Tag: Q2 Earnings

  • AMD Stock Drops 7% Despite Record Q2 Revenue as AI Expectations and SpaceX’s NVIDIA Deal Weigh

    AMD Stock Drops 7% Despite Record Q2 Revenue as AI Expectations and SpaceX’s NVIDIA Deal Weigh

    Advanced Micro Devices (AMD) shares closed 7% lower on Wednesday, even as the company reported record second-quarter revenue of $11.54 billion and a 107% surge in data-center sales. The decline highlights how elevated market expectations and external pressures, including SpaceX’s decision to exclusively use NVIDIA chips, overshadowed strong financial results.

    AMD Q2 Revenue Up 50%

    AMD posted revenue of $11.54 billion, up 50% from $7.69 billion a year earlier, and above the $11.28 billion analyst consensus cited by Reuters. Non-GAAP earnings reached $1.66 per share, while GAAP earnings were $1.38 per share. Data-center revenue rose 107% to $6.72 billion, accounting for 58% of quarterly sales, driven by demand for EPYC server processors and Instinct graphics processors.

    The company forecast third-quarter revenue near $13 billion, with a possible $300 million swing, exceeding the $12.52 billion analyst estimate. However, analysts noted that investors had set a higher bar after recent customer deals. Gross margin improved to 54% under standard accounting, up from 40% a year earlier. Operating income hit $1.99 billion, compared with a $134 million loss, and net income jumped 163% to $2.30 billion.

    SpaceX Chooses NVIDIA for AI Systems

    SpaceX CEO Elon Musk announced that the company would build its AI computing systems exclusively with NVIDIA hardware, calling NVIDIA’s architecture “the best” during SpaceX’s earnings call. NVIDIA shares rose 3.4% while AMD stock fell. Musk’s statement shifted from his earlier position that his companies could source processors from AMD, NVIDIA, and others. AMD CEO Lisa Su expressed “tremendous respect” for Musk and said AMD expects to work with SpaceX over time.

    AMD continues to serve large technology companies and expand its AI product line. Its Helios rack-scale systems, using MI450 accelerators, support AI training and inference, with shipments expected to rise in the second half of 2026.

    Wells Fargo Raises AMD Price Target to $700

    Wells Fargo analyst Aaron Rakers raised AMD’s price target from $615 to $700 while maintaining an Overweight rating, even as the market focused on valuation and near-term growth. Other analysts described the results as solid but noted a “very high bar” (TD Cowen) and that the quarter beat consensus but missed more optimistic forecasts (Deutsche Bank). Supply constraints, including TSMC’s N3 process and CoWoS packaging through 2027, remain on investors’ watchlists.

    CEO Lisa Su expects data-center revenue to more than double by 2027, with server revenue growth of 80% in the second half of 2026 and over 70% year-over-year in 2027. AMD stock closed at $482.53, down 6.6%, erasing nearly $59 billion in market value.

  • Samsung Achieves Record Q2 Revenue Driven by AI Memory Chip Demand

    Samsung Achieves Record Q2 Revenue Driven by AI Memory Chip Demand

    Samsung Electronics Co. Ltd. reported a sharp increase in Q2 earnings, fueled by strong demand for AI memory chips, even as its share price remains volatile amid investor concerns about future spending and competition.

    The South Korean technology group’s revenue for the quarter ending June 30 reached 171.5 trillion won, its highest quarterly revenue on record. Net profit rose to 71.27 trillion won, surpassing Bloomberg estimates of 68.36 trillion won. Additionally, operating profit increased more than 19-fold to approximately 89.5 trillion won, broadly in line with the company’s previous forecast.

    AI Memory Business Continues to Lead Growth

    The semiconductor business remained the primary growth driver. It benefited from high memory chip prices and rising volumes of its advanced High Bandwidth Memory (HBM) products for AI servers and data centers. According to the company, demand from cloud providers and AI infrastructure projects continued to support strong pricing across the memory market. Samsung anticipates this trend to continue in the second half of 2026.

    Samsung predicted ‘robust demand centered on servers stemming from continued AI infrastructure capex and broader adoption of agentic AI.’ Even with production increases, Samsung stated that the global memory market would remain ‘undersupplied.’

    Consumer Business Remains Under Pressure

    While the semiconductor business earned a record profit, Samsung’s smartphone, television, and home appliance divisions were less profitable as consumer demand weakened and component prices jumped. The company will continue to focus on high-margin AI memory products and invest in expanding its semiconductor manufacturing. In 2026, projects on 2-nanometer technology chips are projected to more than double each year, executives said in a post-earnings conference call.

    Market Reaction and Outlook

    Samsung shares were highly volatile during Thursday’s trading session, despite the strong results. The stock initially surged up to 7% but lost most of its gains as overall market weakness hit South Korea’s stocks. Investor sentiment is growing skeptical about the ability of AI-led semiconductors to maintain their valuations. Competition from Chinese chipmakers and heavy capital spending have also dampened investor confidence. Samsung also revealed that it is not currently planning to list its shares on American Depository Receipts (ADR), following queries from investors after rival SK Hynix recently listed in the US.

  • Tesla Q2 2026 Revenue Tops Estimates as Earnings Slip and Cash Flow Turns Negative

    Tesla Q2 2026 Revenue Tops Estimates as Earnings Slip and Cash Flow Turns Negative

    Tesla Surpasses Revenue Expectations in Q2 2026

    Tesla reported stronger-than-expected revenue for the second quarter of 2026, driven by record vehicle deliveries and growth in its energy storage business. However, the company’s earnings fell short of analyst estimates, and free cash flow turned negative for the first time in over two years, reflecting heavy investments in artificial intelligence, robotics, and future production programs.

    The electric vehicle maker generated $28.24 billion in quarterly revenue, above market consensus. Adjusted earnings per share came in at $0.33, well below the expected $0.50. Tesla also posted negative free cash flow of $1.09 billion, as capital expenditures more than doubled from the previous quarter and the same period last year.

    Record Deliveries Boost Top Line

    Tesla delivered 480,126 vehicles during the quarter, up from 384,122 a year earlier. The Model 3 and Model Y accounted for 467,762 deliveries, while other models contributed 12,364 units. This 26% year-over-year increase in deliveries helped push trailing twelve-month revenue past $100 billion for the first time.

    Energy storage deployments also showed strong growth, reaching 13.5 gigawatt-hours, compared with 9.6 GWh in the same quarter of 2025.

    Margins and Profitability Under Pressure

    Despite higher revenue, Tesla’s profitability faced headwinds. Automotive gross margin fell to 16.3%, below analyst expectations, as the company relied on lower-priced models and incentives to sustain demand. Revenue from regulatory credits dropped to $146 million, about two-thirds below the prior-year level.

    Net income stood at approximately $1.11 billion, while operating income plunged 57% to $398 million. Rising research and development costs, along with increased spending on production and technology programs, weighed on quarterly earnings.

    Heavy Spending on AI and Future Programs

    Tesla’s capital expenditures reached $5.8 billion in Q2, more than double the amount spent in both the first quarter of 2026 and the second quarter of 2025. Chief Financial Officer Vaibhav Taneja indicated that annual capital spending would exceed $25 billion, directed toward AI systems, robotaxi services, manufacturing equipment, and robotics development.

    CEO Elon Musk described 2026 as “a massive capex year,” emphasizing that the investments will support new products and expanded production capacity. Tesla has already started Cybercab production and is installing manufacturing lines for its Optimus humanoid robot.

    Full Self-Driving Subscriptions Grow

    Tesla ended the quarter with approximately 1.48 million active Full Self-Driving (FSD) subscriptions, a 56% increase year-over-year. More than 55% of new North American deliveries included an FSD subscription. The company continues to seek regulatory approval for the driver-assistance system in Europe and China.

    Musk noted that customers are increasingly considering FSD when purchasing a vehicle, though the system remains supervised and requires driver attention. Tesla is also expanding its robotaxi operations while navigating local regulations and safety requirements.

    Market Reaction

    Tesla shares declined following the earnings release, as investors reacted to the earnings miss, weaker automotive margins, and negative cash flow. The results highlight the balancing act Tesla faces between sustaining revenue growth and funding its ambitious autonomy, energy, and robotics initiatives.

  • Tesla Stock Awaits Q2 Earnings: Margins, Cash Flow, and Robotaxi Updates in Focus

    Tesla Stock Awaits Q2 Earnings: Margins, Cash Flow, and Robotaxi Updates in Focus

    Tesla stock edged higher ahead of its second-quarter earnings report, as investors zeroed in on automotive margins, free cash flow, and rising capital expenditures. The upcoming results, due after the market close on Wednesday, July 22, will also shine a spotlight on the company’s progress with Robotaxi expansion, Optimus humanoid robot production, and whether stronger vehicle deliveries can offset mounting costs.

    Shares gained roughly 3% on Tuesday, rebounding from four consecutive losing sessions, though the stock remains down about 13% for 2026.

    Deliveries Recover, Bolstering Revenue Forecasts

    Tesla delivered 480,126 vehicles in the second quarter, a 25% increase year over year. Production reached 451,758 units, while energy storage deployments hit 13.5 gigawatt-hours. Model 3 and Model Y accounted for 467,762 deliveries.

    The company’s internal consensus points to quarterly revenue of approximately $27.58 billion. Analysts expect adjusted earnings of roughly $0.55 per share, up from $0.40 a year ago. Broader market estimates place revenue between $26.2 billion and $27.7 billion.

    The delivery rebound may provide a tailwind for automotive revenue after weaker periods. However, Tesla cautioned that pricing, production costs, foreign exchange rates, and product mix also influence profitability.

    Margins and Cash Flow Under Pressure

    Wall Street forecasts Tesla’s automotive gross margin, excluding regulatory credits, will fall to about 18.1%, down from 19.2% in the previous quarter. Financing incentives, vehicle discounts, and higher input costs could further weigh on the metric.

    Free cash flow is likely to draw particular scrutiny. LSEG data points to negative free cash flow of roughly $3.3 billion for the period, which would mark Tesla’s first quarterly cash burn in more than two years.

    Gene Munster of Deepwater Asset Management expects automotive margins to slightly exceed consensus and projects second-quarter capital spending of about $6.7 billion. “I expect good news,” Munster wrote, but questioned how investors would react to higher spending in 2027.

    In April, Tesla raised its 2026 capital expenditure plan above $25 billion, covering data centers, vehicle plants, robotaxis, and the Optimus humanoid robot program. Investors will be watching whether operating cash flow can fund these projects without severely depleting Tesla’s cash reserves.

    Robotaxi Timelines Return to the Forefront

    Gary Black of The Future Fund noted that repeated missed Robotaxi targets have eroded confidence in Tesla’s public timelines. He pointed to Elon Musk’s earlier forecast that the service would cover half of the U.S. population by the end of 2025.

    Tesla expanded Robotaxi coverage to Orlando and Tampa ahead of earnings, but the service remains limited compared with earlier national ambitions. The company has started production of the Cybercab, though those vehicles have not yet entered its commercial network.

    Investor questions also center on the Optimus production schedule and obstacles slowing Robotaxi expansion. Nine of the ten most-supported questions on Tesla’s investor platform concern artificial intelligence projects, Full Self-Driving, Robotaxi, or Optimus.

    Shareholders have also asked about market speculation regarding a potential Tesla-SpaceX merger. Neither company has confirmed such a transaction. The earnings call is expected to focus on reported financials, spending plans, and management’s timelines for products that have yet to generate significant revenue.

    Tesla shares traded near $379 early Wednesday, placing its market capitalization above $1.3 trillion. The earnings call will begin at 5:30 p.m. Eastern Time.

  • BASF Q2 Earnings Surpass Forecasts as Coatings Sale Boosts Profit; Abishai Financial Asia Analyzes Revised Outlook

    BASF Q2 Earnings Surpass Forecasts as Coatings Sale Boosts Profit; Abishai Financial Asia Analyzes Revised Outlook

    BASF delivered a strong second-quarter performance, clearing consensus estimates by a wide margin and raising its full-year guidance even as the company adopts a more cautious economic outlook. Adjusted EBITDA reached $2.7 billion, above the $2.4 billion consensus and the $1.8 billion reported a year earlier. Net profit surged to $4.7 billion from $90 million, driven by a $4.4 billion pre-tax gain from the sale of its coatings business to Carlyle.

    Quarterly sales came in at $19.6 billion, a 16% year-over-year increase and ahead of the $18.8 billion analysts had expected. Pricing contributed 11 points of the growth, volume added 7 points, while currency and portfolio effects each reduced a point. Strong automotive and construction demand supported cost pass-through.

    Adjusted EBITDA exceeded consensus across all segments except Surface Technologies. Reported EBITDA was approximately $2.3 billion after special charges. The coatings divestiture, now completed, is expected to incur a mid triple-digit million-dollar tax charge. According to Daniel Coventry, Director of Private Equity at Abishai Financial Asia, “the profit line flatters a quarter that was already improving on its own merits.”

    Segment performance was mixed: Materials, Industrial Solutions, and Agricultural Solutions exceeded forecasts; Nutrition and Care slightly surpassed estimates; while Chemicals and Surface Technologies fell short. Surface Technologies struggled due to the absence of prior catalyst gains, weaker Battery Materials earnings from lapsed subsidies, and the exit from Brazilian decorative paints.

    Cash generation was more cautious, with free cash flow turning negative to $0.2 billion from positive $0.6 billion a year earlier, as raw material costs absorbed working capital. Operating cash flow fell to $0.6 billion from $1.8 billion, and capital expenditure held at $0.8 billion.

    Management raised full-year adjusted EBITDA guidance to $7.9 billion to $8.8 billion, up from $7.1 billion to $8.0 billion, and nearly 17% above the previous year’s $7.5 billion. The consensus stood at $8.3 billion. Free cash flow guidance remained at $1.7 billion to $2.6 billion, and capital expenditure at $3.9 billion. Coventry described the upgrade as “delivered without loosening a single discipline on the balance sheet.”

    However, macroeconomic assumptions were trimmed: GDP growth forecast lowered to 2.5% from 2.7%, industrial production to 2.0% from 2.3%, and chemical production to 1.8% from 2.4%. The oil price assumption was raised to $87 per barrel from $70.7.

    The second-half outlook remains unusually uncertain, with the key risk being negotiations between the United States and Iran over access to the Strait of Hormuz. A prolonged closure could disrupt feedstock supply and demand, while a timely settlement could boost chemical demand. BASF maintains that neither individual risks nor their combined weight threaten its continued existence.

    Liquidity remains strong, with cash and equivalents of $3.6 billion at the end of the quarter, a $13.6 billion commercial paper program, and a $6.8 billion standby facility maturing in several years. Credit ratings from S&P, Moody’s, and Fitch are stable at A-/A-2, A3/P-2, and A/F1, respectively. Capital returns continue alongside portfolio pruning, with a buyback of up to $1.7 billion and approximately $912 million in Wintershall Dea receipts collected earlier in the year. Coventry noted that the balance sheet is “built to absorb a rougher second half rather than to chase it.”

    In summary, the quarter reflects a selective recovery, with strength in Materials, Agricultural Solutions, and Industrial Solutions offsetting weakness in Surface Technologies and Chemicals. The coatings gain dominated reported profit, capital discipline remains intact, and softer growth assumptions inject uncertainty. The Strait of Hormuz remains the key swing variable for feedstock costs and demand. Abishai Financial Asia continues to monitor segment trends, cash generation, and macroeconomic revisions.

    About Abishai Financial Asia

    Abishai Financial Asia Pte. Ltd. (UEN: 201016239E) is a Singapore-based asset manager focused on a research-first approach to capital allocation. Its strategy emphasizes risk-aware compounding in public markets, combining active equity selection, bottom-up analysis, and disciplined rebalancing with overlay tools such as systematic tilts, opportunistic hedging, and drawdown-aware controls. Governance relies on macro-aware risk budgeting with explicit limits, exposure and concentration guardrails, liquidity filters, stress testing, and transparent attribution. ESG considerations are incorporated where financially material. The firm is also exploring compliant product wrappers and distribution routes that may, subject to suitability criteria, extend selected solutions to retail-qualified investors over time. For more information, visit abishai.com. Media inquiries can be directed to Peng Joon at p.joon@abishai.com.

  • Tesla Stock Poised for 7% Swing as Q2 Earnings Put AI and Robotaxi Plans in Focus

    Tesla Stock Poised for 7% Swing as Q2 Earnings Put AI and Robotaxi Plans in Focus

    Tesla stock enters a key earnings week with options traders preparing for a sharp move. The company will release its second-quarter results after the market closes on Wednesday, July 22, followed by an earnings call at 5:30 p.m. Eastern Time.

    Recent options pricing points to a potential swing of about 7% in either direction by Friday. Based on Thursday’s close, that range could take TSLA stock near $365 or above $416. Shares closed Friday at $380.84, down 2.6%.

    The expected move reflects that traders see room for a strong reaction to the Q2 report, though options pricing does not predict direction. Tesla shares have fallen more than 10% since the start of 2026, and a 7% rise would recover part of those losses, while a similar decline would push the stock further below analyst targets.

    Wall Street remains divided on Tesla’s valuation. Among 11 analysts tracked by Visible Alpha, six rate the stock neutral, four rate it a buy, and one recommends selling. Price targets range from $130 to $600, with a $408 average. Morgan Stanley recently raised its price target to $417 from $415, maintaining an equal-weight rating and expecting a solid quarter. The firm noted that the key investor debate remains whether Robotaxi and Optimus progress can justify an accelerating AI investment cycle.

    For the second quarter, Tesla’s company-compiled consensus calls for revenue of $27.58 billion, up from $22.50 billion a year ago. Analysts expect non-GAAP earnings of $0.55 per share and GAAP earnings of $0.36. Automotive revenue is projected at $20.05 billion, energy storage at $3.77 billion, and services at $3.76 billion. Wall Street anticipates a 19.5% gross margin but also forecasts negative free cash flow of about $3.25 billion and capital spending near $6.70 billion.

    Tesla delivered 480,126 vehicles during the quarter and produced 451,758, with Model 3 and Model Y deliveries reaching 467,762. The company also deployed 13.5 gigawatt-hours of energy storage products.

    Investors are expected to look beyond vehicle sales during the call, as Tesla shifts resources toward autonomous driving, Robotaxi services, the Optimus humanoid robot, energy storage, and other AI-linked projects. Progress on Robotaxi and Optimus could shape the stock reaction, with analysts seeking clearer timelines, spending plans, and commercial targets. The Tesla Semi program may also draw questions, especially after Tesla opened a public Megacharger station in Bloomington, California, and encouraged fleet customers to install chargers at their depots.

    Investors have submitted questions about Semi production, sales estimates, and revenue. While Tesla does not answer every submitted question, the Q2 call will provide the next scheduled update on financial results and the company’s broader growth plans.