TOP STORY
🚀 SpaceX Rockets 26% After Its First-Ever Earnings Report

🥳 Investors were in for a nice surprise this week, with markets soaring to a new all-time high and the Nasdaq posting its best month since last April as an Iran peace deal finally gets more concrete.

🌍 Across the indexes:

• The S&P 500 rose +3.58%

• The Nasdaq 100 rose +5.10%

• The TSX rose +3.28%

🚀 Q2 earnings season is now nearly wrapped up, with SpaceX filing its first-ever earnings report as a public company, sending shares up nearly 26% to close the week (our feature story this week).

🛍️ At the same time, Shopify, which only a few weeks ago was down over 30% year-to-date, posted earnings and ended this week up 24% in one of the greatest turnaround stories of 2026.

📉 One piece of bad news was that the U.S. jobs report for July came in below expectations (jobs fell by -23,000 vs. the 90,000 gain expected).

📈 But despite the jobs miss, the market rose, with investors betting that added jobs pressure will give the Fed even less reason to hike interest rates next month (which is good for the stock market).

🛰️ But without further ado, let’s dive into our top story of the week, SpaceX’s first earnings report, why the stock soared, and my + analyst thoughts on the stock.

🚀 SpaceX Surges 26% Following Its First-Ever Earnings Report As a Public Company

🏆 This Tuesday marked the very first time SpaceX ($SPCX) reported earnings, and the numbers were a beat across the board, with growth well above expectations:

• ✅ Revenue hit $7.81 billion vs. $6.93 billion expected, up 92% year-over-year

• ✅ Earnings per share came in at -$0.09 vs. -$0.26 expected

• ✅ Quarterly net losses fell to $541 million, down from about $1 billion a year ago

🛰️ For the quarter, Connectivity (a.k.a., Starlink) remained the driving engine of the business, pulling in $4.3 billion in revenue on 12 million subscribers, up 66% year-over-year, while its “AI segment” (Grok and the new compute infrastructure business) saw quarterly revenue soar 247% year-over-year to $2.6 billion.

🎯 SpaceX’s CFO also said the company is on pace to hit a $100 billion annualized revenue run rate by the end of this year, and that SpaceX has already pulled back its internal $1 trillion revenue target from 2031 to 2030.

📉 But even though the stock ended the week up big, shares originally fell about 8% in after-hours trading.

💸 Rising AI CapEx Spend, Lower Profits

🤖 The cause of the initial stock drop was the same theme we’ve been seeing for weeks now: jitters over rising AI spending.

💰 AI spending absolutely exploded this quarter, with $15.8B spent on AI investments in Q2. SpaceX is now projected to spend $60B across 2026, up from the $46B previously estimated.

😮 This represented a massive 105% increase from just last quarter, dwarfing the $2.6B SpaceX earned from AI revenue and landing at nearly double SpaceX’s entire revenue for the quarter.

👀 This is consistent with what I said a month or so back when we covered SpaceX’s IPO, that SpaceX is quickly becoming more of an AI story than a space company.

💡 SpaceX defended these investments, saying that unlike some of the other data center buildouts that can take many years to recover costs, SpaceX has a payback of less than one year, with Elon saying:

🤑 Basically the argument is that the AI division can fund its own growth rather than relying on ​Starlink's cash generation.

🚀 And despite the initial drop, these arguments were enough to ease fears over the AI spending, with SpaceX jumping the next morning and ending the week up 26%, snapping it out of a 4-week losing streak that had brought the stock down 46% from its peak.

🤔 But not everyone is so confident in the AI spending strategy… but before we dive into what analysts are saying, a quick word from this week’s sponsor, Dynamic!

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TOP STORY CONT.
🧐 Some Analysts Skeptical On SpaceX’s AI Timelines

⏰ A lot of SpaceX’s strategy relies on its payback timelines, and unfortunately, accurate timelines aren’t something Elon is exactly known for… as one analyst puts it:

💬 Drew Cupps, a portfolio manager at Polen Capital, calls out that:

🙏 But says he has faith in Musk’s vision, engineering leadership and execution track record, and holds a position in SpaceX.

✨ And that’s ultimately what this comes down to, as it does with Tesla as well. Both firms are trading at the ‘Musk premium’, with the valuation based heavily on the hope that Musk can flawlessly execute his vision.

🤑 For Musk fans, that bet might be a no-brainer. For me, I’m a bit more cautious, partially due to the constantly shifting timelines on the robo-taxi and Optimus with Tesla. So personally, I’ll be staying out of this one, but for the 9,000 folks in the community that hold SpaceX, I hope I’m wrong!

Next up, let’s switch gears to a stock I do hold that also turns out to be one of my best performers (up 257% since I bought): Shopify!

🌾 But first, a quick word from our other sponsor this week, Harvest ETFs…

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TURNAROUND STORY
🛍️ How Shopify Went From Being the “AI Loser” to Having Its Best Day Since 2024

📉 2 weeks ago, Shopify was one of 2026’s biggest disappointments, down over 30% year-to-date.

🚀 But this week’s earnings turned that around, with the stock soaring 24% and notching its best day since 2024.

📊 By the numbers:

• ✅ Revenue hit $3.58 billion vs. $3.45 billion expected, up 34% year-over-year

• ✅ Earnings per Share hit $0.42 vs. $0.39 expected, up 20% year-over-year

• ✅ Gross merchandise volume (GMV) climbed to $115.57 billion, up 32% year-over-year

🤿 So let’s dive into the turnaround…

🔥 The Turnaround

🎯 A ton of stocks have been getting squashed by AI as investors fear their business models will be disrupted, and Shopify was caught in the crossfire.

🤷 For Shopify, the market was asking, “why build a Shopify store when a chatbot (or an AI agent) can do your shopping for you?”

😰 Google faced the same scare, with the stock tumbling as investors worried that ChatGPT would replace search.

🏆 But this quarter, Shopify is proving that, like Google, it could be an AI winner, with Shopify’s president pointing out that its growing AI partnerships are laying the foundation for Shopify to be a leader in the new age of agentic commerce:

💰 And the numbers last quarter backed this up…

🤖 In its earnings report, Shopify reported that orders coming from AI agents and other AI-related search 3x’d year-over-year. With that same traffic converting better specifically because Shopify is feeding AI clean data.

💡 Unlike other sites where AI tools have to scrape the data, Shopify is set up to feed official catalog data directly to the AI, which is leading to a 2x conversion rate in sales.

🎯 This leaves me, and many analysts, bullish - with many increasing their price targets this week after the results.

CBOE ETF ALERT
🎂 Happy Anniversary to the Franklin U.S. Quality Moat Dividend Index ETF!

🎂 Normally in the CBOE ETF Alert we highlight newly listed ETFs, but today we’re highlighting an ETF that will be celebrating its 1-year anniversary this coming Friday!

💸 That ETF is the Franklin U.S. Quality Moat Dividend Index ETF, a fund that holds U.S. dividend-paying stocks with durable competitive advantages, strong growth, and high-quality characteristics for those seeking total return and long-term income and growth potential, tracking the Morningstar US Dividend Opportunity Index.

📊 At the time of writing, the ETF holds over 100 companies, including popular names like Broadcom, Nvidia, Mastercard, Visa, Home Depot, Eli Lily, Coca Cola, and more.

IN OTHER NEWS
🚨 Other Top Headlines

🧠 Demis Hassabis Steps Down as Google DeepMind CEO

• 🤖 Google had a shock to its AI team this week when DeepMind co-founder Demis Hassabis announced he would be stepping down as CEO of the AI division to become chairman and chief scientist at Alphabet.

• 😰 According to Time, Hassabis’ departure comes at a time when Gemini has faced repeated delays and fallen behind models from OpenAI and Anthropic at the frontier, with Google losing top talent to competitors.

• 👀 But others suggest the move makes sense, with Hassabis saying he believed that artificial general intelligence (AGI) is “close at hand” and decided to switch roles “so that I have the time and space to focus on the big picture and help influence what is to come to the best of my ability.” 

• 📉 Alphabet (Google) shares ended the week down roughly 3%.

🌶️ Chipotle Falls 9% on Potential Salmonella Outbreak

• 🧑‍🔬 Second we had Chipotle ($CMG), which suffered this week after the company pulled jalapeños from its restaurants nationwide after they were suspected in a salmonella outbreak that has led to 345 people in 27 states getting sick, including 36 hospitalized.

• ✅ Officials say the risk is contained for now, with Chipotle and its distributors having removed the product, and both the CDC and FDA “do not consider there to be a current ongoing risk from these establishments to consumers in this outbreak.”

• 📉 Chipotle shares fell 9% on Tuesday when the outbreak was first reported, with investors reading the news as a déjà vu to the company’s rough 2015-2018 stretch where a similar outbreak at a larger scale pushed the stock down for years.

🚗 Uber Posts Record Cash Flow, Guidance Falls Short

• 📊 Uber ($UBER) also reported its Q2 earnings this week on Wednesday, with revenue of $14.19 billion, up 12% year over year, but missing analyst estimates of $14.21 billion by a hair. Non-GAAP EPS came in at $0.81, in line with the $0.81 expected.

• 🤖 One of Uber’s main focuses for the quarter was to remind investors of its push to dominate the delivery scene, most recently with its $14.8 billion agreement to acquire Germany’s Delivery Hero. The company also announced plans to commit more than $10 billion in the next few years to bring autonomous vehicles to market at scale.

• 📉 Shares closed about 5% lower following the report as the company’s guidance for the third quarter trailed expectations, with Q3 bookings projections of $59.25 billion falling behind estimates of $59.33 billion.

FROM THE BLOSSOM COMMUNITY
⭐️ Featured Posts of the Week

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