News and analysis

Ethereum (ETH) is rising by 0.57% to $3,856 this week, outperforming the broader crypto market, where Bitcoin (BTC) is down 0.62% to $118,479. Investor enthusiasm is growing as ETH posted an impressive 55.3% gain in July, drawing attention to the key psychological level of $4,000. A break above this barrier could trigger a move toward $4,500, with the potential to challenge the all-time high of $4,864. Bitcoin also shows strength, with room for another 30% rally that could carry it toward the $150,000–$160,000 range. Such a move would likely boost Ethereum further, possibly pushing it to $5,000, though any additional upside beyond that point would depend heavily on broader market dynamics.

Microsoft re-joins the $4 trillion market caps race, shortly after NVIDIA surpassed that mark. The Windows maker, which is now better known as Azure cloud service seller and an ardent AI promoter has without a doubt delivered phenomenal quarterly metrics. That's why the stock jumped as much as 8.5% already in the very first post-earnings hour of the extended trading yesterday, on July 30, peaking well above $550 per share for the very first time in its history. Its total cloud division's revenue added 27% to reach $46.7 billion, compared to the 20-22% growth rate only 3 months before, including specifically Azure growth pace of as much as 39% YoY vs the 33% to 35% range seen recently. This was fuelled by “demand across every industry and sector” as companies increasingly adopt AI-driven tools, according to CEO Satya Nadella. Cloudy leadership is a natural testament to Microsoft's lucky AI integration into its multi-year strategy, while normal server products sales gradually declined by 2% to 3% in sync with ongoing shifts from its previously on-premises oriented solutions. Indeed, the past is dust while the best way of predicting your future is to create it.

When Microsoft's capex is at $24.2 billion (+27% YoY) due to its continued investment into AI capabilities, its living business generated $42.6 billion in cash flow from operations (+15%) as a good example why Microsoft just hit its own absolute records in terms of both revenue ($76.4 billion, which is $2.6 billion above consensus estimates, or $6.3 billion better than in the previous quarter to provide +17% YoY) and equity per share ($3.65 vs $3.37 in analyst pool projections, $3.46 in the previous quarter and $2.95 in the same period of 2024 to provide 23.7% YoY). Any rally above $600 per share looks like a modest goal on such solid financial grounds. This would likely form the next starting point for something bigger. No one can stop Microsoft. Let's remember this day clearly as the day of probably never seeing MSFT price below $500 anymore after it.

META, which owns Facebook, Instagram, WhatsApp and creates the platform for billions of Reels, showed an even more impressive percentage gain of over 11% last night than even Microsoft, which was up "just" over 8.5% at the same moment. So, the month of love for tech giants ends brilliantly. Well, breakthrough financial results lead the stock to breakthrough technical levels, now historical highs at nearly $775. And yes, Meta provided all the prerequisites for this victory.

The company reported quarterly EPS (equity per share) of $7.14, which is $1.29 or 22% better than the consensus projection of $5.85. This profit metric was achieved on total revenue at $47.52 billion compared to the consensus estimate of $44.72 billion (+6.25% vs the average analyst pool's hope). Meta-business earned an extra $5.2 billion in 3 months and almost $8.5 billion new in 12 months. Is that even legal? Joking. Seriously, we are dealing with the second best set of indicators for Meta's business after its yet unrivalled (for obvious reasons) Christmas quarter. But the dynamics now look even better. That's why the bullish rally for Mark Zuckerberg's brainchild rushed to new heights without delay. And what good fellows we are, that we kept buying along the way which mostly climbed but sometimes made pullbacks for brave investors to buy more.

The company's forward guidance is also very impressive, so that I feel difficult even to limit myself with any conditional goal like $850 or maybe $950 for the rest of the year. Meta CEOs announced they see Q3 total sales between $47.50 billion and $50.50 billion versus the analyst pool's ripe and runny as a rancid Roquefort consensus estimate of $46.20 billion. If so, the stock will add at least the same $80 per share as it did it last night to warm up with achieving $775+ $80 = $855 as the very first target, as I feel, but would never stop there forever. By the way, Reuters just calculated that Meta Platforms saw 21 positive EPS revisions and 10 negative EPS revisions in the last 90 days. Hold on folks, there is more! Meta's deep push into AI would bear more fruits, like in the very recent case of Microsoft.

Meta will soon squeeze all the juices out of the advertising base with its “Personal superintelligence for everyone in the world” concept for 3.5 billion daily active users. "We believe in putting this power in people’s hands to direct it towards what they value in their own lives... This is distinct from others in the industry who believe superintelligence should be directed centrally towards automating all valuable work, and then humanity will live on a dole of its output”, Zuckerberg wrote in his somewhat alarming manifesto published earlier today. As for me and most other investors, I feel we agree to live on a dole of Meta's output.

Being "careful about what we choose to open source", he still added that "building a free society requires that we aim to empower people as much as possible" as "the rest of this decade seems likely to be the decisive period for determining the path this technology will take, and whether superintelligence will be a tool for personal empowerment or a force focused on replacing large swaths of society”. Now he seems almost as passionate a supporter of freedom of opinion as Elon Musk, which is barely true, as Mark Zuckerberg expresses himself more floridly and less clearly in his manifesto. But anyway, more freedom for users is definitely beneficial for business.

Payment services group Visa set its all-time record on both the bottom and top lines of its quarterly report released late July 29. For the three months from April to June, the firm generated $2.98 of EPS (earnings per share) on revenue of $10.2 billion, while the Wall Street pool of analysts suggested $2.84 per share on $9.84 billion. This is an additional increase of almost 5% and 3.6% compared to 17% and 10.5% YoY, respectively, already included in the consensus forecast. With such amazing financial results, it seems so that any other stock would be doomed to grow. Yet, that's the way it goes sometimes, when your favourite cookie crumbles despite you least expect it. Visa shares have remained in their consolidation phase since mid-June.

An initial 3% slide down in extended trading during the first minutes after earnings came out, from $351.3 to $340 per share, was then rewarded by a partial recovery to $344.5, so that losses shrank to 1.8% in the pre-market trading on July 30. The June 20 low around $335 and the April 30 low at $333.24 are still the two major pillars of technical support for Visa that are encouraging bulls, so we figure that the overly rapid previous Visa run from $299 to $375.5 this spring simply needed a breather for a while. Nominally, a good excuse for taking some extra time to catch a breath may be that Visa just kept its full-year guidance for net revenue pace unchanged in the "low-double-digits" and a diluted EPS increase in the "low-teens", which could be a simple way of conservatism, especially given the macro environment of tariff wars to potentially boost some prices and limit consumer spending.

None of this is noticeable or even close yet, however. But the earnings beat is great and already here, and cross-border payment volume even accelerated by 12% YoY or 11% YoY if excluding intra-Europe, according to Visa's Q2 report. Its card business is still expanding as well to 4.8 billion cards worldwide, a 7% higher than in the same period of 2024, while the key metric of credit cards grew 8% to 1.4 billion. More details for revenue structure show that its data processing segment led with 15% growth to $5.15 billion, followed by international transactions at 14% to $3.63 billion, while service revenue added 9% to $4.33 billion and the other and smaller revenue parts (up to $1 billion or so) even performed particularly strong with 32% growth. The company also continued its attractive capital return program to distribute as much as $6 billion to shareholders through $4.83 billion in share repurchases and $1.15 billion in dividends during the last quarter. We generally do not see any weak spots in Visa business and expect a gradual return to active purchases from current dips, especially when tariff-driven uncertainty fades further, with the first target price of $375 and the subsequent one of about $400 per share.