☕️ Apple posts record $109B quarter but stock falls

Hi there, this is your daily ☕️ Finpresso.

In today's newsletter:

🍎 Apple posts record $109B quarter but stock falls

🇨🇳 China leads the AI models everyone runs on

☁️ AWS sales surge 37% in fastest growth in years

🇯🇵 Yen surges most in 2 years on intervention

📉 US economy slowed to 1.5% in Q2

🤯 Star AI hedge fund sells all stocks to Citadel

Plus: 🌍 10 macro news, 🏢 8 corporate news, 💰 8 deal flow, and 📑 5 research & reports.

📊 Before The Bell

• Apple shares fell more than 6% in after-hours trading despite a record $109.42 billion in fiscal third-quarter revenue, as investors focused on a softer outlook of 9% to 11% sales growth this quarter, which the company blamed on tight component supplies.
• The iPhone drove the beat with $54.25 billion in sales, up nearly 22%, while Mac revenue jumped almost 29% to $10.35 billion; profit reached $2.02 per share versus the $1.89 expected, though tariff reimbursements added 11 cents.
• Gross margin hit a record 50.06%, roughly two percentage points of which came from refunds after the US Supreme Court struck down certain Trump-era tariffs, meaning the underlying margin would have landed near the 47.9% analysts expected.

• Chinese open-source AI models now account for 48% of usage tracked by OpenRouter, up from 20% a year earlier, while US models slid to 32% from 74%, as low-cost Chinese systems become the base others build on.
• A Nvidia-led coalition signed by Microsoft, Meta, OpenAI and Google is urging Washington to treat open AI as a national priority, warning that Chinese labs like Zhipu and Moonshot are releasing capable models at a fraction of US costs.
• The stakes are commercial: open "weights" that companies download and run in-house cut costs and keep proprietary data private, threatening the premium model OpenAI and Anthropic charge for access to their closed, proprietary systems.

• Amazon's cloud unit AWS posted its fastest growth in 18 quarters, with sales up 37% year-on-year as businesses ramped up spending on cloud computing and artificial intelligence services.
• The surge drove AWS operating profit to $16.6 billion from $10.2 billion, powering total quarterly revenue up 20% to $200.6 billion and sending Amazon stock up 3.90% to $235.50, then 6.37% higher after hours to $250.49.
• Heavy spending to expand data centers and chips pushed free cash flow to a $7.6 billion outflow from an $18.2 billion inflow, while a $53.4 billion pre-tax gain, mainly from its Anthropic stake, lifted net income to $62.6 billion.

• The yen jumped as much as 3.3% against the dollar on Thursday, its biggest intraday move since December 2023, after Japan's Nikkei reported officials had again stepped into the market to support the currency, which closed at 159.53.
• Japan spent a record ¥11.73 trillion buying yen last quarter, likely drawing on foreign reserves including US Treasuries, yet the currency stayed near a four-decade low amid rising oil prices, budget deficits and a wide US-Japan interest-rate gap.
• The move landed a day before the Bank of Japan's rate decision, with markets expecting a hold after last month's hike lifted rates to their highest since 1995, though analysts said the meeting is now "live" given past interventions preceded hikes.

• The US economy grew at just 1.5% in the second quarter, below the 1.8% economists expected and down from 2.1% in the first quarter, signaling a cooling in overall activity.
• Inflation stayed well above the Fed's 2% target, with the central bank's preferred price gauge running at 3.7% annually, though a monthly dip of 0.1% and steady core reading of 3.3% matched forecasts.
• Stock futures rose and Treasury yields jumped sharply after the data, which landed a day after a divided Fed voted 9-3 to hold its key rate at 3.5%-3.75%, where it has stayed all year.

• Situational Awareness, the roughly $20 billion AI-focused hedge fund started by ousted OpenAI researcher Leopold Aschenbrenner, has sold its entire public stock portfolio to Ken Griffin's Citadel, a person familiar with the deal told Axios.
• The sale lands during a recent sell-off in AI stocks, especially chipmakers, and follows a Financial Times report that the fund had suffered heavy losses in the rout and was seeking fresh capital from investors.
• Backed early by Stripe's Patrick and John Collison, former GitHub chief Nat Friedman and ex-Apple employee Daniel Gross, the fund was founded after Aschenbrenner was fired from OpenAI in 2024 over an alleged leak he disputes.

🌍 Macro News

• Bank of Japan holds rate at 1%, flags inflation risks ahead. LINK
• China's manufacturing PMI fell to 49.2, ending four-month expansion streak. LINK
• JPMorgan warns fading Clarity Act odds could deter institutional crypto participation. LINK
• Fed officials say dollar-linked stablecoins will strengthen the dollar's global role. LINK
• Major banks completed cross-border payments using tokenized money in BIS pilot. LINK
• EU's AI Act is becoming a global corporate governance benchmark, study shows. LINK
• Coal's share of China's electricity fell below 50% for first time. LINK
• Drone strikes on Novorossiysk shut Kazakhstan's main crude export pipeline again. LINK
• South Korea's Kospi jumped 14% Friday, its largest one-day gain ever. LINK
• Bond yields set for biggest monthly rise since March on inflation fears. LINK

🏢 Corporate News

• Anthropic says three Claude models breached real systems during safety testing. LINK
• ICE to buy MarketAxess for $5.7 billion at 33% premium. LINK
• Apple warns of supply constraints as AI demand squeezes memory chips. LINK
• Nexus Data Centers seeks $15 billion loan for Anthropic's Texas AI campus. LINK
• Scale AI names Francis deSouza, ex-Google Cloud executive, as new CEO. LINK
• Coinbase shares fell 5% after quarterly revenue missed analyst expectations. LINK
• New York sues Kalshi over unlicensed gambling, seeking billions in damages. LINK
• Zoox wins federal exemption to launch paid robotaxi rides in Las Vegas. LINK

📈 Stocks

📑 Research & Reports

• Apollo study finds AI exposure lowers wage growth more than jobs lost. LINK
• US private credit default rate hit record 6% in second quarter. LINK
• Jefferies report says China is best positioned to lead global AI race. LINK
• Bitcoin's major buyers turned net sellers in first half of 2026. LINK
• Tokenized gold proved reliable collateral, but only 1.5% is actively used. LINK

💰 Deal Flow

• HSBC exits Australian retail banking, selling loan book to Blackstone. LINK
• Vertex's $10 billion Crinetics deal sparks takeover speculation around Viking Therapeutics. LINK
• Nscale buys Anyscale for $1.65 billion to expand AI software offerings. LINK
• Commonwealth Fusion Systems raises $1 billion more, reaching $4 billion total. LINK
• Health-testing startup Function raises $450 million to expand early disease detection. LINK
• Schneider Electric buys 90% of AiDASH for $350 million in climate tech. LINK
• AI research startup Simile raises $200 million Series B at $2 billion valuation. LINK
• Venezuelan fintech Cashea raises $100 million to expand payment services. LINK

📅 Market Calendar

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