Welcome to Staten News — where a record quarter can still cost you 13% and the busiest earnings week of the year starts in 48 hours.
Lam Research put up the biggest quarter in its history and lost 12.82% of its value in five trading days. Revenue hit $8.22 billion, up 22% from June. Earnings came in at $2.19 a share.
The stock got crushed anyway.
That's the market walking into Monday. Good numbers are table stakes now. The guidance and the spending are what get graded, and the biggest exam of the season starts Wednesday.
🏆 Last Week's Winner: Zscaler (ZS), +23.04%
Zscaler had the best week on the board, up 23.04%. Wall Street banks lifted price targets after the company's 2026 Investor Day, where management laid out a path to at least $8 billion in annual recurring revenue by fiscal 2031.
Then a critical server flaw hit midweek, a channel survey showed security budgets still growing, and the whole cyber group caught a bid. CrowdStrike (CRWD) gained 13.27%. Palo Alto Networks (PANW) added 11.27%.
Security is the one corner of tech where nobody is asking about the capex bill. Companies don't get to skip the firewall because the AI budget ran hot.
📉 Last Week's Loser: Lam Research (LRCX), -12.82%
Lam reported Wednesday after the close. Revenue of $8.22 billion. Non-GAAP EPS of $2.20. Gross margin of 52.4%. For the December quarter it guided to $8.2 billion to $9.0 billion in revenue, $8.6 billion at the midpoint, with EPS of $2.33 plus or minus 15 cents.
Strong on paper. The street read it as light.
Meta reported the same afternoon, and that's where the real damage came from. Meta pushed its 2026 capex range to $135 billion to $145 billion, posted negative free cash flow of $2.12 billion, and booked a $9.89 billion charge tied to its settlement with state attorneys general. Meta finished the week down 9.40%. KLA (KLAC) fell 12.15% right alongside Lam.
Translation: the biggest buyer of AI hardware just showed everyone what the bill looks like, and investors started asking how long the buyers can keep writing checks. The Nasdaq Composite had its worst day since June on Thursday.
That's not a Lam problem. That's a customer-wallet problem wearing a Lam ticker.
📊 The Scoreboard
S&P 500: 7,623.68, down 0.47% on the week
Nasdaq-100: 28,957.53, down 0.79%
Dow: 52,215.16, up 0.41%
Brent crude: $116.72, up 6.24%, its highest settle since April 29
10-year Treasury: 5.00%, down from 5.09%
Read that last line again. Yields fell 9 basis points in a week when oil ran 6%. Thursday's drop in the 10-year was the sharpest one-day move in more than three years, per the Wall Street Journal. Bond traders were buying safety while the stock side was still arguing about Meta.
📅 The Week That Decides It
About a third of the S&P 500 reports this week, per Reuters. The Fed hands down its decision Wednesday at 2 p.m. ET, with Chair Kevin Warsh at the podium after.
The Fed hiked in September, its first increase since 2023. Futures price only about a 5% chance of another hike Wednesday and roughly 80% for December, per LSEG data. The midterms are November 3. Nobody on the Street expects Warsh to hike a week before an election.
Wednesday: Fed decision at 2 p.m. ET, then Alphabet and Microsoft after the close
Thursday: Amazon earnings, plus Q3 GDP, September PCE and jobless claims at 8:30 a.m. ET
Friday: Exxon Mobil earnings, employment cost index
Also reporting this week: Intel, Eli Lilly, Chevron, Caterpillar, Sandisk
The PCE print matters more than usual. Forecasts call for headline inflation at 3.7% year over year and core at 3.1%. A hot number Thursday morning and that December hike stops being a forecast.
🚀 This Week's Predicted Gainer: Microsoft (MSFT)
Microsoft closed Friday at $524.51, up 0.66%, on a day when Alphabet, Amazon and Meta all finished red. Consensus for Wednesday is $4.72 in EPS on $90.75 billion in revenue.
The thesis is simple. Meta spends on AI and has to sell more ads to pay for it. Microsoft spends on AI and rents it straight back out through Azure. When the market panics about who covers the capex bill, the company sending the invoices is where money hides, and Friday's tape already hinted at it.
If Azure growth holds and any spending increase arrives with a revenue number attached, MSFT is the cleanest relief trade in the group. The risk is obvious. Raise capex without the cloud growth to match and Microsoft gets the Meta treatment. Possible? Sure. But it has the better story to tell.
🧊 This Week's Predicted Loser: Amazon (AMZN)
Amazon reports Thursday with consensus at $1.96 in EPS on $202.2 billion in revenue. The stock closed Friday at $248.00, down 0.95%.
Because Amazon goes last, it gets graded on everyone else's homework. By Thursday the market will already know what Microsoft and Alphabet said about spending, and it will have the PCE print from that morning. Hyperscaler capex is tracking around $800 billion this year, per Reuters, and Amazon is one of the biggest checks in that pile.
It also has the one business in the group that runs straight through the consumer. Michigan sentiment sits at 48. One-year inflation expectations are at 4.7%. Brent is above $116.
Amazon has to defend the data center budget and the shopper on the same call. That's two bills.
🎯 The Bottom Line
Third-quarter S&P 500 earnings are on pace to grow more than 32% from a year ago, per LSEG. Earnings aren't the problem. What companies are doing with the cash is the problem.
This is the week the market decides whether the AI trade just had a bad checkup or got an actual diagnosis.
Sources: Lam Research Q1 FY2027 results, Reuters Wall Street Week Ahead, The Glass Desk weekly market review, Stocktwits week-ahead calendar
This is not financial advice. Always do your own research.
— The Bandicoots 📈🔥