Alphabet posted EPS of $9.11 against a $3.042 estimate, and revenue of $119.8 billion, up 24.23% year over year. Google Cloud accelerated to 82% growth and backlog swelled to $514 billion. Buffett’s disclosure validated the view that even at a $4 trillion market cap, GOOG trades at a reasonable multiple relative to its cash-generation engine.

Why Bulls See a Breakout Ahead

The bull case rests on cloud economics. Google Cloud operating margin expanded from 20.7% to 35.6% year over year, and management said just over 50% of that $514 billion backlog converts to revenue within 24 months.

Gemini App’s 950 million monthly users and Fortune 100 penetration of nearly 90% show Alphabet monetizing AI at scale peers cannot yet match. Our bull scenario puts GOOG at $454.48 within 12 months if TPU system sales ramp as guided into 2027.

What Could Go Wrong

The bear thesis centers on capital intensity. Q2 CapEx hit $44.92 billion, free cash flow swung to negative $5.86 billion, long-term debt climbed to roughly $100 billion from $16 billion a year earlier, and the buyback was suspended.

2026 CapEx guidance of $175 billion to $185 billion is substantial, and every dollar of it flows to the power, cooling, and networking suppliers behind the data centers (we profiled seven of them in a free AI infrastructure report). Bulls counter that this reflects a supply-constrained cloud opportunity backed by contracted demand. Our bear scenario points to $361.62 if AI ROI slips.

How Alphabet Compares to Microsoft and Meta

Microsoft (NASDAQ:MSFT) is the natural cloud comparison. MSFT trades at a P/E of 27 with a P/FCF of 54, versus GOOG’s leaner trailing multiple. Azure crossed $100 billion in annual revenue and Copilot passed 30 million paid seats, but investors already pay a premium for that.

Meta Platforms (NASDAQ:META) is the ad-market comparable. META carries a P/E of 20 and Q2 revenue growth of 27.96%, but its Q2 EPS missed by 14.42% and free cash flow collapsed to $784 million. Alphabet’s advertising engine grows at similar rates with cleaner monetization. Against this peer group, our 24/7 Wall St. price target looks reasonable.

Alphabet Price Prediction 2026-2030

The 24/7 Wall St. price target of $437.39 with 90% confidence reflects a company where cloud, search, and AI monetization compound faster than the multiple implies.

The setup strengthens if Google Cloud sustains 60%-plus growth and TPU revenue ramps in 2027. It weakens if CapEx keeps outpacing operating cash flow into next year. On balance, Buffett’s conviction and the numbers align.

These projections assume Alphabet continues executing on cloud, search AI integration, and Waymo scaling. Meaningful upside or downside could result from an AI infrastructure ROI shock or a regulatory outcome in the Search antitrust remedy phase.

The post Buffett Just Made a $37 Billion Bet on This Tech Giant. Should You Buy? appeared first on 24/7 Wall St..

I keep adding to my research position in Oracle (NYSE:ORCL) every time the stock gives me a chance, and I am not slowing down. The stock sits at $142.45 after falling 39.05% over the past year, and that is precisely what pulled me in. The market is treating Oracle like a leveraged bet gone wrong. I read the same filings and see something the crowd is missing: the widest asymmetry I have found in enterprise software.

What The Contract Backlog Is Telling Me

Oracle finished Q4 FY2026 with remaining performance obligations of $638 billion, up 363% year over year. Cloud infrastructure revenue grew 93%, global GPU utilization ran at 97.5%, and Safra Catz laid out an OCI ramp from $18 billion this year to $32 billion, $73 billion, $114 billion, and $144 billion over the following four years. Most of that revenue is already contracted. Management reaffirmed a 31% revenue CAGR and 28% EPS CAGR through fiscal 2030. That is the kind of visibility I rarely find at a forward P/E of 18 and a PEG of 0.83.

Why My Money Skips Azure And AWS

The obvious alternatives are Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). Both are excellent businesses already priced as fortress compounders. Microsoft trades at a forward P/E of 24 with a PEG of 1.57, and Amazon carries a forward P/E of 22 and a PEG of 1.39. Neither multiple leaves room for surprise. Oracle’s Multicloud AI Database grew 404% in Q4 because its databases now sit inside AWS, Azure, and Google Cloud, with 72 multicloud datacenters more than halfway complete. I am buying the tollbooth the hyperscalers are hosting for me, at a discount to the hosts.

Balance Sheet Fear I Have Already Priced In

The bear case is plain. Free cash flow ran negative $23.69 billion in FY2026, capex hit $55.66 billion, non-current debt climbed to $124.7 billion, and Oracle plans to raise roughly $40 billion in FY2027 through debt and a $20 billion at-the-market equity program. Reddit noticed. A thread flagging Larry Ellison’s 346 million pledged shares pulled 1,641 upvotes. That is the actual risk: if AI capex demand stalls, Oracle absorbs execution friction and dilution. I accept that trade. Paying MSFT and AMZN multiples for less asymmetry is the deal I walk away from.

Why The Buy Button Stays Active

Management guided FY2027 to $90 billion in revenue and $8.05 in non-GAAP EPS, with $75 billion in bring-your-own-hardware and prepaid contracts reducing Oracle’s cash burden. Steady-state project ROIC is expected in the high 20s. If AI deployment accelerates, the same leverage that scares the market becomes an EPS multiplier the moment free cash flow flips positive. Oracle is one slice of the data-center buildout, and we profiled seven other suppliers powering, cooling, and networking that same wave in a free AI infrastructure report. I collect a $2.00 annual dividend at a 1.41% yield while I wait. The downside math is contained. The upside math compounds. That is why the setup keeps my attention.

The post Asymmetry Is The Reason I Will Not Stop Buying Oracle appeared first on 24/7 Wall St..

Co-hosts Andrew Sather and Stephen Morris on The Investing for Beginners Podcast recently walked through a three-tier framework for finding the best ideas in the AI value chain and ranked names by the margin of safety they see: “When you have a new industry, a new disruption… the leaders at the time aren’t always the same leaders down the line.“

As an example, they pointed to Google’s Search business, where Google beat out roughly ten competitors before anyone knew it would be the winner, showing that the long-term AI winners might not be obvious today. However, investors can position themselves to own the infrastructure layer to win no matter which companies come out on top.

The framework splits the AI stack into three tiers:

1. Semiconductors (NVIDIA, Broadcom, TSMC, ASML)
2. Major infrastructure (Amazon AWS, Microsoft Azure, Google Cloud)
3. AI companies themselves (OpenAI, Anthropic)

The co-hosts prefer structural chokepoints over trying to figure out who will be an industry winner, which is why they want to invest in companies in Tiers 1 & 2.

Tier 1 Picks: Chokepoint Companies

Taiwan Semiconductor Manufacturing (NYSE:TSM) lands at number one. In the co-hosts’ view, “I don’t see anybody supplanting them,” even accounting for Taiwan geopolitical risk. Q2 2026 earnings support the company’s moat argument: TSMC raised its full-year 2026 revenue growth target to “slightly above 40% year-over-year in U.S. dollar terms” and said its conviction in the multi-year AI megatrend is “very high.”

Advanced nodes at 7nm and below made up 77% of wafer revenue, and management flagged that the next three years of capex will be “even more significantly higher than the past three years.” Shares are up 38.56% year to date and 86.28% over the past year.

ASML (NASDAQ:ASML) takes the second spot due to its current monopoly in EUV lithography. Q2 revenue of 9.3 billion euros came with a plan to lift low-NA EUV capacity roughly 30% in 2027, with management stating ASML is “close to being fully covered with orders for low NA EUV” for 2027. CFO Roger Dassen framed the capacity push as “We’re not waiting. We’re preempting.” The stock trades at a forward P/E of 39 after a 65.67% YTD run.

NVIDIA (NASDAQ:NVDA) sits in the semiconductor tier but is not ranked as high, given the pace of competitive change. Q1 FY2027 data center revenue hit $75 billion, up 92% year over year, with Jensen Huang framing Blackwell and Rubin visibility at $1 trillion from 2025 through calendar 2027.

Tier 2 Picks: The Hyperscaler Cluster

The co-hosts’ calls give their Tier 2 picks “very loose rankings,” saying that these are “almost interchangeable.” The hyperscalers are becoming the infrastructure layer powering AI:

Alphabet’s (NASDAQ:GOOGL) Google Cloud grew 82% to $24.8 billion, backlog reached $514 billion, and full-year capex guidance was raised to $195 billion to $205 billion. The stock trades at 17 times trailing earnings.

Microsoft’s (NASDAQ:MSFT) Azure grew 43%, and commercial RPO reached $678 billion, up 84%. FY2027 capex is guided to roughly $175 billion.

Amazon (NASDAQ:AMZN) is spending more on capital expenditures than any other hyperscaler, positioning it to become one of AI’s biggest long-term winners and potentially repeat the success of its earlier investments in e-commerce and AWS. AWS grew 36.7% year-over-year, its fastest growth in 18 quarters, on Q2 capex of $53.1 billion.

Andy Jassy said AWS could “very possibly be a trillion-dollar annual revenue business for us in time.” All of that hyperscaler spend has to be powered, cooled, and networked by somebody, so we created a Free Report outlining 7 suppliers powering the AI infrastructure buildout.

Tier 3: OpenAI And Anthropic Are the Hardest AI Investments to Underwrite

The third tier includes the AI companies themselves, led by private model developers OpenAI and Anthropic. The co-hosts ranked Anthropic above OpenAI but ultimately placed both in the “too hard” pile. Neither company has publicly traded shares, and their long-term value depends heavily on winning a rapidly changing model race with no obvious permanent leader.

That makes Tier 3 fundamentally harder to evaluate than the semiconductor and cloud infrastructure layers. TSMC’s multiyear lead times and ASML’s monopoly in EUV lithography create structural advantages that competitors cannot quickly replicate. OpenAI and Anthropic may produce enormous growth, but their models must continually outperform a crowded field.

Key Takeaways

The three-tier framework favors businesses that benefit regardless of which AI platform ultimately wins. TSMC and ASML control scarce manufacturing technologies, while Alphabet, Microsoft, and Amazon own the cloud infrastructure supporting the boom. In a rapidly changing industry, owning the chokepoints may be safer than betting on the winner of the race.

The post Top Investors Name 5 AI Stocks That Could Win No Matter Which Model Leads appeared first on 24/7 Wall St..

I keep hitting the buy button on Salesforce (NYSE:CRM) because the agentic AI thesis I bought into is now showing up in the financials, and the market is finally starting to notice. Shares are up 27.74% over the past month and 9.47% in the past week, but the stock is still down 20.67% year to date from a start price of $263.53. That gap between what the business is doing and what the stock reflects is exactly why my cost basis keeps working lower.

What Keeps Pulling Me Back to the Buy Button

My thesis is simple: AI capital is rotating out of pure infrastructure and into the application layer where enterprise workflows actually live, and Salesforce owns that layer. Q1 FY27 (reported May 27, 2026) is the receipt. Revenue landed at $11.133 billion, up 13.27% year over year, and EPS came in at $3.88 against a $3.1271 consensus. That is the fifth consecutive quarter exceeding EPS expectations. Marc Benioff put it plainly: “Agentic AI is the biggest growth opportunity for our customers, and for Salesforce.”

Three Reasons the Conviction Holds

First, the AI numbers are moving from slideware to actual ARR. Agentforce ARR reached $1.2 billion, up 205% year over year, and combined Agentforce plus Data 360 ARR reached nearly $3.4 billion. More than 50% of those bookings came from existing customers expanding commitments, which tells me the land-and-expand motion is intact.

Second, cash generation is doing the heavy lifting. FY26 free cash flow hit $14.402 billion, up 15.83%. That funded a $25 billion accelerated share repurchase, retiring 103 million shares, or roughly 11% of shares outstanding. There is a new $50 billion authorization behind it. Meanwhile, the dividend was raised to $0.44 per share.

Third, the valuation. CRM trades at a P/E of 24x with a forward P/E of 15x and an FCF yield of 8.41%. Total RPO of $72.4 billion, up 14%, gives me multi-year visibility.

Why CRM and Not the Usual Alternatives

The obvious reaches are Microsoft (NASDAQ:MSFT), ServiceNow (NYSE:NOW), and Oracle (NYSE:ORCL). Microsoft has broader AI exposure but trades at a much richer valuation than CRM’s 15x forward multiple. ServiceNow is a fine business, but its multiple is also richer and its dividend is thinner. Oracle sells cloud infrastructure, which is what capital is rotating away from. Salesforce is the pure-play on agentic workflows, and analyst targets sit at $243.98 against today’s $209.06.

A Risk I’m Not Waving Off

Noncurrent debt jumped to $39.3 billion from $10.4 billion a year ago to fund the ASR, and management flagged an approximately five point headwind to operating cash flow growth from the associated interest expense. That is real. It is offset by the retired share count itself. I am comfortable with leverage taken to buy back 11% of the float when the business is compounding cash flow at a mid-teens rate.

Why the Buy Button Stays Active

Management is guiding to $45.9 billion to $46.2 billion in FY27 revenue and a $63 billion FY30 target. Tokens processed hit 28.6 trillion, up 152% quarter over quarter. When the underlying business compounds this hard and the price sits below where it started the year, I stop asking whether to buy and start asking how much.

The post I Keep Buying Salesforce Because It Is Doing What I Expected appeared first on 24/7 Wall St..

Jim Cramer used his opening segment on Mad Money to make a counterintuitive call. He said the political backlash brewing against data center construction may end up strengthening the largest hyperscalers rather than derailing them. Hyperscalers are the small group of cloud giants that operate massive data center footprints. Cramer focused on Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN).

Two Governors, One Fast Reversal

Cramer opened with a stark shift in political posture. Texas Governor Greg Abbott now wants local approval before builders can break ground and said the companies “basically dug their own grave.” Pennsylvania Governor Josh Shapiro, previously a booster, signed an executive order stating data centers “could harm Pennsylvania’s right to clean air and pure water” and told developers, “If you can’t agree to our strict requirements to get the communities where you want to build to say yes, then you’re not welcome.”

Cramer’s read on the speed of the flip: “Neither governor says no to data centers, but both have gone from boosters to critics in the time it takes to flip a coin. Politicians don’t do that unless they think something’s very, very unpopular.”

Here is how he framed the stakes: “The data center thesis, perhaps the greatest investment theme in a generation, is now under attack and it may never be the same.” He added, “The unbridled build out is most likely over.”

Why Cramer Says the Hyperscalers Win

The turn in his argument centers on competition for finite resources. “The cost of building a data center is being boosted by many companies constructing these things on spec, not just the hyperscalers,” he said. Spec builders are developers who put up data centers without a signed tenant, betting they can lease the shell to a cloud company later. Their bids drive up land, power, labor, and chip costs for everyone.

Remove that layer of demand and the math shifts. “If you get rid of the smaller speculative builders, you get rid of the insane competition that’s pushed up the price of everything from land to construction to labor, electricity, and of course, the inside of a data center like Nvidia,” Cramer said. He argued the incumbents “are the biggest beneficiaries because they can afford to compensate local communities and get their warehouses full of servers built, while the spec builders will indeed get obliterated.” His summary: “This political pushback might be a godsend for the hyperscalers.” Furthermore, “This data center pushback may be a victory for big tech.”

The balance sheets back the framing. Microsoft guided fiscal 2026 capital expenditures to $115.95 billion, with Q4 capex alone at $35.8 billion. Alphabet’s Q2 capex reached $44.92 billion, and management raised roughly $70 billion in combined equity and debt to fund the buildout. Amazon spent $54.21 billion on capex in Q2. CEO Andy Jassy said AWS backlog stands at $496 billion, growing “triple digits year over year.” That spend has to land somewhere: power, cooling, networking, and the physical guts of the buildout. (We mapped seven of those non-chipmaker suppliers in a free report you can grab here.)

A Caveat Investors Should Not Miss

Cramer paired the bullish read with a warning: “I think you sell some. You can’t be as heavily invested in this theme because the price earnings multiples are not going to expand.” He also said, “The AI trade which we’re heavily involved in is currently broken.”

Current valuations illustrate the setup. Microsoft trades at a P/E of 27, Alphabet at 17, and Amazon at 21. Microsoft has climbed 27.7% over the past month, Alphabet 8.9%, and Amazon 12.9% over the same period. Alphabet leads the trio year to date with a gain of 11.2%.

What to Watch Next

The key signal for Cramer’s thesis is whether permitting friction translates into lower input costs for the largest builders. Track whether smaller speculative developers begin failing or selling projects, and whether hyperscaler capex commentary shifts from “Demand continues to exceed available supply” to a firmer tone on unit economics. Microsoft CFO Amy Hood already flagged flexibility on her Q4 call. She said, “The investment into land and data center builds is actually quite flexible” and that “timing can be changed on much of that.” For anyone holding these names through index funds, the near-term question is who gets to keep building on their own terms.

The post Why Jim Cramer Thinks the Data Center Backlash Could Be a Victory for Big Tech appeared first on 24/7 Wall St..

Four stocks account for roughly 44.6% of Vanguard Growth Index Fund Admiral Shares (VIGAX). If you own this fund, you own a concentrated bet on NVIDIA, Apple, Alphabet, and Microsoft, wrapped in an index label. That is the story worth understanding before another dollar goes in.

VIGAX is the Admiral share class of Vanguard’s large-cap growth index fund, tracking the CRSP US Large Cap Growth Index. It is a passive mutual fund with an ETF twin, VUG, and an Investor share class, VIGRX. Because Admiral, Investor, and ETF shares hold the same portfolio, holdings and performance below are drawn from Vanguard’s most recent VUG fact sheet dated June 5, 2026, and VUG’s live price history as of August 24, 2026.

A Growth Index That Is Really a Mega-Cap Tech Fund

The index label understates how top-heavy this portfolio has become. As of June 5, 2026, NVIDIA (NASDAQ:NVDA) sat at 13.3% of assets, Apple (NASDAQ:AAPL) at 12.3%, Alphabet (NASDAQ:GOOGL) at 9.9%, and Microsoft (NASDAQ:MSFT) at 9.1%. Round out the top 10 with Amazon (4.6%), Broadcom (4.4%), Meta (4.1%), Tesla (3.5%), Eli Lilly (2.6%), and Visa (1.7%), and a supposedly diversified index fund becomes something closer to a semiconductor-plus-platforms basket with a healthcare and payments sleeve attached.

On a $100,000 balance, roughly $65,000 is riding on the ten names above. That is the tradeoff investors accept in exchange for owning the growth style at index cost.

Cheap, but the ETF Twin Is Cheaper

VIGAX’s Admiral shares carry Vanguard’s usual $3,000 minimum investment and an expense ratio in single basis points, keeping fee drag near the floor for retail funds. The ETF twin, Vanguard Growth ETF (NYSEARCA:VUG), lists a net expense ratio of 0.03% on its June 5, 2026 fact sheet, and it holds an identical portfolio with no minimum beyond one share. For investors in taxable accounts, the ETF wrapper also tends to distribute fewer capital gains than the mutual fund format. That is a meaningful reason to check whether VUG fits before defaulting to VIGAX.

Performance That Rewards the Concentration, So Far

The strategy has paid off during the mega-cap growth cycle. VUG, which mirrors VIGAX, returned 7.15% year to date, 14.27% over one year, 76.79% over five years, and 404.19% over ten years, all measured through August 24, 2026 on a price-adjusted basis. VUG closed at $86.93 that day, down 2.18% for the week.

The uncomfortable other side of that ledger is 2022. When rising rates repriced long-duration growth stocks, this strategy fell harder than the broad S&P 500 because its portfolio is more tech-heavy and more expensive on valuation. Anyone considering VIGAX should assume a repeat of that dynamic is possible whenever growth multiples compress.

Real Risks: Concentration and Valuation

Two risks matter more than the others. First, single-stock risk: with NVIDIA alone at 13.3% of assets, a 30% drawdown in one company hits a VIGAX shareholder harder than most “diversified” index owners assume. Second, valuation risk: growth indices weight the most expensive segment of the U.S. market by design. Buyers today are paying premium multiples for the earnings expected to justify them, and much of that premium sits on the AI capex story (we profiled seven suppliers powering that buildout, from power to cooling, in a free report you can grab here). Buyers today are paying those premium multiples for earnings expected to justify them.

Who VIGAX Actually Suits

Long-horizon investors in tax-advantaged accounts (IRAs, 401(k)s) who already hold a total-market or S&P 500 fund and want to tilt toward growth may find VIGAX worth a look, especially if they can stomach 25%-plus drawdowns without selling. Investors nearing retirement, anyone who already owns heavy positions in mega-cap tech through employer stock, or those in taxable accounts who could use VUG instead have better options.

Related Funds Worth Researching

• Vanguard Growth ETF (NYSEARCA:VUG): the ETF twin, same index, 0.03% expense ratio, no minimum, generally more tax-efficient.
• Vanguard 500 Index Fund Admiral (VFIAX): a less concentrated, broader U.S. large-cap alternative for investors uneasy about mega-cap growth weightings.
• Vanguard Value Index Fund Admiral (VVIAX): the natural counterweight, pairing with VIGAX to reduce style risk in either direction.
• Invesco QQQ Trust (QQQ): a Nasdaq-100 ETF for readers who want even more explicit tech concentration than VIGAX offers.

The post Vanguard Growth Index Fund Admiral Shares (VIGAX): What Investors Should Know appeared first on 24/7 Wall St..

CoreWeave (NASDAQ:CRWV) is the AI infrastructure name everyone is talking about after Q2 revenue of $2.575 billion and its recent selection for inclusion in the Nasdaq-100 Index.

But the more interesting setup in the neocloud space sits one ticker over, with a cleaner balance sheet and the same hyperscaler validation driving CoreWeave’s story.

Nebius Group (NASDAQ:NBIS) is the same neocloud thesis with a far cleaner balance sheet, validated by the same hyperscalers that underpin CoreWeave’s story, and priced earlier in the arc. The retirement investor who is tired of chasing headlines has good reason to look closely at Nebius before piling into the more crowded name.

Crowded, Levered, and Losing More Every Quarter

CoreWeave’s growth is real, but the economics underneath keep deteriorating. Q2 net loss widened to $626 million from $290 million a year earlier, and adjusted operating margin compressed to 5% from 16%.

Debt is doing the heavy lifting here. Interest expense reached $640 million in Q2; management guided Q3 interest expense to $860 to $940 million, and debt-to-equity is 8.94.

Full-year 2026 capex guidance was raised to $35 to $39 billion, and Q2 alone burned $5.74 billion of free cash flow. This is a business that must tap capital markets continuously to keep delivering contracted revenue.

Investors also carry legal overhang from a securities fraud class action alleging concealed data center construction delays, and the shares are down 1.92% over the past year despite the AI mania. The consensus is already in the stock.

Microsoft, Meta, and NVIDIA Are Building Nebius Up

Nebius carries the same hyperscaler stamp that CoreWeave earns its multiple on, and, in some ways, a stronger one. Its Microsoft (NASDAQ:MSFT) contract is worth roughly $17.4 billion and could expand to $19.4 billion, and a second Meta Platforms (NASDAQ:META) arrangement could reach $27 billion if all available capacity is purchased.

NVIDIA (NASDAQ:NVDA) has gone well beyond supplier status, committing a $2 billion strategic equity investment plus $2 billion of pre-funded warrants, a rare vote of confidence in a neocloud still scaling.

The operating results back the validation. Q2 revenue rose 454% year over year to $582.3 million, group adjusted EBITDA margin hit 41%, and remaining performance obligations reached $37.5 billion.

CEO Arkady Volozh told investors that “We could sell today our entire 2027 capacity on these terms if we wanted to. But we are not doing this,” because Nebius is deliberately holding capacity back for shorter-duration contracts priced at $40 million to $50 million per megawatt. That is pricing power CoreWeave has not demonstrated.

Cleaner Balance Sheet, Earlier in the Story

The financial contrast is what should really matter to a retirement investor. Nebius ended Q2 with $8.04 billion in cash, generated $4.5 billion of operating cash flow in the first half, and said it has almost no corporate-level debt.

Customer prepayments accompanied roughly 70% of Q2 deals and are expected to provide more than $9 billion of upfront funding during 2026. CoreWeave, by comparison, must raise external capital every quarter to plug the hole its own contracts create.

The risks are real and worth naming. Three customers each account for more than 10% of revenue; convertible debt has a value of $8.5 billion and a fair value of $20.8 billion; and losses will continue as the company builds toward its $3 billion to $3.4 billion 2026 revenue guide.

None of that changes the setup. The research case for Nebius is worth working through before the same institutional desks that just discovered CoreWeave notice the cleaner version sitting next to it, and the broader buildout story reaches beyond either name (we profiled seven suppliers powering the AI data-center boom, from power to networking, in a free report here: 7 Stocks Powering the AI Boom).

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ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) both reported blockbuster quarters this summer, and both raised dividends yet again in 2026. That makes this the right moment to look past a single earnings report and ask a harder question: over a full decade, which oil major has actually treated dividend investors better?

Two Very Different Quarters Under the Hood

Chevron’s Q2 was the louder headline. Revenue hit $67.20B, worldwide production reached a record 4,070 MBOED, and adjusted EPS came in at $6.06, a seventh straight beat. CEO Mike Wirth credited “disciplined investment and strong execution”, and it shows: US refinery throughput ran at 97% utilization, and downstream earnings jumped to $4.87B from $737M a year earlier.

ExxonMobil’s Q2 was quieter on the surface but arguably more impressive. The company posted industry-leading earnings of $14.5 billion and $23.6 billion in operating cash flow despite losing “approximately 10% of our upstream production” to Middle East disruption. Guyana alone contributed roughly 900,000 barrels per day, and Permian output topped 1.8 million oil equivalent barrels per day.

Ten Years of Dividend Checks, Side by Side

Now the payout question. Both companies have been quietly compounding for a decade, but the paths look different.

Chevron grew its per-share payout by a larger dollar amount over the decade, and its yield today is meaningfully higher. But Exxon never blinked through the 2020 crash, when many peers cut, and now sits on 43 consecutive annual increases. On pure streak length and defensiveness, Exxon wins.

Organic Growth Vs. Buy-and-Build

The strategies funding those checks have diverged sharply. Exxon is riding organic firepower: Permian, Guyana, Golden Pass LNG, and $16.3 billion of cumulative structural cost savings since 2019. CFO Neil Hansen described Guyana as “very much an inflection into free cash flow” after full recovery of the $55 billion investment.

Chevron went the acquisition route. Hess synergies hit a $1.5 billion annual run-rate six months ahead of schedule, and Chevron cut more than $8 billion of debt in Q2 alone. Then came Project Kilby, a 20-year take-or-pay deal with Microsoft (NASDAQ:MSFT) for 2.67 gigawatts of behind-the-meter power for AI data centers. That is a genuinely new revenue stream for a Big Oil dividend.

What Decides the Next Ten Years

I will be watching whether Guyana’s cash-flow inflection lets Exxon accelerate its raises past the current roughly 4% annual pace. You should keep an eye on whether Chevron’s Microsoft deal actually clears FID later in 2026, because mid-teens returns on contracted power would change the dividend math.

Why I Give the Decade to Exxon, But Own Chevron for Yield

If someone made me pick a ten-year dividend winner based on durability, I lean Exxon. The 0.17 debt-to-equity balance sheet and unbroken streak through 2020 tell me the check keeps clearing in the ugliest markets (we ranked ten companies with the longest raise streaks by valuation in a free Dividend Kings report).

If I wanted more current income and did not mind Hess integration risk, Chevron’s 3.39% yield and Kilby optionality look more interesting. Both can work. Neither is broken. I just view them as meaningfully different investments.

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Anthropic executives believe their upcoming public offering will match or exceed the $75 billion that SpaceX (NASDAQ:SPCX) raised in June in what was then the largest first-time share sale ever, per a Bloomberg report, as reported on CNBC by Andrew Ross Sorkin. The company could file for its public listing before the end of the month, and it has pointedly avoided naming a valuation in recent investor briefings.

That silence is the actual story. Raise size and valuation are different numbers, because a company can sell a small slice of itself for an enormous check and defend almost any market cap the syndicate wants. Sorkin’s claim that the industry is waiting on Anthropic is really about the second number, since “the entire industry is largely dependent on what valuation Anthropic comes up with, because then it will move towards what valuation OpenAI ultimately comes up with.”

Both Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) hold Anthropic as an investment and have booked large non-operating gains from earlier rounds. Whatever mark Anthropic prints will move those carrying values and anchor the comp OpenAI’s bankers will use next.

Reading Anthropic’s Silence On Price

The refusal to discuss valuation is a negotiation tactic and probably a smart one. Bankers prefer to let demand set the range, and every leaked target then reads as a floor rather than a ceiling.

There is also positioning at work. SpaceX is a company with hard assets, cash flow, and a two-decade operating history, while Anthropic sells tokens, so the size comparison flatters the newer business.

Sorkin’s view that the sector waits on this one number is fair. Private-market AI valuations have converged on a small set of comparable rounds, and each print justifies the next.

Whether that is genuine price discovery or a self-referential loop depends on the S-1. Without disclosed revenue durability and specific compute obligations, the headline number is consensus about consensus, and public investors will be underwriting the private-round mark with a filing wrapper.

Why Amazon Is The Closer Trade

Amazon is the deeper partner to Anthropic by a wide margin. Its Q2 report showed $53.4 billion in non-operating pre-tax income tied largely to marking up the Anthropic stake, which produced a GAAP EPS of $5.75 against a $1.82 consensus.

The operating relationship goes further. Andy Jassy said Anthropic and OpenAI have made “multi-year, multi-gigawatt commitments” to Trainium, and AWS grew 36.7% in Q2 to $42.2 billion, its fastest expansion in 18 quarters.

AWS backlog reached $496 billion, and Jassy told investors AWS could eventually be “a trillion dollar annual revenue business.” The Anthropic relationship is a live piece of that thesis, and it is a reminder that the AI trade extends well past the chipmakers into the power, cooling, and infrastructure names doing the actual buildout (we pulled seven of those into a free report here: 7 Stocks Powering the AI Boom).

Shares are up 12.05% year-to-date at $258.63. An IPO that validates the current carrying value would be confirmation, and one priced materially higher would force analysts to rework the sum-of-the-parts for Amazon.

Microsoft’s Smaller Stake And What To Watch In The S-1

Microsoft (NASDAQ:MSFT) is more of an OpenAI story than an Anthropic story. Q4 FY2026 still included a $3.2 billion gain from our investment in Anthropic as a discrete driver, and the bigger AI comp is the roughly 27% OpenAI position valued at about $135 billion after the Q1 restructuring.

Satya Nadella framed models as inputs and Azure as fungible infrastructure hosting “over 11,000 models including the latest from OpenAI, Anthropic, Mistral, XAI as well as our own MAI family.” Shares are essentially flat year-to-date at $483.24 after a 24.03% one-month rally.

For the S-1, the real test is whether public investors receive sufficient disclosure to underwrite the multiple without relying on private-market comps. Watch the split between primary and secondary shares, revenue concentration among a handful of API partners, and the scale of Anthropic’s compute obligations to Amazon and others.

If those disclosures are thin, the IPO is a private round with a public wrapper, and the reprice it forces on Microsoft and Amazon will likely fade. If they are substantive, it becomes something a public investor can actually underwrite, and the number Anthropic prints will genuinely reset how the market values every AI-exposed name you already own.

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Microsoft has become the quiet outlier in the AI trade. While NVIDIA (NASDAQ:NVDA) absorbs the spotlight and hyperscaler rivals chase headlines, Microsoft (NASDAQ:MSFT) is quietly compounding the deepest enterprise AI moat in software.

Our 24/7 Wall St. price target for Microsoft is $590.17, implying upside of 22.13% from a current price of $483.24. We rate it a buy with high confidence, driven by an Azure business that just crossed $100 billion in annual revenue and a Copilot franchise that has become the fastest-monetizing enterprise product in the company’s history.

24/7 Wall St. Price Target Summary

Why Microsoft Feels Overlooked Right Now

Microsoft shares are down 3.37% over the past year and roughly flat year to date, even after ripping 24.03% in the last month.

The July earnings report was a statement: revenue of $90.01 billion grew 17.75%, non-GAAP EPS came in at $4.74, and Azure grew 43%. The stock reacted with a 15.51% day-of pop, its strongest earnings reaction in the dataset. Retail sentiment on Reddit has followed, with recent posts on the OpenAI stake driving bullish readings.

Bull Case: Path to $614 and Beyond

Bulls see Microsoft as the purest scaled beneficiary of enterprise AI adoption. Commercial remaining performance obligations sit at $678 billion, up 84%, a backlog that de-risks near-term revenue. Management guided Q1 FY27 Azure growth to approximately 45% in constant currency, and CFO Amy Hood flagged that “demand continues to exceed available supply.”

Copilot has cleared 30 million paid seats, GitHub Copilot revenue accelerated over 60% quarter over quarter, and a new per-seat plus consumption model expands the TAM materially. Our bull scenario points to $614.33, a 27.13% return, on stronger Azure re-rate and Copilot ARPU expansion.

Bear Case: Capex Digestion Risk

The main risk is the sheer cost of the buildout. Full-year capex hit $115.95 billion, up 79.62%, and free cash flow fell 23.19% in the quarter. Bears argue this compresses returns if AI demand normalizes. All that spend flows straight to the power, cooling, and networking vendors behind the racks (we broke down seven of those suppliers in a free report here: 7 Stocks Powering the AI Boom).

That said, bulls counter that the FCF decline reflects heavy investment in capacity management has repeatedly said is fully monetized in-quarter, and net income still grew 31.33%. Our bear-case target is $507.22, still modestly positive, reflecting the durability of the installed base.

How Microsoft Stacks Up Against Alphabet and Amazon

Alphabet (NASDAQ:GOOGL) is the most direct cloud AI comparable. Google Cloud accelerated to 82% growth in Q2 2026, hitting $24.77 billion, and Alphabet is guiding $175 to $185 billion in 2026 capex. Google Cloud is growing faster, but Azure is much larger at scale, and Microsoft’s Copilot attach into Office 365 remains structurally hard to replicate.

Amazon (NASDAQ:AMZN) trades at a P/E of 36, meaningfully richer than Microsoft’s 27, despite AWS growing 37% in Q2, a slower rate than Azure’s 43%. That valuation gap makes our $590 target look conservative.

Bottom Line: I’d Buy It Here

The 24/7 Wall St. price target of $590.17 and buy rating carry 90% confidence. The tipping factor is the disconnect between Microsoft’s growth acceleration and its P/E of 27, cheaper than Amazon on far higher margins.

I’d be a buyer here if Azure sustains 40%-plus growth into FY27. I’d stay on the sidelines if capex intensity keeps free cash flow negative on a YoY basis for another two quarters.

These projections assume Microsoft sustains Azure growth above 30% and Copilot seat expansion continues. Meaningful upside or downside could come from OpenAI’s evolving relationship with Microsoft or a broader slowdown in enterprise IT budgets.

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