🩸 Netflix Won. Stock Tanked

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Netflix $NFLX ( ▲ 0.91% ) beat on earnings and the stock still dropped 8.3%.

Welcome to earnings season, where the scoreboard says you won and the market sends you home anyway.

Here's what happened 👇

Q2 revenue came in at $12.56 billion, up 13.4% year over year. Sounds great, until you learn it missed Wall Street's target by $20 million.

That's a miss of about 0.16%. The market treated it like Netflix forgot to file taxes.

EPS was $0.80, beating by a whole penny. Operating income hit $4.19 billion vs $4.13 billion expected.

But here's the ugly one: free cash flow was $1.53 billion vs $2.93 billion expected. That's roughly half of what analysts pencilled in. Ouch.

Notice a pattern? The home market is now the slowest horse in the stable. The growth story lives abroad.

This is where the sell button got pressed.

Q3 revenue guidance is $12.86 billion vs the $13 billion consensus. Q3 EPS guide of $0.82 vs $0.84 expected. Full-year guidance got narrowed to $51.0-51.4 billion, with the midpoint sitting just under the Street's $51.38 billion.

When your "raise" is actually a shave, investors notice.

The bright spots: Netflix expects ad revenue to roughly double this year to around $3 billion, and Q3 operating margin is projected at 33.2% vs 28.2% a year ago. The ads bet is working. Just not fast enough to save the print.

Netflix says GenAI workflows have touched roughly 300 titles this year, mostly in post-production. Plus LLM-powered search and voice search are rolling out.

Netflix is using AI to make content cheaper to finish. Watch that margin number over the next few quarters.

Netflix is now priced for perfection, and perfection didn't show up. Shares fell over 8% after hours to $68.38, which is actually below the stock's 52-week low of $70.86.

If you own the 2x leveraged Netflix ETF $NFXL ( ▲ 2.43% ), you had a worse night.

The business is fine. Growing 13%, expanding margins, doubling ad revenue. The problem is the price tag assumed all that and more.

When great companies get punished for good quarters, that tells you more about the valuation than the business. Keep it on the watchlist.

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Micron just signed deals with seven automotive giants. The stock dropped 5.65% anyway.

Markets are funny like that.

The memory maker announced strategic customer agreements (SCAs) with Qualcomm $QCOM ( ▼ 4.14% ), Visteon $VC ( ▲ 0.66% ), HARMAN $HAR ( 0.0% ), JOYNEXT, DENSO, Astemo, and Hyundai Mobis $HYMTF ( ▼ 7.44% ) on Thursday. That's a who's who of the companies building the brains of your next car.

And the reward? Shares fell 4.5% in premarket trading. And ended 5.65% down on the day.

Modern vehicles are basically data centres on wheels. Touchscreens, driver assistance, cameras, infotainment. All of it runs on memory and storage.

CEO Sanjay Mehrotra put it plainly: as vehicles get smarter, memory becomes a critical enabler of everything consumers expect from them.

Micron wants to be the chip inside every dashboard before anyone else gets there.

These deals follow SCAs Micron already locked in with GM $GM ( ▲ 0.1% ) and Ford $F ( ▲ 0.07% ). The agreements were first flagged on the company's Q3 earnings call, so anyone paying attention saw this coming.

The strategy is clear. Micron is stitching itself into the automotive supply chain at every level:

Lock in demand across the whole ecosystem, and you smooth out the boom-bust cycle that memory stocks are famous for.

Good news, falling stock. What gives?

SCAs are commitments, not headline revenue numbers. There's no "$X billion contract" for traders to get excited about.

When the announcement is strategic and the numbers are vague, markets shrug. Or in this case, sell first and ask questions later.

For Micron, the bet is long-term. Cars take years to design, and whoever gets designed in now collects the cheques for a decade.

Piper Sandler dropped coverage on three space stocks late Wednesday. The verdict raised some eyebrows 👇

Yes, you read that right. The most famous rocket company on Earth got the same rating as "meh."

AST SpaceMobile builds satellites that connect directly to the phone already in your pocket. No special hardware, no dish on your roof.

And instead of fighting the telecom giants, it teamed up with them. AT&T, Verizon, Vodafone and Rakuten are all partners.

That partnership play gives AST access to over 3 billion wireless subscribers globally. Piper thinks it only needs about 45 million of them by 2031 to justify the bull case.

The numbers get spicy from there. Piper forecasts revenue exploding from $166 million in 2026 to over $5 billion by 2031, with EBITDA hitting around $4.2 billion.

That's roughly 30x revenue growth in five years. Even by space-stock standards, that's a big swing.

The main threat? Starlink's direct-to-cell service. Piper flagged SpaceX as the number one risk to the whole thesis. Add in heavy capital needs, launch schedules, and regulators, and there's plenty that can go wrong.

Piper actually loves the company. It basically invented the modern space industry and could cash in on orbital AI infrastructure down the line.

The problem is the stock, not the rockets:

In short? Great company, but investors may want receipts before paying up for the sci-fi stuff.

Rocket Lab got praised as the strongest publicly traded alternative to SpaceX, with a vertically integrated model and a proven Electron rocket.

The catch is that everything hinges on Neutron, its bigger reusable rocket that's supposed to unlock higher-margin space services.

And Piper says the optimism is already priced in. RKLB trades at a premium to SpaceX on EV-to-revenue. You're paying SpaceX prices for the challenger.

Piper's big-picture take: reusable rockets are the moat in the space economy. But moats don't matter if you overpay for them.

That's the whole thesis in one line. The launch giants have the best businesses, but AST has the best risk-reward, thanks to a cheaper valuation and a clearer path to actual earnings.

Whether a pre-revenue-ish satellite company deserves a 20x EBITDA multiple on 2031 numbers, discounted back to today? That's the $100 question. Literally.