What You Need To Know For July 31st

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The Week Ahead Of Us 🔍

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Tariffs are officially coming, effective tomorrow, August 1st, with Trump hitting India 25% tariffs, with an additional potential penalty due to making energy purchases from Russia. India will face tariffs higher than most other partners, with jewelry, apparel, generic drugs, auto components, and electronics hurt in particular. Roughly 10% of total India exports would be impacted by these tariffs. But lately the Fed and economic data has been more important than the latest with tariffs - we’ll get into the surprising GDP print later in the piece.

This was one of the big takeaways from the GDP print though - that AI spending matters more than the consumer. With AI related capex becoming a bigger part of GDP, that’s going to become the ultimate indicator of when the party is over. But earnings from Meta and Microsoft yesterday tell us the AI gold rush is far from over. Let’s get into it.

Earnings Corner 📈 📉

UnitedHealth $UNH ( ▼ 0.49% ) Revenue came in soft and EPS missed as rising medical costs pushed the care ratio to 89.4%, up from 85.1% last year. UnitedHealthcare and the broader Optum segment posted y/y growth, but Optum Health revenue fell 7%, with margins under pressure from delayed procedures and Medicare cuts. The new CEO admitted to pricing and operational missteps and said third-party audits will now be conducted annually, with the Company reinstating guidance and planning to return to earnings growth in 2026.

Meta $META ( ▲ 1.54% ) Beat on both lines. They blew past revenue estimates with a 22% y/y jump to $47.5B as AI-powered ad tools drove stronger pricing and engagement. EPS also beat, coming in at $7.14. Daily users and ad metrics topped forecasts, and third-quarter revenue guidance landed well ahead of consensus. Meta spent $17B on AI data centers this quarter and reaffirmed full-year capex of $66B–$72B, with management flagging even higher investment in 2026. Despite the hiring spree and Scale AI stake, expense growth remains contained. Shares surged 11% after hours.

Microsoft $MSFT ( ▲ 0.43% ) Beat on both revenue and EPS with total revenue up 18% y/y, driven by a 39% surge in Azure and strong demand for AI and cloud services. Total cloud revenue jumped 27% to $46.7B. Management disclosed Azure topped $75B in annual revenue for the first time and guided for 37% growth in the current quarter. Capex hit $24.2B in the fourth quarter and is expected to soar to a record number of $30B next quarter. The company also noted it’s renegotiating its relationship with OpenAI while growing internal investment in proprietary models. Shares rose 8.5% after hours.

Starbucks $SBUX ( ▲ 1.71% ) Revenue beat, but EPS came in light. Global same-store sales fell for the sixth straight quarter as traffic remained weak, though U.S. results were slightly better than expected and China comps turned positive for the first time in 18 months. Earnings were dragged by one-time tax and event costs. Management said the turnaround is ahead of schedule, with initiatives like Green Apron Service and a focus on existing store upgrades aimed at driving stronger in-store engagement. Guidance remained cautious heading into 4Q, with executives citing an uncertain consumer backdrop.

Ford $F ( ▼ 0.13% ) Revenue missed and EPS beat. Total sales came in light at $42.8B vs. $44.2B expected, while EPS of $0.47 topped consensus. North America margins held up, but EV losses widened and international performance lagged. Ford said it will slow the rollout of some EV models to prioritize hybrids and reduce capital intensity. Management reaffirmed FY guidance but warned that tariff pressures and pricing competition remain key headwinds. The stock is down 1.56% after hours.

Nucor $NUE ( ▼ 0.24% ) Beat on both revenue and EPS, helped by stronger steel pricing and solid demand. Steel Mills earnings more than tripled q/q, and Steel Products rose 28%. Backlogs remain strong, but management flagged upcoming margin pressure and tariff risk.

Visa $V ( ▲ 0.01% ) Beat on both lines. Net revenue rose 14% y/y to $10.17 B and EPS hit $2.98 vs. the $2.85 consensus. Payment volume climbed and cross‑border volume both saw growth. Management emphasized durable demand, innovation in AI and stablecoins, and strong capital returns. Management guided to high single digit revenue growth and reiterated margin discipline.

Waste Management $WM ( ▼ 0.81% )  Beat on both revenue and EPS. Sales rose 19% y/y to $6.43B and adjusted EPS landed at $1.92. Core operations grew 7%, but the company cut its full-year revenue guidance due to weaker recycled commodity pricing and early-year weather disruptions. EBITDA guidance midpoint was held steady.

Spotify $SPOT ( ▲ 1.81% ) Revenue grew 15% y/y to €4.75B but missed consensus €5.0B, and EPS missed, coming in at a surprise loss of €0.48 vs. €2.29 expected. Subscriber growth beat across the board, with premium subs and total MAUs both ahead of estimates. Management cited higher operating expenses and social charges for the earnings miss. Gross margin improved and FCF hit a record, but third quarter revenue guidance of was also light. The FY gross margin outlook was raised slightly.

Boeing $BA ( ▲ 0.01% ) Revenue and EPS both missed. Commercial aircraft deliveries declined y/y and defense unit performance remained soft. Management emphasized cash flow preservation and ongoing cost cuts as MAX delays and supplier issues continued to weigh. No change to full-year guidance.

Procter & Gamble $PG ( ▼ 0.74% ) Beat on both revenue and EPS. Management warned of a $1B pretax hit from global tariffs in FY26, with mid to single digit price hikes coming on about a quarter of products. Fiscal 2026 EPS guidance of $6.83–$7.09 came in below consensus, with tariff, FX, and interest expense headwinds driving the weaker outlook.

Booking Holdings $BKNG ( ▲ 1.33% ) Beat on both revenue and EPS. Sales rose 9% y/y to $6.54B and EPS hit $39.04, both above consensuses. Summer travel demand stayed strong, especially across international markets and alternative accommodations. Management guided to solid third quarter gross bookings growth and flagged healthy trends in U.S. and European travel.

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Today’s Headlines 🍿 

• The Fed holds rates: In no surprise to anyone, the Fed held rates in a 4.25%-4.50% range. Fed Governors Waller and Bowman dissented, likely in an effort to throw their hats into the race to become the next Fed Chair. Fed Chair Powell shared that the September decision is going to depend on August data, including seeing whether tariffs make its way into the economy via price increases. The market expects 1-2 25bps rate cuts this year, but there’s a growing crowd saying 0 rate cuts is a possibility if inflation ticks a bit higher

• GDP surprises to the upside: 2Q GDP ran at 3% - much higher than estimates of 2.3% and a sign of strength after a 0.5% decline in 1Q. A 30% drop in imports helped to drive the increase, potentially overstating the economy’s underlying strength, while consumer spending rose 1.4%

• Stimulus Checks: Missouri Senator Josh Hawley introduced a bill that will send tariff rebate checks to Americans - at least $600 per adult and dependent child, with a larger rebate if tariff revenues come in higher than expected. This comes after the federal government brought in $26.6B in tariff revenues last month

• Trump reaches a deal with South Korea, setting a blanket tariff at 15%. The deal also includes a $350B investment in the U.S, something that’s become a theme in Trump’s trade agreements

• More Moves out of London: Tony Chedraoui’s hedge fund Tyrus Capital is moving its headquarters from London to Abu Dhabi. A lot of London based investment firms are starting to set up shop in Abu Dhabi and Dubai to leverage the tax-free status and ultra high net worth area.

• Pharma companies await tariffs: Tariffs on imports from the EU were announced at 15% on Sunday, but many fear a much higher number will soon come. Some companies, like Novartis, Roche, Amgen, and Biogen have less of a manufacturing footprint in the U.S. and will be more exposed to the potential 200% tariffs that Trump has floated

• July apartment rents fall as vacancies move to multiyear high: The national multifamily vacancy rate rose to 7.1% in July, the highest since the Apartment List index began in 2017. Rent is cheaper now than it was in the same month last year, with the national median at $1,402

• Anthropic is raising at a $170B valuation while throttling rate limits: With users stretching the compute thin, Anthropic had to set up new rate limitations for Claude to curb usage of its AI coding tool

• Senate committee votes to advance ban on stock trading for members of congress: The bill also includes the president and VP in its restrictions, although Trump and Vance would be exempt. Lawmakers and their spouses would be limited to investing in diversified mutual funds, ETFs, and Treasury bonds while in office if the bill passes

• Fifth Third and Eldridge announce a private credit partnership: The Commercial Bank and the $70B AUM private credit manager teaming up is meant to help Fifth Third’s asset backed lending business, while giving more deal flow to Eldridge

• Las Vegas is in trouble - Unemployment was 5.8% in June, up from 5.5% in May and way higher than national levels of 4.1%

• Figma prices its IPO at the high-end: The design software startup priced at $33/share, $1 above its expected range, raising $1.2B and valuing the company at $19.3B

• United Airline Labor Dispute: Flight attendants rejected a contract that called for immediate raises of at least 26% along with other benefits, with 71% voting against the proposal. Flight attendants at United have not received a raise since 2020

• High Noon Recall: High Noon had to recall its vodka seltzer drinks because they were somehow mislabeled as Celsius energy drinks - be careful if you’re opening one of the Sparkling Blue Razz cans before work

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M&A Transactions💭 

Palo Alto Networks (NAS: PANW) will acquire CyberArk Software (NAS: CYBR), a cybersecurity vendor, for an estimated $25B. EV/Revenue was 16.67x.

First National Financial (TSE: FN), a Canadian originator, underwriter and servicer of predominantly prime residential and commercial mortgages, has entered into a definitive agreement to be acquired for CAD 2.9B by Birch Hill Equity Partners and Brookfield Asset Management. EV/Net Income was 26.03x and EV/Revenue was 7.51x. BMO Capital Markets and RBC Capital Markets advised on the sale.

Richardson Wealth (TSE: RCG), a wealth management focused company, has reached a definitive agreement to be acquired for CAD 597.0M by Industrial Alliance Insurance and Financial Services (TSE: IAG). Purchase price of CAD 597.0M includes a CAD 370.0M valuation for RF Capital’s fully diluted equity and CAD 227.0M in financial obligations. EV/EBITDA was 8.44x and EV/Revenue was 1.18x. CIBC Capital Markets and Cormark Securities advised on the sale.

Mydentist, provider of dental care services, has entered into a definitive agreement to be acquired for GBP 775.0M by Bridgepoint Group. Morgan Stanley advised on the sale.

L.A.B. Golf, manufacturer of golf putters, was acquired for $200.0M by L Catterton.

Industries Mecanicas de Extremadura, manufacturer of metal lattice towers, was acquired for EUR 150.0M by Sociedade de Investimento e Gestao (LIS: SEM). Nomura Global Financial Products advised on the sale.

EuroGroup Lamination (MIL: EGLA), develops and produces stators and rotors, has entered into a definitive agreement to be acquired for EUR 295.0M by FountainVest Partners. Rothschild & Co advised on the sale.

Bavarian Nordic (CSE: BAVA), a biotechnology company, has entered into a definitive agreement to be acquired for DKK 19.0B by Permira and Nordic Capital. EV/EBITDA was 10.51x and EV/Revenue was 3.33x. Citigroup advised on the sale.

Arden University, provider of online educational services, has entered into a definitive agreement to be acquired for $1.0B by Brightstar Capital.

Opdenergy entered into a definitive agreement to acquire The Wind Energy Portfolio of Acciona Energia for an estimated EUR 530.0M. EV/Net Income was 3.01x. BNP Paribas advised on the sale.

Upside, provider of corporate cards, was acquired for JPY 46.0B by Mizuho Financial Group (TKS: 8411).

The Ritz-Carlton, operator of luxury hotels, was acquired for $247.7M by Dilawri Group of Companies and Pacific Reach Capital. CBRE Canada advised on the sale.

Shin Kong Financial Holdings, engaged in managing its subsidiaries and investing in businesses, was acquired for $7.0B by Taishin Financial Holdings (TAI: 2887). EV/Net Income was 47.72x and EV/Revenue was 8.08x. Morgan Stanley advised on the sale.

Spire (NYS: SR) reached a definitive agreement to acquire The Tennessee Local Distribution of Piedmont Natural Gas Company for $2.48B.

OrthoLite, manufacturer and designer of foam insoles, was acquired for $770.0M by Coats Group (LON: COA). Lazard advised on the sale.

Norfolk Southern (NYS: NSC), class-I railroad i Eastern United States, has reached a definitive agreement to be acquired for $89.35692B by Union Pacific(NYS: UNP). EV/EBITDA was 13.73x and EV/Revenue was 7.34x. Bank of America advised on the sale.

Eco Material Technologies, manufacturer of near-zero carbon cement material, has reached a definitive agreement to be acquired for $2.1B by CRH (NYS: CRH). Jefferies advised on the sale.

Cruise.co.uk, operator of an online cruise travel agency, was acquired for GBP 252.0M by Hays Travel. Houlihan Lokey advised on the sale.

Chart Industries (NYS: GTLS), a variety of cryogenic equipment for storage, has reached a definitive agreement to be acquired for $13.058B by Baker Hughes (NAS: BKR). EV/EBITDA was 13.45x and EV/Revenue was 3.07x. Wells Fargo advised on the sale.

Amplitude Surgical (PAR: AMPLI), engaged in developing and marketing products, was acquired by Zydus Lifesciences (BOM: 532321) and Mr. Olivier Jallabert for EUR 256.8M.

Air Rail, distributor of railway maintence equipment, has entered into a definitive agreement to be acquired for EUR 270.0M by IFM Investors. Natixis advised on the sale.

Lannett Company, developer of generic medicine, has reached a definitive agreement to be acquired for $250.0M by Aurobindo Pharma USA. EV/Revenue was 0.82x.

Principia Energy has entered into a definitive agreement to acquire The Wind Farm Assets of EDP Renovaveis for an estimated EUR 200.0M.

ART Fertility Clinics, provider of fertility treatment services, was acquired for an estimated EUR 264.0M by IVI-RMA Global. EV/EBITDA was 11.05x and EV/Revenue was 3.52x. Moelis & Company advised on the sale.

Acculynx, developer of a cloud-based software, has reached a definitive agreement to be acquired for $2.35B by Verisk Analytics (NAS: VRSK). William Blair advised on the sale.

Private Placement Transactions💭 

Ramp, developer of a financial operations platform, raised $500.0M of venture funding in a deal led by ICONIQ Capital at a pre-money valuation of $22.0B.

Keye, operator of an AI system intended to help private market investors accelerate and enhance due diligence, has raised a $5M seed round from Dunamu, Palm Drive Capital, and General Catalyst.

MapLight, operator of a biopharmaceutical company, raised $372.5Mof Series D venture funding led by Forbion and The Goldman Sachs Group.

Lyten, developer of lithium-sulfur battery technology, raised $200.0M of venture funding from undisclosed investors.

Hadrian, developer of an autonomous manufacturing platform, raised $260.0M of Series C venture funding through a combination of debt and equity at a pre-money valuation of $640.66M. The equity portion of $161.34M was led by Founder Fund and Lux Capital.

1KOMMAS, provider of installation and services related to solar, raised EUR 150.0M of venture funding in a deal led by G2 Venture Partners and California State Teachers’ Retirement System.

Velosting, provider of digital infrastructure services, raised $128.0M of venture funding from EST.

Grammarly, developer of writing assistance technology, raised $672.38M of venture funding in the form of options and warrants from Renegade Partners.

ARTBIO, operator of a radiopharmaceutical company, raised $132.0M of Series B venture funding led by Sofinnova Investments and B Capital Group.

Ambience Healthcare, developer of an AI powered medical scribe, raised $243.0M of Series C venture funding led by Andreessen Horowitz and Oak HC/FC.

Observe, developer of an enterprise SaaS platform, raised $156.0M of Series C venture funding led by Sutter Hill Ventures at a pre-money valuation of $658.22M.

Odds of the Day 🍒 

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