Piper highlights Meta as best large-cap pick, lifts forecasts on AI strength
"We like META most in Large Caps given strong checks & AI investments," the analysts wrote, raising their estimates for the company.
Digital ad spend grew 6.6% year over year in the second quarter, a notable acceleration from the first quarter and 130 basis points above Piper's expectations.
'2Q results returned to a beat/raise cadence after 1Q25 was the worst our ad buyer has seen since 4Q22,' the firm noted in its note assessing the sector.
June was reportedly the strongest month, with performance advertisers capitalizing on brand and China reseller weakness.
Commentary from Cannes also boosted optimism. Piper highlighted Meta's new WhatsApp ad units, with one ad buyer describing them as 'effective & interest-based' despite initial skepticism.
Meta's resilience was said to have been evident throughout, the analysts said, helped by lower CPMs that 'brought in new advertisers that were priced out of the market.'
AI continues to underpin Piper's bullish stance. The analysts pointed to the company's Reels product, new verticals such as travel and CPG, and CEO Mark Zuckerberg's hiring strategy and AI roadmap as key positives.
'We're excited to hear CEO Zuckerberg talk about the new AI hires and strategy,' they wrote, adding that investors appear braced for higher capital expenditures.
Piper recently lifted Meta's out-year estimates, projecting that third-quarter revenue could hit $47 billion, or 16% year-over-year growth.
'Best execution in Internet, reiterate OW,' the analysts concluded.
Related articles
Piper highlights Meta as best large-cap pick, lifts forecasts on AI strength
Paypal stock falls after JPMorgan plans data access fees
US working on trade deal with India, tariffs may drop below 20% - Bloomberg
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
30 minutes ago
- Yahoo
Stocks to watch this week: Microsoft, Apple, Shell, AstraZeneca and HSBC
Four more of the "Magnificent 7" are to due to report in the coming week, along with a raft of major companies across a range of sectors. Following on from Tesla (TSLA) and Alphabet (GOOGL, GOOG) earnings this week, Microsoft (MSFT), Meta (META), Apple (AAPL) and Amazon (AMZN) are next up from the Mag 7 to report. On the London market, Shell (SHEL.L) is due to report, having already flagged weaker trading and production for its integrated gas division in the second quarter. Another FTSE 100-listed (^FTSE) giant reporting in the week ahead is pharmaceuticals company AstraZeneca (AZN.L), which has just pledged $50bn of investment in its US operations. Meanwhile, HSBC (HSBA.L) will be the latest UK-listed bank to report, following on from Lloyds (LLOY.L) and NatWest (NWG.L) this week. Here's more on what to look out for: Microsoft (MSFT) – Releases fourth quarter earnings on Wednesday 30 July Tech companies are continuing to cut jobs to reduce costs and streamline operations. This includes Microsoft (MSFT), which recently revealed that it was cutting another 9,000 jobs globally, not long after it axed around 6,000 roles in May. And in a memo to staff on Thursday, CEO Satya Nadella admitted that the recent layoffs had been "weighing heavily" on him. "These decisions are among the most difficult we have to make," he said. "They affect people we've worked alongside, learned from, and shared countless moments with — our colleagues, teammates, and friends." He acknowledged that by "every objective measure, Microsoft is thriving — our market performance, strategic positioning, and growth all point up and to the right." However, Nadella added: "This is the enigma of success in an industry that has no franchise value. Progress isn't linear. It's dynamic, sometimes dissonant, and always demanding." Despite the recent layoff announcements, Microsoft (MSFT) shares have climbed since the company released third quarter results at the end of April and are currently up 21% year-to-date. The company beat expectations in the third quarter, reporting revenue of $70bn (£52.1bn) compared to forecasts of $68.4bn, according to Bloomberg consensus estimates. Earnings per share of $3.46 also beat estimates of $3.21. Read more: Tesla disappoints while Alphabet tops expectations to kick off Mag 7 earnings Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "Microsoft is the king of quietly going about its business and nailing execution along the way." He said cloud performance through Microsoft Azure was stronger than expected last quarter "and there could be some upside to guidance of 34-35% growth in next week's fourth-quarter results if it's been able to bring more supply online." "Margins will be in focus as eye-watering AI investment continues, but as supply/demand dynamics become more favourable there should be a natural tailwind," he said. Britzman added that there would also be "keen interest in how efforts to boost efficiency are progressing". "Recent reports suggest Microsoft has already saved over $500m in annual costs by integrating AI into its customer service functions," he said. "Some analysts think there's much more to come and will be keeping an eye out for any further commentary on AI driven cost savings." Apple (AAPL) – Releases third quarter results on Thursday 31 July Shares in Apple (AAPL) are down nearly 15% year-to-date, as tariff headwinds have weighed on the iPhone-maker. Apple CEO Tim Cook warned in a second-quarter earnings call at the beginning of May that tariffs were expected to add $900m to costs in the third quarter. Hargreaves Lansdown's Britzman said that this "sounds big, but is relatively small in the grand scheme of things". Apple's second-quarter results topped estimates, with revenue of $95.4bn compared with forecasts of $94.5bn, and EPS of $1.65 compared to expectations of $1.62. Read more: Stocks that are trending today Britzman said that investors will "hoping for more meat on the AI bone" in this latest set of results. "Apple's relatively disappointing developer conference had a distinct lack of news on the AI strategy and investors are rightly looking for some updates," he said. "Apple's approach to AI has fallen well short of what investors and consumers have come to expect from one of the world's leading brands," he added. "Apple Intelligence has so far failed to deliver the game changing experience that was promised, so investors should watch out any updates on new AI features and where Apple stands with Siri, another product with huge potential but poor execution." Shell (SHEL.L) – Releases second quarter results on Thursday 31 July Shares in oil major Shell (SHEL.L) fell in early July on the back of a trading update, in which the company warned that it expected to report lower trading and production results for its gas division in the second quarter. Shell lowered the top end of its production guidance for the integrated natural gas division to 900,000 to 940,000 barrels of oil equivalent per day (boe/d) for the quarter, compared with a range of 890,000 to 950,000 previously given. The upper end of its outlook for its liquefied natural gas (LNG) production was also lowered, to 6.4 to 6.8 million metric tons compared with a previous range of 6.3 to 6.9 million tons. Shell raised the lower end of its output guidance for its oil-focused upstream division, to a range of 1.66 million to 1.76 million boe/d, up from a previous projection of 1.56 million to 1.76 million boe/d. Stocks: Create your watchlist and portfolio AJ Bell's investment experts Russ Mould and Dan Coatsworth said: "Shell's shares are down by around 6% in the past year and oil & gas producers is the seventh worst performer within the 39 sectors that make up the FTSE All-Share (^FTAS) thanks, in the main, to soggy oil prices. "At the same time, the share price seems to be doing its best to ignore a steady recovery in natural gas, although is still not actually that far below May 2024's all-time high." In the full second quarter results next week, they said that analysts are looking for pre-tax profit of $5.5bn, down from $9bn in the first three months of the year and $7.4bn a year ago. As for Shell's preferred metric of adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), the benchmark is the $16.8bn figure the company reported in the second quarter of last year. "In terms of cash returns, Shell kept its quarterly dividend unchanged at 35.8 US cents in the first quarter (equivalent to a cash payout of $2.2bn)," said Mould and Coatsworth. "The oil major also ran a $3.5bn buyback in Q2 after a $3.3bn scheme in Q1 and analysts and shareholders will look to see what chief executive Wael Sawan offers for the third quarter." AstraZeneca (AZN.L) – Releases first half results on Tuesday 29 July Earlier this week, AstraZeneca (AZN.L) announced plans to invest $50bn in the US by 2030, as the threat of Trump's tariffs loom over the sector. AstraZeneca said in a statement on Monday that the cornerstone of this investment will be a new multi-billion dollar manufacturing facility in Virginia. In addition, the company said that the investment would go towards other facilities in the US, including a research and development centre in Cambridge, Massachusetts, as well as manufacturing facilities for cell therapy in Maryland and California. Read more: NatWest beats on profits and announces £750m share buyback AstraZeneca said that these investments would collectively help the company deliver its goal of reaching $80bn in total revenue by 2030, of which 50% is expected to be generated in the US. The announcement comes as the Trump administration carries out a Section 232 probe to determine which drug manufacturers are operating in countries that pose a national security threat to the US. Trump teased earlier this month that an announcement around pharmaceuticals tariffs would be coming soon, saying in a cabinet meeting that the rate could be as high as 200%. In terms of performance, AstraZeneca (AZN.L) posted a 10% increase in revenue in the first quarter to $13.6bn, which it said was driven by double-digit growth in oncology and biopharmaceuticals. Reported earnings per share of $1.88 were up 34% on the same quarter last year. At the time, AstraZeneca reiterated its guidance for the year, expecting total revenue to increase by a high single-digit percentage and core EPS to grow by a low double-digit percentage. HSBC (HSBA.L) – Releases first half results on Wednesday 30 July In the first quarter, HSBC (HSBA.L) posted a $3.2bn drop in pre-tax profits to $9.5bn compared with the same period last year, though this was well ahead of expectations of $7.8bn, according to Reuters. HSBC said the drop was primarily because of the net impact in the first quarter of last year of business disposals in Canada and Argentina. The bank said that contributors to profits in the latest quarter included strong performance in its wealth business, as well as in foreign exchange (forex), debt and equity markets. Net interest income (NII) – the gap between what it pays out to savers and receives from borrowers in interest – fell by $0.4bn to $8.3bn. Revenue fell by $3.1bn, or 15%, year-on-year to $17.6bn. Read more: IMF wants Bank of England to ease interest rates 'gradually' HSBC said its board had approved a first interim dividend of $0.10 per share and planned to launch a share buyback of up to $3bn, which it expected to begin shortly after its annual general meeting on 2 May and complete before its interim results announcement. Richard Hunter, head of markets at Interactive Investor, said: "The overhang from China and the tariff trade wars may not be central to its numbers next week from an investment viewpoint. Whereas HSBC had been moving towards becoming a business with a slavish reliance on interest rate movements and levels, the revised and increasing focus on the growth in affluent wealth, especially in Asia, is key to the new offering. "The group has been investing heavily in this move, giving HSBC higher, but more diversified income streams," he added. " "Apart from the longer-term potential for the key Chinese market, the group previously identified areas such as India and Vietnam as being some of the fastest growing economies at present, while the building economic connections between Asia and the Middle East, notwithstanding any geopolitical conflicts, are also emerging opportunities for HSBC with its sprawling footprint." Other companies reporting this week include: Monday 28 July Primary Health Properties (PHP.L) Science Group (SAG.L) Cranswick (CWK.L) Essilor Luxottica ( Heineken ( Porsche ( Tuesday 29 July Games Workshop (GAW.L) Croda (CRDA.L) ConvaTec (CTEC.L) Shaftesbury Capital (SHC.L) Morgan Sindall (MGNS.L) Greggs (GRG.L) Inchcape (INCH.L) Staffline (STAF.L) SThree (STEM.L) Forterra (FORT.L) Restore (RST.L) AG Barr (BAG.L) Tristel (TSTL.L) Advantest (6857.T) NEC (6701.T) L'Oréal ( Christian Dior ( Air Liquide ( Orange ( Ferrovial ( Philips ( Endesa ( Kering ( Logitech ( Brembo ( TF1 ( Visa (V) Procter & Gamble (PG) Merck (MRK) United Health (UEEC) Boeing (BA) Spotify (SPOT) Starbuck's (SBUX) Royal Caribbean Cruises (RCL) Mondelez (MDLZ) UPS (UPS) Norfolk Southern (NSC) Electronic Arts (EA) Sofi Technologies (SOFI) Teradyne (TER) Qorvo (QRVO) Caesar's Entertainment (CZR) Wednesday 30 July Hargreaves Services (HSP.L) Rio Tinto (RIO.L) GSK (GSK.L) Bodycote (BOY.L) Hostelworld (HSW.L) Franchise Brands (FRAN.L) Fujitsu (6702.T) Kyocera (6971.T) Japan Airlines (9201.T) Alibaba (BABA, Prada ( Hermès ( Airbus ( UBS ( Banco Santander (BNC.L) Intesa SanPaolo ( Siemens Healthineers ( Danone ( Mercedes Benz ( Caixa Bank ( Adidas ( BASF ( Wolters Kluwer ( CapGemini ( Telefonica ( Leonardo ( Carrefour ( Krones ( Meta Platforms (META) Qualcomm (QCOM) ARM (ARM) LAM Research (LRCX) Altria (MO) Hess (HES) Carvana (CVNA) Ford (F) American Eagle (AEO) Hershey (HSY) GE Healthcare (GEHC) Kraft Heinz (KHC) eBay (EBAY) Smurfit Westrock (SW) Skyworks (SWKS) F5 (FFIV) Alamos Gold (AGI) MGM Resorts (MGM) Harley Davidson (HOG) Thursday 31 July British American Tobacco (BATS.L) Unilever (ULVR.L) London Stock Exchange (LSEG.L) Rolls-Royce (RR.L) SEGRO (SGRO.L) Standard Chartered (STAN.L) Haleon (HLN.L) Mondi (MNDI.L) Weir (WEIR.L) Endeavour Mining (EDV.L) Schroders (SDR.L) Drax (DRX.L) Elementis (ELM.L) Hammerson (HMSO.L) Spire Healthcare (SPI.L) Helios Towers (HTWS.L) Indivior (INDV.L) Sabre (SBRE.L) Coats (COA.L) Robert Walters (RWA.L) Nichols (NICL.L) Toyota Motor (7203.T) Hitachi (6501.T) Tokyo Electron (8035.T) Japan Tobacco (2914.T) Samsung Electronics ( Budweiser APAC ( Schneider Electric ( Sanofi ( ABInBev ( Ferrari (RACE) ENEL ( BBVA (BVA.L) Universal Music ( BMW ( St Gobain (COD.L) Subsea 7 ( Pirelli ( Clariant ( UCB ( Legrand ( Amadeus IT ( Société Générale ( ArcelorMittal ( Mediobanca ( Lufthansa ( AirFrance-KLM ( Amazon (AMZN) Mastercard (MA) AbbVie (ABBV) Stryker (SYK) Comcast (CMCSA) KLA-Tencor (KLAC) KKR (KKR) Bristol-Myers Squibb (BMY) Coinbase (COIN) CVS (CVS) Cigna (CI) Roblox (RBLX) Ingersoll-Rand (IR) Clorox (CLX) Baxter (BAX) Norwegian Cruise Lines (NCLH) Shake Shack (SHAK) Verona Pharma (VRNA) Azenta (AZTA) Friday 1 August International Consolidated Airlines (IAG.L) Intertek (ITRK.L) Melrose Industries (MRO.L) Pearson (PSON.L) IMI (IMI.L) KDDI (9433.T) TDK (6762.T) Suzuki Motor (7269.T) Nippon Steel (5401.T) Yamaha (YAMCF) Daimler Truck (DTG) AIB (AIBGY) Jeronimo Martins (JRONF) ConocoPhillips (COP) Kimberly-Clark (KMB) AngloGold Ashanti (AU) DraftKings (DKNG) Moderna (MRNA) Icahn Enterprises (IEP) Goodyear Tire (GT) You can read Yahoo Finance's full calendar here. Read more: UK set to lose 16,500 millionaires this year as non-dom status ends UK's rising debt cost puts Reeves and tax rises in spotlight London IPO fundraising slumps in blow to UKSign in to access your portfolio
Yahoo
10 hours ago
- Yahoo
Markets are about to kick off a huge week of earnings and macro data
The stock market is headed for its biggest week of the summer. Investors are watching Magnificent Seven earnings, the Fed meeting, and a barrage of macro data. Trump's August 1 deadline for tariff negotiations will cap off the week. This week is jam-packed with potential catalysts to move markets. Investors are looking at a heavy week of economic data and market-moving updates, with the Federal Reserve set to kick off its latest policy meeting, four out of the Magnificent Seven due to report earnings, and GDP and jobs data on deck. Here are the things investors can expect to look forward to: Mag 7 earnings More of the biggest tech giants in the US are set to report earnings for the last quarter, offering investors some insight on the state of the AI trade and whether companies are still willing to shell out for artificial intelligence chips. Here's who is on deck to report after the close: Wednesday: Meta, Microsoft. Thursday: Amazon, Apple Of the Mag 7 group, Alphabet and Tesla already reported earnings last week. Alphabet beat earnings and revenue estimates for the second quarter, but investors were concerned about the company's unexpected $10 billion increase in capital expenditures. Tesla, which has been mired in a long-running EV sales decline, saw its biggest quarterly revenue drop in at least a decade. Chip titan Nvidia will report at the end of August. Of the 34% of S&P 500 companies that have reported their results so far, 80% have beat earnings estimates, above the running average for the last 10 years, according to the latest update from FactSet. Data deluge The market is also gearing up for fresh inflation, jobs, and economic growth data coming out this week. Here's the timeline of what investors can expect: Wednesday Second-quarter GDP (second estimates). Economists expect the second estimate for second-quarter GDP to show that the economy expanded 2.3% year-over-year last quarter. Advanced estimates from the Commerce Department suggested that real GDP rose 2.8% year-over-year. ADP private payrolls. Economists expect the private sector to add 82,000 in July. That compares to the 33,000 jobs the private sector lost in June, according to last month's ADP report. Thursday Personal Consumption Expenditures inflation. The Fed's preferred inflation measure will get an update this week. Core PCE rose 2.7% in May, with June's figure also expected to clock in at 2.7%. Friday July Jobs report. Economists expect the US to add 102,000 jobs in July, down from the 147,000 payrolls added in June. Trump's tariff deadline Trump's August 1 deadline for tariff negotiations is coming up at the end of the week. Trump announced a fresh trade deal with the European Union on Sunday, which includes a 15% tariff on European imports and several stipulations for the EU to invest in the US and purchase more goods in key sectors. Yet, other countries are still negotiating. The US has only inked a handful of trade agreements with other countries, but Trump's team has said in recent weeks it expects more deals to follow. Some investors are hoping Trump will extend his deadline for tariffs, as he did earlier in the year, but Commerce Secretary Howard Lutnick said the deadline is set in stone with "no more grace periods" planned when speaking to Fox News on Sunday. Countries that haven't reached a trade agreement with the US by then will be subject to the tariff rate the president proposed on Liberation Day, or the tariff rate he proposed in a slew of letters sent to 23 countries that he also published on Truth Social. Some sector tariffs, like Trump's 50% tariff on copper imports, are also set to kick in on Friday. Fed meeting All eyes are on Fed Chair Jerome Powell on Wednesday as the central bank concludes its July meeting and announces its next interest rate decision to the public. Markets largely expect the central bank to keep rates steady as it eyes the impact of tariffs on inflation. Investors are pricing in a 98% chance the Fed will leave its benchmark rate unchanged this week, and a 44% chance the Fed will cut rates just once or twice by the end of the year, according to the CME FedWatch tool. "While the Federal Reserve is under pressure to cut interest rates, it's clear that this economy has been able to and should continue to be able to withstand the current level of interest rates. Stocks are up almost 10% so far this year, and we haven't seen a rate cut in eight months," Paul Stanley, the CIO of Granite Bay Wealth Management, wrote in a note. Trump has been highly critical of the Fed Chair, pushing for lower interest rates this year. But the president seemed to suggest he would accept whatever decision FOMC members came to when visiting the Fed last week. "Well, I'd love him to lower interest rates. Other than that, what can I tell you?" Trump said when speaking to reporters on Wednesday. "We would be helped if interest rates would come down, but we're going to see how the Board rules on that soon. I'd love to see them come down a lot," he later added. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
11 hours ago
- Bloomberg
Meta Names Chief Scientist for New AI Unit
Meta continues its hiring push for its new Superintelligence unit and names Shengjia Zhao, who joined from OpenAI, as the group's new chief scientist. Bloomberg's Kurt Wagner discusses the unit's growth with Caroline Hyde and Ed Ludlow on 'Bloomberg Tech.' (Source: Bloomberg)
