TSMC turns the AI dial to 11

Good morning. SpaceX (SPCX) spent Wednesday doing the one thing rockets are not supposed to do: descend. Shares fell for a fourth straight session and briefly dipped below their $135 IPO price for the first time since last month's record $86 billion debut, closing at $135.27. The slide has trimmed the company's market value to roughly $1.75 trillion from a $2.6 trillion peak, Bloomberg reported, just as Starship's 13th test flight is slated for today. Newton, it turns out, published the Street's first research note on momentum: what goes up must come down.

SEMICONDUCTORS

The world's biggest chip foundry took the AI trade's temperature this morning, and the thermometer needed a bigger scale.

Taiwan Semiconductor Manufacturing Co. (TSM) reported a 77.4% jump in second-quarter net profit to a record NT$706.6 billion (about $22 billion), far past estimates, on revenue of NT$1.27 trillion, up 36% from a year earlier. High-performance computing, the bucket where AI chips live, supplied 66% of revenue.

The stove is hot; the news is that TSMC is buying more burners.

Every AI accelerator worth bragging about, from Nvidia's GPUs to the hyperscalers' custom silicon, gets forged in TSMC's fabs, which makes its guidance the closest thing the AI trade has to a weather report from inside the volcano.

By the numbers: TSMC raised its 2026 capital-spending plan to $60–64 billion from $52–56 billion and now expects full-year revenue to grow more than 40% in dollar terms, up from "more than 30%" — and CNBC reported the company will pour an additional $100 billion into its Arizona buildout.

Hot Commodity: After Wednesday's chip-stock wobble, a $12 billion capex raise from the industry's landlord resets the sector's thermostat. When the foundry adds capacity this aggressively, it is telling you what its order book looks like two years out.

PAYMENTS

PayPal spent two decades living inside everyone's checkout flow. Now it's the item in the cart.

PayPal (PYPL) shares surged 17% to $55.45 on Wednesday after Reuters reported that Stripe and private-equity firm Advent International submitted a $60.50-per-share offer to take the payments pioneer private, valuing it north of $53 billion.

That would rank among the largest fintech acquisitions ever, and the largest compliment Stripe has ever paid a rival.

The logic writes itself: Stripe owns the developer-facing rails of internet commerce, PayPal owns a massive consumer and merchant base, and the pair have spent years selling against each other. CNBC reported the bid is backed by roughly $50 billion in committed bank financing, with Stripe and Advent each taking a 50% stake. The offer represents a 28% premium to Tuesday's $47.37 close, per Yahoo Finance, and PayPal has not confirmed the approach.

Cart Not Yet Checked Out: This is a reported offer, not a signed deal. Financing, board response, and an antitrust review of two payments giants merging still stand between the cart and the receipt.

CONSUMER

Uber looked at the global food-delivery menu, skipped the appetizers, and ordered the entrée that comes with 50 countries on the side.

Uber (UBER) announced a €41.50-per-share cash offer for Delivery Hero this morning, valuing the German delivery group at roughly $14.8 billion. The deal folds Delivery Hero's stable of brands — Korea's Baemin, Foodpanda, Foodora and Hungerstation among them — into the Uber Eats empire, the Korea Herald reported.

Food delivery has been consolidating since the pandemic-era land grab ended and profitability became the entrée rather than the garnish. This is the biggest bite yet.

Tip Your Regulator: A takeout order this size gets inspected in Brussels and Seoul before anyone eats. Expect a long antitrust review, and expect rivals DoorDash and Just Eat to lobby for extra scrutiny with everything on their plates.

FINANCE

The big six banks didn't merely beat the quarter. They beat it, framed it, and hung it in the trophy case.

Five of the six reported Tuesday, and Morgan Stanley (MS) closed out the set Wednesday with record revenue. The theme across every tape: equities desks printing numbers nobody modeled. Bloomberg Intelligence senior bank analyst Herman Chan noted on the network's July 14 show that JPMorgan's profit rose about 41%, though the bank itself cautioned analysts not to pencil in a repeat for the third quarter.

The quarter's box score reads like a video game with the difficulty turned down:

Extra Innings? Trading revenue seasonally cools in the third quarter, so the desks likely give back some of the lead. The bull case shifts to investment banking, where the SpaceX-led IPO wave that stuffed Morgan Stanley's wealth flywheel is still working through record pipelines.

Personal Seahawk Day: The Seattle Seahawks agreed to sell for an NFL-record $9.6 billion to a group led by billionaire Vinod Khosla, 59% above the record Josh Harris paid for the Commanders in 2023, with most proceeds earmarked for the Paul G. Allen Foundation, per CBS Sports.

Beige Against the Machine: The Fed's July Beige Book found economic activity rising at a slight-to-moderate pace in 11 of 12 districts, with prices increasing moderately.

Rotation Station: Cooler wholesale inflation (June producer prices fell 0.3%) helped the S&P 500 rise 0.38% to 7,572.40 Wednesday, though traders rotated out of chipmakers like Micron, down 8%, and into Big Tech, sending Apple up 4% to a record.

TSMC set the bar before breakfast; Netflix (NFLX) gets the microphone after the close, with the Street looking for about $12.6 billion in revenue. Somewhere in between, Starship attempts test flight No. 13. A big day for things that need to stick the landing.

That's the tape. We'll see you at the open. — AllThingsWallSt