Breakfast News: PUBM Falls Despite Strong Q2

Breakfast News: PUBM Falls Despite Strong Q2

Source: Image Created by Jester AI.

1. PubMatic's Q2 Beat Overshadowed by Outlook

Rule Breakers recommendation PubMatic (PUBM -21.10%) fell over 24% after the market closed, as the forecast for the coming quarter disappointed investors despite second-quarter revenue and adjusted earnings beating previous guidance.

• Q3 revenue guidance of $63.5 million, 10.8% below expectations: Fool analyst Alicia Alfiere commented "3Q guidance was a disappointment for some investors, as the company forecasted revenues to fall at least 3% (that's excluding last year's political ad revenues), due to macro uncertainty and platform issues for a top DSP client."
• "We are building for what we believe will be one of the largest market shifts our industry has seen in years": CEO Rajeev Goel highlighted new AI-powered products, with platform expansion another reason why he believes the long-term trajectory of the company is bright. Alicia notes Goel thinks "AI is blurring the line between demand and supply side platforms, and that his company could be well positioned to grow as a result."

2. Musk Accuses Apple of AI Antitrust

Tesla (TSLA -0.43%) CEO Elon Musk has attacked Apple (AAPL 0.84%), claiming the App Store favors OpenAI on the chart leaderboards, as he seeks to enhance the market share of his xAI company.

• "An unequivocal antitrust violation": Musk confirmed he will be taking immediate legal action against Apple, saying they were playing politics by not highlighting his products relative to competitors.
• "OpenAI will just stay focused on making great products": Apple and OpenAI have a partnership around AI built into the latest iPhones, but any special treatment was downplayed by OpenAI CEO Sam Altman in a reply to Musk.

3. China Deters H20 Chips Amid Tariff Pause

Chinese authorities have sent notices to a range of companies, discouraging them from using Nvidia's (NVDA 0.03%) H20 chips, despite President Trump confirming a 90-day extension of the pause on additional tariffs.

• Concern around location-tracking and remote shutdown capabilities: The guidance was particularly focused on any use around government-related purposes by either state or private businesses, given fears around chip usage.
• New tariff pause increases odds of physical meeting: The extension means headline rates of 30% for Chinese imports and 10% on U.S. exports will continue, but the November deadline means more time for trade teams to meet.

4. Next Up: CAVA, CRWV, CRCL & CPI

Rule Breakers rec CAVA (CAVA 0.83%) is set to report quarterly earnings after the closing bell, with expectations of a strong 23% rise in revenue, building on the rapid growth from last quarter.

• Two of 2025's largest initial public offerings: CoreWeave (CRWV -0.89%) will release results following the market close, with investors focused on the size of AI capex spend. Circle (CRCL 6.25%) will report ahead of the opening bell, with the stablecoin and blockchain company expected to post a Q2 loss.
• Higher inflation could put pressure on future rate cuts: Consumer Price Index inflation data for July is expected to rise from 2.7% in June to 2.8%, with the impact of higher tariffs likely to start to feed through to price level data.

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