Softbank stock continued its strong downward trend, reaching its lowest level since April this year. It dropped to ¥4,595, down by nearly 50% from the year-to-date high. This retreat has pushed its valuation substantially lower to the current ¥30.4 trillion.

Softbank stock drops as key portfolio companies face major headwinds

Softbank, a large telecommunications company in Japan, has become a major proxy for the artificial intelligence industry, thanks to its massive investments in the US and other countries. 

It is the biggest shareholder to Arm Holdings, a company now valued at over $261 billion. Arm Holdings stock has plunged by 46% from its peak this year, and this sell-off may continue when it publishes its earnings.

It is also a participant in the Stargate project that aims to spend over $500 billion in US data centers. Other companies in this project are OpenAI and Oracle.

READ MORE: Micron, memory stocks sell-off: cyclical bottom or a deeper correction?

Softbank also owns a large stake in OpenAI. It owns about 13% stake in the company through its commitment to invest about $40 billion in the company. 

Therefore, the company’s business is facing substantial challenges despite the ongoing artificial intelligence boom. For example, OpenAI has continued to lose market share in the AI industry. A recent report showed that its share dropped below 50% for the first time ever, with Google’s Gemini and Anthropic’s Claude gaining share.

OpenAI is also facing stiff competition from Chinese companies like Moonshot and DeepSeek. Moonshot’s Kimi K3 model has become one of the most advanced in the industry.

The fear among investors is that corporates and individuals will take advantage of China’s models at the expense of the more expensive American ones. 

These fears explain why OpenAI is said to be considering postponing its initial public offering (IPO) that was expected to happen this year. 

Softbank stock is also plunging because of the ongoing unwinding of the AI trade, with most companies in the industry falling. Kioxia Holdings stock has dropped by over 60% from its peak, while top South Korean names like SK Hynix and Samsung being in a deep correction.

The next few days will be important for the Softbank stock. For one, big tech companies like Meta Platforms and Microsoft will publish their financial results, providing more color on the state of capital spending in the AI space. 

A sign that these companies are continuing to spend will be bullish for their suppliers. However, as we saw with Google stock, investors are now more focused on the return on investment.

Softbank share price technical analysis

Softbank stock chart | Source: TradingView

The weekly chart shows that the Softbank stock has plunged in the past few months, moving from ¥9,077 to the current ¥4,730. It recently dropped below the 50% Fibonacci Retracement level. 

The stock has now plunged below the 50-week Exponential Moving Average (EMA) and the Major S/R pivot point of the Murrey Math Lines tool. Also, the Relative Strength Index (RSI) has pointed downwards.

Therefore, the stock will likely continue falling, potentially to the 61.8% Fibonacci Retracement level of ¥4,165. This retreat will continue as sentiment in the industry wanes.

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The Roundhill Memory ETF (DRAM) has been in a free fall this week, reaching its lowest level since May 7 this year. It has plunged by over 43% from its highest point this year. This retreat may continue after the latest SK Hynix earnings, which pushed its stock to its lowest level since April 30th. 

DRAM ETF at risk as SK Hynix stock drops

The Roundhill Memory ETF has been in a strong sell-off this month as top memory companies continued plunging. This retreat may continue after SK Hynix, a top constituent, continued its downfall in South Korea.

SK Hynix stock dropped to 1.25 million won, its lowest level since April, after publishing its financial results. Its stock plunged after the company signalled a surge in capital expenditure, which will hit $31 billion, a 50% surge. 

The company said that its revenue and margins jumped, even as the profit came short of expectations. This growth is happening because of the ongoing demand of its memory products, which analysts expect will continue in the near term. 

SK Hynix’s stock has also plunged amid the ongoing deleveraging in South Korea, where many retail and institutional investors have borrowed heavily. Indeed, a senior South Korean minister apologized as many South Koreans who have lost a fortune in the past few weeks.

SK Hynix has a major influence on the DRAM ETF since it is the third-biggest constituent, with a 22% stake. Micron and Samsung, the other large companies in the fund account for 27% and 24%. 

Top memory stocks have plunged ahead of their earnings

The ongoing DRAM ETF crash is happening as other top companies in the memory space drop ahead of their earnings report. Kioxia Holdings stock plunged to 38,380 yen, down by 65% from its highest level this year. This sell-off accelerated ahead of its earnings report.

In South Korea, Samsung Electronics stock has plunged because of the ongoing deleveraging and focus on other companies. It has dropped ahead of its final second-quarter results, which will provide more details than the preliminary one.

Micron stock has dived by 35% from its peak, while other top names like Sandisk, Western Digital, and Seagate Technologies have fallen by double digits. 

DRAM ETF inflows continue

Still, despite these jitters, investors have continued allocating capital to the Roundhill Memory ETF. Data shows that the fund has had $160 million in inflows on July 27. It has added over $7.4 billion in inflows in the last month, with only a single day of outflows in this period.

DRAM inflows | Source: ETF Db

One reason for this optimism is that analysts have maintained their bullish outlook about the top names in the fund. For example, DA Davidson and Susquehanna analysts have boosted their Micron stock target to $2,000, a big increase from the current $820. The average estimate among analysts is $1,268, up by 54% from the current level.

All analysts tracking SanDisk have a buy rating, with Susquehanna having a target of $3,050, much higher than the current $1,278. Wells Fargo targets $1,620, while Evercore seeing it rising to $3,100. 

The general view among analysts is that the artificial intelligence industry has more room to run as more companies continue spending. The estimate is that companies like Amazon, Google, and Microsoft will spend over $750 billion in capital expenditures this year. It is estimated that these firms will spend over $5 trillion by 2030, with some of these funds going to memory companies.

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Qualcomm stock price continued its strong downward trend this week, reaching its lowest level since April 30. QCOM has plunged by over 37% from its highest point this year, with its market capitalization falling from $265 billion to $171 billion. 

Qualcomm’s crash has coincided with the ongoing sell-off among other semiconductor companies. The VanEck Semiconductor (SMH) ETF has dropped from $671 to $529, while the iShares PHLX SOX Semiconductor Sector ETF (SOXX) has pulled back from a high of $655 to $490 today. 

Qualcomm stock has dropped ahead of earnings

QCOM stock has been in a strong bearish trend in the past few months as semiconductor and memory companies came under pressure. Nvidia, the biggest name in the industry, remains down by over 17% from its peak. Other companies like Intel and AMD have plunged in this period.

Qualcomm stock will be in the spotlight as the company publishes its financial results. Analysts expect the upcoming results to show that its revenue dropped by 6.68% last quarter to $9.6 billion. Also, its earnings-per-share (EPS) is expected to drop from $2.77 to $2.22. 

Qualcomm plans to address the revenue weakness by hiking prices. Media reports suggest that the company plans to boost prices for all chips going out in September this year. This is important as its products power most devices like smartphones, tablets, and some laptops.

According to Bloomberg, the company says that the price hikes are necessary as it has exhausted its ability to absorb costs from its suppliers. Also, it has faced its hard to find alternative suppliers to lower its prices. 

The price increases should help to support the stock in the near future as analysts predict that its full-year revenue will be lower than what it made a year earlier. Analysts expect the revenue to drop by 3.50% to $42.6 billion this year, followed by $44.18 billion next year.

The risk, however, is that soaring prices may lead to lower demand for smartphones and other devices. 

QLCOM has become a bargain as options market points to a rebound

Third-party data shows that the company has become a bargain. It has a forward price-to-earnings ratio of 15, lower than the sector median of 23. The iShares Semiconductor ETF (SOXX), which tracks the biggest semiconductor companies, has a price-to-earnings ratio of 67. 

Qualcomm also has a forward price-to-cash flow ratio of 12.90, also lower than the sector median of 18.7. 

The options market expects the company to be highly volatile, with the implied volatility rising to 123%. Its put/call open interest has moved to 0.55, a sign that more investors see the stock rising. 

QCOM stock price technical analysis

Qualcomm stock chart | Source: TradingView

Qualcomm share price has plunged from a high of $260 in May to the current $162. Technicals suggest that the stock has more downside. For example, the Percentage Price Oscillator (PPO) has continued falling. Also, the Relative Strength Index (RSI) has continued falling and is nearing the oversold level of 30. The RSI suggests that it has more downside before it becomes oversold.

On the positive side, the stock has formed a falling wedge pattern, which is made up of two falling and converging trendlines. This pattern often leads to a bullish breakout.

As such, these technicals suggest that the stock will be highly volatile after its earnings report. The key levels to watch will be at $150 and $180. 

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Robinhood stock price has fallen in the past few weeks, moving from the year-to-date high of $119.87 to a low of $87.93. This retreat will be put to the test as the company publishes its financial results, which will provide more color about its business. 

Robinhood to publish its quarterly results today

HOOD stock will be in the spotlight after the market closes today, July 29, as the fintech giant publishes its financial results. These numbers are expected to show that its revenue jumped in the second quarter as volume in the stock and options markets soared. 

The volume soared because of the artificial intelligence (AI) boom and the US-Iran war that fueled volatility in the market. In its recent report, the company said that its funded clients jumped to 27.7 million in May, up by 110k from the end of April. Also, the total platform assets jumped by 9% from April to $377 billion, while net deposits rose to $5.6 billion.

Robinhood has also benefited from the predictions business through its partnership with Kalshi. This growth likely accelerated during the recently concluded World Cup event, which drew more people to the market. 

READ MORE: Robinhood stock to soar as it becomes ‘the first hyperscaler of online brokerages’

The main blemish to watch will be its crypto business, which has suffered from the ongoing crypto winter. Bitcoin price has fallen from last year’s high of $126,300 to $64,000 today. As a result, the market capitalization of all coins has dropped from over $4.2 trillion to about $2 trillion. 

Yahoo Finance data shows that the average estimate is that its revenue jumped by 29% in the second quarter to $1.28 billion. Its earnings-per-share is expected to come in at 43 cents, up slightly from the previous 42 cents. In its last results, Robinhood’s earnings-per-share missed analysts estimates.

Robinhood Chain metrics are growing

The upcoming earnings come at a time when the recently launched Robinhood Chain is seeing strong growth. DeFi Llama data shows that the platform’s total value locked (TVL has jumped to a record high of $342 million. This growth makes it the fastest-growing chain in the crypto industry. 

More data shows that DEX protocols in the chain have handled over $12.8 billion since its launch, with Uniswap being the biggest protocol. In total, Robinhood Chain has made $3.43 million since its launch earlier this month.

As Coinbase’s Base, this network will not generate substantial amounts of revenue for Robinhood. However, it will be a layer where a lot of assets, especially tokenized stocks are traded in. The company will provide more details about this business in its earnings report. 

Additionally, Robinhood will provide more information about its Trump Accounts business, which is expected to bring billions of dollars in assets to its platform over time.

Most analysts have boosted their forecast for the stock, with KeyCorp and BTIG placing a target of $125. Needham has a target of $123, while Bernstein and Goldman Sachs have a target of $160 and $137, respectively.

HOOD stock price technical analysis

Robinhood stock chart | Source: TradingView

The daily chart shows that the Robinhood share price has dropped sharply in the past few days, moving from a high of $119.87 to the current $92.76. It has formed the highly bullish doji candlestick pattern, whose lower side coincides with the lower side of the ascending channel. A doji candle often leads to a strong rebound. 

Therefore, the stock will likely continue rising, potentially to the psychological level of $110. A move above that level will point to more gains, potentially to this month’s high of $119.87.

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When Alphabet (GOOGL) released its earnings last week, a rapid growth in its Google Cloud business revenue was seen as a pressure point on Microsoft and Amazon, which were to announce their earnings this week.

For much of the past two years, investors debated whether Google Cloud could meaningfully challenge Microsoft Azure and Amazon Web Services as artificial intelligence reshaped enterprise technology spending.

Instead of exposing a clear winner, the latest earnings season showed that each of the three hyperscalers is strengthening its position in different ways.

Google Cloud is growing the fastest, Microsoft continues to demonstrate remarkable resilience despite intense competition, while Amazon Web Services remains the industry’s profit engine with its strongest expansion in more than four years.

Growth figures aside, the cloud results from all three companies answered a larger question: that massive AI investments are generating enough demand to justify the spending.

Google Cloud’s growth was the strongest

Alphabet fired the opening shot last week with one of the strongest cloud quarters in its history.

Google Cloud revenue surged 82% year over year to $24.8 billion during the quarter ended June, far ahead of analysts’ expectations of roughly 64% growth, according to LSEG.

The performance strengthened the narrative that Google Cloud has been expanding faster than both Microsoft Azure and AWS in recent quarters, raising hopes that it was steadily gaining market share.

Demand has become so strong that Alphabet executives said they would rent additional data-centre capacity from third parties to serve customers, even though doing so is expected to weigh on margins.

Wall Street responded by lifting expectations for the company.

More than 20 brokerages raised their price targets following the results, with the median target climbing to $430, nearly 26% above the stock’s last close.

Citizens issued the highest target at $515, while TD Cowen remained the most cautious at $240.

“Google Cloud was an absolute blow out,” said Richard Clode, Portfolio Manager of Janus Henderson Investors’ Global Technology Leaders, in comments reported by Reuters.

“Alphabet has competitive advantage running all the way through the stack from their own custom AI chips through to distribution to billions of users.”

Yet the market’s initial reaction was surprisingly muted.

Despite delivering one of the strongest cloud growth numbers among the major hyperscalers, Alphabet shares fell after earnings as investors focused instead on sharply higher capital expenditure guidance and the company’s first negative quarterly free cash flow in years.

The response illustrated that investors are becoming increasingly selective about AI spending, rewarding companies only when rapid revenue growth is matched by evidence that investment remains financially sustainable.

Microsoft proves Azure is still firmly in the race

If Google’s results raised questions about Microsoft’s competitive position, Azure’s earnings provided an emphatic response.

Microsoft reported that Azure revenue rose 43% in its fiscal fourth quarter, comfortably ahead of analysts’ consensus estimate of about 40%, according to Visible Alpha.

Its Intelligent Cloud segment generated $39.31 billion in revenue, representing annual growth of 31.6% and exceeding StreetAccount estimates of $38.16 billion.

Azure’s growth also accelerated from 40% in the previous quarter to 43%, while annual Azure revenue crossed the $100 billion milestone for the first time.

The results immediately shifted market sentiment.

“It seemed kind of like Google was taking market share from everybody, and they could catch up to the market share of Azure if they keep on that trajectory,” Dave Wagner, portfolio manager at Aptus Capital Advisors, told Reuters.

“But what Azure is showing us is that it’s staying right there in the race.”

Microsoft’s earnings also addressed another issue weighing on technology stocks in recent weeks—whether the industry’s massive AI investments were becoming too expensive.

Unlike Alphabet, Microsoft reassured investors by keeping its long-term capital expenditure outlook broadly unchanged while reiterating that it expected to remain free cash flow positive during fiscal 2027.

Azure’s accelerating growth, coupled with disciplined spending guidance, convinced investors that Microsoft’s AI investments were already translating into commercially meaningful demand.

The stock responded accordingly, surging about 15% after the results, while semiconductor companies and AI infrastructure suppliers rallied alongside it.

Amazon reminds investors why AWS remains the leader

Amazon became the final piece of the puzzle.

Amazon Web Services reported revenue growth of 37% to $42.2 billion during the second quarter ended June 30, comfortably beating analysts’ expectations for growth of just over 31%, according to LSEG.

It was also the fastest growth printed in 18 quarters, which Morningstar described as “astounding” given AWS’s enormous scale.

“AWS is booming,” chief executive Andy Jassy said in a statement.

“Our AI and chips businesses each eclipsed run rates of more than $25 billion.”

Jassy added during the earnings call: “AWS is now a $169 billion dollar annualized revenue run rate business, which, for perspective, would place it 24th on the Fortune 500 list if it was a standalone company.”

AWS contract backlog increased to $496 billion from $364 billion in the previous quarter, while Jassy acknowledged that demand remains so strong that the company still lacks enough computing capacity despite significantly increasing capital expenditure.

The strong performance prompted at least five brokerages to raise their price targets.

“We’re encouraged by the strength in the core AWS business, which has a high correlation with AI revenue, and we expect this relationship to further strengthen over time as more AI workloads move into full-scale production and drive additional demand for core services,” JP Morgan wrote in a note.

“There were concerns about market share losses on AWS, but that’s been put to bed now,” Dan Morgan, portfolio manager at Synovus Trust, said.

“It just gives more evidence that AWS’s lead is still intact. The AI tide is rising all boats here.”

Why Google Cloud’s growth deserves a deeper look

Cloud Wars founder Bob Evans, who closely tracks the cloud and AI industries through research, interviews, and market analysis, argued that customers are increasingly differentiating between the three hyperscalers rather than treating them as interchangeable providers.

“The numbers show that customers don’t view the hyperscalers as some homogenous blob where there’s not even a dime’s worth of difference among the companies. Quite the contrary,” Evans wrote.

He pointed out that while all three companies have accelerated cloud growth in recent quarters, Google Cloud’s expansion continues to outpace its rivals by a considerable margin.

“The numbers also show a powerful quantitative shift among customers for the AI and cloud solutions that Google Cloud is offering, because Google Cloud added an astonishing $4.8 billion in incremental Q2-over-Q1 revenue, by far the biggest sequential quarter-to-quarter jump ever reported by any hyperscaler,” he said in a note.

According to Evans, that reflects a meaningful shift in customer preference.

“It shows that right here in the present — not two or three or four years in the past — more and more customers are choosing Google Cloud as their preferred provider.”

Google Cloud’s backlog and what it says

The latest earnings season also shifted investor attention away from quarterly revenue growth and towards a metric that could determine who dominates enterprise AI over the next several years: backlog.

For cloud providers, backlog, or remaining performance obligations (RPO), represents contracted business that will be recognised as revenue in the future.

As companies commit billions of dollars to AI infrastructure, these figures provide one of the clearest indicators of long-term demand.

That is where the competitive picture becomes more nuanced.

Google Cloud’s backlog also reflected that momentum.

Its backlog jumped 390% year over year to $514 billion, beating analyst estimates of $488.1 billion.

Alphabet added more than $50 billion of new backlog sequentially during the quarter, the largest increase among the three companies.

Alphabet expects just over half of that backlog to convert into revenue over the next two years, with the remainder recognised over longer periods.

Despite the impressive numbers, Alphabet’s backlog is not without risk.

Much of the increase reflects large, multi-year AI compute contracts that can carry significant headline values.

Those agreements could become vulnerable if customers decide to renegotiate spending or reduce future compute requirements as competing infrastructure becomes cheaper or more readily available.

That risk has become more visible as Chinese AI models continue improving rapidly and domestic semiconductor manufacturing capabilities advance.

For now, however, investors appear willing to accept that uncertainty, given the pace at which Google Cloud continues to add customers.

Microsoft’s backlog masks a concentration risk

Microsoft reported the largest commercial remaining performance obligations among the three companies.

Commercial RPO rose 84% year over year to $678 billion.

On the surface, that appeared to reinforce Microsoft’s leadership in enterprise AI.

However, one comment from chief financial officer Amy Hood during the earnings call suggested that a substantial portion of that backlog may be tied to a single customer: OpenAI.

Rather than disclosing OpenAI’s commitments directly, Hood said commercial RPO “increased 25% when excluding OpenAI.”

Microsoft ended fiscal 2025 with a commercial RPO of $368 billion.

According to Benzinga, if backlog excluding OpenAI grew 25%, Microsoft’s commercial RPO without its AI partner would now stand at roughly $460 billion.

That implies approximately $218 billion of Microsoft’s reported $678 billion backlog could be associated with OpenAI-related commitments, representing roughly one-third of the total.

Microsoft also emphasised that all sequential commercial RPO growth this quarter came from customers outside frontier AI model companies, suggesting management is actively trying to diversify its order book beyond its largest AI partner.

That effort is encouraging, but the company’s dependence on OpenAI remains one of the biggest risks embedded in Microsoft’s otherwise formidable backlog.

AWS leans on diversification

Amazon Web Services presents a different picture.

Its contracted backlog reached $496 billion, smaller than Microsoft’s and Google’s in absolute terms but growing rapidly from a much larger existing cloud business.

More importantly, AWS benefits from what analysts consider its biggest structural advantage: diversification.

Its enterprise customer base spans hundreds of thousands of organisations across industries and geographies, meaning no single customer contributes anywhere close to the concentration that OpenAI represents for Microsoft.

When Jassy told analysts that AWS’s backlog growth came from “the breadth of really the Amazon product portfolio as well as our customer portfolio,” he was highlighting precisely that advantage.

Instead of depending heavily on one AI model developer, AWS continues to generate demand across enterprises building AI applications in healthcare, financial services, retail, manufacturing, and countless other industries.

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Palantir stock price remained under pressure this week as traders waited for the second-quarter earnings. PLTR was trading at $122.26, down by over 40% from its highest point this year, erasing some of the gains it made last year. This retreat will be put to the test as it publishes its financial results.

Palantir Technologies to publish its earnings on Monday

PLTR stock has plunged in the past few months as investors sold software companies and continued booking profits, following its strong bull run last year. At its peak last year, it was up by over 3,200% from its lowest level in 2023.

The stock will be in the spotlight as the management publishes its financial results for the second quarter. Analysts expect these numbers to show that its revenue growth accelerated in this period as companies and governments continued to spend.

Yahoo Finance data shows that the average estimate is that its revenue jumped by 80% YoY to $1.81 billion. This growth will make it one of the fastest-growing companies in the software industry.

For the third quarter, analysts expect the revenue will grow by 70% YoY in the third quarter to $1.91 billion. As a result, for the year, the company is expected to make over $7.72 billion, up by 72% YoY.

Palantir’s business has benefited from the ongoing demand from companies that are interested in its Foundry product, which is an operating system for data that lets firms integrate, model, and act on their data across the organization. Demand for the Artificial Intelligence Platform (AIP), which layers large language models (LLMs) and AI on top of Foundry.

Most importantly, its government business is continuing its growth as the US and its allies boost their spending. The Trump administration has requested over $1.5 trillion defense budget, with some of these funds flowing to Palantir. In its last results, the company said that its government revenue jumped by 85% to $1.67 billion. Its commercial revenue rose by 133% to $595 million. 

Palantir has become undervalued

On paper, Palantir seems like a highly overvalued company as its forward price-to-earnings ratio has moved to 83. However, the multiple is much lower than the five-year average of 127. 

Most notably, as a software company, one way of assessing its valuation is the Rule-of-40, which looks at its revenue growth and margins. It has a Rule-of-40 multiple of 145%, making it a bargain. This multiple suggests that its revenue and margins are continuing.

In addition to the valuation, the options market points to a rebound. Options expiring next week shows that its call open interest stands at 71,463 against puts of 40,276, giving it a put/call open interest ratio of 0.56. Based on the volume, the company has a multiple of 0.40.

Palantir stock price technical analysis

PLTR stock chart | Source: TradingView

The weekly chart shows that the PLTR stock bottomed at $106, a notable level that coincides with the 50% Fibonacci Retracement level. It has now rebounded slightly above the 100-week Exponential Moving Average (EMA).

The stock has formed a falling wedge pattern, which is made up of two descending and converging trendlines. These two lines are nearing their confluence, which may lead to a rebound. 

This likely explains why analysts have maintained their bullish outlook. Rosenblatt Securities reiterated the target to $225, while Citigroup has a target of $200. The consensus target among analysts is $190, higher than where it is today.

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