A quick round-up of the day’s key events:
Alphabet reported revenue of $119.8 billion; Google Cloud grew by 82 per cent
Tesla exceeded revenue of $28.2 billion, but EPS disappointed at $0.33
AMD is investing up to $5 billion in Anthropic and will supply 2 gigawatts of chips
Anthropic will purchase tens of billions of dollars’ worth of AI chips from AMD
The European Commission has approved the $110 billion merger between Paramount Skydance and Warner Bros
A US court has, for the time being, blocked the same merger with a 14-day interim injunction
Google Cloud exceeded forecasts with a backlog of $514 billion and 82 per cent growth
Foreign investment
Wednesday brought two major earnings surprises from the technology sector. After the market closed, Alphabet reported second-quarter revenue of $119.8 billion, a year-on-year increase of 24 per cent, with the star of the quarter being its Google Cloud division — its revenue rose by 82 per cent to $24.8 billion, significantly exceeding analysts’ estimates of $22.4 billion, according to an SEC Form 8-K filed on Wednesday. The cloud backlog reached $514 billion. Although reported GAAP earnings per share of $9.11 were four times higher than the consensus estimate of $2.89, almost the entire significant jump stemmed from the revaluation of Alphabet’s approximately 14 per cent stake in Anthropic — operating earnings per share were approximately $2.85, in line with expectations. The downside is capital expenditure of $44.9 billion — double the figure from the previous year — which pushed free cash flow into negative territory at −$5.9 billion. Alphabet shares closed Thursday’s pre-market trading only slightly higher. Tesla also reported after the close: revenue of $28.24 billion beat the estimate of $26.4 billion and is 26 per cent higher year-on-year, but non-GAAP EPS of $0.33 fell short of the estimate of $0.54, the operating margin slumped to 1.4 per cent and free cash flow was negative at −$1.09 billion, with record capital expenditure of $5.79 billion. Record quarterly deliveries of 480,126 vehicles (+25 per cent) thus significantly outweighed profitability.
A historic deal is taking place in the world of AI chips. US processor manufacturer AMD and artificial intelligence laboratory Anthropic announced a partnership agreement on Thursday, under which AMD will invest up to $5 billion in Anthropic and Anthropic will commit to purchasing up to two gigawatts of the latest generation of AI chips from AMD, with deliveries set to begin in the first half of 2027, according to a joint press release from both companies. The Wall Street Journal, citing sources, reports that the total value of the contract is in the tens of billions of dollars. The deal is vital for AMD — as the second-largest GPU manufacturer after Nvidia, the company aims to lure customers away from the CUDA ecosystem. For Anthropic, this represents a move to diversify its chip suppliers and secure computing capacity for future generations of the Claude model.
Significant events with global impact
The $110 billion merger between Paramount Skydance and Warner Bros Discovery was given the green light on Wednesday by the European Commission, which approved the transaction in a press release, citing the commitments made regarding film distribution and cable content licensing. This is a key regulatory milestone that has removed the last of the international antitrust barriers. Paradoxically, however, a 14-day interim injunction issued by a US federal court on the very same day – following a lawsuit brought by twelve US states led by California – is currently preventing the transaction from being finalised. The court is due to decide by 4 August whether to proceed with a substantive hearing of the case.
In the macroeconomic environment, the issue of US tariffs remains unresolved. According to information from the Financial Times the previous day, President Donald Trump plans to announce new tariffs on imports from dozens of countries this week, with Friday’s expiry of the provisional 10 per cent regime serving merely as a springboard. Overnight, global markets reacted nervously to this transition to new, uncertain rates — both the Nikkei and the Kospi opened lower on Thursday.
gnews.cz - GH
Tradingeconomics.com