• Microsoft's top finance executive sent an internal email to workers calling for "intensity" in 2026.
• Last week, another memo from the CEO attempted to explain big job cuts in the midst of huge profit.
• On Wednesday, Microsoft reported a quarterly profit of $27 billion.

Microsoft employees should strap in for another year of "intensity," according to the software giant's top finance executive.

Chief Financial Officer Amy Hood sent an email to employees on Wednesday after the company reported a $27 billion quarterly profit, telling them the year ahead will require "intensity, clarity, and bold execution."

Hood sends out these emails every quarter when Microsoft discloses its financials. Her missives mostly rehash what the company reports publicly, such as how revenue and profit are growing.

Sometimes, though, Hood's emails provide insight into what the company's top executives deem most important and what they want employees to know.

This time, Hood highlighted updates she said were personal "reminders of the scale and importance of the product and services our customers count on us to deliver." She noted that Azure revenue reached more than $75 billion — the first time the company has disclosed this number — and grew 34%.

What perhaps stood out most was Hood's message to employees, reiterating priorities for the upcoming year, and citing a memo from CEO Satya Nadella last week.

"We're entering FY26 with clear priorities in security, quality, and Al transformation, building on our momentum and grounded in our mission and growth-mindset culture," Hood wrote, mentioning Nadella's email. "Both the pace of change and customer expectations are continuously accelerating."

Hood's email, notably, did not mention Microsoft's recent workforce cuts, which have exceeded 10,000 this year even as profit swells. Nadella's email last week attempted to explain this "seeming incongruence" as the "enigma of success." Some employees weren't satisfied with the explanation.

Hood's email expanded on Nadella's thoughts by telling employees the upcoming fiscal year will require "intensity," which has become a buzzword in the tech industry as companies dial up performance pressure and make significant workforce cuts.

"FY26 will require intensity, clarity, and bold execution," Hood wrote. "I'm excited about what we'll accomplish together as we lead in this next frontier of innovation — driving impact at scale for every customer, every partner, and every community we serve around the world."

Microsoft did not comment on Hood's memo.

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• Microsoft reported its fourth-quarter earnings on Wednesday.
• Shares in the tech giant jumped after earnings came in above estimates.
• CEO Satya Nadella said that cloud and AI continue to drive the company's growth.

Microsoft isn't slowing down.

The world's second-largest company by market cap reported blockbuster fourth-quarter earnings, sending shares surging so high after hours that the tech giant became a member of the exclusive $4 trillion club.

Shares were up over 9% after hours following Microsoft's strong earnings report. As a result, Microsoft joined Nvidia as the only other company to reach over $4 trillion in market cap.

Microsoft reported fourth-quarter revenue of $76.4 billion and earnings of $3.65. Analysts surveyed by Bloomberg expected quarterly revenue of $73.89 billion and earnings of $3.37 per share.

CEO Satya Nadella said that cloud and AI continue to fuel the company's growth.

"Cloud and AI is the driving force of business transformation across every industry and sector," Nadella said in a statement. "We're innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75 billion in revenue, up 34 percent, driven by growth across all workloads."

CFO Amy Hood said during the earnings call that "demand remains higher than supply" as Microsoft races to bring more data centers online.

Wednesday's earnings look different than those in the past. That's because for the first time, Microsoft detailed the revenue it is making from Azure, its cloud computing platform.

The company was so famously tight-lipped about how much revenue its Azure cloud generates that even former CEO Steve Ballmer once called for more transparency.

Microsoft said it would spend $30 billion in capital expenditures in the coming quarter, more than analysts expected.

"I feel very good that the spend that we're making is correlated to basically contracted, on-the-books business that we need to deliver," Hood said during the earnings call.

Ahead of the release, analysts said that they were paying close attention to Microsoft's capital expenditures, particularly since Google said it would spend $85 billion. Tech companies continue to push capex spending higher amid fierce competition over the future of AI.

• Meta will report earnings for the second quarter after the closing bell on Wednesday.
• Wall Street expects $44.3 billion in revenue for the quarter.
• Heading toward the 5 p.m. ET call, analysts will be looking for info on capex plans and AI opportunities.

Meta Platforms will report its second-quarter results after the closing bell on Wednesday.

Wall Street is feeling mostly bullish heading into the results. Analysts are eyeing strong AI opportunities and growth in ad spend, but there's some growing caution around high levels of capex and Meta's recent hiring spree aimed at furthering its AI ambitions.

Analysts expect the Facebook parent to report $44.83 billion in revenue and earnings per share of $5.89.

Meta stock is up about 20% year-to-date through Tuesday's close, putting it among the top performers in the Magnificent Seven cohort.

The earnings results will be released shortly after the 4 p.m. ET closing bell. The call with analysts is expected to start at 5 p.m. ET.

Bank of America: Meta is a 'Top Online ad stock'

Bank of America called Meta a "Top Online ad stock" for 2025 in a note this month.

That's because the company looks best-positioned to reap the benefits from AI-driven advertising, analysts wrote, which they believe could support a higher valuation for the stock.

In a separate note, analysts said they expected Meta to beat consensus estimates for second-quarter earnings, pointing to positive checks the bank conducted on Meta's advertising business. Revenue could come in around $45.5 billion, they estimated, at the higher end of Meta's guidance for the quarter.

The bank reiterated its "Buy" rating on Meta. Earlier this month, it lifted its price target for the stock to $775 from $765, which implies 9% upside from current levels.

Meta earnings expectations: Wall Street estimates EPS of $5.89

Second Quarter

• Revenue estimate $44.83 billion
• EPS estimate $5.89
• Advertising rev. estimate $44.07 billion
• Family of Apps revenue estimate $44.4 billion
• Reality Labs revenue estimate $386 million
• Other revenue estimate $502.4 million
• Operating income estimate $17.24 billion
• Family of Apps operating income estimate $22.16 billion
• Reality Labs operating loss estimate $4.86 billion
• Operating margin estimate 38.3%
• Ad impressions estimate +6.91%
• Average price per ad estimate +7.58%
• Average Family service users per day estimate 3.42 billion

Third Quarter

• Revenue estimate $46.21 billion
• Capital expenditure estimate $17.78 billion

Full year

• Total expenses estimate $114.01 billion
• Capital expenditure estimate $67.79 billion

Source: Bloomberg data

Tesla posted its financial results for the second quarter of 2025 this afternoon. The numbers show yet another bad three months for the automaker. As competition in the EV marketplace has exploded, Tesla has increasingly been left behind, with a small and aging model lineup, before we even contemplate how CEO Elon Musk has tarnished what was once the hottest brand in the car world. Earlier this month, we learned that sales dropped by 13 percent year over year in Q2 2025; today, the financials show that automotive revenues fell even more, dropping 16 percent year over year to $16.7 billion.

Tesla’s battery business has been feeling the pain, too. For a while, this was a growth area for the company, albeit one with a relatively minor contribution to the bottom line. During Q2 2025, Tesla’s energy generation and storage division brought in $2.8 billion in revenue, a 7 percent decline from the same period in 2024.

Sales of Carbon credits—those government-issued permits that other automakers buy in order to pollute—shrank by more than half, to $490 million. Those other automakers are now selling EVs, at least most of them, and have less need to buy credits from Tesla. It’s likely this subsidy, which has kept the company out of the red in the past, will be even less of a contributor in the coming years as the US strips away environmental protections.

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• Alphabet beat Q2 expectations, but investors were uneasy over a surprise $10 billion capex increase.
• It's the latest sign that the race to stay ahead on AI is getting eye-wateringly expensive.
• But Google's stock quickly recovered as its CEO touted big growth numbers for its AI features.

Google's parent company Alphabet beat analyst estimates for its second-quarter earnings on Wednesday, but its stock initially faltered after Alphabet reported it would increase its capital expenditures by $10 billion this year.

Investors have been closely monitoring Alphabet for signs of weakness as more and more people turn to ChatGPT instead of Google to find answers on the internet.

The tech giant saw strong growth in its core search business, which was up over 11% year-over-year, fueled in part by the strong performance of its AI overviews, CEO Sundar Pichai said in a statement.

Alphabet also reported strong growth for Google Cloud, which recently signed on OpenAI as a customer and grew by a third to over $13 billion in revenue for Q2.

"We had a standout quarter, with robust growth across the company," Pichai said. "We are leading at the frontier of AI and shipping at an incredible pace."

Despite the strong performance, investors were initially spooked over Google's announcement that it would boost capital expenditures by $10 billion this year — bringing its total to a staggering $85 billion.

Most of those massive expenditures are for keeping Google at the leading edge of an increasingly competitive AI race.

Meta recently upped the stakes with the announcement of a new "superintelligence labs" division and an aggressive hiring spree, reportedly making offers of $100 million or more to top AI researchers.

Alphabet shares were trading down around 2.5% immediately after the earnings release was published on Thursday afternoon.

However, they quickly regained lost ground and were up about 2% during after-hours trading at the time of this writing.

The stock bump happened as Alphabet shared more about its latest user numbers for its AI features, showing strong momentum.

For example, Pichai revealed that AI Overviews — the feature which summarizes Google Search results — now has 2 billion users, up from 1.5 billion in May.

The app for Google's answer to ChatGPT, Gemini, now has 450 million monthly active users, Pichai also said. Plus, a new Search function called AI Mode, which just launched this summer, has 100 million users in the US and India.

During the earnings call, Pichai said that the $10 billion capex increase was due, in part, to a lack of chips for training and running Google's latest AI models.

Those are especially critical for Google Cloud, which is growing fast and provides AI services to users like its rival AWS.

"It's a tight supply environment, and we are investing more to expand," Pichai said.

Pichai shrugged off the AI talent wars raging across Silicon Valley.

"Through this moment, we continue to look at both our retention metrics — as well as the new talent coming in — and both are healthy," he said. "I do know individual cases can make headlines, but when we look at numbers deeply, I think we are doing well through this moment."

Here are the key numbers for Alphabet's second quarter, compared to analysts' estimates compiled by Bloomberg and LSEG:

Earnings per share: $2.31 vs. $2.17 expected

Revenue: $96.42 billion vs. $93.94 billion expected

Google advertising revenue: $71.34 billion vs. $69.69 billion expected

YouTube advertising revenue: $9.79 billion vs. $9.56 billion expected

Search revenue: $54.19 billion vs. $52.85 billion expected

• Donald Trump has complained about media companies making movies outside the US.
• Netflix just emphasized how much of its production happens in the US.
• Coincidence?

Donald Trump, who frequently complains about media companies, doesn't appear to be angry at Netflix at the moment.

Netflix would like to keep it that way.

Which may explain why the company spent a bit of time in its latest earnings report talking up its commitment to making its shows and movies in America.

In the streamer's second quarter earnings report, Netflix officials made a point of emphasizing how much money it has spent making content in the US — $125 billion between 2020 and 2024 — and how much more it plans to spend in the near future — including new production facilities in New Mexico and New Jersey.

Does that have anything to do with the confusing announcement Trump made in May, when he vowed to slap a "100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands?" A Netflix rep declined to comment.

But you can check out the language the company used in its shareholder letter for yourself:

As we grow globally, our most significant investment remains in the US, which accounts for the majority of our content spend, workforce and production infrastructure. From 2020-2024, we estimate that we contributed $125 billion to the US economy. Our expansion in Albuquerque, NM—adding four new soundstages to a 108-acre site—and our plan to invest roughly $1B to develop a state-of-the-art production facility (including 12 new soundstages) in Fort Monmouth, NJ, underscore our ongoing commitment to production in the US.

This isn't the first time Netflix has played up its interest in US production. That statement above includes a link to a report spelling out its investment in the US, which was published April 23 — less than a couple weeks before Trump came out with its Hollywood tariff plan.

And Netflix also discussed its US investments in its previous earnings report, which came out on April 17. But the language it used there was much lighter on superlatives, and much less America-centric. Compare and contrast:

While the majority of our content spend and production infrastructure investment is in the US, we now also spend billions of dollars per year making programming abroad. And instead of just licensing local titles, we're now making local shows and films in many countries, commissioned by our local executives, that keep our members happy. And our local slates are improving each year.

If Netflix is trying to please Trump or his circle via corporate messaging, they wouldn't be the first company to do so. In May, for instance, cable/broadband giant Charter went out of its way to describe its plan to acquire Cox as an explicitly pro-American move.

Netflix co-CEO Ted Sarandos, by the way, has said he had a "nice long dinner" with Trump in December at Trump's Mar-a-Lago estate, prior to Trump's second inauguration. "He said Melania and [son] Barron were big fans," Sarandos said.

• Netflix posted record-setting earnings and revenue for the second quarter on Thursday.
• The streamer also raised its revenue forecast for the year.
• Analysts are watching the platform's plans to scale through live sports and TV and grow its ads business.

Netflix posted record-setting revenue and earnings for the second quarter, and signaled there's more growth on the horizon.

The streaming giant's revenue rose 15.9% year over year to $11.08 billion, and earnings grew 47% to $7.19 per share. Analysts surveyed by Bloomberg expected quarterly revenue of $11.06 billion and earnings of $7.09 per share.

The company also raised its revenue forecast for 2025 to $44.8 billion to $45.2 billion, in part because of its momentum growing subscribers and its advertising business.

Netflix shares were relatively flat in after-hours trading following the earnings release on Thursday.

Wall Street has long crowned Netflix as the streaming king. The streamer's latest win comes on the heels of releases like "Squid Game," which released its third and final season in late June. Netflix said the season was its sixth biggest ever with 122 million views.

Netflix stopped reporting specific subscriber figures last quarter, which makes it difficult to gauge the platform's user growth.

But estimates from third-party data firm Antenna suggest Netflix's gross monthly subscriber additions in the US have fallen from their peak.

Analysts are focused on how the platform continues to scale through live sports and TV, as well as creator-driven partnerships.

So far, Netflix has announced a return of a Christmas Day NFL game, a September fight between Canelo Alvarez and Terence Crawford, and a forthcoming reboot of the late-80s hit "Star Search," among other live programming.

The live content serves dual purposes: helping Netflix continue to grow its subscription base and providing ample opportunities for its budding advertising business.

Netflix expects its advertising revenue to double this year, as executives previously outlined on the first-quarter earnings call. The company also plans to introduce interactive ads in the second half of 2025, co-CEO Greg Peters said on Thursday's earnings call.

Nearly half of new Netflix subscribers in the US chose the ad tier from January to May, according to Antenna data.

At $8 a month, Netflix's ad plan is starting to look like a bargain. It's the same as Paramount+'s ad tier and cheaper than comparable plans from Disney+, Hulu, and HBO Max. The ad version of Amazon Prime Video costs $15 a month. And Peacock is planning to raise the price of its ad plan to $11 a month, Vulture reported on Thursday.

"We also think that we are an incredible entertainment value — not only compared to traditional entertainment, but if you think about other streaming competitors," Peters said.

Netflix said it also wants to use artificial intelligence to help create ads, content, and content recommendations.

Co-CEO Ted Sarandos told analysts that "The Eternaut," an Argentine sci-fi show, has the first generative AI final footage to appear on screen in a Netflix show or movie. The series used generative AI for a sequence where a building collapsed in Buenos Aires.

"That VFX sequence was completed 10 times faster than it could have been completed with visual, traditional VFX tools and workflows," Sarandos said on the earnings call. "Also, the cost of it would just wouldn't have been feasible for a show in that budget."

• Take-Two's CEO said in an earnings call Thursday that the delay of "GTA 6" is a "worthy investment."
• The delay led to an initial 8% drop in Take-Two's stock. Shares fell again on Thursday.
• Take-Two said it remains optimistic, citing coming releases like 'Borderlands 4.'

The company behind "Grand Theft Auto 6" tried to spin the game's delayed release as a good thing during an earnings call on Thursday.

"I believe affording Rockstar additional time for such a groundbreaking project is a worthy investment," Take-Two CEO Strauss Zelnick said.

Zelnick went so far as to call the crime-filled video game the "most anticipated entertainment property of all time."

Wall Street doesn't seem to be buying it, however.

Rockstar Games, which produces the "Grand Theft Auto" series, announced on May 2 that the game's release would be delayed until 2026. The announcement sent shares of Take-Two, Rockstar's parent company, tumbling by more than 8%.

Take-Two's stock dipped again on Thursday ahead of the company's earnings call. The company's forecast fell short of expectations, largely due to the delay of "GTA VI."

Zelnick said the "ambition and complexity" of "Grand Theft Auto 6" is greater than any other game Rockstar has created. "The team is poised to release another astonishing entertainment experience that will exceed players' expectations," he said.

Zelnick said the "Grand Theft Auto" series has been "the standard bearer, not just for our company, but for the industry, since it was launched."

"We, of course, do market research around here, and the market research that we've done is pretty astonishing," Zelnick said on the call. "But look, we're not in the business of claiming success until it happens. All we're focused on is making the best possible entertainment here. That's our job. The rest will take care of itself."

Despite the game's delay, Take-Two executives said they expected the company's year to be successful ultimately, pointing to other coming releases like "Borderlands 4" and "Mafia: The Old Country."

• Major airlines say premium cabins and international demand are key amid economic uncertainty.
• Budget carriers have historically lacked premium seats in favor of cheaper no-frills cabins.
• Frontier, Spirit, and Southwest are all deploying new premium strategies to generate more revenue.

Major airlines continue to prove the importance of premium cabins as budget carriers play catch-up.

First-quarter earnings from American Airlines, Delta Air Lines, and United Airlines showed slowed growth and planned capacity cuts amid economic uncertainty and diminishing demand. Less government travel and fewer US-bound tourists didn't help.

Only one carrier, United, offered any financial guidance for the rest of the year, and warned a recession could cut profits by a third.

One thing all major carriers reporting results so far can agree on is that premium and international demand are helping to keep things afloat, even as share prices crater. That's something budget carriers have only recently begun to invest heavily in.

Without first-class or business seats to offer flyers, Frontier Airlines, Spirit Airlines, and Southwest Airlines have fewer ways to compensate for decreased demand and capacity cuts.

"We anticipate softness in the domestic main cabin to continue," American CFO Devon May said in the airline's Thursday earnings call. "To partially offset this, we expect long-haul, international, and premium bookings to outperform year over year."

Delta and United said economy cabin travelers tend to be more price sensitive and may delay travel plans amid the downturn, while premium economy, business class, and first-class seats are a more resilient and significant portion of their revenue.

New premium strategies announced by a slew of budget airlines last year, like plusher seats and luxury amenities, could help generate more revenue in the long run, but installing them on planes will take time.

Mainline carriers are cashing in on premium demand

All three major carriers reported year-over-year premium revenue growth in their first-quarter earnings. American saw a 3% rise, Delta's was 7%, while United increased by 9.2%.

"I don't think we've ever had premium as a larger percent of our total revenues as we do right now," Delta president Glen Hauenstein said in the airline's April earnings call. "It's sitting very resilient."

Executives attributed this to affluent travelers still willing to pay for premium seats despite the economic environment, especially long-haul flights to Europe and Asia.

They said as much as 75% to 80% of their international revenue originates in the US, and bookings remain strong through the summer compared to the comparatively lower domestic demand.

On the other hand, low-cost airlines' historically all-economy airplanes do not have swanky first or business-class cabins and do not fly long-haul to popular international markets like London and Japan.

Budget carriers' limited revenue streams and lower profit margin offerings make it harder to account for their losses as they cut thousands of flights this year. Mainline flight reductions can be more easily offset.

Budget carriers want a piece of the premium pie

Frontier, Spirit, and Southwest started bucking their historically no-frills trend in 2024. These add-ons come at a cost and would help the budget carriers collect more revenue.

For example, Spirit revamped its premium "Big Front Seat" bundle with more perks like free snacks, alcohol, Wi-Fi, and priority check-in. Frontier added a "business-class-like" cabin where the middle seat is blocked.

Southwest plans to deploy new premium extra legroom and front row seats in 2026. It will also start charging for checked bags in May for the first time in its 50-year history, though loyalty and elite status holders will still keep the perk. Those investments likely won't show up until at least the third-quarter results, analysts said.

"There was a better way to maximize the revenue per square foot in the aircraft, which is the whole game here," Southwest CEO Bob Jordan said in Thursday's earnings call on adding premium seating.

Delta earned $5.4 billion in revenue from its economy seats and $4.7 billion from its premium cabins during the first quarter. That means its premium cabin revenue was equal to 88% of the economy class revenue despite taking up much less real estate inside the plane.

Those are the types of returns the low-cost airlines and their investors hope to get a taste of.

Expected second-quarter revenue from Delta and American ranges from down 2% to up 2%, while Southwest expects flat performance or a decrease of as much as 4% year-over-year.

Frontier's stock is down about 55% year to date, and Southwest is down 21%, outpacing the broader market. Both have pulled their full-year guidance.

Spirit shares will begin trading again on April 29 after the airline emerged from Chapter 11 bankruptcy in March.

Tesla managed to hold onto profitability in the first quarter of 2025—but only just. Earlier this month, the automaker reported double-digit declines in both production and delivery numbers thanks to the impact of CEO Elon Musk's central role in the Trump administration, a global trade war, and an increasingly outdated and tiny product lineup. Yesterday, we saw the true cost of those factors when Tesla published its profit and loss statement for Q1 2025.

Total revenues fell by 9 percent year over year to $19.3 billion in Q1. Selling cars accounts for 72 percent of Tesla's revenue, but these automotive revenues fell by 20 percent year over year. Strong growth (67 percent) in Tesla's storage battery and solar division helped the bottom line, as did a modest 15 percent increase in revenue from services, which includes its Supercharger stations, which are now opening to other car brands.

But Tesla's expenses grew slightly in Q1 2025, and more importantly, its profitability shrank. Income from operations fell by two-thirds to $399 million, and its operating margin—once as high as 20 percent—has fallen to just 2.1 percent. After the third successive fall in a row, the company will start to lose money on every car it sells if this trend continues.

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