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Baby Boom Fuels Progyny’s Rally
2:46 pm — PGNY +20.41%
By Alicia Alfiere
Team Rule Breakers
Progyny’s (PGNY +22.81%) stock is up today, partly because of the conservative guidance issued during its fourth-quarter earnings call. Back in March, Progyny projected that benefit usage could slip to the lower end of its historical range. That conservative guidance likely caused Progyny’s share price to decline after its fourth-quarter results were released.
The company reported first-quarter earnings and, instead of historically low benefit utilization, said member engagement came in at the higher end of expectations.
Nelnet’s Growth Continues
2:26 pm — NNI -15.07%
By Buck Hartzell
All divisions of Nelnet (NNI 14.62%) grew YoY. The biggest driver of growth is their acquisition of Klarna’s (KLAR 0.54%) BNPL loans. That balance reached $766.2 million at quarter end. Their provision for loan losses was $48.5 million vs $13.0 million in Q1 2025. This was entirely due to portfolio growth. Their bank saw net loan and interest income grow 43.5% YoY to $17.8 million. Loan Servicing grew revenues 5.8% to $128.8 million. Education Technology and Payments grew revenues 4.8% YoY to $154.4 million. Nelnet still has two very large assets in ALLO Communications and Hudl that I believe are undervalued on their balance sheet. The stock is still a buy.
NYSE: NNI
Key Data Points
Amazon Data Center Overheats
1:10 pm -- AMZN +0.8%
Amazon (AMZN +0.68%) Web Services is battling a "thermal issue" at a Northern Virginia data center that has crippled major trading and betting platforms. Starting Thursday night, the overheating in a primary US-East-1 availability zone triggered server impairments for Coinbase Global (COIN +2.04%) and Flutter Entertainment's (FLUT +0.33%) FanDuel. While Coinbase reported core services are resolving, FanDuel users faced extended lockouts, preventing crucial mid-game bet cash-outs. AWS, which controls a third of the cloud market, expects a full recovery to take several hours as technicians bring supplemental cooling capacity online to rescue the affected hardware.
- The Cost of Centralization: This single-zone failure highlights the systemic risk for fintech firms reliant on AWS, as even localized hardware heat can disconnect millions from global markets.
- Infrastructure Fragility: The reliance on EC2 virtual servers means that until the physical Virginia facility cools down, digital platforms remain vulnerable to intermittent "instance impairments."
Today's Lunchtime News
1:05 pm -- PGNY +17.5%
Progyny (PGNY +22.81%) posted higher first-quarter revenue and profit while expanding its client base and completing a $200 million share repurchase program, signaling continued momentum despite the loss of a previously disclosed large client. Revenue rose 1.4% year over year to $328.5 million, or 12.2% excluding the lapsed contract.
- Operational highlights: Net income jumped to $24.2 million, or $0.29 per diluted share, from $15.1 million a year earlier, while gross margin expanded to 25.3% from 23.4% on operational efficiencies and lower stock-based comp. Fertility benefit services revenue rose 1.5% to $209.4 million, and the company served 595 fertility and family building clients, up from 532 a year earlier.
- Capital return push: Progyny repurchased more than 5.5 million shares for $116.4 million during the quarter, completing its $200 million authorization. The board is currently evaluating a new repurchase plan. CEO Pete Anevski said the early selling season is pacing ahead of last year, with new pipeline build "substantially favorable" versus a year ago.
NASDAQ: PGNY
Key Data Points
MercadoLibre's Revenue Surges 49%
12:20 pm
By Buck Hartzell
MercadoLibre's (MELI 12.73%) margins shrank as they invested in future growth. Credit expansion, improved logistics, first party sales, cross border trade and free shipping are all working well.
- Revenue + 49% YoY (46% FXN) to $8.8 B USD (fastest growth since Q2 2022)
- Income from ops -19.9% to $611 M (6.9% margin vs 12.9% in Q1 25)
- Net income -15.5% to $417 M (4.7% margin vs 8.3% in Q1 25)
- TPV + 50% YoY (55% FXN) to $87.2 B
- Credit portfolio + 87% YoY to $14.6 B
Issued 2.7 M credit cards in Q1 26. Credit growth requires reserving, which hurts near term margins. The stock remains attractive for patient capital.
NASDAQ: MELI
Key Data Points
Gas Prices Sink Sentiment to New Low
11:25 am
Consumer sentiment plummeted to a preliminary reading of 48.2 in May, marking a fresh record low as the Iran war continues to drive energy costs higher. Despite a strong labor report, the University of Michigan survey revealed that one-third of respondents blame surging gas prices — now averaging $4.54 nationally — for their deteriorating outlook. While retail giants like Walmart (WMT +0.65%) and Amazon (AMZN +0.68%) have remained resilient, the 9% drop in current conditions suggests major purchases are being shelved. Sentiment is unlikely to recover until supply disruptions resolve, though stock indexes stayed positive as long-term inflation expectations eased slightly to 3.4%.
- The Double-Whammy Effect: Beyond the pump, another third of consumers cited aggressive tariffs as a primary headwind, creating a challenging environment for import-heavy companies like Target (TGT 0.36%).
- Inflationary Silver Lining: While current attitudes are grim, the one-year inflation projection dipped to 4.5%, offering the Federal Reserve a slim hope that price expectations are not becoming permanently unanchored.
The High Cost of Scaling AI
10:25 am
The AI infrastructure race is becoming a high-stakes cash-flow test for Alphabet (GOOG +0.18%), Microsoft (MSFT 1.43%), Amazon (AMZN +0.68%), and Meta Platforms (META 1.06%). Capital expenditures for data centers and chips are consuming an increasingly large share of operating cash, with Amazon spending nearly everything it generates on build-outs. Alphabet is the most striking example of this tension; its forward price-to-free-cash-flow multiple has soared above 200x. While these "hyperscalers" can afford the massive investment, the market is closely watching for when this capital-intensive "backbone" starts yielding clear bottom-line payoffs as free cash flow gets squeezed.
- The 100% Threshold: If capex exceeds operating cash, these giants must look beyond daily profits to fund growth, a pivot that historically triggers investor anxiety.
- Valuation Disconnect: Alphabet’s surging multiple suggests investors are pricing in future AI dominance while simultaneously ignoring the shrinking pile of cash that survives the build-out.
Opening Bell
9:35 am
Markets are climbing this Friday as a robust jobs report and resilient tech earnings override geopolitical friction. Nonfarm payrolls added 115,000 positions in April, shattering the 55,000 estimate, while the unemployment rate held steady at 4.3%. Chipmakers are providing the muscle, with Qualcomm (QCOM +7.54%) up 6% and Micron Technology (MU +13.40%) rising 4%. Despite a brief exchange of fire in the Strait of Hormuz, which President Trump characterized as a "love tap," markets remain optimistic. Investors are closely watching for Iran's formal response to a peace proposal as the S&P 500 continues to flirt with all-time highs.
- Broad-Based Earnings Power: Analysts expect 20% year-over-year earnings growth to persist through 2026, suggesting the current market momentum has significant fundamental support beyond just a few tech giants.
- Energy Market Tension: Crude prices hover near $95 as the U.S. Navy destroyers intercepted attacks, though the continued ceasefire suggests traders are pricing in a diplomatic resolution rather than a full-scale oil supply shock.
Market indexes
Trade Desk's Real Risk Is the Publicis Standoff
9:15 am -- TTD -13.11% in pre-market trading
By Sanmeet Deo
Team Rule Breakers
It seems the most pressing concern coming out of The Trade Desk's (TTD 4.53%) Q1 2026 earnings is not the macro nor the EPS miss but whether the Publicis situation represents an isolated negotiating dispute or the beginning of a broader agency pushback against TTD's pricing and transparency practices.
Omnicom's subsequent audit found no issues, which suggests the Publicis allegations may be overstated. But the market does not trade on what Omnicom found. It trades on uncertainty, and the uncertainty here is significant. Publicis manages enormous ad budgets for global brands. If their advisory against TTD sticks with even a portion of their clients, the revenue impact in Q2 and Q3 could be material, and TTD's guidance would be giving no credit to that risk.
The secondary concern is margin trajectory. A full-year target of at least 40% adjusted EBITDA margin requires a dramatic improvement from the 30% reported in Q1. That ramp requires either a meaningful revenue acceleration in the back half of the year or aggressive cost containment. The call gave investors no clear picture of which lever management is pulling.
The bull case remains intact in the long-term, the open Internet thesis, retail media, AI search, objectivity as competitive advantage. Jeff Green's $150 million personal stock purchase is not nothing. But the near-term is genuinely cloudy, and the call did more to validate investor anxiety than to resolve it.
NASDAQ: TTD
Key Data Points
U.S. Hiring Surges Past Expectations
9:15 am
The U.S. labor market demonstrated surprising resilience in April, adding 115,000 jobs--nearly doubling economist forecasts of 65,000. While the tech-heavy information sector continues to contract, essential services like healthcare and logistics are propping up the S&P 500. Wage growth moderated to a 3.6% annual clip, providing a "Goldilocks" scenario for the Federal Reserve: strong enough to prevent a recession, but cool enough to avoid an inflationary spiral. This stability likely cements a "higher-for-longer" interest rate path, favoring companies with robust cash flows over speculative growth names.
Lime's IPO Filing Signals Thaw in IPO Market
8:00am
Micromobility pioneer Lime, officially incorporated as Neutron Holdings, has filed for an initial public offering to list on the Nasdaq under the ticker symbol "LIME." The start-up arrives at the public gates with significant institutional backing, most notably from Uber Technologies (UBER 1.94%), and a narrative centered on robust revenue expansion and a surging global user base. While the filing remains "placeholder" in nature--omitting specific pricing terms and valuation targets--the heavy-hitting underwriting team led by Goldman Sachs (GS +0.82%) and JPMorgan Chase (JPM 1.41%) suggests a high-conviction push to capitalize on the recent thaw in the IPO market.
- Strategic Ecosystem Value: As a key partner in the Uber app ecosystem, Lime's public performance will be a critical litmus test for the long-term viability of the rental scooter and e-bike business model.
- Wall Street Heavyweights: The inclusion of top-tier bookrunners like Jefferies (JEF +2.49%) and Evercore (EVR +2.24%) indicates that institutional appetite for late-stage venture success stories is returning to the transportation sector.
This Morning's Breakfast News
7:30 am -- NET -17.75% in pre-market trading
Cloudflare (NET 23.26%) fell over 18% ahead of the opening bell as investors see the company belatedly playing catch-up on AI, with management noting it's "the biggest tailwind we've ever seen," along with quarterly results showing a 4.67% fall in gross profit margins from the prior-year period.
- "Cloudflare's usage of AI has increased by more than 600% in the last three months alone": 1,100 staff are being cut, with an email sent to staff saying management "have to be intentional in how we architect our company for the agentic AI era," with the job cuts representing 20% of the current workforce.
- News overshadows strong set of results: Despite the fall in gross margin, revenue rose by 34% versus the same period last year, with the outlook for full-year fiscal 2026 revenue and earnings raised.
ICYMI: Thursday's Scoreboard
6:30 am -- COST unchanged in pre-market trading
Costco (COST 0.52%) was the subject of the latest Scoreboard video.
Rocket Lab's Best Quarter Is the Drama-Free One
6:00 am -- RKLB +6.83% in pre-market trading
By Lou Whiteman
Team Hidden Gems
Rocket Lab (RKLB +31.23%) beat expectations for the quarter, but the real story of the earnings report was how little drama there was about the quarter.
The company generated $200 million in revenue in the quarter and posted a $12 million EBITDA loss, better than Wall Street's $190 million and a loss of $26 million expectation. But note that the company had guided for $185 million to $200 million in revenue, and the EBITDA beat was largely because of accounting: Rocket Lab benefited from a reversal of some 2025 bonus compensation accruals.
Rocket Lab needs to be viewed as a long-term growth story, not a quarter-to-quarter standout. And the company's forecast for the future, though not surprising, was encouraging. The company grew its backlog by 20% since last quarter thanks to strong bookings in its launch business.
NASDAQ: RKLB
Key Data Points
TSMC's AI Demand Drives April Revenue Higher
5:15 am -- TSM +0.63% in pre-market trading
TSMC (TSM 1.40%) reported a robust 17.5% year-over-year revenue increase for April, totaling NT$410.73 billion ($13.08 billion), as the global appetite for advanced AI hardware remains insatiable. While monthly sales dipped a marginal 1.1% from March, the year-to-date trajectory is formidable, with revenue up nearly 30% through the first four months of 2026. The world's leading foundry is successfully navigating a complex macro environment, leveraging its dominance in 3nm and 5nm nodes to support "Magnificent Seven" clients like Nvidia (NVDA +1.63%) and Apple (AAPL +2.05%). Management's bullish Q2 guidance of up to $40.2 billion suggests that the bottleneck for growth remains production capacity rather than a lack of orders.
- Aggressive Capex Expansion: To meet "extremely strong" demand, the company has raised its 2026 capital expenditure target to a range of $52 billion to $56 billion, focusing on advanced packaging and new global fabs.
- Geopolitical Balancing Act: Despite tightening U.S. technology restrictions on high-end silicon, TSMC's record-high margins of 66.2% prove its specialized manufacturing moat currently outweighs the risk of regional trade friction.
NYSE: TSM
Key Data Points
Top of the Morning
5:00 am -- SRAD +0.88% in pre-market trading
By Morning Show host Jim Mueller, CFA
Team Rule Breakers
What should you do if you're the CEO of a company when a short attack article comes out about your company?
If you're smart, very little. At most, comment on any errors of fact, answer analyst questions, and then shut up.
That's what Carsten Koerl, CEO of Sportradar (SRAD 3.89%), has done.
A bit over two weeks ago, Muddy Waters and Calisto Research put out nearly identical short reports on the company claiming, among other things, that the company should be unprofitable because it was purposefully doing business with criminal enterprises. Evidence given was an interaction with a sales rep and finding evidence of Sportradar's code on various illegal gambling websites.
Shares fell over 20% that day. Good for Muddy Waters, I guess.
In reply, the company moved up its earnings release and did nothing else until the new release date. Then, on the day of earnings, they filed with the SEC a document explaining that there were three ways for their code to be found on various sites, only one of which was legitimate. Further, the way Muddy Waters detected the code couldn't distinguish among the three.
During the conference call Koerl also answered questions posed by analysts about various points raised by Muddy Waters. For example, he said that the sales rep was quite young (as in inexperienced) and that talk is talk until due diligence has been performed. He strongly implied that such due diligence would have not led anywhere if the Muddy Waters reps were legitimate instead of trying to entrap the rep.
He answered a few other questions, but then he did a smart thing. He shut up.
4:30 am -- ABNB -0.98% in pre-market trading
By Morning Show host Alicia Alfiere
Team Rule Breakers
Airbnb (ABNB +1.32%) reported that gross booking value, which is the value of bookings on the booking platform, grew 19% to total $2.9 billion in the first quarter. That's impressive, but what's more fascinating is that the company's new "Reserve Now, Pay Later" bookings drove roughly 20% of global gross booking value. This new feature has changed how guests can book and Airbnb reports that the increased flexibility has caused long lead times and travelers booking pricier accommodations.
And there were other signs of a platform that continues to grow-like an increase in first time bookers. The growth in these new-to-Airbnb travelers grew 10% in the first quarter-which is the highest rate seen since early 2022. Additionally, this new Airbnb-er expansion is driven by younger customers and travelers who live in Airbnb's expansion markets, like Brazil, Japan, and India.
NASDAQ: ABNB
Key Data Points
Before the Opening Bell
4:45 am
U.S. stock futures advanced early Friday as optimism over a potential diplomatic resolution to the U.S.-Iran conflict outweighed Thursday's slight retreat from record highs. Despite the Dow's 314-point slide yesterday, all three major benchmarks remain on track for a winning week, buoyed by a resilient tech earnings season. The Nasdaq Composite leads the charge with a projected 2.8% weekly gain, while the S&P 500 and Dow Jones Industrial Averagehave risen 1.5% and 0.2%, respectively. All eyes now pivot to the April nonfarm payrolls report, which will serve as a critical health check for the economy amid shifting geopolitical undercurrents.
