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RTX raises 2026 profit forecast to $7.25 as defense demand surges
Edgen Stock·Jul 23 2026, 10:49Share to
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[1] RTX Again Raises Full-Year Forecast on Robust Demand, Higher Backlog (https://www.wsj.com/business/earnings/rtx-aga ...)[2] RTX lifts 2026 forecasts on aircraft repair, defense demand (https://www.aol.com/articles/rtx-lifts-2026-f ...)[3] RTX Boosts Outlook on Rising Demand for Weapons, Engine Parts (https://www.bloomberg.com/news/articles/2026- ...)[4] Google increases capex forecast again after cloud-driven quarterly beat (https://www.reuters.com/business/google-quart ...)
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Jul 23 2026, 12:07
Toyota, Honda and Hyundai control 86% of surging hybrid market
**Three Asian automakers that never abandoned hybrid technology now control 86% of America's fastest-growing vehicle segment.** Hybrid vehicles captured a record 15.4% of US new-car sales in the first half of 2026, up nearly 20% from a year earlier, as consumers gravitated toward fuel-sipping powertrains while elevated gas prices and lingering EV range anxiety pushed buyers toward the middle ground. "The only growth we're seeing is in hybrid market share," Elizabeth Krear, CEO of the Center for Automotive Research, said. "All other propulsion systems have lost market share year to date." Toyota sold more than 600,000 hybrids in the period across its Toyota and Lexus brands, giving it half the market, according to Baum & Associates. Hyundai Motor Group — encompassing Hyundai, Genesis and Kia — edged past Honda for the No. 2 spot, as the three Asian automakers together control 86% of US hybrid sales. Hybrids now account for 31% of American Honda's total volume, the company said, and it set a US hybrid sales record in the first half. The shift has upended the competitive order in the world's second-largest auto market. General Motors, which has bet heavily on battery-electric vehicles and offers just one hybrid — the Corvette E-Ray — has seen its US sales volumes pressured as Toyota's hybrid-heavy lineup pushes it closer to the top-selling automaker. Baum & Associates projects hybrids will reach a quarter of the US market by 2030, while pure EVs will account for 9.5%. **Why Hybrids Won** Toyota and Honda stuck with hybrid technology even as Tesla and legacy automakers pivoted to pure EVs, a strategy that drew criticism from activists and shareholders. Toyota argued it could reduce carbon emissions more effectively at scale by producing millions of fuel-efficient hybrids with smaller batteries rather than a limited number of EVs with large ones. "Toyota had a very much a North Star strategy," Krear said. "Hybrids deliver that meaningful fuel savings without requiring changes in driving habits or charging infrastructure." The persistence paid off. Honda, which posted its first loss in nearly 70 years as a public company in 2026 partly due to a $16 billion charge on EV restructuring, is now planning a new hybrid system designed for larger vehicles to defend its position. "At that point, there's really nothing to stop us in terms of battling it out with anybody in terms of hybrids," Gary Robinson, vice president of auto strategy at American Honda, said. **California Leads the Pivot** In California, the largest US market for plug-in vehicles, hybrids accounted for nearly one in four new registrations in the second quarter, outpacing EVs at 17.8%, according to the California New Car Dealers Association. The state's average gasoline price of $5.52 a gallon — well above the national average of $4.02 — has accelerated the shift, as has the end of federal EV tax credits under President Donald Trump. Used EV prices have surged 12% to an average of $38,342 since the Iran conflict pushed oil above $100 a barrel, according to Cox, narrowing the affordability gap that had long favored combustion cars. Still, pure EV sales in the US rose 15% quarter over quarter in the second quarter to 247,226 units, driven by new models from Toyota, Subaru, Kia and Hyundai, suggesting the segment is finding organic demand even without federal subsidies. **Investment Angle** The hybrid boom creates a clear divergence in automaker fortunes. Toyota, trading at a premium to Detroit peers on the strength of its hybrid margins, is positioned to extend its lead as hybrids approach 25% market share by the end of the decade. Hyundai Motor Group's broad hybrid rollout across SUVs and large vehicles gives it a growth vector that pure-play EV makers like Tesla and Rivian lack in the near term. For GM and Ford, the data signals that a hybrid strategy — not just an EV roadmap — may be necessary to defend US market share as consumer preferences shift decisively toward the middle ground. This article is for informational purposes only and does not constitute investment advice.
Jul 23 2026, 11:49
Nestlé profit margin forecast cut sends stock down 7%
Nestlé reported H1 operating profit of CHF7.1bn, down 2.8%, as coffee and cocoa costs squeezed margins and forced a guidance cut. "The RIG-led growth strategy is delivering, with organic growth of 3.7% and RIG of 1.8% in Q2, making steady progress toward our medium-term guidance," Chief Executive Officer Philipp Navratil said. The maker of KitKat and Nescafé posted net profit of CHF3.5bn, down 31.4% from CHF5.1bn a year earlier. Organic growth rose to 3.6% from 2.9%, with real internal growth — a measure of volume-driven sales — climbing to 1.5% from 0.2%. Pricing contributed 2.1 percentage points to growth, down from 2.7 points a year ago, as the company shifted toward volume-led expansion. The guidance downgrade sent shares down 7% in Zurich trading, the biggest single-day drop since 2020. Nestlé now expects second-half margins to be broadly in line with the first half, dashing hopes of improvement after a string of cost-saving initiatives. | Metric | Actual | Consensus | Beat/Miss | |--------|--------|-----------|-----------| | Q2 organic growth | 3.7% | ~3.5% est. | +0.2pp | | Operating profit | CHF7.1bn | not yet disclosed | — | | Operating margin | 16.4% | not yet disclosed | — | | Q2 volume growth (RIG) | 1.8% | 2.0% (some investors) | -0.2pp | The company's underlying trading operating profit margin improved to 16.4% from 15.7% in the second half of last year but remained 10 basis points below the 16.5% reported in H1 2025. Free cash flow rose to CHF3.4bn, with Fuel for Growth cost savings reaching CHF1.7bn, on track for the CHF2bn full-year target. Emerging markets delivered organic growth of 7.1%, while developed markets grew 2.3%. Coffee led category performance with 7.5% organic growth, followed by Food & Snacks at 3.7% and Petcare at 2.7%. Nutrition was the only category to decline, falling 1.2% as the infant formula recall continued to weigh on results. Nestlé also announced a 50:50 joint venture with Platinum Equity for its waters and premium beverages business, valued at €4.9bn. The deal, named Peranel, will generate net cash proceeds of about €3bn for Nestlé in the first half of 2027. The company classified its mainstream vitamins and ice cream divisions as assets held for sale, showing progress in portfolio reshaping. The guidance revision reflects persistent commodity inflation in coffee and cocoa, which Nestlé said also weighed on margins alongside higher marketing spending and the infant formula recall. The company maintained its full-year outlook for 3% to 4% organic growth and expects free cash flow to exceed CHF9bn. "The volume numbers were not good enough given the run-up in the stock," Barclays analyst Warren Ackerman said. The margin warning from a bellwether consumer company suggests cost pressures are spreading across the packaged food sector. Investors will watch Nestlé's Q3 trading update for signs of whether commodity costs have peaked and whether volume growth can accelerate enough to offset margin compression. This article is for informational purposes only and does not constitute investment advice.
Jul 23 2026, 11:47
China semiconductor profits surge as AI demand fuels 74,400% gain
**China's semiconductor sector posted its strongest half-year earnings on record, with storage chip maker Longsys reporting net profit surged as much as 74,400% as AI demand cascaded from cloud GPUs to edge devices.** China's semiconductor supply chain posted a collective earnings explosion for the first half of 2026, with storage chip maker Longsys leading a 74,400% net profit surge as AI demand cascaded from cloud GPUs to edge devices. At least a dozen companies across storage, GPU design, FPGA, testing equipment and advanced packaging all reported triple-digit profit growth in their semi-annual earnings previews released this month. "AI demand for memory will keep the market in a state of tight supply and demand extending to 2028," a J.P. Morgan report said, citing server upgrades and high-bandwidth memory consumption. The bank's view echoes a broader industry reality: HBM's 3D-stacked structure consumes more than three times the wafer area of standard DRAM, and the three major memory makers have diverted clean-room resources toward HBM, squeezing general-purpose DRAM and NAND supply. Longsys, a mid-stream memory module maker, expects net profit of 92 billion yuan to 110 billion yuan ($12.6 billion to $15.1 billion) for the six months ended June 30, up from roughly 148 million yuan a year earlier. Revenue is seen at 220 billion yuan to 250 billion yuan, up 116% to 145% year over year. The company locked in supply through long-term agreements with major wafer suppliers, securing scarce capacity as HBM expansion consumed fab resources. Rival Biwin Storage forecast net profit of 70 billion yuan to 75 billion yuan, up 3,200% to 3,422%, while GigaDevice posted a 1,099% profit jump to about 69 billion yuan on strength in NOR Flash and niche DRAM — categories that major overseas suppliers have been exiting. **Storage Dominates, But the Boom Is Broad** The earnings wave extended well beyond memory. GPU makers Haiguang Information and Moore Threads reported revenue growth of 56% to 70% and 135% to 149%, respectively, signaling that domestic computing chips are moving beyond "backup" status to capture real AI inference workloads. China's AI chip market is projected to grow from 142.5 billion yuan in 2024 to 1.3 trillion yuan by 2029, a compound annual growth rate of 54%, according to Frost & Sullivan. FPGA and SoC makers also posted standout results. Fudan Microelectronics forecast net profit of 8 billion yuan to 10 billion yuan, up 313% to 416%, as its FPGA products (reprogrammable chips used in edge AI inference) saw surging demand from industrial automation and smart devices. Rockchip and Allwinner, two leading system-on-chip designers, reported profit gains of 60% to 71% and 195% to 220%, respectively, as AI workloads migrated from cloud-only to edge and terminal devices. **Equipment and Packaging Ride the Wave** Testing equipment maker Changchuan Technology forecast net profit of 9 billion yuan to 10 billion yuan, up 111% to 134%, benefiting from three simultaneous cycles: AI chip testing, memory chip testing driven by domestic memory makers' capacity expansion, and advanced packaging testing for Chiplet and CoWoS architectures. SEMI data shows the global semiconductor equipment market is projected to grow from $116.6 billion in 2024 to $155.6 billion by 2027, with test equipment growing at a 21.1% compound rate — the fastest segment. Advanced packaging emerged as another profit center. Tongfu Microelectronics, which counts a major global AI chip maker as its anchor customer, forecast net profit of 16 billion yuan to 18 billion yuan, up 288% to 337%. Huatian Technology posted a 231% to 275% profit gain. The bottleneck in CoWoS packaging — TSMC's capacity shortfall exceeded 30% in early 2026 — has pushed packaging prices up across the industry, with ASE Technology and others announcing 30% price increases on advanced packaging services. The question for investors is whether this pace is sustainable. The product cycle transition from 800G to 1.6T optical interconnects, the pace of cloud vendor capital expenditure in the second half, and the potential for technology route changes in co-packaged optics all introduce variables. But for now, the income statements are speaking louder than any narrative: China's semiconductor supply chain is converting AI demand into real revenue at a scale that few predicted even 12 months ago. *This article is for informational purposes only and does not constitute investment advice.*