Semiconductors are having a busy Monday, with speculation still going on about how Intel’s CEO, Lip-Bu Tan, is going to deal with the President of the United States calling for his resignation (see the Podcast), and President Trump confirming reports that Nvidia and Advanced Micro Devices will pay the U.S. fifteen percent of what they make from sales of AI chips to China.

But, the focus today is really on Micron Technology, which announced this morning that its revenue and profit for the quarter ending this month is going to be higher than expected. The announcement was made because the company’s chief business officer, Sumit Sadana, and its head of investor relations, Satya Kumar, were both appearing onstage today with John Vinh, semiconductor analyst at KeyBanc, for brokerage’s “Technology Leadership Forum.”

The stock is up three percent today, bringing its return this year to forty-five percent. Micron is one of the TL20 stocks worth considering.

It’s been a strange week: possible ouster of the head of Intel by the president of the United States, a massive tariff on semiconductors, and now reports Nvidia will have to pay money to the U.S. government in order to sell GPUs to China.

Stocks rose nicely last week, including Mega-Cap tech, bolstered by favorable earnings reports.

A hundred and forty-seven tech companies of note reported, and only sixty-five ended the week down, so, the vast majority did alright. See the table at the bottom of the post for the details.

“Steve Jobs humbly said when the iPhone was announced in 2007 that he thought he had a two-year lead over Blackberry and Nokia. We have substantially more than that.”

In a week packed with earnings like this one, with nearly a hundred and fifty names of merit, one way to look for patterns is to ask whether the latest report marks any kind of departure from trend for a company, good or bad.

In that respect, some companies saw a rebound, after disappointment, such as chip equipment vendor Onto innovation, and some saw a continuation of healthy trends, such as software tools maker Jfrog.

And, then, some companies stumbled after offering high hopes, including communications software maker Twilio and advertising platform The Trade Desk.

Let’s take the positive stories first.

Among healthy trends that continued were not only Jfrog but also cloud data storage vendor Backblaze; cyber-security software maker Gen Digital, which owns the famous Norton consumer safety brand; GigaCloud, which runs a B-to-B parcel network to connect Asian manufacturers with U.S. retailers; and LegalZoom, which is basically a cloud-based, outsourced legal department for small businesses.

All of these companies had notched at least one prior quarter where the stock had jumped, and in some cases, they’re on a three or four-quarter streak.

This week’s earnings calendar is the gift that keeps on giving, with forty companies — yes, forty — reporting Wednesday evening, and another sixteen on Thursday morning.

I’ve tried to pick out just the most interesting this afternoon on which to dwell.

First, Fortinet, one of the more popular cyber-security names over the past several years, is Thursday’s most spectacular implosion, receiving five downgrades after the company missed with its outlook for revenue this quarter, sending its stock down over twenty-five percent at $72.32.

The stock had already sat out the year, rising only two percent, and it was a dud in the past twelve months as well.

The problem is that the company has been talking to the Street for a while now about how its customers have to “refresh” their licenses to the company’s main product, the firewall. That should be an automatic bump-up for any company whose revenue is tied to customers renewing a contract, which is why so many had a positive view on the stock.

But, that refresh has largely played out now, and the very success of it leaves less in the cupboard to get excited about.

Tuesday evening’s earnings reports featured a rebound for two artificial intelligence darlings that had fallen out of favor, and a hard landing for one stock darling that had soared this year. 

But first, Arista Networks was the star, rising seventeen percent on Wednesday to a new 52-week high (also an all-time high) of $138.78. 

The company had come into Tuesday evening’s report under something of a cloud, a debate between BNP Paribas’s Karl Ackerman, who said the company would be severely impacted by Nvidia’s sales of ethernet networking, and the positive view, which I had articulated, that ethernet is a rising tide that lifts all ships.

The stock was up seven percent this year, trailing the market, as that negative narrative had been carrying the day. Tuesday, the positive view won out. 

The week ending August 1st saw stocks decline on further tariff pressure in spite of some very upbeat earnings, with the Nasdaq Composite Index and the S&P 500 both closing the week down 2%. 

But, the highlight last week, from a news standpoint, was the initial public offering of thirteen-year-old Figma, a software maker that is, sort-of, the Adobe for the current epoch, a company that is the tool of choice of designers of apps and Web sites.

The IPO, which netted $400 million, soared in value, almost quadrupling on its first day from the $33 offer to $115.50, then, rising again on Friday to $122. 

Then, the stock plunged on Monday by 27%, which is probably because the smart money realized that the stock isn’t worth anything nearly so much.

Shares of Palantir are surging by seven percent Tuesday, at $172.04, after the company Monday evening turned in its best earnings beat since coming public in September of 2020, with revenue seven percent higher than expected, better than the second-best beat, back in February, which was six-point-seven.

The fact that revenue is already at a billion dollars per quarter and rising at forty-eight percent last quarter is rather stunning to just about everyone. Combined with a mid-forties adjusted operating margin, Palantir is the only software firm currently a “Rule of 90” company — probably one of the only ones on the planet — meaning, its combination of growth and profitability.

Price targets are zooming to as high as $200, and at least one bear is stepping out of the way.

Deutsche Bank’s Brad Zelnick raises his price target on the stock from Sell to Hold, calling the report “AI Excellence.”

Monday morning’s earnings reports started off with a bang, with the announcement by Amphenol, the $137 billion maker of a variety of connectors for electronics equipment, that it will acquire from CommScope a business called “Connectivity and Cable Solutions,” for $10.5 billion.

Yes, it’s viewed as a play on artificial intelligence growth. The “CCS” business, as it’s called, makes $2.8 billion a year selling fiber-optic connectivity devices of various sorts including optical amplifiers and passive optical network terminals. It’s on a rapid growth path, in part because of its use in data centers.

In the press release, Amphenol CEO R. Adam Norwitt specifically noted that the unit adds “significant” fiber-optic product ability, “including for artificial intelligence applications.”

In the quarter just ended, the “enterprise” part of CCS, the part focused on AI, rose eighty-eight percent, year over year, to $213 million. Amphenol said in its announcement today that it expects the unit to generate $3.6 billion in sales this year, and a fairly decent Ebitda profit margin of twenty-six percent.

On Friday, I sat down software maker Procore Technologies’ CEO, Tooey Courtemanche to discuss the company’s quarterly report on Thursday evening. The full interview is in the accompany video. There’s also an audio version if you like.

Procore’s software tools are used to run the core operations of construction project management by general contractors, sub-contractors, and, increasingly, project owners.

Although results and outlook topped expectations, the stock sold off by thirteen percent on Friday.

On investors’ minds is whether the tariff drama is going to hurt construction firms’ willingness, or ability, to spend with Procore. On that score, Courtemanche is adamant that higher costs are not as serious a worry as most people consider them.

A whopping twenty-eight significant tech names have reported in the past twenty-four hours, and despite some very upbeat reports from Apple, Amazon and others, nothing matters as much this Friday as the news overnight that the administration of U.S. President Donald Trump has slapped more tariffs on dozens of countries, including a thirty-five percent tariff on Canadian goods.

I have been remarking weekly, including in the latest podcast, that we are not out of the woods when it comes to tariffs, and today’s drop in Apple shares despite the positive iPhone sales are clear evidence of that, coming as it does following a decline already of seventeen percent in Apple shares.

Although you shouldn’t read too much into stock prices in a single day, let’s start with what’s not working at the moment. 

Small-cap companies that have complex stories that are not well understood by investors: That includes Enovix, makers of a novel silicon battery technology, and Innodata, a services company helping in the training of artificial intelligence models, and Riot Platforms, one of the many crypto-currency hopefuls now trying to be more of an AI hosting provider. 

Shares of GPU-chip rental service CoreWeave are soaring on Thursday by fourteen percent at $116.95 following Microsoft’s upbeat report Wednesday evening, in which CEO Satya Nadella reaffirmed a commitment to spend like made on cloud and artificial intelligence, and also said Microsoft remains supply-constrained for computing capacity. 

It’s rather surprising that Microsoft should resuscitate CoreWeave’s recently limp stock given that one big knock against CoreWeave for a while now has been the fact that so much of its revenue is tied to Microsoft, which accounts for about two thirds of CoreWeave’s sales. Usually, when a company is so concentrated with a single customer, it’s a negative. 

All the bullish sentiment about Microsoft and Meta, and it’s been plentiful for several quarters now, was rewarded Wednesday evening as both companies continued a streak of satisfying with their results and outlook.

This is a repeat of April’s earnings calls from the duo, which showed business is humming along for both.

Microsoft is now on track to become the next four-trillion-dollar company by market value, after Nvidia, as its stock rises by eight percent in early trading to $554.98.

Microsoft stock has gotten one upgrade already this morning, from KeyBanc’s Jackson Ader, who regrets having downgraded the stock in April as he now raises his rating from Sector Weight to Overweight, and introduces a $630 price target (about thirteen percent upside): “And thus ends a terribly timed and short-lived stint at Sector Weight.”

Allow me to bring you up to speed on the state of play as of Wednesday afternoon in a very busy earnings week.

We had winning reports from numerous companies, including seven in particular that have seen double-digit gains following the reports: Cadence Design Systems, Corning, Sanmina, Celestica, Teradyne, and Amkor Technology.

All six are very intimately tied to manufacturing on a global scale, which obviously puts them in the middle of tariff pressures. You might think they would be affected already by months of uncertainty.

So far, actually, the firms are doing just fine, and my sense is the contract electronics manufacturers such as Celestica and Sanmina may even be poised to thrive in this environment.

These companies get paid a fee to assemble stuff for clients around the world, from computer network equipment to wireless earbuds. They’re broad, diverse contract assembly businesses that work closely with tons of different kinds of clients.

Earnings season can bring some surprises, and Wednesday morning saw Palo Alto Networks, the biggest name in cybersecurity, announce it will acquire CyberArk, one of the younger vendors in the market, for $25 billion, confirming a Wall Street Journal article yesterday speculating on the deal.

Both are companies in the TL20 group of stocks to consider. CyberArk is up thirteen percent since being added in February, which is good, but Palo Alto is up only twenty-seven percent since being added in August, just below the Nasdaq’s thirty percent.

The purchase price, consisting of 2.005 shares of Palo Alto, and cash worth $45 per share of CyberArk, works out to $471.54 for every CyberArk share, which is a nine percent premium to yesterday’s close, although CyberArk had already jumped over thirteen percent yesterday on the Journal’s speculation. 

Palo Alto is slumping by seven percent this morning, adding to yesterday’s five-percent drop, as holders are clearly not thrilled with this large expenditure. 

This is Palo Alto’s biggest acquisition by far, after doing deals mostly worth less than half a billion dollars. That kind of change from the playbook is typically something that doesn’t sit well with investors. 

• The Nasdaq Composite keeps hitting new highs after rising one percent for the week ended July 25th. That was helped by a week of largely favorable earnings from the likes of Alphabet, Coursera, and AT&T.

• Some are asking if we are heading toward the end of a decade-plus bull market, which is a fair question to ask given the massive change coming to the global economy. 

• Tariffs on goods imported to the U.S. are on track for their highest level in a century, based on deals announced by U.S. President Donald Trump with the EU, Japan and other nations, and what may come from further talks with the Chinese. 

• As The Financial Times’s Aime Williams, Alan Smith, Jonathan Vincent, and Emily Herbert write in a piece on Monday, the U.S. is on track for a 17.3% average tariff rate across all of its agreements so far — the highest level since the 1930s.

Far be it from me to be a Negative Nancy, but when I hear about a penny-stock name that’s suddenly surging on artificial intelligence euphoria, I have my doubts. 

Shares of six-year-old Graphjet Technology, based in Malaysia, are soaring by over forty percent on Monday, to $0.14 a share, after the company issued a press release saying that they were going to benefit in a big way after Tesla announced it is entering into an agreement with Samsung Electronics to make Tesla’s next version of its AI chip at a Samsung factory in Texas. 

Before today’s surge, the company’s stock had collapsed by eighty-four percent this year, and ninety-six percent in the past twelve months.

Tesla CEO Elon Musk posted on Twitter, “Samsung’s (SSNLF) giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate. Samsung currently makes AI4. TSMC (Taiwan Semiconductor) will make AI5, which just finished design, initially in Taiwan and then Arizona." 

Reuters’s  Heekyong Yang and Hyunjoo Jin relate that Musk subsequently tweeted, “The $16.5B number is just the bare minimum,” meaning, the projected revenue for Samsung. 

In response, Graphjet issued a press release titled, “Samsung and Tesla collaboration to benefit Graphjet.”

One of my worst calls this year was writing in January that Palantir must go down because it was valued at an outrageous fifty-six times projected revenue.

A hundred and ten percent later, the stock, at a recent $158.80, trades for an even-more-ridiculous eighty-nine times forward revenue.

Oh, well. Some people are coming off the sidelines. Piper Sandler software analyst Brent Bracelin on Friday initiated coverage of Palantir with an Overweight rating, and a price target of $170, while suggesting people buy the stock on the dip.

“We have monitored PLTR for 5+ years,” writes Bracelin. He has concluded that Palantir has “a one-of-a-kind growth+margin model that if proven durable could grow into a $24B run-rate by CY32E via share gains across two $1+ trillion TAMs,” those being its defense sector and enterprise markets.

Now, however, Palantir has “a one-of-a-kind growth+margin model that if proven durable could grow into a $24B run-rate by CY32E via share gains across two $1+ trillion TAMs,” those being its defense sector and enterprise markets.

“We see PLTR as an AI secular winner,” writes Bracelin. For me, the key slide in his note is the one showing the relative paucity of high-growth software companies:

Intel shares are up fractionally in late trading Thursday, at $22.71, after the company topped expectations with its quarterly revenue forecast, only the second time the company has beaten with its outlook in the past year and a half.

The stock soon gave up the gains and is now down a point.

It may be reason to celebrate, though the company is hardly out of the woods. The upside in the forecast is entirely a result of analysts having cut their own estimates massively. 

The current consensus estimate is twenty-two percent lower than it was a year ago, a sign of how far Intel’s prospects have fallen.

Recently appointed CEO Lip-Bu Tan said in prepared remarks that “Our operating performance demonstrates the initial progress we are making to improve our execution and drive greater efficiency.” 

Tan came aboard in March, promising to refashion Intel in a way that goes back to its roots “as an engineering-led company.”

Just a quick recap of the first flood of earnings reports overnight. In brief, shares of chip maker MaxLinear, Alphabet, ServiceNow, and BE Semiconductor are all rising nicely while Tesla and IBM are the standout disappointments.

DATA CENTER CHIP BRIGHT SPOT

The simplest of these is MaxLinear, a small-cap, or, you could even say, micro-cap ($1.3 billion) analog chip maker that specializes in communications chips that go into cellular infrastructure but also data centers. The stock had been down twenty-three percent this year prior to the report, but it’s up twenty-two percent in early trading.

Like a lot of analog chip makers, it’s a story of the company’s end markets turning a corner. “we think MXL has undoubtedly turned the corner with a multi-year growth cycle ahead,” writes David Williams with The Benchmark Company this morning.

“These are the industries that have been slowest to digitize, not because they're slow but because they're complex.”

It sure feels like tech stocks on Tuesday afternoon are just taking a breather after racking up new all-time high prices for many weeks now.

The Nasdaq Composite is down less than a point, but most of Mega-Cap tech is falling harder, with conspicuous declines in Applied Materials, Broadcom, Dell Technologies, Advanced Micro Devices, Oracle, and Nvidia, among others. Many of those had hit or were close to hitting new lifetime high prices in recent days.

There are, however, a couple things in play today to perhaps give investors pause about the state of the world.

They include two announcements overnight, one from chip maker NXP Semiconductor, a broad-based supplier of analog chips that go into cars and consumer goods and industrial equipment; and a profit warning from European telecom equipment stalwart Nokia tied to the weaker U.S. dollar and also the expected impact of tariffs.

In the case of Nokia, which will formally report its quarterly results on Thursday morning, the company surprised the market Tuesday morning with a terse statement that said that its operating profit for this year will come in lower than expected. Nokia shares fell almost six percent.

• Stocks keep hitting new all-time highs, as the Nasdaq Composite closed the week of July 14th to 18th with a two-percent gain.

• Among new highs, Microsoft and Nvidia, while Mega Cap names close to all-time highs include Broadcom, Oracle, SAP SE, Texas Instruments and Taiwan Semiconductor Manufacturing. 

• So many others can be included in the group of at-or-almost-at-new-all-time-high-prices, such as Amphenol, Coinbase, Robinhood Markets, RocketLab, Flex, KLA Corp.

• We’re not out of the woods as far as the U.S. tariff regime. Keep in mind the observation of The Financial Times’s Oliver Roeder, Eva Xiao and Molly Taylor this weekend: “If all of [U.S. President Donald] Trump’s policies announced by July 13 are implemented […] the average effective tariff rate for US consumers could rise as high as 20.6 per cent — the highest since 1910, according to estimates by Yale’s Budget Lab.”

A three-quarter streak of price jumps ended Thursday evening for Netflix as the stock sagged in late trading following the company’s second-quarter earnings report. 

It was an upbeat report, however, and it’s not surprising to see people taking profits after a forty-three percent gain in the stock this year, at Thursday’s close of $1,274.17. 

The outlook is robust and should keep the shares in favor. The forecast for this quarter’s revenue, $11.5 billion, is two percent higher than consensus, which is the biggest upside in the quarterly forecast in years. The company also raised its year revenue outlook for the second time since it issued it back in October 

All this is very validating for the multiple analysts who raised their ratings back in January. 

The quarterly report Thursday morning of Taiwan Semiconductor, the largest chip manufacturer in the world, was quite a contrast to the dour tone of chip-equipment maker ASML on Wednesday. 

Just like ASML, Taiwan Semi is seeing increased uncertainty because of global trade riffs. But demand from companies such as Nvidia to make artificial intelligence chips is even stronger than it was in April, according to TSM’s CEO C.C. Wei. His company is racing to “fill the gap” between escalating demand and how many chips he can manufacture.

The shares rose Thursday by over three percent, and gave a lift to Nvidia and other stocks, but there was an odd dichotomy here: Wei’s outlook for this year is going higher even as he urges caution.

The outlook this year’s revenue is now for “around thirty percent” growth, up from what Wei forecast in April would “mid-twenties-percent.” 

At the same time, Wei is keeping the company’s outlook for capital spending this year the same, despite the fact that he is building factories all over the world, in Japan, in Germany, in the U.S., and in Taiwan at a pace the company has never been on before. Taiwan Semi is one of ASML’s biggest customers, and that prudence doesn’t help ASML at the moment. 

Shares of chip-equipment maker ASML closed down eight percent Wednesday, after the Dutch company’s earnings report Wednesday morning offered a repeat of the dour tone in April: lots of uncertainty in the world.

ASML is our first read on how the chip-equipment market tshis earning’s season, so the negative tone of the report put a damper on shares of peers including Applied Materials and KLA and Lam Research.

My take on things is that it’s all about the tariffs, and the uncertainty that the U.S.’s on-again, off-again tactics are having. ASML’s management is signaling that its customers are not sure what’s going to happen with their own costs, nor with global GDP this year and next.

The verbiage in the conference call with CEO Christophe Fouquet and CFO Roger Dassen Wednesday morning was, on the surface, baffling. Fouquet said expectations for growth in the business in 2026 that he had previously signaled were now less certain.

His actual remark was that “Against this backdrop,” meaning, tariffs and trade, “while we are still praying for growth in 2026, we cannot confirm it at this stage,” my emphasis added. “We will continue monitoring developments over the coming months.”

The news overnight that Nvidia has been granted permission by the U.S. government to resume selling its artificial intelligence chip to customers in China has sharply lifted not only Nvidia stock but also the broader tech market, yet another sign of the enormous role the company is playing as a market maker. 

Nvidia shares are up almost five percent after the company announced in press releases and a blog post late Monday that the company has been given assurances from the administration of U.S. President Donald Trump that the export ban on its “H20” chip, a dumbed-down part designed for the Chinese market, will be reversed. That ban had lead to a four-and-a-half-billion-dollar write-down by Nvidia in the April quarter, and lost revenue, the company said in May, of eight billion dollars.

It was said back in May, by Wedbush analyst Matt Bryson said, that politics was the only thing could slow Nvidia. Well, CEO Jensen Huang’s decision to be “politic” about tariffs and trade seems to have been the right move.

• Stocks continue to hit new highs, and many, new all-time highs. During the week ended July 11th, in which the major indices, Nasdaq and S&P 500, were basically flat, several names hit new all-time highs, including Nvidia, Texas Instruments, and Microsoft.

• Many others are near new all-time highs, including Broadcom, Meta Platforms, and Taiwan Semiconductor Manufacturing.

• Others are still trying to get back to all-time highs they had a year ago, such as ASML and Dell and Salesforce.

• These new all-time highs mean you have to tread even more carefully as far as stock-picking, to find things that are not over-priced at the moment relative to their potential.

“There are a lot of things that feel like they're full. There are other companies that feel decidedly overvalued. And then there are some names that feel very reasonable, and some things that are just downright cheap.”

Stocks continue to hit new 52-week highs, and some are hitting new all-time highs, including Broadcom, Microsoft, SAP, and Nvidia.

The last of these, Nvidia, hit a new all-time Wednesday morning of $164.42, a return since it started trading in January of 1999 of 432,000 percent. Not bad.

As you can see in the accompanying chart, adjusted for splits, the past decade for Nvidia stock really stands out. It was 2015 that was the year that things really changed, as Nvidia started to become an AI stock. (The first sixteen years were not bad, though, a return of 181,327 percent.)

This new high is special because it moves Nvidia into a market capitalization of four trillion dollars, the first to make it that far, and well ahead of the next-closest, Microsoft, at $3.8 trillion.

I would imagine no one is particularly moved by this event, as it is not very different from $3.999 trillion, but Dan Ives of Wedbush Securities, one of the biggest fans of Nvidia, remarks today that it “speaks to the AI Revolution hitting its next stage of growth,” which just means that, yes, the AI trade is alive and well. Ives thinks Microsoft “will also hit the $4 trillion market cap club this summer and then over the next 18 months the focus will be on the $5 trillion club,” without making any predictions.