What you Need to Know for October 23rd

Meta $META ( ▼ 6.98% ) beat on revenue at $64.6B and EPS at $3.83 vs. $3.56, driven by strong ad growth as AI-powered recommendations boosted engagement, ad volume and pricing. Shares fell as the company raised 2026 capex guidance pushing free cash flow negative and increasing concerns around how long its AI buildout will take to generate returns. The company also created a new non-voting share class that could be used to raise capital for AI spending without diluting voting control. Mgmt. guided Q4 revenue to $73B–$76B, above expectations.

Tesla $TSLA ( ▼ 3.08% ) Slightly missed on revenue at $28.05B vs. $28.13B, while adjusted EPS beat at $0.48 vs. $0.44. Revenue was pressured by lower YoY vehicle deliveries and softer pricing, while EPS benefited from lower spending and stronger margins. Shares fell after the company cut 2026 capex guidance to ~$20B from $25B, raising concerns around the pace of its AI, robotaxi and Optimus buildout. The company also confirmed special committees are evaluating a potential SpaceX merger.

IBM $IBM ( ▲ 0.26% ) Beat on revenue at $17.1B vs. $16.8B and also beat on EPS, as delayed software deals from Q2 began closing and helped software revenue grow 8% YoY, supporting mgmt.’s view that last quarter’s weakness was largely timing rather than lost demand. Growth was led by hybrid cloud and transaction processing, while consulting remained roughly flat. Mgmt. raised its 2026 software growth outlook to and increased its FCF outlook.

AT&T $T ( ▲ 3.79% ) Beat on revenue at $32.3B vs. $31.7B and EPS at $0.65, driven by wireless and fiber growth. Fiber revenue per user fell 4% as bundle discounts weighed on pricing, while Starlink competition remains a concern. Mgmt. raised 2026 EPS guidance.

Proctor & Gamble $PG ( ▲ 5.58% ) Beat on both the top and bottom lines, with revenue at $23.3B, as consumers bought more products despite pressure on household budgets, driving stronger volumes across key categories. Rising commodity and freight costs remain the main risk, with FY27 profit expected to take a ~$1.4B hit and pressure margins. Mgmt. maintained organic sales growth guidance of 1%–3%.

Union Pacific $UNP ( ▲ 3.55% ) Beat on both the top and bottom lines, with revenue at $7.2B, as higher trucking costs pushed more freight to rail, driving 6% volume growth, pricing gains and higher fuel surcharges. Higher fuel costs pressured expenses, but stronger volumes and operating efficiencies helped offset the impact. Mgmt. maintained guidance, while its $71.5B Norfolk Southern merger remains under regulatory review.

Lockheed Martin $LMT ( ▲ 6.96% ) Beat with revenue at $20.7B and EPS also above expectations, as higher defense spending and strong missile demand drove growth across all four segments. Governments are replenishing weapons and expanding air defense capacity, helping push backlog to a record $292B, led by major PAC-3, F-35 and other defense awards. Mgmt. raised 2026 sales and EPS guidance.

Spotify $SPOT ( ▲ 11.1% ) Revenue was roughly in line at €5.0B, while EPS missed at €2.48 vs. €2.80, partly due to higher employee compensation costs. Growth was driven by rising premium subscribers, higher pricing and improving ad sales, while AI features helped engagement. Mgmt. guided Q4 operating income above expectations and expects 10M new premium subscribers.

American Airlines $AAL ( ▲ 2.98% ) Beat on revenue at $16.34B vs. $16.22B and posted a smaller than expected EPS loss as premium and international demand remained strong. However, fuel costs surged 68% YoY, adding nearly $2B in costs and overwhelming much of the revenue growth, forcing the company to cut its 2026 outlook.

Southwest Airlines $LUV ( ▲ 5.39% ) Beat on revenue at $8.42B vs. $8.25B and EPS at $0.66, as higher fares, new fees and strong demand drove record revenue despite carrying fewer passengers. However, fuel costs created an $820M YoY headwind, offsetting much of those gains and forcing the company to cut its 2026 EPS outlook to $2.60–$2.85.

Blackstone $BX ( ▲ 8.38% ) Missed on revenue at $3.22B vs. $3.28B, while EPS beat at $1.32 vs. $1.26. Revenue was pressured by higher rates slowing dealmaking and exits, with net realizations down 34%, while earnings held up better as recurring fee-related income grew on strong fundraising, private wealth inflows and higher AUM. Mgmt. expects realizations to pick up significantly in Q4 as exit activity improves.

Western Digital $WDC ( ▼ 6.43% ) beat on both revenue at $4.38B vs. $4.14B and EPS. AI and cloud customers continued buying more high-capacity storage, helping drive stronger pricing, higher volumes and major margin expansion. Despite the beat and strong Q2 guidance, shares fell after mgmt. warned that rising input costs and heavier capex will pressure cash generation as the company spends more to keep up with demand.

Moderna $MRNA ( ▼ 17.57% ) tumbled after late-stage melanoma vaccine data leaked ahead of its official release, showing a 42% cut in the risk of cancer returning or death, below the 49% seen in an earlier smaller trial.

Skydance $SKYD ( ▼ 1.02% ) erased an early pop to close near flat after Elon Musk reportedly invested about $1Bn in the company.

AI hardware stocks $TTMI ( ▼ 27.67% ), $NOK ( ▼ 14.81% ), and $LRCX ( ▼ 11.76% ) sank as solid results and guidance that only matched expectations failed to impress investors nervous about AI spending.

CoreWeave $CRWV ( ▼ 10.06% ) slid after Bernstein slashed its target to $51, saying the company’s fundamentals are “probably stuck,” while its bonds continued to sell off.

Retailers $KSS ( ▲ 11.82% ) and $TGT ( ▲ 3.76% ) rose after Placer.ai data showed both led foot traffic during October’s deal week, with Kohl’s posting the biggest jump in store visits and Target the largest year-over-year gain.

Biohaven $BHVN ( ▲ 25.02% ) surged after the FDA accepted its resubmitted application for troriluzole, reversing last year’s refusal to review the drug.

The US IPO market is “paralyzed,” with just $587.7mm raised since the end of September after $162.6Bn through the first three quarters. Wall Street is counting on Anthropic’s debut next month, as most deals get pushed into 2027.

Solidigm, a subsidiary of SK Hynix, halted its US IPO due to market volatility.

Citi’s global co-head of equity capital markets, Aloke Gupte, expects IPO investors to get more selective as data center stocks slide, but he still sees a strong 2027 driven by an AI “supercycle.”

Rezera filed for a US IPO with a placeholder size of $100mm. The Boston biotech develops oral pills to treat inflammatory diseases and plans to start a Phase 3 trial of its lead drug in H1 2027.

DayOne is weighing a delay or a smaller US IPO of $2.5-3Bn, about half the $5Bn it originally targeted. The Singapore-based data center operator still wants to list as soon as the markets allow.

Barclays plans to cut 5,000 jobs, about 5% of its workforce, as part of an AI-linked efficiency push, with 60% of cuts in support functions including developers.

Private equity firms are holding portfolio companies beyond the typical 3-5 year window, with 24% of the 33,853 PE-backed companies globally held for at least 7 years.

OpenAI is close to raising up to $30Bn at a $1.25Tn valuation. The round is being positioned as a bridge ahead of a potential IPO, and OpenAI is also negotiating a deal to secure more computing capacity from the UAE.

Blackstone’s Jon Gray calls AI demand “parabolic” as companies are building capacity to keep up with demand rather than hoping it arrives.

Blackstone led a $300M private credit package backing Arlington Capital Partners’ take-private of UK aerospace and defense components maker Gooch & Housego, with JPMorgan and Jefferies participating in the unitranche, delayed draw term loan and revolver.

SpaceX’s $40Bn debt raise is pricing at sharply higher rates as AI fears spread. The lowest-rated portion is expected to carry about 8.3%, and even a safer chip-backed piece could price around 7.75%.

Satellite bus maker Apex is in talks to raise $500M at a $4Bn valuation, nearly double its June round, with Washington Harbour Partners set to lead.

Partners Group-backed EyeCare Partners is set to close a deal with creditors to sell assets and repay $2Bn of debt at a discount of $300M to $400M.

Electronic Arts will shut down BioWare and cut 400 jobs, around 3% of its staff, in a plan to save up to $700M, less than three months after its $55Bn Saudi PIF-led leveraged buyout.

Thoma Bravo is reviving its efforts to sell J.D. Power, targeting a $6.5B valuation. In 2024, the PE Sponsor failed to find a buyer at a $8B valuation.

Apollo says the usual ways to diversify a stock-heavy portfolio are falling short. Bonds now move more in step with stocks, and Apollo’s answer is hybrid capital, which offers equity upside with more downside protection.

Hamilton Lane says continuation vehicles “increasingly resemble direct buyout investments.” The average gain on companies going into them is over 4x invested capital, and first-quartile CVs have outperformed first-quartile buyout funds of the same vintage in every year between 2018 and 2025.

Jane Street, Hudson River, and other market makers are betting billions on AI infrastructure. Optiver’s CEO says firms that skip the compute race will struggle to keep competing as market makers.