TMTB EOD Wrap: META MSFT LRCX FTNT QCOM ARM First Takes
Good afternoon. QQQs -2% on another ugly day for the AI semi bulls as SOX -5% with many names down 5%+ again. Really just more a tale of what has been going on since Friday, not a ton new to say or call out an many individual names - semis selling off hard, internet/software outperforming, and TMT Momentum down significantly (another 10% today).
A little late getting back to my screens this afternoon and hopping on earnings calls now so we’ll just do some earnings recaps for now.
META -9.5%: Disappointing quarter with top line shy of what buyside was hoping for and modest opex increase another negative (vs expects for reit or slight downtick). Capex raise was limited to ~2% at the midpoint with the high end unchanged (buyside & AI semis bulls wanted a bigger raise of $145B at the midpoint). Op inc looks like s slight miss but backing out one time fine and severance costs ($3.6B total), actually a small beat and they reit FY26 op inc. Ad impressions down vs. Q1…not sure much zuck can say on the call to get this ship turned around tomorrow, especially in this tape
Q2 Revenue: $60.8B vs. Street $60.2B
Q2 Ad Revenue Growth: +27% FX-neutral
Q3 Revenue Guide: $61–64B vs. Street ~$63B
Q3 Implied Ad Growth: ~+24% FX-neutral
FY26 Expenses: $165–169B vs. prior $162–169B
FY26 Capex: $130–145B vs. prior $125–145B
FY26 Operating Income: Expected above 2025
MSFT +3%: Very nice Azure number (43% vs 39-40% guide and 41% buyside bogey) and co-pilot adds better to 30M seats (vs 25M expectations). All eyes on the guide on the call with 43% likely being the bogey now. Revenue and EPS also beat comfortably. Investors will now focus on whether the Azure guide sustains the 43% growth rate and what management says about capex. Future leases at $329B up from $197B.
Revenue: $90.0B vs. Street $87.62B
EPS: $4.74 vs. Street $4.24
Azure Growth: +43% constant currency vs. 39–40% guide and ~41% buyside bogey
FTNT +11%: Material beat-and-raise cleared a very high bar. Billings growth accelerated to 33%, product revenue grew 52%, and both the September-quarter guide and full-year billings raise were well above expectations. The pull-forward debate will persist, but the results strong enough here for move up
Revenue: $2.05B vs. Street $1.89B
Billings: $2.37B, +33% y/y vs. Street $2.13B, +20%
Product Revenue Growth: +52% vs. low-40% growth last quarter
Q3 Revenue Guide: $2.055B vs. Street $1.95B
Q3 Billings Guide: $2.30B vs. Street $2.11B
FY Billings Guide: $9.45B midpoint vs. prior $8.95B midpoint
LRCX +6%: Very strong guide meaningfully exceeded elevated expectations. The September-quarter revenue guide was ~14% above Street, with substantial upside across gross margin and EPS as well. The print should help ease concerns that large-cap semicap estimates lacked further upside, especially after KLAC