Everything moving the Street, before it moves you.
Good morning and happy Friday.
SpaceX (SPCX) picked a rough week to remind everyone that rockets are hard. Four Raptor engines declined to light at ignition Thursday, aborting Starship's 13th test flight moments after the countdown hit zero; Elon Musk said two engines will be swapped before another attempt next week. Traders found their own abort button: the stock dipped below its $135 IPO price for the first time, closing near $131.
At least the launch escape system works. Shareholders are still shopping for theirs.
Wall Street Gets Sticker Shock From TSMC's Record-Breaking Receipt
TSMC just printed the most profitable quarter in its history, and the market's first question was who's picking up the check.
The world's largest contract chipmaker (TSM) reported second-quarter net income of NT$706.56 billion, up 77.4% from a year earlier on revenue that grew 36%, beating estimates across the board. Then came the fine print: capital spending is going up, not just this year but for several more.
That single line item turned a victory lap into a sector-wide selloff. The debate on the Street isn't whether AI demand is real. It's what serving that demand now costs, and whether today's valuations already assume the buildout pays for itself.
Check, Please
The tab is getting hard to ignore everywhere you look. Bloomberg's markets wrap noted that TSMC raised its 2026 capex forecast to between $60 billion and $64 billion, up from $52 billion to $56 billion, helping drag a key gauge of chip stocks down 4.3%. Alphabet (GOOGL) added to the gloom, closing down 4.4% after Bloomberg reported its flagship Gemini 3.5 Pro model is months behind schedule. And as Bloomberg's Mike Shepherd noted on Thursday's Bloomberg Tech, TSMC's planned U.S. investment now runs to $265 billion, including $100 billion for four new Arizona fabs alone.
The market didn't punish TSMC for missing. It punished the whole supply chain for what not missing now costs.
By the numbers: The S&P 500 fell 0.51% to 7,533.77 and the Nasdaq dropped 1.47% to 25,881.95, per CNBC, while equipment giant ASML, which Quartz reported raised its full-year sales outlook to €43–45 billion (the second hike this year) and lifted margin guidance to 54–56%, still couldn't buy the sector a bid.
Tab's Still Open: The next tranche of hyperscaler earnings will test whether the companies actually writing these checks still get applause for it. For two years, "we're spending more" was bullish. Thursday was the clearest sign yet that the same sentence can read as a warning label, depending on who's holding the receipt.
PayPal Plays Hard to Get While Uber Puts a Ring on Delivery Hero
Cuffing season arrived early on Wall Street this year, and not every suitor is getting a rose.
The week's biggest courtship hit a wall Thursday: PayPal's (PYPL) board views the $60.50-per-share offer from Stripe and private equity firm Advent International, worth more than $53 billion, as undervaluing the company, Reuters reported, citing financing and regulatory hurdles. Hours earlier, Uber (UBER) skipped the courtship entirely and eloped, agreeing to buy Germany's Delivery Hero for €41.50 a share in cash.
Different deals, same logic: in platform businesses, scale is the strategy, and buying it is faster than building it.
Swipe Right on Scale
The proposals stacking up this week read like a dating app for market cap, and each has its own relationship status.
Reuters put the Stripe–Advent bid at a 28% premium, with the pair splitting ownership equally, roughly $50 billion in committed bank financing from JPMorgan and Morgan Stanley, and about $17 billion of equity, per CNBC.
Uber's $14.8 billion Delivery Hero deal nearly doubles its delivery footprint to 99 markets, with combined 2025 gross bookings of $236 billion; TechCrunch noted Delivery Hero is separately selling 14 markets to SSW Partners for $1.6 billion.
And GameStop (GME) chief Ryan Cohen, whose unsolicited $56 billion bid for eBay (EBAY) was rejected in May as "neither credible nor attractive," told Bloomberg TV he's putting $500 million of his own money into the deal and has committed to $2 billion of cost cuts in year one.
"We're coming for eBay one way or another."
Ring Shopping: Tender math and antitrust reviews will decide which of these courtships makes it to the altar; Uber's offer still needs shareholders to say yes and regulators to hold their peace. But the message from boardrooms is unmistakable: organic growth is out of season, and everyone would rather marry the neighbor than mow their own lawn.
Netflix's Next Season Gets a Rough Pilot Review
Netflix has green-lit plenty of cliffhangers. Its own guidance wasn't supposed to be one of them.
The streamer (NFLX) posted second-quarter revenue of $12.56 billion, up 13% and roughly in line with estimates, then watched its shares fall more than 8% in extended trading. The culprit was the trailer, not the feature: third-quarter revenue guidance of $12.86 billion came in below Wall Street's forecast, pointing to the slowest growth since late 2023, according to StockStory.
For the second straight quarter, investors walked out before the credits.
Recasting the Lead
The deeper story is a franchise in transition. Netflix says members watched 97 billion hours of content in the first half, with live events a top draw, but it will also publish its engagement report just once a year starting in 2027, a disclosure diet that lands awkwardly next to soft guidance. Meanwhile the company disclosed that roughly 300 titles this year used generative AI, mostly in post-production, Variety reported, part of a pitch that AI can fatten margins even as the growth engine downshifts. On Bloomberg Intelligence's instant-reaction episode Thursday, senior media analyst Geetha Ranganathan said the quarter "feeds into this whole bearish thesis," noting YouTube's share of TV viewing time has held at 13–14% in Nielsen's data while Netflix's slice slips.
"Maybe something is broken slightly within their system … and they have to do something to really juice up the growth."
Renewed, With Notes: Nobody is canceling the show; Netflix remains streaming's incumbent, and its ad tier, live events, and AI-assisted production are all plausible plot devices. But every one of those fixes takes seasons, not episodes, to pay off, and this stock's audience just proved twice in a row that it doesn't sit through slow arcs quietly.
The Tape
Higher Purpose: Eli Lilly (LLY) agreed to buy psychedelic drugmaker AtaiBeckley for up to $3.8 billion, paying $6.75 a share in cash plus up to $2.50 more in milestone payments, Bloomberg reported, the largest psychedelics deal on record.
Brick House: Databricks signed a term sheet for a Coatue-led strategic round at a $188 billion valuation, up roughly 40% from its $134 billion mark earlier this year.
Maker's Market: Citadel Securities invested $400 million in Crypto.com at a $20 billion valuation, the exchange's first institutional round.
What You May Also Like
Great Wall of weights: Beijing's Moonshot AI released Kimi K3, a 2.8-trillion-parameter model it bills as the largest open-source model ever, with the weights themselves promised by July 27.
Compute poaching: Meta is hiring Dave Brown, the AWS compute chief who spent nearly 19 years at Amazon, to help run its data-center buildout, the Wall Street Journal reported.
Trial balloon: Prediction market Kalshi launched a 13-contract pilot letting traders bet on late-stage drug-trial results and FDA decisions.
Just For Fun
MLB effectively banned teams from using dugout iPads to ask AI for pitch calls and substitutions; roughly a third of clubs were reportedly doing it. Moneyball, meet HAL-9000's intentional walk.
A rural New York district will put "Sally," a Realbotix humanoid robot, into high-school classrooms this fall, per New York Focus. Detention just got a firmware update.
After the Bell
Quite the Thursday: the most profitable chipmaker in history spooked its own sector by promising to spend more money, three different suitors got told "it's not you, it's the premium," and the biggest rocket on Earth couldn't get four engines to show up for work. If your week felt unproductive, at least you cleared ignition.
That's the tape. We'll see you at the open. — AllThingsWallSt
