Oh Sh*t.. Bad News for The Stock Market

Holy smokes. Yeah. SpaceX down 6% following their earnings. AMD down six. Zeta down 10. What's going on? What do you need to know? We will break it all down for you in today's episode. We do have some catalyst coming tomorrow morning as well. As far as economic data, we do have big earnings tomorrow as well in after hours. And I will will share my thoughts and perspectives around all of this and what this now means for the markets in today's episode. The only thing that I ask you to do is hit the like button for the YouTube algorithm to help push this video out to more people that need to see it. Okay, so let's break down your SpaceX earnings. First things first, and uh honestly, very impressive. adjusted EPS of negative9 cents versus 29 cents was the estimate. So that was a big beat. Revenue at 7.8 billion. The estimate was 6.82 billion. So that's a big beat as well. Up 92% year-over-year. Adjusted IBIDA at 3.5 billion. The estimate was 2 billion. Massive beat. Uh AI operating loss 1.26 billion. The estimate -2.4 billion. That's a big beat. Cash and investments at 100 billion, their backlog at 47.5 billion, segment revenue connectivity at 4.3 billion, AI at 2.56 billion, and space at 962 million, net loss 541 million, and capex at 18.4 billion. We were expecting capex around 12.5 billion. So that is a lot higher than most people were expecting, but really the numbers across the board here for SpaceX quite impressive, but I mean the stock's down 6% here in after hours and uh people don't seem to care too much all about the numbers. Now I think it's bigger than the earnings. I think the harsh reality is you're going to go from 638 million shares trading hands today. In two days from now, there's going to be 1.5 billion shares trading hands. The the first big share lockup takes place on Thursday. So, there's a lot of supply coming and that's just going to add downwards pressure to SpaceX. I've I've kind of put it like this. It's it's almost like you're trying to climb a mountain with a broken ankle. like it's not impossible. You can still make progress, but it's just very hard to do so. Now, AMD is also down 5% following their earnings, but the stock was up 7% today. So, keep that in context. The same with SpaceX. You know, SpaceX was up 9.5% today. It's down 5% in after hours. You're still holding on to um about half of the gain of the day today. All right. Now AMD adjusted EPS at $1.66. The EPS uh estimate was $162. So that beat but not much. Revenue came in at 11.54 billion. The estimate was 11.31 billion. I mean that's a beat but for these AI hardware stocks as that's where the focus has been recently. You know, AMD's went from $200 a share to over 500 in the last one to two quarters. Beating by $200 million is just not good enough. Adjusted operating income at 3.09 billion. The estimate 3.01 billion. Again, a beat, but not good enough. Adjusted operating margin at 27%. The estimate was 26.9%. Again, just not good enough. R&D expenses at 2.53 billion. Estimate 2.45. 45 billion, capex atund or 808 million. The estimate was 298 million. So that was a a big increase on capex. They see Q3 revenue 12.7 billion to 13.3 billion. The estimate was 12.5 billion. So they raised but definitely not like Nvidia style earnings where you know Nvidia comes out and they beat and raise by billions of dollars. AMD is not there. And you know, even though AI stocks have come down quite a bit recently, hardware stocks still, it's just not impressive enough to drive additional upside after AMD has already went up so much. So on face value here, comparing SpaceX to AMD, SpaceX looks a lot better than uh AMD. I wouldn't be expecting the markets to just bid up AMD following these results. They're kind of lackluster. SpaceX on the other hand much better than expected. That capex number was a lot higher than expected and that's inevitably going to bring up fears of you know dilution and needing to raise capital again but I mean they have hundred billion of cash. So that's not like a super near-term concern. All right. Now Zeta Global down 9 and a half%. Um, this is a big stock that I that I own, a big position for me and A+ quarter, A+ across the board. But why is the stock down 9.5%? We will talk about that as well. So, Zeta Global's EPS came in at 3 cents versus the 19 cent estimate. So, that looks like a big miss. It's not a big miss. It It's a big beat. This is a algorithm uh mistake that uh was made. revenue came in at 443 million versus 420.6 million. That was the estimate that is up 44% year-over-year. So very nice beat there. Adjusted uh IBIDA 92 million with a 20.7% margin. Free cash flow 58 million up 73% year-over-year achieved positive gap net income of 8 million. Um so what you're seeing here with the EPS numbers is flip-flopped. Okay. So this is 3 cents is the gap EPS. So you were expecting gap EPS of negative 3 cents. You actually came in at positive 3 cents. You were expecting non-GAAP EPS of like 20ome cents. We beat that. So Wall Street was expecting 19 or well you were expecting 19 cents of non-GAAP EPS. You beat across the board. It's it's an algorithmic mistake that uh is being made that looks like the EPS missed. It's because people are looking at G uh non-GAAP versus GAAP. And both metrics non-GAAP and GAAP EPS the estimates by a large margin. Now for Q3 guidance uh revenue between 469 to 472 million the estimate 461 million. So nice beat there. Uh full year 2026 revenue 1.811 billion to 1.82 824 billion the estimate 1.79 billion so good beat there as well adjusted IBIDA 404.1 million to 406.3 million that is a raise free cash flow um between 254 to 255 million they raised and uh 2026 GAP EPS is now projected between 9 to 11 cents raised from 2 to 4 cents this company raised their gap EPS forecast by 300% today for this year. Supercaled customer counts increased 17% to 197 while ARPU also rose 17% to 1.8 uh 1.8 billion. Operating cash flow climbed 65% to 69 million. Management credited accelerating AI adoption and collaborations with OpenAI, Snowflake and Palanteer for the strong performance. The company introduced a new framework to measure AI adoption and monetization across the platform. Zeta's uh CEO David Steinberg wrote this post on X and said, "Our 20th straight beat and raise quarter," which they've beaten and raised revenue guidance 20 quarters in a row. No other company on Wall Street has done that. So Zeta holds the title here for uh the most beat and raised quarters in a row for revenue. They raised annual revenue by 33 million 443 million in revenue up 44% 28% ex 28% excluding M&A 92 million in adjusted Ibida 58 million in free cash flow positive gap net income and achieved the rule of 64 um they completed phase one integration with palenteer and have two joint uh customer engagements and they raised fullear gap EPS guidance by greater than 300% at the midpoint point. Um, David Steinberg says, "Very few AI companies are growing free cash flow faster than revenue. Thank you to our customers and partners for continuing to grow with us as Zat Global has become the intelligent AI infrastructure layer for enterprise decision-making. I'm more confident than ever in the opportunity ahead and as always, incredibly proud of team Zeta." So, it was a phenomenal quarter from Zeta. I think part of why the stock is down right now is because you went up quite a bit heading into the report. From last quarter, you kind of went into that report at like $145 a share. At the high of the last three months, you hit $26. Today, you were at $24 heading into it. So, expectations were really high. And there's inevitably going to be a lot of traders in a stock like that. You know, when a stock goes from, you know, 145 to $24 in three months heading into a big catalyst, people are going to sell just to sell, right? There was nothing wrong with Zeta's earnings. They were better than expected across the board. They beat on every metric and raised guidance on every metric. There's nothing that that missed. But sometimes when there's a big rally before earnings, you kind of get a lot of traders that inevitably sell out after the earnings report. This is kind of what happens with Nvidia every time, right? Nvidia, everyone buys Nvidia ahead of Nvidia earnings and then they sell the stock after. Even though Nvidia beats on everything, then you tend to see Nvidia like do well following earnings in the weeks and months to ahead of that. And Zeta is no different. You know, Zeta tends to sell off after earnings regardless. Last earnings, same thing. They beat and raised across the board. Stock went up a little bit after earnings and then it proceeded to fall for like a week and then it rallied from, you know, $15 to 26. Something similar to that could happen this time around as well. Now, tomorrow morning you are going to have earnings from Eli Lilly, Shopify, Uber, Walt Disney, Riot, Circle, Blooming Brands, Unity, and Novo, Nordisk. Wednesday and after hours, you will have earnings from SanDisk, Western Digital, uh, Applovin, ELF, Marcato, Libre, Axon, and some others. Thursday uh pre-market you have Kico Phillips, D-Wave, Data Dog, Celsius, Fizzerv, and then Thursday and after hours you have DraftKings, Airbnb, uh Regetti, The Trade Desk, Eno Data, and some others. And then Friday pre-market you have Alo, Vistra, Vistra Energy, Take 2, uh Wendy's, Under Arour, ACM Research, and some other smaller names. So tomorrow, specifically for the AI hardware trade, SanDisk and Western Digital will be big. Now, tomorrow you are going to have the ADP employment change for July. You're expecting 70,000 jobs. That is in the private uh payroll report. Last month, you were at 78,000. So, you are expecting that to uh come down quite a bit. Um but Wall Street doesn't really care about this most of the time. Now, we get our jobs report on Friday, and that's going to be a bigger catalyst for the markets. We want to see, you know, jobs come in, okay, but not too strong. Now, tomorrow morning, you also have the ISM services PMIs. This is the purchasing managers index. So, it's basically a survey of managers in the services economy, and they tell you their outlook for business activity, employment, new orders, and prices. Specifically, prices is what Wall Street cares about because services, they're about 80% of the economy. So if the managers of 80% of the economy think prices are going higher, that's not a great sign for inflation. Even though there's not a whole lot of correlation between um ISM prices and what we actually get from inflation, it will be something that does move the needle tomorrow morning. You know, as far as my thoughts on some of these earnings, again, I actually went out and bought the dip on Zeta here after their stellar quarter. AMD I'm more concerned about compared to all of the others because again if you're a semiconductor company and you're barely meeting expectations, you're barely beating, barely raising, and you're up, you know, like as much as AMD is since the last quarter, still up like 175%, hundreds of billions of dollars of market cap. That's just not good enough to give you, you know, another large rally. I don't think AMD has to die on these earnings, but it's definitely going to set some things back a little bit. So, it was good, but just for how you were priced, how you're priced for AI hardware, it's definitely one of the most lackluster AI hardware earnings we have seen this earning season so far. again, not because it's bad, but because it's not that impressive. SpaceX, on the other hand, very impressive, um, but you have the share lock up in two days. So, you're you're fighting and you're trying to climb a hill with a broken ankle. It's just it's not going to be a whole lot you can do with that. So, let me know your thoughts on all of this down below in the comment section. Hit the like button as well as subscribe to the channel if you guys have not done so already. If you guys want to come trade and invest alongside of us, that link is down below in the description of today's episode.