If you’re ever anxious about screwing something up at work, at least you aren’t responsible for a massive worldwide technological malfunction that has left hundreds of billions of dollars in damages in its wake.

As you probably know by now—or have experienced firsthand—banks, airports, and even hospitals all had to deal with massive disruptions from a flawed software update pushed out by cybersecurity firm CrowdStrike this morning. When the update went awry it interrupted customers using Microsoft Windows in what is perhaps the biggest IT outage of all time (don’t worry, at Morning Brew we have Macs).

CrowdStrike clarified that the IT failure wasn’t due to a cyberattack or security breach, but instead a bug in their Windows update.

Beyond the danger and logistical hurdles triggered by the IT failure, the cyber meltdown caused a PR nightmare of epic proportions for a cybersecurity firm that is now in the spotlight for all the wrong reasons.

CrowdStrike shares fell 11.10% by the end of the day, while Microsoft was down 0.74%.

Should you buy the dip?

Analysts have long pointed to cybersecurity as a “recession-resistant” industry due to its necessity for huge firms in any economic environment. After all, as technology gets more advanced, so do cyberattacks and subsequent cybersecurity measures.

But CrowdStrike’s botched update has reminded investors how high the stakes are for cybersecurity companies, and how many people, companies, and institutions are seriously impacted if something goes wrong with the tech.

Despite today’s debacle, Wedbush analyst Dan Ives believes there’s still long-term upside for CrowdStrike—although he acknowledges that the outage is a “clearly a major black eye” for the company and that, “The stock will be under pressure after this global outage.”

The good news? Ives pointed to CrowdStrike’s CEO, George Kurtz, as “one of the best tech CEOs in the world” who’s managed to do some damage control for CrowdStrike. He also noted that CrowdStrike’s “strong brand and global marketing presence” will be helpful for rehabilitating the firm’s image.

But not everyone paints as rosy as a picture. Evercore analyst Peter Levine lowered his price target on the stock from $405 to $350 in the wake of the IT failure today, while maintaining an “outperform” rating on the stock. Levine called the failed update “unprecedented” in his note, while highlighting the still-unanswered questions the company must face: “The questions we have now are what’s the reputational risk, who’s liable for the financial impact, and does this headline alter the platform consolidation narrative?"

On the other hand, this disaster could be a boon to CrowdStrike’s cybersecurity rivals, including SentinelOne (S) and Palo Alto Networks (PANW), which are up 7.80% and 2.16%, respectively, on Friday. But overall the First Trust Nasdaq Cybersecurity ETF (CIBR) was down about 1.44% on Friday.

Overall, investors should have a “wait and see” mentality with how CrowdStrike responds to the outage over coming days, and how other cyber competitors perform.

“It could create opportunity for some competitive displacements, but this will take time to determine the path of CIOs and companies looking ahead and legal actions related to this outage,” wrote Ives.—LB

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Investors poured into the small-cap trade this week as semiconductors sold off and tech finally took a breather. But while this rotation was a long time coming, it may be too much of a good thing.

According to Variant Perception, with so many traders stocking up on small caps, the group has become exposed to “bad news catalysts.” Who knows, maybe one of those catalysts might be the largest tech outage in history?

Special thanks to our readers who submitted alternatives to “rise” and “fall” for this section. We’ll use the best of the bunch today, and in future editions!

🟢 What’s up

• Intuitive Surgical entered its slay era, serving 9.34% thanks to a strong earnings report.
• Arm Holdings went Super Saiyan, soaring 3.20% after it received an analyst upgrade from Morgan Stanley, as well as a higher price target.
• Schlumberger waxed like the moon, rising 1.97% on an earnings report that missed estimates but showed surprisingly strong international revenue growth.

What’s down

• SunPower transformed into a stock submarine, sinking 55.01% after the company made it clear it’s about to go out of business.
• American Express fell faster than a greased pig on skates, sliding 2.68% after beating bottom line expectations but missing on revenue.
• Plug Power turned into a lead balloon, descending 13.87% after management declared a $200 million stock offering.
• Halliburton crumbled like a cookie, dropping 5.63% following a mixed earnings report that saw the fracking giant fall short of revenue expectations.
• Travelers journeyed to the center of the Earth, burrowing 7.73% after beating earnings expectations, missing on revenue, and revealing that catastrophe losses came in higher than hoped.
• Comerica sank like a stone, plummeting 10.50% due to lower net interest income last quarter and forecasts of lower interest income in the quarters ahead.

Fortunately for Netflix—but unfortunately for everyone mooching off of their parents—cracking down on password sharing proved to be an effective strategy that Netflix rode to the bank this earning season.

The company reported earnings yesterday after the market closed, and they were a show-stopper. Implementing measures to prevent password sharing wasn’t the only thing boosting its subscriber count. Netflix’s two hit shows this past quarter—the steamy Regency-era English drama Bridgerton, and Baby Reindeer, the creepy thriller that I am too afraid to watch—added 8 million new subscribers over the second quarter, the company reported.

This was the most subscribers the streaming service added since the second quarter in 2020, when we all were mesmerized by bizarre docuseries Tiger King to help distract us from the collapse of society amid the Covid-19 pandemic.

The subscriber boost helped Netflix beat Wall Street’s earnings expectations. Its revenue came in at $9.56 billion, slightly higher than estimates of $9.53 billion, and the company reported $4.88 earnings per share, beating analyst expectations of $4.76 by 2.5%.

Netflix’s advertising-supported memberships were a closely watched metric this quarter, given that it’s still a new and as-yet-untested part of the business. Fortunately for shareholders, paid memberships jumped 16.5%, pumping more funds into the company’s coffers.

But shares still dropped after the announcement, largely due to Netflix’s forward-looking guidance warning that subscriber count would drop next quarter. However, the company did lift its revenue estimate for the full year.

Should investors tune in?

Heading into yesterday evening, investors had to get great news to justify the firm’s high share price, which has risen 37% year to date, far outpacing the S&P 500’s 17% gain over the same time period.

And although the second quarter was a huge success for the entertainment company in a competitive market, some analysts warn that its valuation could be lofty considering how tenuous the streaming business is.

“Netflix continues to win in the video entertainment streaming market and remains a compelling story,” wrote Deutsche Bank analyst Bryan Kraft in a note today. “We believe the valuation is demanding at 34x 2024E earnings per share (EPS) and 30x 2025E EPS, especially given what we believe will be a significant slowdown in revenue, operational intelligence (OI), and EPS growth next year.” Kraft maintained his “hold” rating on the stock.

According to a compilation of analyst ratings on MarketWatch, 26 analysts give the stock a buy, while 6 are overweight, 19 say hold, and only 2 give it an underweight or sell rating.

So, whether or not it’s time to buy shares of Netflix, it looks like it’s time for me to invest in my own personal subscription to catch Outer Banks season four.—LB

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• 6-month Treasury bills are a hot new buy among retail investors thanks to high yields and quick turnover.
• America needs to build 4.5 million new homes to meet demand across the country, and one economist has a plan to do it in just five years.
• Solar energy stocks should benefit from a tougher stance on China in a second Trump presidency, while EV makers will suffer—except for Tesla.
• A bait-and-switch scam cost Robinhood $2 million over the course of four years.
• Check please: With US retailers beginning to decline check payments, primarily affecting Americans over the age of 55.
• Speaking of the 55-and-up crowd, they hold 70% of the wealth in the US and they’re spending it at retirement communities, creating a surge in local economies.

After a quiet week of data, things pick back up again next week. We’ll get some insight into the housing market with Tuesday’s Existing Home Sales report, as well as Wednesday’s New Home Sales. We’ll see how the economy is doing with Wednesday's PMI key reading, plus Thursday’s Durable Goods Orders, Wholesale Inventories, and an advance look at second-quarter GDP.

Finally, Friday brings out the big guns with a reading of the Personal Consumption Expenditures Price Index, or PCE. This reading, plus Wednesday’s PMI report, will go a long way toward determining the Fed’s next move—particularly where a July rate cut vs a September rate cut is concerned.

Meanwhile, earnings season hits full stride next week with a slew of big names reporting their quarterly numbers.

Monday: Verizon, Truist Financial, SAP, and NXP Semiconductors lead things off next week.

Tuesday: Alphabet, Tesla, Coca-Cola, Visa, GE, UPS, Comcast, Spotify, Paccar, GM, and Capital One.

Wednesday: AT&T, IBM, Chipotle, Ford Thermo-Fisher Scientific, Waste Management, and General Dynamics.

Thursday: A hearty mix of healthcare (AstraZeneca, Abbvie) and footwear (Deckers Outdoor, Skechers), plus Union Pacific, Unilever, Honeywell, Valero.

Friday: Bristol-Myers Squibb, Colgate, and 3M wrap up the week.

A new trend has gripped the ultra-rich, who are apparently tired of spending Scrooge McDuck amounts of money on yachts, cars, and an entire fossilized stegosaurus.

Cryogenic freezing was once the stuff of sci-fi novels, but it’s becoming more and more of a reality as technology advances. In fact, there are facilities that will cryonically preserve a person’s body after they die, and there are already hundreds of such frozen cadavers stashed away for future thawing once death has been cured.

Of course, such a process comes with a hefty price tag—which includes not only the upfront fees but also the establishment of a trust that will continue to pay for the freezers to stay on. And it also comes with a lot of thorny philosophical conundrums, such as, “Once revived, are you the same person you were?” and, “When I’m frozen, does that make me a people popsicle?”

Talk about beating the summer heat.—MR