Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services. This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications across ERP, CRM, power apps, and power automate; and on-premises ERP and CRM applications. The Intelligent Cloud segment offers server products and cloud services, such as azure and other cloud services; SQL and windows server, visual studio, system center, and related client access licenses, as well as nuance and GitHub; and enterprise services including enterprise support services, industry solutions, and nuance professional services. The More Personal Computing segment offers Windows, including windows OEM licensing and other non-volume licensing of the Windows operating system; Windows commercial comprising volume licensing of the Windows operating system, windows cloud services, and other Windows commercial offerings; patent licensing; and windows Internet of Things; and devices, such as surface, HoloLens, and PC accessories. Additionally, this segment provides gaming, which includes Xbox hardware and content, and first- and third-party content; Xbox game pass and other subscriptions, cloud gaming, advertising, third-party disc royalties, and other cloud services; and search and news advertising, which includes Bing, Microsoft News and Edge, and third-party affiliates. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online, and retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.

Microsoft Corporation

NVIDIA Corporation NVDA is all set to report its much-awaited fiscal 2026 second-quarter (ended July 30) earnings after the closing bell on Aug. 27. This announcement could be pivotal for NVIDIA, particularly following its recent agreement with the U.S. government to re-enter the Chinese market and amid record-high data center spending. Therefore, it is important to explore the strategic actions investors can consider before the upcoming earnings report.
NVIDIA Gears Up for Explosive Q2 Results
It’s been nearly three months since NVIDIA reported fiscal first-quarter results. Its revenues of $44.1 billion were up 69% year over year. A similar performance is expected in the fiscal second quarter as well, with revenues projected at $46.03 billion, up 53.2% year over year.
Furthermore, NVIDIA’s earnings per share (EPS) are expected to come in at $1.00 compared to $0.68 in the same quarter a year ago, representing a 47.1% year-over-year increase. NVIDIA’s trailing four-quarter earnings surprise, on average, is a positive 3.9%, which suggests that the stock may deliver second-quarter growth.
Image Source: Zacks Investment Research
Why NVIDIA Could Post Solid Q2 Results?
NVIDIA’s new-generation Blackwell Ultra graphics processing units (GPUs) architecture is experiencing significant demand because it can execute artificial intelligence (AI) tasks 50 times quicker than the previous Hopper architecture. The shipping of these Blackwell Ultra GB300 GPUs started in large quantities during the latter half of the year. Since the fiscal second quarter includes July, there is a strong possibility that the sales of Blackwell Ultra GB300 GPU will enhance NVIDIA’s revenues and profits.
In the fiscal first quarter, NVIDIA lost $2.5 billion in sales and incurred a $4.5 billion charge due to the U.S. government restrictions on selling its H20 chips to China. However, in April, the Trump administration permitted NVIDIA to export its H20 chips to China, stipulating that the company must share 15% of its revenues from the sales of this chip with the government. Now, with NVIDIA expected to sell chips worth $8 billion to China in the fiscal second quarter, there is a strong possibility that removing the export restrictions will assist the company in recovering some of the revenues lost in the previous quarter and enhance its performance in the reporting quarter.
Buy, Hold, or Sell NVIDIA Stock Ahead of Q2 Earnings?
With NVIDIA’s H20 chips heading to China, and the demand for Blackwell chips remaining strong, an upbeat fiscal second-quarter results are on the cards, typically driving its stock price higher. Additionally, the future looks promising for NVIDIA as the company is set to benefit from ongoing growth in data center capital expenditures (capex). Its GPUs, which power data centers, are in demand as customers plan to increase their capex to establish more AI data centers to meet rising computing capacity needs.
Alphabet Inc. GOOGL and Meta Platforms, Inc. META have increased their 2025 data center capex forecast from $75 billion to $85 billion, and from $64 billion to $66 billion, respectively. Amazon.com, Inc. AMZN anticipates that its capex for data centers in 2025 will reach a record $118 billion, while Microsoft Corporation’s MSFT capex has already reached $88 billion for the fiscal year 2025, which concluded on June 30.
Therefore, it’s prudent for NVIDIA stakeholders to retain their stock for potential long-term benefits. New investors should wait until NVIDIA’s fiscal second-quarter results either surpass or align with analysts’ forecasts for the stock to rise further.
Given that NVIDIA’s top customers are boosting their capex in data centers, it’s unlikely that the fiscal second-quarter results will underperform expectations, presenting a timely opportunity for new investors to purchase the stock.
For now, NVIDIA has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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NVIDIA to Post Q2 Earnings: Buy, Hold, or Take Profits?

Key Points
Stanley Druckenmiller, who formerly ran Duquesne Capital, is a frequent investor in big tech names.
Druckenmiller remains disciplined on valuation and is not afraid to sell a stock that he thinks has gotten ahead of its skis.
Microsoft is really starting to execute on its artificial intelligence playbook.
Hedge funds recently filed their latest batch of 13F forms with the U.S. Securities and Exchange Commission, divulging what stocks they held at the end of the second quarter. Comparing those forms to the prior set allows investors to see what stocks hedge funds and billionaires have bought and sold in any given quarter.
The market is always curious to see how the leading names in the investing world are allocating capital. Few billionaire investors elicit more interest than Stanley Druckenmiller. A protege of George Soros, Druckenmiller consistently generated some of the highest annual returns out there at Duquesne Capital, which he founded and ran for decades. Now, he operates the Duquesne Family Office, which manages his own billions.
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In the second quarter, Druckenmiller exited his position in Tesla (NASDAQ: TSLA) and piled into another "Magnificent Seven" stock that has crushed the broader stock market this year.
Dumping Tesla
The Duquesne Family Office didn't own its stake in the electric vehicle (EV) maker for too long. The fund initiated its Tesla position in the fourth quarter of 2024 and closed it in the second quarter. Druckenmiller is not afraid to trade in and out of stocks, or to sell a stock if he feels it has become too expensive, as he did in the past with Nvidia.
Unlike many investors in this red-hot market, Druckenmiller has always been a close observer of valuations, and Tesla is certainly one of those names that has for many years traded at meteoric valuations. As of Thursday, the stock was trading at about 190 times expected forward earnings. Meanwhile, Tesla's core EV business has been struggling in recent quarters. With the federal $7,500 EV tax credit set to expire at the end of the third quarter, the EV industry broadly could continue to struggle.
However, many investors seem less concerned about Tesla's EV business and more focused on how the company's other initiatives, such as robotaxis and humanoid robots, could power its results in the future.
Tesla intends for its self-driving robotaxis to form the backbone of a new autonomous ride-hailing fleet, giving it access to a huge market in the personal transport space. Some early analyses indicate that Tesla's approach to autonomous vehicle systems is much cheaper than rivals like Waymo. Tesla has begun to deploy robotaxis (though not its Cybercabs, which it has yet to produce) in Austin and San Francisco. However, while these vehicles are driving autonomously, they have reportedly been geofenced to stay within set boundaries of those cities, and have been operating with humans monitoring them remotely thus far.
Given the short period of time that Druckenmiller held Tesla and the stock's volatility this year, it's likely that he and his team saw a short-term trading opportunity, unless there was a significant change in their thesis recently.
Buying a Magnificent Seven outperformer that has executed this year
Duquesne's second-largest purchase in the second quarter also happened to be the second-largest company in the world by market cap -- Microsoft (NASDAQ: MSFT). In the quarter, Duquesne bought just over 200,000 shares of the tech giant for a value of roughly $100 million as of June 30. Microsoft is now up by about 20% this year, crushing the S&P 500's roughly 8% gain.
I think many investors were initially skeptical about the tech conglomerate's artificial intelligence (AI) investments and whether or not they would pay off. But its latest quarterly results indicate they are starting to. In Q2, revenue from Microsoft's Azure and other cloud services division, which contains a lot of the company's AI-related business, surpassed $75 billion, a 34% increase from the prior-year period. Companies and developers can access large language models from OpenAI through Azure, and can easily integrate generative AI capabilities into workloads.
"Enterprises are beginning to move from proof of concepts to enterprisewide deployments to unlock the full ROI [return on investment] of AI," Microsoft CEO Satya Nadella said on the company's second-quarter earnings call. "And our AI business has now surpassed an annual revenue run rate of $13 billion, up 175% year over year."
Microsoft currently trades at a forward price-to-earnings ratio of almost 33, which is close to its five-year average of slightly below 32. It's executing on AI and is also one of the only companies with a higher credit rating on its debt than the U.S. government. With all of those advantages, I see Microsoft as one tech stock that investors can buy and hold forever.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Billionaire Stanley Druckenmiller Just Dumped Tesla and Piled Into a "Magnificent Seven" Stock That's Crushing the Stock Market This Year

Okta OKTA is set to release second-quarter fiscal 2026 results on Aug. 26.
Okta anticipates non-GAAP earnings in the range of 83-84 cents per share in the to-be-reported quarter. Revenues are expected to be in the range of $710-$712 million, indicating growth of 10% year over year.
The Zacks Consensus Estimate for earnings has remained steady at 84 cents per share over the past 30 days, indicating year-over-year growth of 16.7%. The consensus mark for revenues is pegged at $711 million, indicating an increase of 10.1% from the year-ago quarter’s reported figure.
Okta’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with the average earnings surprise being 13.53%.
Okta, Inc. Price and EPS Surprise
Let’s see how things have shaped up for Okta prior to this announcement:
Factors to Note for Okta’s Q2
OKTA’s expanding product portfolio, especially in security and identity governance, is expected to have helped it win clients, driving top-line growth in the to-be-reported quarter. It exited first-quarter fiscal 2026 with roughly 20,000 customers, reflecting strong growth prospects for subscription revenues. Customers with more than $100 thousand in Annual Contract Value increased by 70 sequentially to 4,870.
Continued momentum from new products like Identity Governance, Privileged Access, Device Access, Fine Grained Authorization, Identity Security Posture Management, and Identity Threat Protection with Okta AI is expected to have been a tailwind in the to-be-reported quarter. Okta’s offerings include Okta AI, a suite of AI-powered capabilities embedded across several products, which empowers organizations to harness AI to build better experiences and protect against cyberattacks.
Okta is benefiting from a rich partner base that includes the likes of Amazon Web Services, CrowdStrike, Google, LexisNexis Risk Solutions, Microsoft, Netskope, Palo Alto Networks, Plaid, Proofpoint, Salesforce, ServiceNow, VMware, Workday, Yubico and Zscaler. The company has more than 7,000 integrations with cloud, mobile, and web applications and IT infrastructure providers as of April 30, 2025. This is expected to have benefited top-line growth in the fiscal second quarter.
However, results are expected to have suffered from sluggish federal business, a challenging macroeconomic condition and stiff competition from Microsoft MSFT in the Identity and Access management domain. The company is also facing stiff competition from enterprise security providers like SentinelOne S and Cisco Systems CSCO.
OKTA Shares Outperform Sector, Industry
Okta shares have increased 13.9% in the year-to-date period against the Zacks Computer & Technology sector’s return of 10.4% and the Zacks Security industry has increased 6.9% over the same time frame. Okta has outperformed SentinelOne and Cisco over the same timeframe, but lags Microsoft. While Cisco and Microsoft shares have appreciated 19.6% and 13.2% year to date, SentinelOne declined 25.1%.
OKTA Stock’s Performance
Image Source: Zacks Investment Research
OKTA Stock is Currently Overvalued
OKTA stock is not so cheap, as the Value Score of D suggests a stretched valuation at this moment.
In terms of forward 12-month Price/Sales, OKTA is trading at 5.22X, higher than SentinelOne’s 4.99X and Cisco’s 4.46X.
Valuation: OKTA vs. SentinelOne
Image Source: Zacks Investment Research
Valuation: OKTA vs. CSCO
Image Source: Zacks Investment Research
Here is Why Okta Shares are a Hold Now
Okta rides on an innovative portfolio and an expanding clientele. For fiscal 2026, OKTA expects revenues between $2.85 billion and $2.86 billion, indicating 9-10% growth from the figure reported in fiscal 2025.
Rich partner base bodes well for Okta. The company and Palo Alto Networks announced an expanded partnership that combines Okta Workforce Identity and Palo Alto Networks’ Prisma Access Browser. Integration between Identity Threat Protection with Okta AI and Palo Alto Networks AI-driven Cortex SecOps platform offers organizations a unified view of identity-related risks across their entire attack surface.
Okta’s strong liquidity is a key catalyst. The company ended the first quarter of fiscal 2026 with $2.73 billion in cash, cash equivalents, short-term, and long-term investments. Net cash provided by operations was $241 million in the first quarter of fiscal 2026, while free cash flow was $238 million. For fiscal 2026, Okta raised free cash flow margin guidance to roughly 27%.
However, a challenging macroeconomic condition, anticipated sluggishness in federal business and a stretched valuation makes make the stock a risky bet ahead of second-quarter fiscal 2026 results.
OKTA currently carries a Zacks Rank #3 (Hold), which implies that investors should wait for a favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Buy, Sell or Hold OKTA Stock? Key Tips Ahead of Q2 Earnings

Intuit INTU reported fourth-quarter fiscal 2025 non-GAAP earnings per share (EPS) of $2.75, which beat the Zacks Consensus Estimate of $2.65. The bottom line jumped 38.2% from the year-ago quarter.
Results reflected a rise in Global Business Solutions, Consumer, Credit Karma and ProTax revenues year over year.
Revenues of $3.83 billion beat the consensus mark of $3.74 billion and increased 20.3% year over year.
Q4 Details of INTU
Global Business Solutions Group revenues (78.6% of total revenues) grew 17.8% year over year to $3.01 billion.
Within the segment, total Online Ecosystem revenues climbed 21.1% year over year to $2.2 billion.
QuickBooks Online Accounting revenues were up 23.2% year over year to $1.10 billion, driven by higher effective prices, customer growth and mix-shift.
Online Services revenues, which include payroll, payments, time tracking and capital, jumped 19% year over year to $1.11 billion, driven by growth in money and payroll offerings.
Total international online revenues increased 9% year over year on a constant-currency basis.
Revenues from the Consumer Group (3.6% of total revenues) increased 21.2% to $137 million.
Further, ProTax Group's professional tax revenues (0.8% of total revenues) rose 10.3% year over year to $32 million.
The Credit Karma business contributed $649 million to Intuit’s fiscal fourth-quarter total revenues, which increased 33.8% year over year, driven by strength in credit cards, personal loans and auto insurance.
INTU’s non-GAAP operating income climbed 39.2% to $1.02 billion. Non-GAAP operating margin increased 360 basis points to 26.5%.
INTU’s Balance Sheet & Cash Flow
As of July 31, 2025, Intuit’s cash and investments were $4.6 billion compared with $6.2 billion as of April 30, 2025. The company exited the fiscal fourth quarter with a long-term debt of $6 billion.
Intuit repurchased $2.8 billion of stock during fiscal 2025.
INTU announced that its board approved a quarterly dividend of $1.20 per share to be paid on Oct. 17, 2025. The newly approved dividend represents a year-over-year increase of 14%.
INTU’s Q1 & FY 2026 Outlook
For the first quarter of fiscal 2026, INTU expects revenues to grow between 14% and 15% on a year-over-year basis. Non-GAAP earnings for the quarter are estimated in the range of $3.05-$3.12 per share.
Intuit projects fiscal 2026 revenues in the band of $20.997-$21.186 billion, indicating approximately 12-13% growth. The company expects fiscal 2026 non-GAAP earnings per share to be between $22.98 and $23.18, indicating an increase of approximately 14-15%.
The company anticipates fiscal 2026 non-GAAP operating income between $8.611 billion and $8.688 billion.
Further in its business segments, the Global Business Solutions segment revenues are expected to grow within 14-15% on a year-over-year basis. Consumer Group revenues are expected to grow by approximately 8-9%. Credit Karma revenues are expected to grow between 10% and 13%. ProTax revenues are forecasted to grow 2.3%.
INTU’s Zacks Rank
Intuit carries a Zacks Rank #3 (Hold) at present.
Intuit Inc. Price, Consensus and EPS Surprise
Performance of Other Computer Software Stocks
PTC Inc. PTC reported third-quarter fiscal 2025 non-GAAP EPS of $1.64, beating the Zacks Consensus Estimate by 34.4%. The company reported non-GAAP EPS of 98 cents in the prior-year quarter.
Revenues came in at $644 million, rising 24% year over year. The top line beat the consensus estimate by 10.6%. PTC’s focus on digital product innovation, combined with its shift toward SaaS and subscription-based models, is creating a stable and scalable revenue base. PTC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Microsoft MSFT reported fourth-quarter fiscal 2025 earnings of $3.95 per share, which beat the Zacks Consensus Estimate by 8.96% and increased 23.7% on a year-over-year basis.
Revenues of $76.44 billion increased 18.1% year over year and beat the Zacks Consensus Estimate by 3.7%. At constant currency, revenues grew 17% year over year, showcasing strong demand for cloud and AI offerings. Currently, MSFT carries a Zacks Rank #2 (Buy).
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Intuit Q4 Earnings Surpass Estimates, Revenues Increase Y/Y

C3.ai, Inc. AI stock has experienced a significant decline, declining 42.2% over the past month. In fact, AI stock fell around 24% since it released its preliminary results for its fiscal first quarter, which ended on July 31, 2025. Recent news indicates challenges for the company, including quarterly revenue falling below expectations, which has impacted investor confidence.
The current stock price is around $16.86, with a 52-week high of $45.08 and a low of $14.70. The stock has been volatile, with a weekly volatility of about 12%, higher than most U.S. stocks.
1-Month Share Price Performance
Image Source: Zacks Investment Research
A Snapshot of AI’s Q1 Preliminary Results
Revenues are now expected to be in the range of $70.2 million to $70.4 million, well below both analysts’ expectations and the company’s own guidance given in May. GAAP operating loss is estimated to be in the range of $124.7 million to $124.9 million, while non-GAAP operating loss is predicted to be between $57.7 million and $57.9 million.
C3 AI’s CEO, Thomas Siebel, admitted the quarter’s sales performance was “completely unacceptable.” Siebel pointed to the company’s reorganization and his own health challenges as the primary reasons for the weak results.
The company closed the quarter with $711.9 million in cash, cash equivalents and marketable securities, underscoring a strong liquidity position despite the wider losses.
In late July, Siebel announced his intention to step down as CEO once a successor is found, citing serious health challenges, including an autoimmune diagnosis and vision impairment. This announcement, coupled with the abrupt results miss, heightened investor anxiety about the company's leadership and near-term trajectory.
C3.ai’s Estimate Revision Trend
The Zacks Consensus Estimate for fiscal 2026 and 2027 loss per share has widened to $1.39 and 47 cents from a loss of 42 cents and 16 cents in the past 30 days, respectively. The estimated figure indicates a widened loss for fiscal 2026, as you can see below.
Image Source: Zacks Investment Research
Can C3.ai Stock Stage a Comeback?
Despite the rough preliminary first-quarter fiscal 2026 report, several underlying positives suggest that C3.ai may still be set up for a potential rebound.
First and foremost, the company boasts a robust financial cushion. As of late July 2025, C3.ai held approximately $711.9 million in cash, cash equivalents, and marketable securities, only modestly down from its April balance of $742.7 million. This sizable liquidity gives the firm a significant runway—even as it continues to operate at a non GAAP loss.
Second, management is taking serious action. The poor fiscal first quarter outcomes were openly attributed to the disruptive effects of reorganizing its sales and services functions, along with CEO Tom Siebel’s health-related absence from sales processes. However, these leadership and operational changes are now complete, with the company having installed a team of seasoned, enterprise sales executives across key roles. The restructuring brought in several industry veterans, including Rob Schilling as executive vice president and chief commercial officer and John Kitchingman as general manager for EMEA. The company also added Jeff Cosseboom as group vice president for North America East Sales and Lars Farnstrom as group vice president for the Nordics.
Third, the firm’s strategic positioning in key growth areas remains compelling. C3.ai’s ongoing expansion into diverse industries beyond its core oil and gas sector also contributes positively, with emerging traction in manufacturing, life sciences, and state and local government markets. Their AI solutions have been adopted by prominent customers such as the U.S. Air Force, Shell, SK, and the State of California, highlighting practical value and return on investment. They have introduced generative AI applications for government programs that improve constituent services and operational efficiency.
Finally, the firm's market positioning remains unique. C3.ai differentiates itself from other enterprise AI providers by offering industry-specific, prebuilt AI applications and a full-stack, low-code development platform—enabling quicker deployments across sectors like defense, healthcare, energy, and beyond. These capabilities, paired with strategic alliances—such as go to market relationships with Microsoft MSFT, Amazon’s AMZN AWS, Alphabet’s GOOGL Google Cloud, PwC, and McKinsey QuantumBlack—continue to bolster C3.ai's market reach and credibility.
In summary, even in the face of a dismal quarter, C3.ai retains several positive undercurrents: a strong cash reserve, a refreshed sales leadership structure aimed at operational stabilization, growing traction in high-value AI segments like generative and federal contracts, and optimistic investor projections suggesting meaningful upside if execution improves. The company’s success over the remainder of fiscal 2026—and its ability to reach positive free cash flow by the fiscal fourth quarter—will be pivotal in determining whether these positives can translate into a real rebound.
C3.ai Valuation
AI stock is priced at a discount relative to its industry. It has a forward 12-month price-to-sales ratio of 5.44, which is well below the industry average.
P/S (F12M)
Image Source: Zacks Investment Research
C3.ai’s Competition Landscape
C3.ai operates in a vibrant and highly competitive enterprise AI landscape, with key challengers ranging from tech behemoths to specialized AI innovators. Major cloud and AI players like Microsoft, Amazon, Google, and NVIDIA frequently appear in comparisons due to their substantial investments and robust AI platforms. Again, Palantir and DataRobot challenge C3.ai in enterprise analytics and AI solutions. Consulting and IT service providers like Accenture, Infosys, and Wipro also compete in large-scale enterprise AI deployments. Additionally, data-focused platforms such as Databricks, Snowflake, and Alteryx offer alternative machine learning and AI environments. This mix of cloud leaders, AI specialists, and IT integrators makes the competitive landscape highly dynamic.
How to Play C3.ai Stock Now?
C3.ai’s steep 42% monthly decline, wider-than-expected losses, and leadership uncertainty signal heightened risk for investors. The CEO’s pending departure, weak revenue outlook, and volatility underscore operational instability, while downward estimate revisions highlight deteriorating fundamentals. Despite a solid cash position and potential in enterprise AI, execution challenges and lack of near-term visibility outweigh the positives. With a Zacks Rank #4 (Sell) and mounting investor skepticism, C3.ai’s risk-reward profile remains unfavorable. For now, investors would be better served exiting positions rather than betting on an uncertain rebound.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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C3.ai Stock Down 42% in a Month: Should You Buy the Dip?

International Business Machines Corporation IBM is focusing more on smaller, domain-focused artificial intelligence (AI) models, emphasizing reliability, cost-efficiency and practical enterprise utility. IBM’s watsonx platform has been the core technology platform for its AI capabilities. It delivers the value of foundational models to the enterprise, enabling them to be more productive. This enterprise-ready AI and data platform comprises three products to help organizations accelerate and scale AI — the watsonx.ai studio for new foundation models, generative AI and machine learning, the watsonx.data fit-for-purpose data store built on an open lake house architecture and the watsonx.governance toolkit to help enable AI workflows to be built with responsibility and transparency.
The IBM Concert solution is an AI-powered automation solution that offers intelligent resilience for complex IT operations such as patch management and the orchestration of security-related activities. It brings together all relevant data and specializations for AI-driven recommendations and workflows. IBM Concert helps reduce operational costs associated with patching vulnerabilities through fast response times and higher efficiency in securing all systems, thereby freeing up IT resources and manpower that can be used for other productive purposes. Leveraging Generative AI, IBM Concert develops an optimized and prioritized patching plan by creating contextual information about system topology and business requirements that enables end-to-end AI-powered automation.
IBM works closely with a diverse AI partner ecosystem through an open and collaborative approach to plan, build, implement and operate generative AI solutions. This open ecosystem approach is likely to help clients define the right models and architecture to deliver their desired outcomes. IBM has collaborated with SAP SE SAP to tap generative AI technology within the retail industry. The collaboration is likely to facilitate higher productivity and help accelerate business transformation in consumer-packaged goods and retail firms. The company also collaborated with Salesforce, Inc. CRM to drive increased productivity and help accelerate business transformation with generative AI.
Other Blue-Chip Tech Firms Focusing on AI
Amazon.com, Inc.’s AMZN expansion of its Bedrock platform has positioned it as a frontrunner in the enterprise AI race. Amazon Bedrock has emerged as a game-changing, fully managed service that offers enterprises seamless access to high-performing foundation models from leading AI companies. The platform's recent developments, including automated reasoning checks and multi-agent collaboration capabilities, address critical challenges in AI adoption while opening new revenue streams for Amazon's cloud division.
Microsoft Corporation MSFT is striving to maintain its competitive edge in AI with the introduction of the Agent Store, which creates a new marketplace for AI-powered workplace assistants. The platform features more than 70 agents and provides developers with monetization opportunities through Microsoft 365 Copilot integration. The Azure AI Foundry application and agent development hub has been adopted by developers at more than 70,000 enterprises and digital-native companies. Microsoft's Azure AI Agent Service has been utilized by more than 10,000 organizations to build, deploy and scale agents.
IBM’s Price Performance, Valuation and Estimates
IBM has surged 22.1% over the past year compared with the industry’s growth of 14.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, IBM trades at a forward price-to-sales ratio of 3.24, below the industry.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for IBM’s earnings for 2025 has been on the rise over the past 30 days.
Image Source: Zacks Investment Research
IBM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can IBM's Focus on Innovative AI Solutions Spur an Uptrend?

The T Rowe Price Capital Appreciation Premium Income ETF is seeing unusually high volume in afternoon trading Thursday, with over 157,000 shares traded versus three month average volume of about 54,000. Shares of TCAL were down about 0.3% on the day.
Components of that ETF with the highest volume on Thursday were Walmart, trading down about 4.3% with over 29.9 million shares changing hands so far this session, and Microsoft, up about 0.3% on volume of over 4.5 million shares. Cytokinetics is the component faring the best Thursday, up by about 2.4% on the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Thursday's ETF with Unusual Volume: TCAL

Alibaba Group's BABA aggressive AI strategy is rapidly becoming an expensive gamble that threatens to destroy shareholder value rather than create it.
Despite appearing cheap on traditional metrics, Alibaba represents a classic value trap where superficial attractiveness masks deeper structural problems. Alibaba continues to trade at a premium valuation with a Value Score of C. The market has priced in AI upside while underestimating execution risks and capital intensity required for meaningful transformation.
While management trumpets AI as the company's salvation, the underlying fundamentals reveal a deteriorating business model facing relentless competitive pressure and unsustainable capital requirements that make BABA a clear sell for 2025.
Alibaba Group Holding Limited Price and Consensus
Margin Compression Accelerates Despite AI Hype
The most alarming development for Alibaba investors is the accelerating margin deterioration masked by AI revenue growth narratives. Mizuho expects Alibaba to experience meaningful margin contraction in the second quarter, with competitive pressure affecting margins continuing through the second half of 2025 and into 2026. The investment bank has slashed its June 2025 quarter EBITDA forecast from 55 billion RMB to 45 billion RMB, representing an 18% reduction that signals serious profitability concerns.
More troubling is the company's cash flow destruction. Free cash flow plummeted 76% to RMB3,743 million compared to RMB15,361 million in the same quarter of 2024, mainly attributed to increased cloud infrastructure expenditure. This dramatic deterioration exposes the hidden cost of Alibaba's AI ambitions - massive capital expenditures that are hollowing out the company's financial strength while delivering questionable returns.
The cloud business, supposedly Alibaba's crown jewel, requires enormous ongoing investment just to remain competitive. Despite triple-digit AI product revenue growth for six consecutive quarters, these gains come at an unsustainable cost structure that suggests the business model is fundamentally flawed rather than temporarily challenged.
Competitive Annihilation From Multiple Fronts
Alibaba faces an unprecedented competitive assault that threatens its core market position. Competition in China's e-commerce and cloud markets continues to intensify. Domestic rivals like PDD Holdings PDD and ByteDance's Douyin maintain pressure on e-commerce operations, while international cloud providers like Microsoft MSFT and Amazon AMZN compete for enterprise customers. With the stock declining 7.9% over the past six months while underperforming the Zacks Internet-Commerce industry and the Zacks Retail-Wholesale sector, investors are paying elevated prices for a deteriorating business.
BABA Underperforms Peers & Sector in 6 Months
Image Source: Zacks Investment Research
PDD Holdings reported 94% year-over-year rise compared to Alibaba's 9% growth in the same quarter, demonstrating how quickly market dynamics can shift against established players. The emergence of social commerce and live-streaming sales channels represents an existential threat to Alibaba's traditional marketplace model, requiring massive investment in areas where the company lacks competitive advantages.
Douyin increased gross merchandise volume (GMV) by 46% year over year between August 2023 and July 2024, while Alibaba's flagship marketplaces Taobao and Tmall posted only 5% GMV growth. This stark performance gap illustrates how rapidly Alibaba is losing market share to more agile competitors. Douyin is integrating its supermarket and hourly delivery services, heating up competition in China's instant commerce sector against Alibaba. This forces Alibaba into expensive defensive battles across multiple fronts while competitors focus resources on specific market segments.
Regulatory and Earnings Deterioration
The regulatory environment continues deteriorating with new e-commerce rules requiring platforms to reduce merchant fees, directly pressuring Alibaba's already-strained margins. The Zacks Consensus Estimate for fiscal 2026 earnings indicates a decline of 4.77% year-over-year to $8.58 per share. The market appears to be pessimistic about Alibaba's growth trajectory. This continued earnings contraction occurs despite modest revenue growth, highlighting operational inefficiencies and competitive pressure.
Image Source: Zacks Investment Research
The company's strategic AI pivot requires patience and capital that rational investors should be unwilling to provide, given superior alternatives available in both technology and e-commerce sectors. Alibaba's transformation story may eventually succeed, but the execution risks, competitive threats, and capital intensity make it an unsuitable investment for 2025.
Conclusion
Investors seeking growth should look elsewhere rather than hoping Alibaba can successfully navigate its mounting challenges while simultaneously funding an expensive AI transformation. The risk-reward profile simply doesn't justify maintaining exposure to this deteriorating situation. BABA stock currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Alibaba Doubles Down on AI Margins: Time to Hold or Cut Your Losses?

Key Points
Purchase valued at ~$98.75 million, based on Walmart shares' average price in Q2 2025.
The trade represented 1.6% of Advisory Services Network’s 13F reportable AUM.
Walmart became the fund’s fourth-largest disclosed holding after the transaction.
What happened
According to a filing with the U.S. Securities and Exchange Commission dated August 19, 2025, Advisory Services Network, LLC increased its position in Walmart (NYSE:WMT) by 1,037,777 shares during Q2 2025. The estimated value of the transaction was $98.75 million. The firm reported holding 1,280,829 shares as of June 30, 2025.
What else to know
This purchase brought Walmart to 2.0% of the fund’s 13F assets under management (AUM) at the endof the second quarter.
Top holdings after the filing:
Nvidia: $225.78 million (3.63% of AUM)
Apple: $183.46 million (2.95% of AUM)
Microsoft: $147.66 million (2.38% of AUM)
Walmart: $125.50 million (2.02% of AUM)
Amazon: $119.91 million (1.93% of AUM)
Walmart shares were priced at $100.70 as of August 18, 2025
Dividend yield: 0.90%; Forward P/E (FY2026): 38.75; EV/EBITDA (TTM): 21.06; 5-year revenue CAGR: 5.38%.
Company Overview
Market Capitalization
$808.54 billion
Revenue (TTM)
$685.09 billion
Net Income (TTM)
$18.82 billion
Dividend Yield
0.90%
Company Snapshot
Offers a broad range of products including groceries, consumables, health and wellness items, home goods, apparel, electronics, and financial services through physical stores and e-commerce platforms.
Targets value-conscious consumers globally, serving both individual shoppers and businesses through its Walmart U.S., Walmart International, and Sam's Club segments.
Operates a multi-channel retail model that integrates physical stores with digital commerce to maximize reach and convenience for customers.
Walmart operates a multi-channel distribution platform, integrating physical stores with expansive e-commerce operations to reach a broad customer base.
Foolish take
Walmart is a globally recognized retailer with some of the most purchasing power in the world, giving it the ability to function as a discounter at both the big box retail level and the discount warehouse level. Not only does it compete with Target, it also competes with Costco under its Sam’s Warehouse branding.
Over the last few years, Walmart seems to have taken more of Target’s market share by simply existing and having cheaper products, which speaks to a resilience during difficult economic times. It also pays consistent, but small dividends, which can make it appealing to a range of stock investors.
Walmart not only has solid fundamentals, it has seen increasing income and revenues in a time when other retailers are having much more difficulty. This is in part due to the massive purchasing power Walmart wields, in part due to consumers fleeing their preferred retailers for less expensive options, and in part due to Walmart’s continued expansion into new areas, including a long-term push into eCommerce.
This blue chip stock has a game plan that includes streamlining logistics and upgrading technology to get it through difficult financial times, but will feel the pinch from global tariffs that are still in the making. Even so, its ultra-thin margins should keep it competitive in areas like grocery that are not optional for consumers.
Glossary
13F: A quarterly SEC filing by institutional investment managers disclosing holdings of certain U.S. securities.
Assets Under Management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Dividend Yield: Annual dividends per share divided by the share price, shown as a percentage.
Forward P/E: Price-to-earnings ratio using forecasted earnings for the upcoming fiscal year.
EV/EBITDA: Enterprise Value divided by Earnings Before Interest, Taxes, Depreciation, and Amortization; measures company valuation.
CAGR: Compound Annual Growth Rate; the mean annual growth rate of an investment over a specified period longer than one year.
TTM: The 12-month period ending with the most recent quarterly report.
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Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, Nvidia, and Walmart. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Advisory Services Network Loads Up 1.03 Million Walmart Shares

Short sellers are wagering against top AI stocks currently, which has earned them billions. On Wednesday, the Nasdaq Composite fell 0.7%, capping a two-day decline of 1.5% as concerns about the sustainability of the AI boom made the rounds.
According to data from S3 Partners, short sellers amassed $5.6 billion on wagers against AI-linked companies in just two trading sessions.
Big Tech Takes a Hit
Among the Magnificent Seven, Meta META has been the hardest hit, down 4% over the past five sessions. NVIDIA NVDA slipped 3.8%, while Microsoft MSFT and Apple AAPL fell nearly 3% each. Alphabet GOOG also fell about 1%. Short bets against these five giants alone led to $2.8 billion in profits for investors over the past two days.
Sharp Losses Outside the Tech Biggies
Beyond Big Tech, losses were steeper. Advanced Micro Devices AMD slid more than 10% in the last week, while Broadcom AVGO and Micron MU each fell over 5%. AI data center operator CoreWeave CRWV — seen as an AI “pure play” — nosedived 24% in the same period.
Meta and Palantir Under Pressure
Meta has made huge investments in AI. Despite this, short sellers increased positions worth $4.7 billion over the past week, reaping $1.1 billion in profits in just two days. Meanwhile, Palantir PLTR, which had surged more than 150% since April, has now fallen over 15% in its longest losing streak since March. Investors shorting Palantir have gained more than $1 billion.
AI Bubble Speculations
The recent downturn has been fueled by shifting sentiment. On Monday, researchers for MIT’s Project NANDA released a report saying 95% of companies it studied are getting no return on AI. The findings of the report were first detailed by Fortune, as quoted on Yahoo Finance.
Moreover, OpenAI CEO Sam Altman recently indicated that the industry may be in a bubble reminiscent of the dot-com crash. DA Davidson analyst Gil Luria compared the selloff to a pendulum swing, indicating that AI still has “limited applications” outside of chatbots and search. This has tempered enthusiasm among investors, as quoted on Yahoo Finance.
Any Silver Lining?
AI bulls like Wedbush’s Dan Ives remain optimistic. He described the current pullback as temporary and said AI will continue to drive markets higher. He added that “the tech bull cycle will be well intact at least for another 2-3 years given the trillions being spent on AI.”
Inverse ETFs in Focus
Still, if you are of the view that the AI stock valuations are too stretched, you can play inverse tech-based exchange-traded funds (ETFs) at the current level.
These ETFs include the likes of ProShares UltraPro Short QQQ SQQQ, Direxion Daily Technology Bear 3X Shares TECS, MicroSectors Solactive FANG & Innovation -3X Inverse Leveraged ETN BERZ and ProShares UltraShort QQQ QID, which have gained materially. SQQQ, TECS, BERZ and QID gained 1.8%, 1.8%, 4% and 1.2%, respectively, on Aug. 21, 2025.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Microsoft Corporation

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