One company made aggressive spending look justified because demand is clearly outrunning supply. Another still has a great business, but the capex line is getting harder to ignore, while the third is finding out that stronger revenue does not solve everything when investors want a clearer payoff from AI. The opportunities are there, but they are not equal.
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Futures at a Glance📈
Futures are higher after a batch of Mag 7 earnings despite a Fed hold that did not exactly open the door to easy rate cuts. Tech still has plenty of firepower, but oil and a more divided Fed are keeping the market from getting too comfortable.
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What to Watch
Earnings (Premarket):
• Eli Lilly and Company [LLY]
• Mastercard Incorporated [MA]
• Caterpillar, Inc. [CAT]
• Merck & Company, Inc. [MRK]
• ConocoPhillips [COP]
Earnings (Aftermarket):
• Apple Inc. [AAPL]
• Amgen Inc. [AMGN]
• Sandisk Corporation [SNDK]
• Western Digital Corporation [WDC]
• Stryker Corporation [SYK]
Economic Reports:
• Initial jobless claims (April 25): 8:30 am
• GDP (Q1): 8:30 am
• Personal income (March): 8:30 am
• Personal spending (March): 8:30 am
• PCE index (March): 8:30 am
• PCE (year-over-year): 8:30 am
• Core PCE index (March): 8:30 am
• Core PCE (year-over-year): 8:30 am
• Employment cost index (Q1): 8:30 am
• Chicago Business Barometer (PMI) (April): 9:45 am
• U.S. leading economic indicators (Feb.): 10:00 am
Elite Trade Club Insider
One CFO Sold Twice. Another Leadership Team Kept Hitting Sell.
A healthcare CFO sold a combined $1.0 million worth of stock across two sessions, while the CEO, COO, and Chief Risk Officer at an insurer unloaded more than $11.1 million combined in just three days. This kind of activity can lead to big moves, but you’ll only know about it if you’re an Elite Trade Club Insider.
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Cloud & AI Infrastructure
Microsoft Keeps Growing Fast, but the Spending Is Getting Harder to Ignore
Microsoft Corp (NASDAQ: MSFT) delivered a quarter that would normally send the stock higher. Adjusted EPS came in at $4.27 versus $4.06 expected, revenue reached $82.89 billion against the $81.39 billion consensus, and Azure revenue grew 40%, ahead of expectations.
Microsoft also said it now has more than 20 million paid Copilot seats, up from 15 million in January, which gives investors another sign that AI monetization is no longer just theoretical.
The issue is not demand. The issue is cost. Microsoft said 2026 capital expenditures will hit $190 billion, far above the prior consensus of $154.6 billion, largely because of higher memory pricing and the ongoing data-center buildout. Gross margin narrowed to 67.6%, the weakest since 2022, and fourth-quarter revenue guidance came in slightly below consensus.
So this is now a stock that has to keep proving the spend is worth it. The business is clearly strong, but the market is no longer giving hyperscalers a free pass on capex.
My Take For You: Microsoft is still one of the strongest operating stories in large-cap tech, but investors are shifting from pure growth to growth quality. The next question is not whether demand is there. It is whether returns keep pace with the spending.
My Verdict: Hold, don’t chase. The risk is that rising capex and lower margins keep the stock under pressure even while the core business stays healthy.
Internet Platforms
Meta Just Learned That a Beat Is Not Enough
Meta Platforms Inc (NASDAQ: META) beat on revenue and earnings, but the market still hit the stock hard because the weak spot was too important to ignore.
Revenue came in at $56.31 billion versus $55.45 billion expected, and adjusted EPS of $7.31 topped the $6.79 estimate. Revenue also grew 33% year over year, which is the company’s fastest growth rate since 2021.
The problem was users and capex. Daily active people came in at 3.56 billion, below the 3.62 billion estimate, with the company blaming internet disruptions in Iran and WhatsApp restrictions in Russia. Capital expenditures of $19.84 billion also came in well below estimates, while Meta raised its full-year capex range to $125 billion to $145 billion from $115 billion to $135 billion. That combination left investors with a familiar concern: heavy AI spend today, but still no fully formed monetization story tomorrow.
Meta is still printing enormous profits, but the stock now trades like the market wants fewer promises and more visible payoff from the AI push.
My Take For You: The ad machine is still strong, but user softness and bigger capex are making investors more selective. This is still a great business, just not a clean setup after this report.
My Verdict: Wait. The risk is that Meta keeps spending aggressively while the market gets less patient on monetization.
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Cloud & AI Infrastructure
Alphabet Inc Looks Like the Cleanest Winner of the Group
Alphabet Inc Class A (NASDAQ: GOOGL) gave investors exactly what they wanted from a hyperscaler in this market: strong growth, a clean cloud beat, and a clear explanation for why spending is rising.
Revenue came in at $109.9 billion versus $107.2 billion expected, while Google Cloud delivered $20.02 billion, far ahead of the $18.05 billion estimate. Cloud revenue grew 63% year over year, and management said enterprise AI solutions became the primary growth driver for cloud for the first time.
Alphabet also raised its 2026 capex range to $180 billion to $190 billion and said 2027 capex should rise significantly again. Normally that would worry investors. In this case, the market seems more willing to accept it because demand is clearly outrunning supply.
Sundar Pichai said the company is compute constrained in the near term and cloud revenue would have been higher if Google had more capacity. That is a much better problem than spending into weak demand.
This was the strongest read-through of the group because it paired aggressive spending with obvious operating momentum.
My Take For You: Alphabet is no longer just a search story with AI ambitions. It is becoming one of the clearest large-cap ways to own enterprise AI demand through cloud.
My Verdict: Buy this. The risk is that capex keeps ramping faster than expected and eventually weighs on margins even if cloud demand stays strong.
Trivia: What percentage of all U.S. paper currency in circulation, by value, consists of $100 bills?
Movers and Shakers
Viavi Solutions [VIAV]: Premarket Move: +23%
Viavi is ripping because the quarter was strong from top to bottom. EPS came in at $0.27 versus $0.23 expected, revenue hit $406.8 million versus $393.8 million, and Q4 guidance points higher. The Spirent deal is helping, but the bigger point is that core demand is strong too.
Revenue grew 42.8% year over year, margins improved, and this report gives the run real support.
My Take: Buy the strength. This is a real breakout backed by numbers, not hype.
Qualcomm [QCOM]: Premarket Move: +11%
Qualcomm is higher even after soft guidance because the market is looking past the weak patch and betting on the next leg. Smartphone demand appears to be stabilizing, and Qualcomm is pushing harder into data center and AI chips.
That matters because the stock no longer has to trade only on handset cycles. If that shift keeps gaining traction, there is more upside here.
My Take: Buy it. The market is rewarding the transition story, and I would stay on that side of the trade.
KLA Corp [KLAC]: Premarket Move: -7%
KLA is down because the quarter was solid, but the stock was too extended. EPS beat, revenue beat, and guidance was fine, but shares had already run about 160% over the past year and were trading above RBC’s new $1,700 target.
That is what makes this a pullback, not a surprise. Great company, crowded stock.
My Take: Wait. Do not rush in here. Let the stock reset before buying.
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Everything Else
📘 Small-cap momentum is starting to build, as a handful of under-the-radar names across AI, energy, and emerging tech begin showing the kind of early signals that can precede bigger moves.
🚗 Stellantis is in focus after its first-quarter update, with investors watching demand trends across Jeep and the broader auto lineup.
🛢️ Oil prices are climbing again as the U.S.-Iran conflict continues to shape the energy outlook.
🏭 Volkswagen’s first-quarter results are adding another read on how Europe’s automakers are handling a tougher backdrop.
💻 MediaTek says there is no question the AI megatrend continues, even as some investors debate how long the current spending wave can last.
🖥️ Nvidia’s B300 server is reportedly now priced at more than $1 million in China, highlighting how export curbs are distorting the market.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
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