markets

8/6/25

NRG dives on Q2 miss, data center deal where investors were “looking for more”

Power producer and energy trader NRG dove Wednesday after adjusted earnings fell short of Wall Street expectations and GAAP results swung to a surprise loss, linked to fluctuating values of derivatives contracts the company uses to hedge.

NRG is a cornerstone of the AI power trade, a widely placed bet that power producers will prosper from surging demand for juice from the data centers built to power AI.

This consensus has turned a normally sleepy sector of the stock market — utilities — into an outperformer this year. The S&P 500 utilities sector is up more than 13% in 2025, compared to the roughly 8% gain for the broader index.

In addition to the earnings miss, investors also seemed unimpressed with a data center deal that NRG announced in conjunction with earnings, long-term agreements to provide 295 megawatts of power for data centers. Analysts covering the stock at Jefferies wrote of the day’s disappointment:

“Expectations were simply higher and the name is more crowded than we appreciated. We have had over fifteen investor inbounds on NRG this morning, an exceptionally high amount, including many from non-sector specialists, highlighting how crowded of a long the stock has become. Investors were seemingly looking for more than the ~300MW data center contracts.”

NRG Energy Stock Sinks on Earnings. Buy the Dip, Jefferies Says.

NRG Energy Stock Sinks on Earnings. Buy the Dip, Jefferies Says.

This consensus has turned a normally sleepy sector of the stock market — utilities — into an outperformer this year. The S&P 500 utilities sector is up more than 13% in 2025, compared to the roughly 8% gain for the broader index.

In addition to the earnings miss, investors also seemed unimpressed with a data center deal that NRG announced in conjunction with earnings, long-term agreements to provide 295 megawatts of power for data centers. Analysts covering the stock at Jefferies wrote of the day’s disappointment:

“Expectations were simply higher and the name is more crowded than we appreciated. We have had over fifteen investor inbounds on NRG this morning, an exceptionally high amount, including many from non-sector specialists, highlighting how crowded of a long the stock has become. Investors were seemingly looking for more than the ~300MW data center contracts.”

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Nia Warfield, Luke Kawa

S&P 500 closes at record as tech heavyweights flex (besides Apple)

The Magnificent 7 did the heavy lifting, performing better than any S&P 500 sector ETF on Tuesday.

Bull by the horns

markets

4h

Oracle rips as backlog builds, but company misses on top and bottom lines

Oracle shares shot higher after-hours as the company reported a growing backlog, even though its fiscal Q1 results fell slightly short of expectations. The company reported:

Adjusted earnings per share of $1.47 vs. expectations of $1.48.
Revenue of $14.93 billion vs. expectations of $15.04 billion.

Shares were up 21% in after-hours trading, which is a pretty crazy stock move for a company with a market cap of more than $675 billion.

The market was likely impressed by a giant build in the company’s “remaining performance obligations,” or RPO, which is how the company measures the value of signed cloud computing deals that haven’t yet been reported as revenue. In a statement, CEO Safra Catz said:

“We signed four multi-billion-dollar contracts with three different customers in Q1. This resulted in RPO contract backlog increasing 359% to $455 billion. It was an astonishing quarter — and demand for Oracle Cloud Infrastructure continues to build. Over the next few months, we expect to sign-up several additional multi-billion-dollar customers and RPO is likely to exceed half-a-trillion dollars.”

Oracle Announces Fiscal Year 2026 First Quarter Financial Results

Oracle Announces Fiscal Year 2026 First Quarter Financial Results

The market was likely impressed by a giant build in the company’s “remaining performance obligations,” or RPO, which is how the company measures the value of signed cloud computing deals that haven’t yet been reported as revenue. In a statement, CEO Safra Catz said:

“We signed four multi-billion-dollar contracts with three different customers in Q1. This resulted in RPO contract backlog increasing 359% to $455 billion. It was an astonishing quarter — and demand for Oracle Cloud Infrastructure continues to build. Over the next few months, we expect to sign-up several additional multi-billion-dollar customers and RPO is likely to exceed half-a-trillion dollars.”

markets

5h

Robinhood rides index inclusion rally to record close

Robinhood Markets notched a new closing high Tuesday, as the crypto, stock, and options brokerage continued to ride a rally set off by the announcement that it would be added to the S&P 500 Index.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

Robinhood appears to be benefiting from the so-called inclusion effect, a market phenomenon where companies that are added to major market indexes can see a price move as index funds — whose holdings must mirror the membership of the index — rush to buy the stock.

For what it’s worth, it seems like Robinhood will upon entry (effective prior to the market open on September 22) be the top-performing member of the index, as its roughly 220% gain this year is more or less double that of the current leader, Seagate Technology Holdings.

markets

5h

GameStop posts impressive Q2 results with big sales beat

Don’t call it a comeback!

GameStop is jumping aftermarket as the video games and collectibles retailer posted an impressive set of second-quarter results.

Net sales: $972 million (estimate $823 million).
Adjusted diluted earnings per share: $0.25 (estimate $0.16).

Note: these consensus estimates, compiled by Bloomberg, are from only two analysts.

The sales beat is particularly noteworthy, as the company had already done an exemplary job of expense control to help protect its bottom line. Revenues were up more than 20% versus the year-ago quarter, the biggest annual jump in sales since the company (and the world) was emerging from the pandemic in 2021.

The options market implies a move of plus or minus about 9.4% on earnings.

For a while, GameStop’s ability to generate positive net income was purely a function of the interest earnings on its substantial cash hoard. But now, GameStop has strung together five consecutive quarters of positive operating cash flows for the first time in its history!

This was the quarter when the company began to act on its bitcoin treasury strategy, raising money through the sale of convertible notes and using some proceeds to purchase the crypto asset.

Because of how much market value has been ascribed to potential for GameStop CEO Ryan Cohen to use its significant cash holdings to transform the company, the prospect of converting cash into bitcoin initially did not sit too well with investors following the announcement of this new strategic push in March.

Shares of the once-upon-a-time meme stock really didn’t get too much love during retail frenzies earlier in the summer, and were down about 25% year to date heading into this release.

As of the close of the quarter, its bitcoin holdings were valued at $528.6 million.

Western Digital Seagate Technology Rise to top of S&P 500

Data storage is so hot right now

A rapid turnaround in profitability helps explain how Seagate Technology and Western Digital have clawed to the top of the S&P 500 this year.

Matt Phillips7h

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