Strong AI earnings land but the stocks fall anyway

TSMC, ASML and Netflix all beat and raised, yet the AI basket fell ~6% on the week; IBM's pre-announcement sank shares ~25% as a cold June CPI kept the Fed patient

Deepakshi

Kristal Research & Marketing team

20 Jul2 min

Key takeaways — AI summary

The AI complex posted some of its best fundamental news of the year and investors sold it: the broad AI basket fell about 6% on the week versus a 2% Nasdaq decline, the fifth straight instance of strong prints and soft reactions since April. The Nasdaq 100 fell 4.13% to 28,592.66 while the S&P 500 held up at −1.61% (7,497.75).
IBM pre-released a quarter roughly 4% light on revenue ($2.93 EPS, an $0.08 miss) and guided software growth to 5% against 10% expected, sending shares down about 25% — management pinned the miss on enterprise budgets and memory inflation shifting toward AI infrastructure. Apple was the clean exception, up about 4% on the week and roughly 20% over three weeks on early signs of a personalized Siri.
TSMC posted NT$1.27tn revenue (+36% Y/Y), 67.7% gross margin, raised full-year 2026 growth to 'slightly above 40%' and capex to US$60–64bn; ASML raised its FY2026 revenue midpoint from €38bn to €44bn and gross-margin midpoint from 52% to 55%; Netflix beat on a 33.4% margin and a record $4.7bn buyback yet fell 8% on Q3 guidance ~$140m light.
June inflation came in decisively soft: headline CPI −0.4% (vs −0.1% expected), core CPI flat at 0.0% (vs 0.2%), and PPI cooler, with core retail sales −0.2% and better jobless claims — a backdrop the document says gives the Fed room to stay patient.
Gold slipped 2.31% to $4,018.8, the U.S. 10-year yield was little changed at 4.545%, while WTI crude jumped 15.52% to $82.48. Corporate moves included Uber agreeing to acquire Delivery Hero for nearly $15bn and Apple suing OpenAI over AI-device work.

Generated by Kristal AI · reviewed by the research desk

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