• Commodities: Oil prices jumped after Iran launched missiles at Kuwait, expanding the recent surge in hostilities beyond the Strait of Hormuz.
• Bonds: Yields tumbled after Federal Reserve Governor Christopher Waller said that he’s inclined to keep interest rates steady at the Fed’s meeting later this month.
• Everything else: Stocks soared as yields fell, spurred by big gains among Mag 7 stocks. Bitcoin climbed back above $81,000 while the odds of a rate hike sank.

Tech

Morning Brew Inc.

Some of you may know Markiplier as the YouTuber who amassed nearly 40 million subscribers playing video games and making elaborate films.

But for the stock market nerds too busy staring at candlestick charts to keep up with internet celebrities, here’s why you should know him: Markiplier, whose real name is Mark Fischbach, recently disclosed an 8.5% stake in GoPro, making him the company’s largest individual shareholder.

Fischbach says he’s a genuine fan of GoPro’s products and thinks the camera maker is undervalued. And once a viral name like that showed up on the shareholder register, investors piled in: GoPro shares jumped 46% on Monday, then another 55% after hours as news of Markiplier’s stake spread.

Take it to the next level

Just a day later, GoPro announced a $285 million merger with Starman Optical, a private photonics company that makes high-speed optical transceivers used in AI data centers.

“We expect this merger to enable GoPro to grow across consumer, commercial and defense markets as a leading American imaging and optical solutions company, addressing important areas of national security related to cameras, optics and AI infrastructure,” CEO Nicholas Woodman said in a press release.

Starman will own roughly 90% of the combined company, while GoPro shareholders keep about 10%. GoPro also gets its roughly $92 million of debt repaid, while Starman gets GoPro’s brand, optical expertise, and portfolio of more than 2,500 US patents.

The stock closed another 40% higher on the day of the announcement, but lost 17.75% today as investors took profits after the massive run. Still, shares have soared 126.46% higher over the last five days.

A shaky picture

It’s quite the pivot to go from filming parkour to becoming an AI provider, but perhaps a necessary one. GoPro’s core camera business has been struggling for years as smartphones improved and Chinese rivals like DJI and Insta360 gained ground.

In Q2, GoPro’s revenue fell 31% to $105 million, camera sell-through dropped 38%, and the company’s net loss more than tripled from a year earlier to $51 million.

Adding insult to injury, the AI boom has actually been hurting GoPro’s old business. Soaring memory-chip prices have raised the cost of making its cameras, contributing to pressure on a company already carrying debt and fighting declining sales.

Everyone’s an AI company now

This isn’t the first struggling consumer brand to get an AI makeover. In April, Allbirds announced a pivot from sneakers to AI infrastructure, sending shares 582% higher in a day. It later renamed itself Smartbird, but the stock has since given back nearly all of those gains.

Whether GoPro suffers the same fate remains to be seen. To be fair, the company does have more connective tissue: It has decades of experience designing cameras and optical hardware, so pivoting into optical components for AI data centers isn’t quite as far-fetched.

Still, after watching a sneaker company become an AI company, investors may want to make sure the pivot comes with more than a new collection of buzzwords.—SY

      

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Stocks

🟢 What’s up

• Tesla rallied 5.42% ahead of a robotaxi event in Austin, where the company is expected to welcome the first public riders of its steering-wheel-free Cybercab.
• Meta climbed 3.01% following the rollout of its new Muse Spark 1.3 AI model.
• Dell extended its rally 4.63% after an earnings beat and higher fiscal 2027 outlook fueled by booming AI server demand.
• Robinhood jumped 16.57% following a pair of analyst upgrades that pointed to the trading platform’s expanding lineup of financial products.
• Netskope gained 4.29% on a full-year revenue forecast that came in above Wall Street estimates.
• Bitcoin’s rally is Strategy’s 17.56% gain. Fellow crypto stocks also climbed, including Circle Internet Group, which rose 16.46%.

🔴 What’s down

• Victoria’s Secret sank 13.17% on a quarterly revenue miss and disappointing current-quarter profit guidance.
• Tyson Foods fell 7.26% after cutting its full-year outlook as continued pressure in its beef business weighed on results.
• Ciena slipped 10.36% despite an earnings beat and higher-than-expected full-year revenue guidance.
• Hewlett Packard Enterprise dropped 5.04% as its fiscal 2027 earnings growth outlook failed to impress investors.
• Campbell’s tumbled 6.96% on weaker-than-expected fiscal 2027 earnings guidance.
• Ultragenyx Pharmaceutical plunged 44.03% after its experimental treatment for Angelman syndrome failed to meet the main goal of a late-stage trial.
• Moderna declined 1.29% following a Redburn downgrade to Sell that argued enthusiasm around its experimental cancer vaccine has left shares overvalued.

A power move

Mike Dinsdale

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AI

Morning Brew Inc.

Since that fateful day you heard “ChatGPT” for the first time, the AI trade has primarily been about the “picks and shovels” of the tech boom: hardware. But now, investors are learning not to underestimate the AI boom’s soft power.

Today, we got earnings reports from hardware giant Broadcom, along with software player Snowflake. Despite the fact that both companies touted staggering sales growth, investors reacted completely differently to each of them.

Two paths diverged

Snowflake shares popped 16.55% today, the company’s highest close since 2021, after the company told investors that its product revenue came in at $1.49 billion last quarter, surpassing Wall Street expectations of $1.42 billion. Shareholders were even more excited about the success of its vibe coding product, CoCo. Despite being haunted by SaaSpocalpyse fears, Snowflake has continued to prove the haters wrong and bank win after win.

“The key debate into the print was whether product revenue could keep accelerating. It did, and F3Q guidance implies further acceleration,” wrote Bank of America analyst Koji Ikeda in a note today, upping his price target on the stock from $395 to $470.

But while investors celebrated Snowflake’s winning streak, they were grading Broadcom on a curve. Despite the company projecting AI chip revenue doubling from $115 billion next year to $230 billion in 2028, shares plummeted 2.74% today.

The reason was the company’s forward-looking guidance. Broadcom said revenue would come in at $34.8 billion for the current quarter, which is slightly above analyst projections of $34.7 billion. But given the sky-high bar that analysts had for the company, even an A became a B-.

Yet despite a lukewarm quarter, most analysts expect Broadcom to still be among the AI winners in the long term. “Networking remains strong, and no news is good news on the gross margin front,” explained Morgan Stanley equity analyst Joseph Moore in a note today, in which he upped the company’s price target from $502 to $505.

Two sides of the same coin

Today’s reaction to two overall very positive earnings reports underscores an ongoing debate among investors: How much of the gains from the AI boom will come from the companies that build the infrastructure, versus those that actually make products?

As we learned today, predicting which companies AI will be a boon for and which ones the new technology will eventually put out of business—isn’t easy.—LB

      

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News

• Users aged 18 to 20 have wagered over $5 billion on Kalshi betting on sports this year.
• Nvidia just acquired open-source AI software platform Hugging Face for $12.9 billion.
• Nothing to see here: The Dutch central bank moved 86 tons of gold from Canada and the US to London as it reportedly prepares for a “crisis situation.”
• Microsoft will start imposing time limits on Xbox cloud gaming subscribers to cut costs.
• Meet the global strategist who says investors are underestimating Europe.
• Here’s why stocks might shrug off the Fed’s expected rate hike.

Calendar

All eyes turn to the labor market, with the August jobs report ready to arrive first thing in the morning. It’ll be a key bit of data for the Fed ahead of the central bank’s next meeting beginning September 15.

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