📺 2008 was a real deep financial
US stocks held a session on Friday, where investors diluted a surge in revenue reports from key engineers and consumer names, as well as a broader question about the durability of artificial intelligence-driven market profits.
The Dow Jones industrial average hovered near the flat in early trading, but the S&P 500 was slightly higher and strengthened by a congregation of consumer discretionary stocks. Nasdaq composites were behind and were dragged by semiconductor and software names following a choppy revenue report from Intel.
Center Stage Profit
Decker's brand (deck) surged more than 14% in pre-market transactions after footwear companies increased revenue of 17% year-on-year to $964.5 million in the first quarter, breaking the $900 million consensus. The revenue beat was driven by outstanding performances in the HOKA and UGG segments, up 19.8% and 18.9%, respectively. International sales increased by 50%, offsetting softness with US Consumer (DTC) channels.
CEO Stefano Caroti highlighted the company's resilience and informed analysts that despite tariff pressure and uneven domestic momentum, it reflects “Deckers' brand equity and the strength of its international growth trajectory.”
In contrast, Intel (INTC) overturned early profits to test a support level of $20. Chipmaker reported second quarter revenue of $12.9 billion (expected), but reported a non-GAAP total margin of just 29.7% and a rattle investor adjusted EPS loss of $0.10. CEO Lip-Bu Tan's aggressive restructuring plan includes a 15% labor cut and a halt of fab expansion in Germany and Poland, highlighting the company's efforts amid sustained margin pressure and losses of $3.2 billion in casting.
AI Leadership and Microsoft's next actions
Going forward, market participants will be keeping an eye on Microsoft (MSFT) revenue next week. Wedbush analyst Daniel Ives repeated its “outperform” rating and a $600 price target, citing Microsoft's deepening artificial intelligence integration across the enterprise stack. Ives, dubbed “Scotty Schaeffler of Software,” noted that it was accelerating the adoption of AI capabilities across the financial, government and retail sectors.
“We strongly see this as Microsoft's 'glowing moment',” the Wedbush team predicts that AI can add $25 billion in revenue by fiscal year 2026, as more than 70% of Microsoft's installation base integrates Copilot and other AI capabilities.
Despite competition between Amazon Web Services and Google Cloud Platform, Wedbush sees Microsoft as a “clear front runner for enterprise hyperscale AI fronts,” and believes that the price of AI monetization and long-term growth due to cloud demand has yet to take the price completely.
The market remains narrow
Meanwhile, concerns about market concentration persist. More than half of the S&P 500's profits since January 2021 come from just 10 companies, including Microsoft, NVIDIA, Apple and Alphabet, according to Dr. Torsten Sloak, chief economist at Apollo. “The S&P 500's returns are not diversified, but instead they are very focused on small groups of small caps,” Slok said in a daily update.
As the revenue season moves forward, investors will continue to look at whether this narrow leadership can last, or whether the broader market will start to catch up.
📺 Will the Fed finally blink?
