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1. PayPal Surges on Joint Buyout Bid |
Reuters reports PayPal (NASDAQ:PYPL) has received a takeover bid from Stripe and Advent International, valuing the company around $53 billion, as Stripe continues to move forward with an inorganic growth strategy. Recommended by both Team Hidden Gems and Team Rule Breakers, PayPal jumped over 15% in pre-market trading. |
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$60.50 offer per share represents a 28% premium to Tuesday's closing price: Stripe and Advent would take an equal equity stake in PayPal and do not plan to break up the company, with financing reportedly already secured.
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“The turnaround that never came”: Alongside TMF co-founder and CEO Tom Gardner, Fool contributing analyst Tim Green talked through PayPal’s problems in late June. They said “the growth reacceleration we expected never materialized, and now the bottom line is contracting as the company struggles through a prolonged turnaround.”
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2. ASML Benefits as AI Surge Drives Guidance Up |
ASML (NASDAQ:ASML) moved about 5% higher ahead of the opening bell after delivering strong quarterly earnings ahead of market expectations and raising full-year sales guidance for the second time this year. |
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Clients continue to “accelerate their capacity expansion plans”: CEO Christophe Fouquet explained higher demand “is translating into customer commitments across our product portfolio, providing ASML with increased visibility into longer-term demand.”
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Europe’s most valuable company continues to expand: ASML remains the only company globally making extreme ultraviolet lithography machines needed to produce advanced semiconductors. The stock is outperforming the S&P 500 by 134% since the May 2022 Stock Advisor rec by Team Rule Breakers.
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3. Next Up: Foolish Recs Lead Earnings Deluge |
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Cintas (NASDAQ:CTAS) reports before the market opens, as the SA rec by Team Hidden Gems aims to build on the multiple business wins from last quarter. Focus will be on the high growth First Aid and Safety Services division.
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BlackRock (NYSE:BLK) rose around 1.5% ahead of the opening bell thanks to results showing a 31% revenue increase following the 27% gain from last quarter, driven by higher performance fees and subscription revenue for the Team Rule Breakers rec. Progressive (NYSE:PGR) – a Team Hidden Gems rec – also reports this morning, as previewed in Monday's Breakfast News.
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Karooooo (NASDAQ:KARO) is due to deliver results after the market closes. Further Cartrack subscription growth could help performance, although margin compression is becoming more of a focus point for the Team Hidden Gems rec.
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4. IBM's Rough Day Isn't the End for Patient Bulls |
TIM GREEN, TEAM HIDDEN GEMS |
The harsh decline in the stock price on Tuesday suggests that investors are now labeling IBM (NYSE:IBM) an AI loser. This seems premature. Shortages and soaring prices of memory chips and other components are a temporary problem, albeit one that could persist for a while as AI infrastructure capex shows no signs of letting up. Longer sales cycles are a potentially more serious problem, suggesting that clients may be taking a more cautious stance on IT spending.
While IBM’s preliminary results disappointed investors, the company has been successfully adapting for more than a century. A full-year guidance cut could be coming on July 22 when IBM reports its full results, so be prepared for that. For long-term investors, this isn’t the end of the world. IBM’s unique mix of enterprise AI software and consulting still looks like a winning strategy, although the road may be a bit bumpier than expected.
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5. Today’s Take: 5 Years and Never Looking Back |
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I stopped trying to “value” Amazon (NASDAQ:AMZN) years ago — because every time I decide the growth story is maturing, the company grows a new limb. First AWS, then a $70-billion advertising arm, now custom AI silicon. That shape-shifting is why I have never seriously considered selling. |
— YASSER EL-SHIMY • TEAM RULE BREAKERS |
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IBM stock is now down 23.5% over the past year. Meanwhile, the S&P 500 is up 21% over the same period.
Name a company you own and have high conviction in to beat the market over the next three to five years that has lagged the index in the past 12 months, and explain why you retain that faith.
Debate with friends and family, or become a member to hear what your fellow Fools are saying!
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