The Aussie Byte

Amazon's shares surged more than 15% after it reported a fifth quarter of cloud revenue growth, with CEO Andy Jassy saying 'We're unusually well-positioned for this AI inflection'. This boost offsets Apple's drop in the market, where six out of seven megacap US tech companies have reported results. The consensus is that there's more reason to be positive than negative about the profitability of artificial intelligence investments.

Apple shares fell nearly 10% on Friday after a disappointing forecast showed the iPhone maker was struggling to secure enough components due to the AI-driven data centre boom straining global supply chains. This drop would erase nearly $US500 billion ($711 billion) from Apple's market capitalisation, potentially returning the crown of the world's most valuable company to AI chip giant Nvidia.

Apple's third-quarter fiscal 2026 earnings beat estimates, with a profit of $2.02 per share and net sales increasing 16.4% year over year to $109.42 billion. The company's installed base exceeded 2.5 billion active devices across all major product categories and geographic segments. iPhone sales rose 21.7% year over year to $54.25 billion, setting a June-quarter record. Apple Services reached a June-quarter record of $30.74 billion in revenues, with cloud and payment services reaching an all-time high.

Microsoft's stock jumped about 7% after reporting fiscal fourth-quarter results that exceeded Wall Street estimates, with revenue of $90.01 billion and adjusted earnings of $4.74 per share. The company's Intelligent Cloud segment generated $39.31 billion in revenue, up 31.6% year over year, as Azure revenue growth accelerated to 43%. Microsoft also reported that Azure revenue exceeded $100 billion for fiscal 2026, while commercial remaining performance obligations rose 8% sequentially to $678 billion. The company projected first-quarter revenue of $89.85 billion to $90.95 billion, ahead of analysts' estimates. Microsoft maintained its fiscal 2026 capital spending outlook at about $175 billion.

Oracle shares rose by 3.3% after announcing an expansion of its partnership with Google Cloud, which will see the integration of Google's Gemini AI models into Oracle's enterprise software ecosystem. The deal allows customers to build and customize autonomous AI agents using Oracle's AI Agent Studio for Fusion Applications. Oracle plans to embed Gemini natively across its flagship Fusion Cloud Applications and Oracle NetSuite. The rollout features two Google models: Gemini 3.1 Flash Lite and Gemini 3.5 Flash, which will be available for high-efficiency and advanced reasoning tasks respectively. Oracle is maintaining a multi-model architecture, leaving the door open for third-party AI models.

Microsoft's stock price rose 7.63% premarket after the company reported fiscal fourth-quarter revenue of $90.0 billion, up 18% from last year and exceeding analyst expectations of $87.62 billion. Azure revenue grew 43%, accelerating from 40% in the prior quarter, and surpassed $100 billion in revenue for the full fiscal year. Commercial remaining performance obligations rose 84% to $678 billion, with Microsoft saying sequential growth came from customers other than AI model developers. The company guided $89.85 to $90.95 billion in fiscal first-quarter revenue, exceeding consensus estimates of $89.66 billion.

Apple has submitted a response to the UK's Competition and Markets Authority (CMA) consultation on proposed rules governing its App Store. Apple argues that the proposed measures would amount to price regulation and undermine innovation and investment. The CMA's proposals aim to loosen Apple's control over in-app payments, allowing app developers to direct users to payment options outside the App Store. Apple claims there is no evidence that changes to its payment model would lower prices for consumers. Gene Burrus, global policy counsel for the Coalition for App Fairness, supports the proposed measures, stating that they will address barriers faced by developers.

The UK's Competition and Markets Authority has launched an investigation into Microsoft's pricing of Microsoft 365 subscriptions after adding its AI assistant, Copilot. This follows a pending court action by the Australian Competition and Consumer Commission against Microsoft over similar allegations. In early 2025, Microsoft gave existing UK customers access to Copilot at no extra cost for the remainder of their subscription, but when those subscriptions renewed, customers were automatically moved to a higher-priced plan that included the AI features. The CMA is investigating whether Microsoft's communications were misleading and whether customers were given enough information to make an informed choice. Microsoft Australia had previously apologised for not clearly explaining the subscription options and offered affected customers a refund.

Laureate Education has partnered with Google Cloud to accelerate AI-powered learning in Latin America over the next three years. The agreement will see Laureate deploy Gemini Enterprise and other Google AI offerings across its network of institutions in Mexico and Peru, serving approximately 500,000 students. This collaboration aims to bring cloud infrastructure, collaboration tools, artificial intelligence, and innovative skills programs into universities, with a focus on advancing student success, employability, and the modernization of teaching and learning. Laureate President Eilif Serck-Hanssen stated that the partnership will put world-class technology in service of students and faculty, allowing them to evolve what they teach and how they support learning. Google Cloud's Milton Larsen added that this collaboration will help educators shape the future by introducing AI-enabled academic networks.

Microsoft will be reporting its Q2 earnings on Wednesday after market close, having beaten analysts' revenue expectations last quarter with revenues of $82.89 billion, up 18.3% year on year. Analysts are expecting a 14.7% year-on-year growth in revenue this quarter, and have generally reconfirmed their estimates over the last 30 days. Microsoft has a history of exceeding Wall Street's expectations.

Apple's market value briefly reached $5.036 trillion on Tuesday after its shares rose to a session high of $342.89, making it the second publicly traded company to ever reach this milestone, following Nvidia. This achievement comes less than a year after Apple surpassed $4 trillion in October 2025 and has been driven by strong iPhone sales and disciplined capital expenditure. The company's stock needs to close above $340.43 to officially cross the $5 trillion threshold. Apple is scheduled to report its third-quarter earnings on Thursday, July 30.

Cathie Wood's ARK Invest exchange-traded funds purchased $23 million worth of shares in Tesla and Space Exploration Technologies (SpaceX) on Monday, buying 124,543 shares of SpaceX valued at $14.3 million and 27,864 Tesla shares worth $8.7 million. The purchases came as both companies face near-term challenges, including a lock-up expiration for SpaceX's insider-held shares on August 6 and Tesla's mixed fiscal second-quarter results. Space Exploration Technologies has traded below its $135 initial public offering price despite completing its first post-IPO Starship and Super Heavy test flight on July 24. Tesla has remained under pressure following its earnings report, which saw adjusted earnings of $0.33 per share, below analysts' expectations of $0.53.

In July, Elon Musk's Tesla and SpaceX lost $1.2 trillion in market value, while Apple gained $700 billion, making it the world's most valuable company again. The losses were largely driven by Tesla and Alphabet shedding more than $400 billion and $300 billion respectively. Microsoft added nearly $150 billion and Meta added over $100 billion to their market value. Nvidia briefly lost its title as the world's most valuable company but still sits 15% below its May high.

Apple has reclaimed its title as the world's most valuable public company from Nvidia, with its stock rising over 1% and reaching a market capitalization of approximately $4.94 trillion on Monday. This move comes after Apple's shares have climbed more than 22% year to date, outperforming the 'Magnificent Seven' group. The iPhone maker has taken a measured approach to capital expenditures, declining over the past three quarters rather than increasing. Investors are now awaiting earnings this week from Microsoft, Amazon, and Meta, all of which are expected to announce further increases in AI-related spending. Apple will report its own earnings on Thursday after the closing bell. Tim Cook is set to step down as CEO on September 1, passing the reins to John Ternus.

Amazon has launched its dedicated Halloween shop on its website, featuring candy, costumes, and decor for the spooky season, including items starting at $7. The shop is live from now through October 31 and includes curated top picks for indoor and outdoor decor, as well as Summerween-themed items. This comes as a response to the growing trend of celebrating Halloween in the summer, known as Summerween, which has led to increased demand for early holiday shopping. Amazon's shop aims to make it easy for customers to find the latest trends and must-have items before they sell out. The shop includes giant animatronics, like the 12-foot skeleton Skelly from The Home Depot, which have been a hot commodity in trending Halloween lawn decor.

There was no significant news event reported by ABC News & Headlines – Australian Broadcasting Corporation this week. Instead, the publication featured a history quiz titled 'This week in history quiz, July 27: Test your smarts on everything from Apple to Aretha Franklin'. The quiz is part of the ABC's New Quiz topic page, where users can test their knowledge on various historical events.

Mark Zuckerberg and Microsoft CEO Satya Nadella joined Nvidia's Jensen Huang in backing an open letter to US policymakers calling for support of open-weight AI models, which would allow anyone to download and modify the underlying numerical parameters of these models. The move is seen as a response to China's Moonshot AI releasing its own open-weight model, Kimi K3, on July 16, which reportedly hit near-frontier performance levels. Zuckerberg, Nadella, and Huang argued that open models strengthen safety and cybersecurity, accelerate innovation and diffusion, and enable sovereignty. In contrast, OpenAI and Anthropic have been pushing for tighter restrictions on Chinese open-source AI, citing commercial interests.

Morgan Stanley has revised its Microsoft stock forecast ahead of the company's fourth quarter earnings on July 29, predicting a positive catalyst for MSFT stock growth driven by Azure and Copilot performance. Analysts Adam Wood and Josh Baer expect Azure AI to achieve approximately 100% year-over-year growth in Q4 fiscal year 2026. They also believe that Microsoft's expanding infrastructure footprint will ease capacity constraints, allowing Azure to capture robust AI and cloud demand. The analysts have maintained an overweight rating for Microsoft stock with a price target of $600 based on a 25x multiple and EPS estimates for fiscal year 2028.

Melanie Lionello's winter cake recipe, featuring seasonal ingredients such as apple, orange, and fennel, has been published in the book 'Easy Italian Dinners From My Little Kitchen' by Murdoch Books. The recipe uses a unique combination of Venetian ingredients, including grappa, sultanas, polenta, and milk. According to the recipe, it is best served as a breakfast or dessert during winter. The cake serves 8-10 people and can be refrigerated for up to 3 days or frozen for up to 3 months.

Amazon has launched a limited-time deal on Ugreen FineTrack Air Tracker Tags, offering a 4-pack for $20, which works out to just $5 per tracking tag. These tags are Apple Find My Certified and can be used in conjunction with the Apple Find My app to locate lost items. The deal is available now at Amazon, but it's not clear how long it will last. A single AirTag typically costs $29, while a 4-pack of third-party trackers would normally cost less than that, making this offer an attractive option for those who want to track their belongings. Apple AirTags and other supported trackers can be used to locate items such as wallets, house keys, or the television remote.

Apple and Micron Technology are lobbying the Trump administration to take opposing positions on using Chinese memory chips in devices sold outside the US. Apple wants to use memory chips from ChangXin Memory Technologies and Yangtze Memory Technologies to ease a global memory shortage and limit price increases for American consumers, while Micron is warning that allowing this could undermine domestic manufacturing. The dispute has intensified as memory-chip prices have quadrupled over the past year, with AI data centres consuming growing volumes of advanced memory at higher prices. Apple has accused Micron of benefiting from the shortage, citing gross margins exceeding 80%. Micron has pledged to invest $250 billion in US manufacturing and says faster construction of domestic plants can address the supply deficit without relying on Chinese producers.

Tesla and SpaceX shares have plummeted in value over five weeks, erasing an estimated $650 billion to $700 billion from Elon Musk's paper wealth. Tesla's second-quarter adjusted earnings report fell short of expectations, with operating income dropping 56.9% year-over-year to $398 million. The decline in share prices has reduced the value of Musk's 42% economic stake in SpaceX and cut an estimated $18.6 billion from his wealth in one session. SpaceX shares have fallen 16% below their initial public offering price, while Tesla shares fell 14.5%. The decline has also given short sellers a paper gain of around $15.5 billion.

Gardening expert Sabrina Hahn has provided advice to readers of The West Australian on various gardening issues, including the care of a 17-year-old chanticleer pear tree in Nedlands and an infestation of woolly aphids on two apple trees in Stoneville. She attributed the pear tree's decline to nutrient-deficient soil and recommended improving the soil with compost annually and applying wetting agent and fertiliser at specific times. The issue with the apple trees was identified as a significant pest problem across Australia, and Sabrina suggested using parasitic wasps or soil drenches to manage the infestation. Jenny Hamilton from Thornlie also asked about a long-handled cultivator known as a finger hoe with a single tine, which is typically handmade by a blacksmith. The gardening expert provided advice on where to find similar tools.

Elon Musk's net worth plummeted from $1.45 trillion to approximately $738 billion in just five weeks due to SpaceX and Tesla's stock performance. The decline was triggered by a Starship engine failure on July 16 and Tesla's Q2 earnings miss on July 23, resulting in a loss of $650-$700 billion for Musk. SpaceX's stock price dropped from its peak of $225.64 to $112.96 as of Friday, with Musk's paper wealth being wiped out despite maintaining control through the dual-class structure. Public shareholders are absorbing the brunt of the price discovery, while short sellers have racked up approximately $15.5 billion in paper profits.

The US Senate's Small Business Committee has launched an investigation into Amazon over allegations that Chinese influence played a role in decisions made about its online marketplace. The probe comes after reports of Amazon employees in China allegedly selling favors to merchants who wanted better treatment on the platform. An intermediary promised to leverage connections with Amazon workers in China to assist fix marketplace problems for money, challenging Amazon's control of third-party merchants. Those challenges produced the need for middlemen who say they have access to internal decision-making. The allegations also come on top of wider regulatory challenges facing Amazon, including antitrust claims and allegations of deceptive business practices.

Alphabet burned $5.9 billion in free cash flow in the second quarter of 2026, its first cash burn on record, while Tesla burned $1.1 billion. The two reports have raised concerns that Big Tech's AI infrastructure build-out is consuming capital faster than it can generate returns. Alphabet's revenue came in at $119.8 billion, beating consensus, but investors focused on the company's $44.9 billion capital expenditure and negative free cash flow swing. Tesla's vehicle deliveries beat forecasts, but its automotive gross margin was lower than expected, with a surge in capex contributing to the cash burn. The market is now questioning whether AI spending will generate returns in time.

Wedbush analyst Ygal Arounian added Alphabet and Reddit to the firm's Best Ideas List, citing cloud share gains and advertising momentum as the investment theses for each name. Google Cloud revenue grew 82% year-over-year to $24.8 billion, while Reddit saw active advertisers grow more than 75% year-over-year in the first quarter. Wedbush expects Reddit's AI data-licensing agreements with Alphabet subsidiaries Google and OpenAI to see 'renewal economics step up', representing upside not yet reflected in consensus. The firm also lifted its 2026 and 2027 capital expenditure estimates for Alphabet, with free cash flow expected to remain negative through 2027 before an inflection in 2028.

White House Office of Science and Technology Policy Director Michael Kratsios accused China's Moonshot of improperly using US AI models and Nvidia chips to create the Kimi K3 system. The company allegedly acquired GB300-equipped servers and accessed GB300s in Thailand, violating US export control rules and companies' terms of service.

The White House has accused Chinese AI startup Moonshot of violating US export controls by using Nvidia hardware and proprietary American AI models to build its flagship Kimi K3 system. Michael Kratsios, Director of the White House Office of Science and Technology Policy, stated that Moonshot acquired servers equipped with NVIDIA GB300 chips and routed workloads through GB300-enabled infrastructure in Thailand to train its models, which is a violation of US export regulations. The semiconductor systems in question belong to NVIDIA's Blackwell generation, which the US government explicitly bars from export to Chinese companies. Federal investigators are examining whether Chinese entities have bypassed restrictions by utilizing overseas subsidiaries or cloud infrastructure in third-party countries like Thailand. Moonshot claims its Kimi K3 model rivals leading American models and trails only OpenAI's GPT-5.6 and Anthropic's Claude Fable 5 in benchmark testing.

Bank of America Research forecasts the server CPU total addressable market to reach $170 billion by 2030, four times current levels, as NVIDIA's Vera CPU architecture sparks a competition with AMD over how agentic AI workloads should be measured and monetized. The debate centers on whether AI is constrained by time-to-complete an agent or number-of-agents-per-rack. NVIDIA's Vera CPU combines 88 custom Olympus ARM-based cores and positions itself as part of a co-designed system, while AMD's EPYC server line has shown high raw throughput figures. The outcome will determine the performance standard for future CPU investment. Bank of America maintains a Buy rating on NVIDIA with a $350 price target.

A recent analysis by SEO Essex found that 73% of marketers now prioritize content for AI-generated answers due to the rapid spread of AI-generated summaries across Google search, which has reached an all-time high with a 19% year-over-year increase in Google Search ad revenue in Q1 2026. This shift is forcing marketers to rapidly pivot their content strategies as users increasingly rely on AI-generated summaries, leading to a contraction in traditional click-through rates and a move towards brand mentions and direct inquiries.

Microsoft (MSFT) has confirmed its attendance at the AGI Summit SF 2026 on July 18, sparking renewed interest in the company's artificial general intelligence ambitions and potentially undervalued stock price. The company's share price has recently rebounded with a 1-day return of 2.15% and 30-day return of 6.03%, but its year-to-date return is down 14.94%. Microsoft is considered materially undervalued, trading at $402.29 versus a narrative fair value of $466 per share. The company's base case fair value is estimated to be $466 per share, with bull and bear cases ranging from $804 to $229 per share.

Klarna's shares surged 9% after Apple announced a partnership to launch a device leasing program called Apple Upgrade on July 28, which will allow users to pay off devices early or upgrade to new models through a subscription service backed by Klarna.

Alphabet Inc.'s shares rose 1.15% after a report that the company's experimental project, 'Frozen v2', aims to bypass traditional processing overhead by etching its flagship AI model directly onto next-generation chips, potentially achieving 6 to 10 times more power efficiency per token than current TPUs.

AMD stock surged 5% after Microsoft locked in a massive AI infrastructure deal that will deploy AMD's next-gen silicon across Azure services and enterprise customer workloads. The partnership involves the use of AMD Helios Rackscale Solution, which combines AMD Instinct MI455X GPUs, 6th Gen EPYC 'Venice' CPUs, Pensando networking, and ROCm software. Two new virtual machine lines powered by AMD's 'Venice' architecture will be launched on Azure: HDv2 for agentic AI and data processing, and HXv2 for heavy-duty semiconductor design. Microsoft will also deploy AMD Pensando DPUs across its AI backend while integrating AMD silicon directly with Azure Boost to push cloud networking performance limits. The deal is scheduled to begin shipping in the second half of 2026.

Bank of America has reiterated its Buy rating on Apple with a price target of $380 per share, expecting the company to beat consensus in its fiscal third-quarter results due on July 30. Analyst Wamsi Mohan modelled revenue and EPS of $109 billion and $1.89, ahead of Street estimates of $108 billion and $1.87. The firm expects product gross margins to decline sequentially in the June and September quarters before recovering to 38.5% in the December quarter. On Services, BofA modelled 14% year-over-year revenue growth for the third quarter.

Meta and Anthropic are in early talks for a potential computing deal worth up to $10 billion over two years, which would give Anthropic access to Meta's GPU capacity on top of its existing arrangement with SpaceX. The talks are part of Meta's efforts to enter the cloud computing business, with an internal name 'Meta Compute' and plans to spend as much as $145 billion on capital expenditures in 2026, mostly on AI hardware and data centers. Anthropic has been signing compute infrastructure deals due to its rapid growth and capacity constraints, and this potential deal would be another layer of protection against dependency on a single supplier. Meta's stock fell by up to 6% on July 17 after the report came out, but the company declined to comment on the talks. The deal is still in early stages and may not result in a contract.

Tesla investors are awaiting the company's second quarter earnings report on July 22, which is expected to address three major headwinds. Analysts at Deutsche Bank expect Tesla's profit margins to be impacted by $180 million due to incentives offered for Model Y sales in the US, as well as a one-time warranty and tariff relief unwind worth an estimated $230 million. Additionally, Tesla's decision to eliminate the option to purchase FSD outright is expected to result in a $200 million headwind. These factors have contributed to Tesla's stock being down nearly 16% over the past four weeks and more than 42% year-to-date.

Apple has reclaimed its title as the world's most valuable company, surpassing Nvidia with a valuation of $4.9 trillion, after investors grew more confident in Apple's AI strategy. This comes after Nvidia became the world's most valuable company in 2025, driven by the AI boom sparked by the launch of ChatGPT in November 2022. Nvidia's stock has soared over 1,200% since January 2023, but analysts have begun questioning whether massive investments in its chips and software will pay off as new AI products reach the market. Apple's confidence has strengthened in recent weeks, with shares up about 20% since late June. The company also unveiled a redesigned version of Siri, receiving positive early reviews.

Apple and the US Justice Department are in early discussions to settle a 2024 antitrust lawsuit, which alleges that Apple harmed competitors, software developers, and consumers through its alleged conduct, including blocking super apps and discouraging outside messaging solutions.

Meta Platforms has recovered from a 5.7% dip in stock value after reports emerged of early-stage talks to lease its AI data centers to Anthropic in a potential $10 billion deal. The proposed arrangement would involve Anthropic paying Meta in monthly increments over two years for access to the specialized hardware needed for AI model training and deployment. This deal mirrors a larger agreement Anthropic signed with SpaceX in May, under which the AI company is paying $45 billion over three years for computing power. Meta has been expanding its AI capabilities and infrastructure as part of its broader technology strategy. The potential deal would allow the company to monetize excess computing capacity while Anthropic gains access to the necessary resources.

Nvidia has successfully defended its title as the world's most valuable company, fending off a brief challenge from Apple and maintaining its $4.9 trillion market cap. This rebound ensures Nvidia maintains its nearly year-long reign at the top, despite Apple's recent surge to $4.6 trillion. The wider semiconductor market is starting to share the spotlight, with Micron crossing the $1 trillion mark in May and South Korea's SK Hynix making a splashy Nasdaq debut earlier this month.

Alphabet's Google shares fell 2.3% after a Bloomberg report revealed that the company is months behind schedule on delivering Gemini 3.5 Pro, its most powerful flagship AI model, due to delays in improving the model's coding capabilities. This setback has frustrated Google engineers and managers, who are concerned about losing market position as rivals Anthropic and OpenAI produce models exceeding Gemini's capabilities. The delay stems from Google taking additional time to improve the model's coding skills, which is a key area where OpenAI and Meta Platforms Inc. have recently outpaced Google. A Google spokesperson stated that the company is shipping quickly across various models while keeping them cost-effective for customers. Google has also been in talks with the US government about its capabilities and industry safety standards.

Citi has lowered its price target for Microsoft stock from $620 to $570 due to the software sector's declining valuations, despite positive product checks and a maintained Buy rating. The bank expects a solid fiscal Q4 report on July 29, but notes that guidance on operating margins and capital spending in Q1 of fiscal 2027 will be crucial. Microsoft has spent $30.88 billion on capital expenditures in its fiscal third quarter, up 84.4% from the same period last year, with data centers, AI infrastructure, and Azure growth numbers to be closely watched.

Morgan Stanley analyst Erik Woodring believes China's approval of Apple Intelligence represents a key catalyst for Apple, citing the significance of this development in levelling the AI playing field in China ahead of the company's first foldable iPhone launch. The Cyberspace Administration has granted Apple a license to roll out its AI services on iPhone in China, with Alibaba and Baidu serving as technical partners. Chinese consumers place greater importance on smartphone AI than consumers elsewhere, and the approval is seen as a boost for Apple's sales momentum in China, where it is the company's second-largest market after the U.S.

The Prime Minister's promise suggests that the government is taking steps to address concerns about AI-generated content infringing on human creativity, potentially impacting artists, writers, musicians, and other creators. This issue has been gaining attention in recent years as AI technology advances and becomes more capable of mimicking human work. The government's move may aim to establish clear guidelines or regulations for the use of AI in creative industries. The goal is likely to balance innovation with protecting the rights of individuals who create original content.

The product is still under development but will be designed to control smart-home appliances, play media, answer questions, and tap into OpenAI's ChatGPT capabilities. It marks OpenAI's entry into consumer devices, following its success with the popular language model ChatGPT. The device is meant to live in homes as a central hub for AI-powered tasks and interactions. Details about the product's release date or pricing have not been disclosed. This move by OpenAI signals an expansion of its focus beyond B2B applications.

The lawsuit suggests that Meta has been using its AI transformation as an excuse to lay off employees who were already on leave, potentially leaving them without pay or benefits. This raises questions about the treatment of workers during corporate restructuring and the impact of AI-driven layoffs on employees' livelihoods. The situation may be a test case for labor laws and employee protections in the tech industry.