Stocks Surge as Investors Digest Flurry of Earnings Reports, Keep Tabs on Tariff News; Apple Soars, AMD Slides

The S&P 500 Could Get a New Member Soon

9 minutes ago

Paramount Global (PARA) could be on the chopping block if the S&P 500’s managers decide its impending merger with Skydance Media makes it too small for the benchmark large-cap index.

Paramount’s current market capitalization of about $8 billion is one of the lowest in the index, and well below the $22 billion S&P Global requires of new entrants. While stocks usually aren’t booted for having small market caps, S&P considers a company’s float-adjusted market cap and liquidity when determining eligibility, and the Skydance merger could impact both for Paramount. 

The merger is set to close on Thursday, after which the new company will trade under the symbol “PSKY”. But there won’t be much “PSKY” to trade; per the terms of the agreement, Skydance will own roughly 70% of Paramount’s outstanding shares. That could shrink its float-adjusted value to about $3 billion, an amount S&P Global might consider inappropriate for the index or too small to ensure adequate liquidity.

Paramount’s merger could be the opportunity investors in Applovin (APP) and Robinhood (HOOD) hoped would come earlier this year. Both were considered top candidates to replace Hess (HESS) in the index when it was acquired by Chevron (CVX) earlier this month. The retail investor favorites easily satisfy S&P’s market cap and profit eligibility criteria, but were passed over in favor of fintech Block (XYZ). 

Though their size could be an impediment this time around. With market caps of $130 billion and $92 billion, respectively, Applovin and Robinhood would have much greater weights within the index than Paramount. Index managers may prefer to replace Paramount with a company of similar size. Top contenders in that case would be Interactive Brokers (IBKR), EMCOR (EME), and Comfort Systems USA (FIX), the three largest components of the mid-cap S&P 400. 

Investors often want a stock they own to be included in the S&P 500 for both symbolic and substantive reasons. Inclusion in the marquee stock index is, to a certain extent, a vote of confidence in the business’s success. It can also improve a company’s name recognition.

Being in the S&P 500 can also increase demand from passive investors for a company’s stock. America’s three largest ETFs all track the S&P 500, and they cumulatively manage nearly $2 trillion. When S&P Global changes the components of the index, funds tracking the index have to make the same changes, temporarily boosting demand for new entries. S&P 500 components then reap a portion of ETF inflows commensurate with their weight in the index.

For the same reasons, being dropped from the S&P 500 can deal a blow to a stock. Paramount shares have lost about 17% of their value over the past week amid speculation about the stock’s place within the index.

–Colin Laidley

Why AMD is Plunging Despite Strong Results

45 minutes ago

Better-than-expected sales and guidance weren’t enough to lift Advanced Micro Devices (AMD) stock over the high bar set by its run-up in recent months.

AMD on Tuesday reported second-quarter sales that topped estimates, and offered Wall Street a rosier-than-expected outlook for the current quarter. Still, shares of the Nvidia competitor were down more than 6% in recent trading.

Above-consensus revenue was driven by strength in AMD’s gaming segment, while earnings, margins, and data center sales were negatively affected by an $800 million charge related to restrictions on the sale of AI chips to China. The company projected growth at all of its units in the third quarter, and forecast double-digit revenue growth as it ramps sales of its MI355X next-gen AI chip. 

Most analysts attributed the market’s reaction on Wednesday to high expectations and a lofty valuation. “We believe guidance for the AI chip business was in line with Buyside expectations (based on our investor discussions), which is why the stock traded lower,” according to Citigroup analysts.

Bank of America analysts predicted Wall Street was reacting negatively to “likely ignorable earnings noise” and that the stock wasn’t helped by its approximately 80% run-up in the three months leading up to Tuesday’s results.

Read the full article here.

–Colin Laidley

Apple Set to Invest Additional $100B in US Manufacturing

1 hr 16 min ago

Apple (AAPL) CEO Tim Cook is expected to join President Donald Trump at the White House later Wednesday to unveil a $100 billion pledge from the iPhone maker in U.S. manufacturing, according to a White House official.

The two are set to make the announcement from the Oval Office at 4:30 p.m. EDT, and it’s expected to include a new manufacturing program that could help Apple avoid more punishing tariffs on its products. 

“President Trump’s America First economic agenda has secured trillions of dollars in investments that support American jobs and bolster American businesses. Today’s announcement with Apple is another win for our manufacturing industry that will simultaneously help reshore the production of critical components to protect America’s economic and national security,” White House spokesperson Taylor Rogers told Investopedia in a statement.

Shares of Apple were up nearly 6% in recent trading following the news. However, they’ve lost almost 15% of their value since the start of the year amid worries about the company’s progress in AI and a growing hit from tariffs.

The company has faced pressure from Trump in recent months to make more of its flagship products like the iPhone in the U.S. In May, the president threatened that his administration would impose a 25% tariff on phones sold in the U.S. made outside the country if Apple doesn’t move to shift more of its operations stateside. 

While the move from Apple raises its U.S. commitments, it also doesn’t promise a full-fledged shift to making iPhones in the U.S., which Wall Street analysts have called a “non-starter” that would prohibitively raise costs. Still, the expansion of Apple’s U.S. commitments, after a $500 billion pledge earlier this year, could help soothe some of Trump’s ire, as the iPhone maker faces a growing hit from tariffs.

Apple, which said last week that it absorbed $800 million in tariff costs in the fiscal third quarter, projected an even bigger $1.1 billion hit from tariffs this quarter—assuming no changes in current tariff levels. 

After shifting some of its production from China, Cook said that a majority of iPhones sold in the U.S. now come from India, with the majority of Macs and other Apple products sold domestically being shipped from Vietnam.

Wednesday morning, the White House said the U.S. will impose an additional 25% tax on imports from India, raising the overall rate on goods from the country to 50%.

–Kara Greenberg

Shopify Stock Soars as Tariff Impact ‘Did Not Materialize’

2 hr 31 min ago

Shares of Shopify (SHOP) jumped 20% Wednesday after the provider of software for e-commerce firms posted better-than-anticipated results, as tariffs failed to have the impact that the company had projected.

The company reported second-quarter earnings per share of $0.69, with revenue rising 31% year-over-year to $2.68 billion. Both exceeded Visible Alpha forecasts.

Gross merchandise value was up more than 30% to $87.84 billion. CFO Jeff Hoffmeister said that both revenue and GMV growth accelerated in the period and were higher in all global markets. Hoffmeister noted Europe “was a particular source of strength, where GMV grew 42% on a constant currency basis.”

Hoffmeister said on the earnings call that Shopify exceeded its own expectations. “We had factored into our guidance some potential impact from tariffs, which did not materialize,” according to a transcript provided by AlphaSense.

Shopify sees current-quarter revenue to increase by mid-to-high-twenties percent, above expectations.

Shares of Shopify, which were leading Nasdaq 100 gainers on Wednesday, have now gained 42% since the start of the year.

–Bill McColl

Supermicro Shares Tumble After Weak Earnings

2 hr 55 min ago

Super Micro Computer (SMCI), shares plunged Wednesday after the server maker reported weaker-than-expected results, as it faced higher costs from tariffs and changes required by a major customer.

The shares were down 20% in recent trading. Still, they’ve added about half of their value in 2025.

Supermicro posted fiscal fourth-quarter adjusted earnings per share of $0.41, down $0.13 from 2024 and below analysts’ estimates compiled by Visible Alpha. The company blamed the decline on tariffs and higher operating costs. Revenue rose 7.5% year-over-year to $5.76 billion, though that was also short of forecasts.

CEO Charles Liang said revenue was lower in June because of “capital constraints that limited our ability to rapidly scale production, and specification changes from a major new customer that delayed revenue recognition because of new added features.” He said those issues have been resolved.

CFO David Weigand noted that operating expenses jumped 22.6% to $315.7 million on higher compensation payments and headcount.

The company said it sees first-quarter adjusted EPS in the range of $0.40 to $0.52, while analysts had called for $0.60. 

–Bill McColl

Snap Stock Plunges as Ad Platform Issues Hit Results

4 hr 21 min ago

Snap (SNAP) shares plummeted Wednesday, a day after the operator of the Snapchat social media site posted a higher net loss and adjusted earnings missed forecasts as it dealt with an ad platform glitch.

The company reported a net loss of $262.6 million, 6% more than a year ago, and GAAP loss per share of $0.16 was also more than anticipated by analysts surveyed by Visible Alpha. Adjusted EBITDA slumped 25% to $41.3 million, well below the Visible Alpha estimates, while revenue of $1.34 billion was basically in line with expectations.

Daily active users increased 9% to 469 million. However, average revenue per user of $2.87 was just $0.01 higher than in 2024, and was down $0.09 from the first quarter. Total costs and expenses jumped nearly 8% year-over-year to $1.60 billion.

In a letter to shareholders, CEO Evan Spiegel wrote that revenue growth was “impacted by a number of factors in Q2, including an issue related to our ad platform,” which he explained happened because “in our efforts to improve advertiser performance, we shipped a change that caused some campaigns to clear the auction at substantially reduced prices.”

Spiegel said that revenue was also hurt by the timing of the Muslim holy month of Ramadan, along with the Trump administration’s changes to tax rules for purchases of lower-priced imported products.

Shares of Snap were down 20% recently and have lost about a third of their value this year.

–Bill McColl

Futures Point to Slightly Higher Open for Major Indexes

6 hr 5 min ago

Futures tied to the Dow Jones Industrial Average were up 0.3%.

S&P 500 futures rose 0.1%.

Nasdaq 100 futures also tacked on 0.1%.