👉 Can Earnings Season Save the Market?

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ASML reported a Q2 that beat on every line — catalyzed by significant revenue and profitability growth driven by sustained artificial intelligence infrastructure investments. 

Extreme ultraviolet (EUV) systems accounted for €3.8 billion in revenue, while non-EUV products contributed €2.8 billion. The company noted the shipment and revenue recognition of one next-generation High-NA EUV system during the period. The Installed Base Management division served as a massive profitability driver, generating €2.76 billion in sales. This represented an outperformance of roughly €300 million against internal targets as customers aggressively upgraded existing lithography tools to improve fab productivity. 

Management focused on the structural demand created by the proliferation of artificial intelligence. Management emphasized that AI investments are forcing semiconductor manufacturers to accelerate their capacity expansion plans for both advanced logic and memory chips. To meet this surging customer commitment, ASML announced ambitious internal capacity scaling. The company plans to increase its Low-NA EUV and DUV immersion manufacturing capacity by 30% for 2027 and is actively evaluating an additional 30% expansion for 2028.

The bigger story is the full-year raise. ASML now expects 2026 revenue of €43–45 billion with gross margin of 54–56%, a meaningful step up from prior guidance. Behind the numbers is a single force: hyperscaler AI capex. Every new leading-edge fab in Taiwan, Korea, Arizona, and Germany runs through ASML’s EUV monopoly. 

Long ASML.

Netflix delivered double-digit revenue growth that fell short of Wall Street’s expectations. Investors also reacted very negatively to a softer-than-expected third-quarter financial outlook and the announcement that the company will reduce the frequency of its viewership data disclosures.

Revenue expansion was broad-based across all geographic regions. Latin America led the growth with a 21% increase, while the core United States and Canada market grew by 10%. Content engagement remained stable, with total view hours growing 2% in the first half of the year. However, a significant operational shift was announced regarding transparency: management stated that the company will move its granular "What We Watched" engagement report from a biannual to an annual release starting in 2027.

Free cash flow for the quarter was $1.53 billion, a decrease from the prior-year period, which management attributed to higher cash taxes tied to a termination fee. Despite this temporary dip in cash generation, Netflix aggressively returned capital to shareholders. The company executed the largest single-quarter share repurchase in its history, buying back $4.7 billion worth of its own stock.

Management focused on the stability of the financial model and the growing value of the content library. The executive team noted that the financial performance remains on track to meet annual objectives and highlighted that price increases implemented earlier in the year are performing in line with expectations.

Looking ahead, Netflix provided a cautious outlook for the third quarter of 2026. The company expects revenue of $12.86 billion and diluted earnings per share of $0.82, both of which fell slightly below the market's consensus expectations. For the full fiscal year 2026, management narrowed their revenue forecast to a range of $51.0 billion to $51.4 billion and reaffirmed their expectation for a 31.5% full-year operating margin.

Long NFLX.

UnitedHealth Group’s earnings were characterized by exceptional operating leverage and a sharp reduction in its medical care ratio — exceeding Wall Street’s expectations on both the top and bottom lines. 

This performance was anchored by a strategic pivot in Medicare Advantage. By intentionally exiting unprofitable regions and restructuring benefit packages, the company accepted a projected full-year enrollment decline of roughly 1.1 million members to successfully protect operational profitability and drive Medicare margins above 3%. The commercial insurance segment faced headwinds; commercial cost trends ran above 11%, driven by provider billing intensity and frictions within the No Surprises Act arbitration process. The Optum division remained a reliable pillar of stability, setting an operational pace that management expects will yield over $25.45 billion in full-year operating profit across its care delivery, analytics, and pharmacy benefit management units.

UnitedHealth generated $11.1 billion in operating cash flow during the quarter. The company actively deployed this liquidity toward shareholder returns and balance sheet optimization. Through mid-July, management allocated $4 billion to repurchase 11.4 million shares of stock and raised the annual share buyback target to at least $5 billion. 

Management focused on the structural quality of the quarter's earnings and the ongoing simplification of enterprise operations. The executive team emphasized that targeted operational cost increases — reflected in a 12.7% operating cost ratio — were driven by deliberate investments in artificial intelligence and automation designed to modernize care delivery and claims processing over the long term.

Looking ahead, the company increased their EPS guidance to $19.75 and operating cash flow to guidance to $24 billion. 

Long UNH.

“The swap at the top is really about a rotation in how investors are pricing AI. The infrastructure trade has been the entire story for two years. Now the question is who captures the consumer surplus — and Apple has a very strong claim.”