Shesa's Weekend Stock Market Updates - 7|26|26

Welcome to my weekend's updates

U.S. investors and traders showed continued concern despite  good Q2 earnings. The AI related semiconductor stocks continued sharp sell-offs despite their solid results. In other words, investors did not seem to care about good earnings, rather it was a classic “sell-the-news” reactions. The Nasdaq was the worst performer, hit hardest by the sell-off in mega-cap tech and semiconductor stocks. Most of the chip names are in bear market down more than 20-30%. The “Magnificent Seven” collectively lost hundreds of billions in market value amid investor concerns over elevated AI capital spending and so valuations concern. Strong fundamental results from AI-related companies were met with skepticism rather than celebration. Investors appeared more focused on the sustainability of AI spending, the impact of elevated oil prices on inflation and rates, and the broader geopolitical backdrop than on pure earnings beats. The  ongoing geopolitical tension caused oil prices to remain elevated and Brent crude went past $100 per barrel. Having said that, after two weeks of intense tit-for-tat military activity, a temporary mutual pause in direct U.S. - Iran strikes is a good sign for the market. Let's see the stock market indices. 

Major Index Performance (Week Ending July 24, 2026)
•  Dow: Down -0.4% (closed at 51,947.25)
•  S&P 500: Down -0.6% (closed at 7,411.98)
•  Nasdaq down -2.1% (closed at 24,975.82)

Economic Report this week

•  Monday, 7/27: Durable Goods Orders
•  Tuesday, 7/28: Consumer Confidence
•  Wednesday, 7/29: FOMC rate decision and press conference. There may not be rate increase but what FED chair says would be critical.
•  Thursday: Q2 GDP advance estimate 
•  Friday, 7/31: Personal Consumption Expenditures (PCE) - the Fed’s preferred inflation gauge

Earnings last week
Google (GOOG)
Earnings per share: $2.85 vs. $2.89 expected
Revenue: $119.80 billion vs $116.93 billion expected
Google Cloud: up 82% to $24.8 billion.
The company further increased its capex spend in 2026 to $195 - $205 billion vs. $180 - $190B earlier.
Why the stock went down? Net income and EPS were heavily boosted by $98 billion in other income. Please note that Google had invested only $1B In SpaceX in 2015 is now worth about stupendous $90 billion, primarily net unrealized gains on equity securities.

TSLA (TSLA)
Beat on top line, missed on bottom line.
Revenue: $28.24 billion vs. $25.71 billion expected, up 26%.
EPS: 0.33 vs. 51 cents expected
Record Q2 vehicle deliveries: 480,126, up 25% YoY.

My View: Tesla's profit was much below expectations but revenue surpassed expectations. This stock is not cheap but it was never cheap as far as I know. Investing in Tesla may need lots of patience to deal with volatility. This is an investment for future due to its forthcoming RoboTaxi / Cybercab, Optimus robots, Terafab (Chip manufacturing) energy storage etc. As I have said many times, the investors need to think beyond Car manufacturing. 

Intel (INTC) reported better-than-expected second-quarter results on Thursday, notching its fastest revenue growth rate for any quarter since 2011 and issuing guidance that topped expectations.
EPS: 42 cents, adjusted, versus 21 expected
Revenue: $16.1 billion, versus $14.42 expected

Current Investing Environment

I did a poll in my WhatsApp group about how the members feel investing in current environment. Most of the members about 60% said they are OK to invest but remain very careful. I do agree with them. This has been a chaotic environment for AI related and moreover the technology stocks. Even with good or great earnings companies are getting hammered. Thus, it calls for caution for the tech investors. If someone invest on non-tech stocks then it seems OK at this time. Furthermore, around 24% members said, they are not comfortable in this environment and remain on the sideline. This is understandable and I guess that's not a bad decision. It's better to remain on the sidelines until we feel comfortable and market becomes little more stable. 

Key Earnings this week

7/27: APLD

7/28: Corning (GLW)
7/29: META, Microsoft, ARM

7/30: AAPL, AMZN

I will keep an eye on the Mag 7 stocks. We will see if these big tech stocks can have some positive impacts on the market after their earnings. I am not very sure though!

Stocks to watch

AAPL, META,  MSFT, APLD, TSLA, NVDA, MU, DELL, AMD, INTC, GOOG, SOXL

Expectations going forward

The big teach earnings will continue this week with Microsoft, META, Apple and Amazon reporting. Investors will focus less on whether these companies beat estimates (most are expected to) and more on forward guidance for AI infrastructure spending, cloud growth rates, and free-cash-flow trends. Recent reactions to Alphabet and other tech names show the market is in “sell-the-news” mode when CapEx guidance rises. And that's becoming detrimental for the stocks. Investors appeared more focused on the sustainability of AI spending, the impact of elevated oil prices on inflation and rates, and the broader geopolitical situation than on pure earnings beats. So, I am not too excited seeing the current trend and feel risky. With all the negativity, as I said before, after two weeks of intense military activities, a temporary mutual pause between U.S. and Iran could minimize the fear of oil prices going up and inflation ticking up. I hope the market should see some bounce on Monday. But we will have to wait and watch how the market reacts to this positive developments, Fed meeting and earnings. 

Have a good evening!