Most of this week’s content has already been published:
Today's Content:
1. Earnings Round-Up – Microsoft, Starbucks, Intel & SK Hynix
a. Microsoft
Beat revenue estimate by 1.8% & beat guidance by 2.1%.
Beat Azure revenue estimate by 2.6% & beat 45% constant currency (CC) growth guidance by 3 points.
Beat EBIT estimate by 4.1% & beat guidance by 4.7%.
Beat $4.73 EPS estimate by $0.16.
Beat 65% cloud GPM guidance by 1 point.
Beat Agents & Infrastructure revenue estimate by 1.5% & beat Devices & Consumer estimate by 2.9%.
CapEx of $45.2B was 10.8% below $51B estimates and $50B+ guidance. This was tied to 3rd-party capacity delivery delays. Not related to worsening demand or anything like that.
Crushed $8.42B FCF estimate by $10.2B due to lighter CapEx.
Balance Sheet:
$20.3B in cash & equivalents.
$44.2B in short-term investments & $37.8B in equity and other investments.
$35.5B in total debt ($4.4B current; $31.1B long-term). Repaid $4.85B of debt in the quarter.
Diluted share count fell 0.3% Y/Y.
Guidance & Valuation:
Q2 revenue guidance beat estimates by 1.0%.
Q2 CC Azure growth guidance of 49.5% beat 45% growth estimates.
Q2 CapEx guidance of “over $50B” compares to $53.10B expected.
MSFT trades for 25x forward EPS. EPS is expected to grow by 16% Y/Y this year and by 21% Y/Y next year.
b. Starbucks
Results:
Missed revenue estimate by 1.0%.
China sales are weighing heavily on revenue growth right now.
Beat global comparable store sales growth estimate by 1.2 points (7.2% vs. 6.0%) & beat guidance by about 20 bps.
Beat U.S. comparable store sales growth estimate by 1.2 points (7.7% vs. 6.5%) & beat guidance by 1.2 points (Q4 guide of “6.5% or greater”).
Missed International comparable store sales growth estimate by 2.3 points.
Beat $0.72 EPS estimate by $0.08.
Balance Sheet:
$3.68B in cash & equivalents.
$184M in short-term investments, $310M in long-term investments & $1.78B in equity investments.
$13.28B in total debt ($1.50B current; $11.78B long-term).
Diluted share count rose 0.3% Y/Y.
Guidance & Valuation:
FY27 non-GAAP EPS guidance of $3.20 beat the $3.14 estimate by $0.06 (includes slightly more than $0.10 from a 53rd week).
FY27 revenue guidance of about -1% Y/Y missed the +1.4% estimate, mainly due to the Starbucks China joint-venture conversion.
Other FY27 guidance: ~4% North America comp growth; 13.75% EBIT margin.
SBUX trades for 33x forward EPS. EPS is expected to grow by 17% this year and 18% the following year.
c. Intel
Results:
Met revenue estimate & beat guidance by 1.3%.
Missed client computing (CCPG) by 5.1%.
Beat data center and AI revenue estimate by 9.6%.
Beat Foundry revenue estimate by 9.5%.
Beat 42% GPM estimate by 1 point & beat guidance by 2 points.
Beat EBIT estimate by 22%.
Beat $0.40 EPS estimate by $0.12 & beat guidance by $0.14.
Balance Sheet:
$21.8B in cash & equivalents.
$32.2B in short-term investments & $8.8B in equity investments.
$50.1B in total debt ($3.8B short-term; $46.3B long-term).
Diluted share count rose 17.1% Y/Y.
Guidance & Valuation:
Q4 revenue guidance of $15.5B missed estimates by 9.4%; Intel cited ~$300M of lost revenue from an Israel fab explosion in the Q4 guide.
Q4 EPS guidance of $0.25 missed the estimate by $0.18; GAAP EPS guidance of $0.10 missed the $0.31 estimate by $0.21.
Q4 GPM guidance of 38.0% missed the 42.8% estimate by 4.8 points.
Intel trades for 39x forward EPS. EPS is expected to grow by 253% this year, 42% next year and 52% the year after.
d. SK Hynix
Results:
Beat revenue estimate by 5%.
Beat 84.9% GPM estimate by 70 basis points.
Beat EBIT estimate by 7.1%.
Beat operating cash flow estimate by 1.5%.
Sharply missed net income estimate due to ₩32.625T non-operating loss, driven by ₩22.9T of investment-asset valuation losses and ₩11.6T of FX losses. Excluding this, net income would have been about 9% ahead.
Guidance & Valuation:
SK Hynix doesn't give revenue or profit guidance; Q4 outlook calls for mid-20% Q/Q DRAM bit shipment growth and mid-single-digit Q/Q NAND bit growth.
HBM4 is expected to pass HBM3E in both shipments and revenue in Q4; HBM revenue and profit should grow significantly Y/Y in 2027.
2027 demand growth is expected to be similar to 2026 (mid-20% for DRAM; high-teens for NAND), while supply stays below demand through 2030. DRAM and HBM volumes through 2029 are effectively sold out including volumes under discussion.
Long-term agreements with 14 key customers cover more than 50% of 2027 and 2028 capacity.
2027 CapEx will increase significantly vs. 2026 (leading-edge equipment and Yongin fab ramp).
Shareholder returns: ~₩100T for 2026 (at least ₩30T of dividends and ₩60T+ of buybacks/cancellations); target raised to more than 50% of cumulative 2025-2027 FCF.
SK Hynix trades for 3x forward EPS. EPS is expected to grow by 494% this year, 47% next year and 16% the year after.
Balance Sheet:
₩114.46T in cash, equivalents & short-term financial instruments vs. ₩27.85T Y/Y.
Investment portfolio size isn't disclosed in the earnings release; Q3 included ₩22.92T of investment-asset losses, and SK Hynix plans to return most realized Kioxia gains via special dividends.
₩15.80T in total debt vs. ₩24.08T Y/Y
5% debt-to-equity ratio.
Y/Y diluted share count not disclosed in the Q3 release; ₩40T of repurchased shares will be cancelled shortly, with another ₩10T earmarked for cancellation.
2. Axon (AXON) – Product Launch
The new Axon Body Cam (Body 5) is out. It’s lighter, has better video, comes with more reliable connectivity and delivers 20% longer battery life. It also has new perks like a near-focus camera lens and speakers to broadcast live translations more clearly. The real game changer here though is the 25x jump in processing power and more memory. This unleashes a boatload of AI value creation potential to build on AI tools already scaling under the Axon Guardian label (like escalation detection). This should pave the way for several more launches under their AI Era plan (Axon Guardian is part of this), delivering immediate retention boosts and more pricing power down the road. The plan here is simple. Keep infusing more AI utility… but don’t charge for it yet. Get your customers even more reliant on the value and ecosystem you create… build dominant market share like you have elsewhere… and then flex pricing power down the road.
3. Shopify (SHOP) – Fall Product Updates
Shopify rolled out 150+ updates in its Fall ’26 Edition. A key theme of this batch of product releases was to capitalize on the power of Shopify’s network effect. Their 10%+ share of e-commerce gives them a beachhead of data to help across all merchant pain points… fraud, payments, checkout, customer acquisition… everything. To augment the collection of this lucrative merchant data, Shopify POS is now able to recognize when an in-store shopper has ever bought anything from a Shopify Payments merchant. This allows the merchant to collect a more complete customer data profile, sharpening its idea of when to nudge someone with a promotion or when to sit tight. Known in-store shoppers enjoy 60%+ higher lifetime value than unknown ones, making it clear why this matters so much. Next, its fraud system now immediately knows when someone is using a card or address flagged for fraud at any other Shopify merchant. This again leverages the power of giant scale and merchant market share, leaning on that transaction history to fortify fraud systems. Shopify Payments now blocks 12K+ high-risk payments every minute and notched a 60% increase in “product not received” dispute win rates thanks to AI updates.
Shop Pay now works natively inside of AI Agents. Shop Pay now reaches 400M+ shoppers compared to 250M+ in June 2026.
Shop.md lets ChatGPT, Claude and other AI agents discover products, offer recommendations and check out with Shop Pay. Shopify Catalog now makes more than 1B products discoverable across AI channels.
Merchants can also manage their stores from inside AI agents like ChatGPT, Claude, Gemini, Grok, Meta’s Muse and Microsoft Copilot.
For important AI integrations and partnerships, Shopify launched its integration with Google Search (including AI Mode) and the Gemini app that lets customers buy products right from those experiences. Orders end up in the Shopify admin with the company also running checkout, thus ensuring merchants retain access to this important data. They are determined to welcome agentic commerce with open arms, as they’ve been trailblazers in terms of integrations and making sure the suite works seamlessly with AI leaders. Shopify even lets merchants manage their Shopify stores within agents from all of the industry leaders. And with ChatGPT, they now let merchants buy sponsored placements right from that surface through a new ChatGPT Ads app. Hard to overstate how ingrained they’re becoming in the promising new agentic commerce opportunity as the foundational infrastructure needed to ensure this all works with reliability and scale.
Within SHOP’s actual platform, its AI Assistant (Sidekick) also got a value boost. It’s now able to find store issues and suggest solutions. If asked, it can easily make those changes as well. Next, their Campaign Autopilot is a fully automated ad manager that stays within desired budget and delivers on advertiser goals. It works across Microsoft Advertising and Snapchat, with X ads coming soon. Overall Sidekick usage is surging, with daily sessions up 4.2x Y/Y, as the ability to handle harder things like website change testing is directly leading to more usage.
Last notes:
Managed Markets (all-in pricing that includes guaranteed duties and taxes) delivered 50% higher international conversion for brands using it.
The Shop app now offers universal checkout, letting shoppers buy from multiple brands in one cart with one tap.
Shopify Inbox now acts as a smarter storefront shopping agent that offers recommendations and starts checkout from chat. Signed-in Shop customers convert up to 1.5x better in those chats.
Shop Pay will add support for pre-tax HSA and FSA payments in the U.S. via a Truemed partnership.
4. Headlines and Macro
As communicated, Meta raised $37.5B in new equity this week and plans to raise another $60B next year. Of the raise, $25B was class A common stock with voting power and $12.5B in mandatory preferred stock with a 6.5% dividend. These notes will become shares in August 2029. It also acquired a small AI data analytics company called Sundial that was created by former Meta employees.
DoorDash is buying Instacart.
The Fed held rates this week as expected. Chairman Kevin Warsh’s press conference this week came with the following themes and ideas:
The economy is strong and getting stronger.
Jobs market is strong.
Inflation is still too high (duh). Committed to curbing that & avoiding broadening.
Despite inflation issues, "need to accumulate more information" before moving rates again (December hike still the expectation). Markets loved this.
They've seen some signs of progress & tightening from previous hikes flowing through the system. We need more progress, but "real activity is pointing in the right direction."
Still 8 FOMC meetings next year... but 1 now solely dedicated to general strategy & other 7 to policy.
In Brazil, Lula won the election. He has been in power there for the last 4 years and this takes potential tax cuts and deregulation off the table. While those would have been nice tailwinds, I don’t think the names I own with exposure there are at all reliant on them to execute. They’ve thrived with Lula in power and many others too.
