Stock Market Today (LIVE): Lockheed Drops 5%; IBM, Tesla, and Microsoft Down. Why?

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Lockheed Drops 5% Despite War Demand

4:25 pm — LMT -4.62% today

Lockheed Martin (LMT 0.90%) posted Q1 earnings of $6.44 per share, missing estimates of $6.74, as heavy spending on production expansion and $1 billion in debt repayments weighed on results. Shares fell nearly 5% Thursday, though they’re up 6.6% year-to-date.

• The cash burn explained: Free cash flow came in at negative $291 million, driven by production investments across 20+ facilities and $816 million in dividends—not deteriorating demand.
• Full year intact: Lockheed held its 2026 guidance: $29.35–$30.25 EPS and $6.5B–$6.8B in free cash flow, backed by a recent $4.7B Patriot interceptor contract.

Closing Bell

4:07 pm

Stocks closed lower Thursday as rising Middle East tensions pushed oil to its fourth straight gain. Brent crude climbed 3.1% to $105.07 a barrel on stalled U.S.-Iran diplomacy and threats in the Strait of Hormuz. The Nasdaq fell 0.9%; the S&P 500 and Dow each dropped 0.4%.

• ServiceNow Takes the Biggest Hit: Shares of ServiceNow (NOW +2.55%) plunged 18% despite revenue growth — investors punished the company for trimming its projected operating margin. Microsoft (MSFT +0.43%) fell 4% in sympathy.
• IBM and Tesla Also Disappoint: IBM (IBM 0.21%) dropped 8.3% after holding revenue guidance flat. Tesla (TSLA 0.41%) shed 3.6% after announcing $25 billion in planned capital expenditures tied to AI and robotics.

FDA Approves Regeneron’s Historic Hearing Cure

3:52 pm — REGN +2.64%

It’s a big day for Regeneron Pharmaceuticals (REGN +2.60%). The FDA approved Otarmeni, Regeneron’s gene therapy for children born deaf due to a rare genetic mutation, making it the first-ever gene therapy to restore hearing. In clinical trials, it improved hearing in 11 of 12 children. In an unusual move, Regeneron is offering the drug free in the U.S., a striking contrast to the million-dollar price tags common in gene therapy.

• Free of charge, unprecedented: The condition affects just 20 to 50 U.S. newborns annually, but Regeneron aims to expand the drug’s reach if further studies succeed. “We don’t feel like we have to figure out how to maximally price this so that we can try to make a windfall,” said George Yancopoulos, Regeneron’s co-founder and chief scientific officer.
• Same-day Fool rec: Regeneron is recommended in Motley Fool Health AI, the Fool’s newest real-money portfolio, which was launched today. The buy report highlighted Regeneron’s genetic medicines pipeline and $5.9 billion R&D commitment; today’s approval is exactly the kind of pipeline payoff that thesis was built on.

Nvidia Partners With Nuclear Startup Oklo

3:33 pm — NVDA -1.71%, OKLO +6.22%

Because apparently ruling the chip world wasn’t enough, Nvidia (NVDA +0.30%) is teaming up with nuclear startup Oklo (OKLO +5.59%) and the Los Alamos National Laboratory to use AI to advance nuclear research.

• Not just vibes: The trio will develop AI models to validate nuclear fuel and study power generation for nuclear-powered AI factories—real, substantive work with serious infrastructure implications. “The company also shows significant strength in its technology, marked by substantial R&D investments, key project advancements, and strategic partnerships that position it competitively within the advanced nuclear sector,” according to the Moneyball Hidden Gems primary database.
• The bull case for Oklo: HSBC (HSBC 0.90%) slapped a buy rating and $96 price target on Oklo stock, but investors should note Oklo has no meaningful revenue yet and needs regulatory approval before any of this becomes real. “Makes no sense for this stock to be gaining as it is. And yet it continues,” member SoLongGoodbye wrote recently. Right now the stock remains essentially a bet on a future that hasn’t arrived yet; a lot of optimism is already baked in.

Meta Axes 8K Jobs, Kills 6K Openings

2:58 pm — META -2.50%

Mark Zuckerberg isn’t done swinging the axe. Meta (META 0.60%) is cutting 10% of its workforce — about 8,000 jobs — and canceling 6,000 open roles it had planned to fill. Layoffs begin May 20. It’s the latest in a string of cuts at Meta, which has been shedding metaverse-era headcount while pivoting hard toward AI. Microsoft (MSFT +0.43%) apparently got the memo too, announcing its first-ever voluntary buyout program Thursday for roughly 7% of its U.S. workforce.

• Zuck’s AI Gap: Meta has openly trailed OpenAI, Alphabet (GOOG +0.05%), and Anthropic in generative AI — and Zuckerberg seems willing to spend (and cut) whatever it takes to close it.
• Big Tech’s New Math: Amazon (AMZN +1.77%) cut 16,000 jobs in January. The calculus is simple: fewer humans, more GPUs.

Texas Instruments Beats, Raises Guidance

2:30 pm — TXN +17.68%

Texas Instruments (TXN +1.34%) beat on earnings and raised guidance, so the stock did what stocks do and jumped. Nothing shocking about that. The real story is whether they can actually pull off integrating Silicon Labs without tripping over themselves, and whether industrial demand holds up or rolls over next quarter. Management seems buttoned up and the cash generation is real.

Nice beat from a company that some people haven’t thought about since the 1980s…

Today’s Lunchtime News

1:15 pm — SBUX +0.5%

Starbucks (SBUX +0.02%) is seeing early signs that last month’s loyalty program overhaul is pulling in value-conscious customers, CNBC reports. Loyalty transactions accounted for 60% of the coffee chain’s fiscal 2025 revenue, making the Rewards program central to CEO Brian Niccol’s broader turnaround push.

• Early traction: The new 60-star redemption option has become the program’s most popular reward, with more than a quarter of all redemptions opting for the $2 discount. The first “free Mod Monday” more than doubled point redemptions versus earlier Mondays this year, and reusable cup usage for double-star bonuses jumped by double digits.
• Earnings on deck: Starbucks reports fiscal second-quarter results after the bell next Tuesday, with management expected to share more on loyalty trends and the broader turnaround. The chain’s traffic struggles have been tied to losing active Rewards members, so any signs of a rebound there will be a key watch item.

ServiceNow’s AI Wins Can’t Calm the Street

1:25 pm — NOW -18.6%

ServiceNow (NOW +2.55%) beat its own guidance on revenue, earnings, and subscription growth, yet a Middle East-driven deal slowdown and looming margin pressure from its security acquisitions overshadowed the quarter. Revenue climbed 22% year-over-year to $3.67 billion and non-GAAP earnings per share rose 19.8% to $0.97. Adoption of its AI workflow tool Now Assist accelerated sharply, as the number of customers spending over $1 million on the product grew 130% year-over-year.

Delayed on-premises deal closings in the Middle East trimmed roughly 75 basis points off subscription growth, which management attributed to the ongoing Iran conflict. It also warned that integration costs from the Armis and Veza security acquisitions will weigh on margins until fiscal 2027. Those headwinds offset a $205 million bump to full-year subscription revenue guidance.

Shares are down roughly 17% in Thursday mid-day trading near $86.

Today’s Change

(2.55%) $2.16

Current Price

$86.94

Key Data Points

Market Cap

$89B

Day’s Range

$84.97 – $87.35

52wk Range

$81.24 – $211.48

Volume

74K

Avg Vol

23M

Gross Margin

76.56%

IBM Beats on Q1, but Consulting Stalls

12:20 pm — IBM -8.8%

International Business Machines (IBM 0.21%) beat expectations on both revenue and earnings, yet the market punished it for unchanged guidance and weakness in its consulting arm. Revenue grew 9% year-over-year to $15.9 billion and non-GAAP earnings per share jumped 19% to $1.91, ahead of Wall Street forecasts on both lines. The biggest upside surprise came from infrastructure, where a 51% surge in IBM Z mainframe sales helped segment profit more than double.

Software, the company’s largest revenue contributor, grew 11% year-over-year on hybrid cloud and AI demand, and operating margins expanded to 29.8%. Consulting, however, grew only 1% in constant currency. That matters because the segment houses most of IBM’s $12.5 billion generative AI book, where investors are most worried about AI-native competitors eating into IBM’s advisory work. Despite the strong Q1 showing, management reaffirmed its full-year outlook for more than 5% constant-currency revenue growth and a roughly $1 billion free cash flow increase.

Shares are down about 9% in Thursday trading near $228.

Microsoft Cuts 7% of U.S. Workforce

12:10 pm — MSFT -3.3%

Microsoft (MSFT +0.43%) is launching its first-ever voluntary buyout program, targeting approximately 7% of its U.S. workforce as it aggressively reallocates resources toward artificial intelligence. The 51-year-old titan will offer retirement packages to senior directors and below whose age and tenure total at least 70. This strategic thinning comes as Microsoft, Alphabet (GOOG +0.05%), and Amazon (AMZN +1.77%) face immense capital expenditure requirements for data centers while disruptive coding AI threatens legacy software margins. To retain top talent amid this transition, Microsoft is also decoupling stock awards from cash bonuses, granting managers more flexibility to reward elite performers.

• Streamlined Incentives: The move to five pay options instead of nine simplifies the annual review process, allowing the company to pivot compensation toward AI-critical roles.
• Fiscal Prudence: By opting for voluntary exits over forced layoffs, Microsoft aims to reduce its 228,000-person headcount while maintaining internal morale during a volatile period for software valuations.

ServiceNow Plunges on War Headwinds

11:15 am — NOW -16.1%

ServiceNow (NOW +2.55%) shares plummeted 17% Thursday morning, dragging down peers like Salesforce (CRM +2.02%), Adobe (ADBE +0.97%), and Oracle (ORCL 5.98%). While the company matched first-quarter earnings estimates at $0.97 per share, management revealed that the ongoing conflict in Iran delayed several large on-premise deals. This geopolitical friction created a 75-basis-point headwind for subscription revenue, which grew 22% to $3.67 billion. Investors reacted sharply to the news, as the software sector already faces heightened scrutiny regarding its ability to maintain growth rates while navigating both global instability and the rapid transition toward generative artificial intelligence.

• Collateral Damage Discovered: The sales slowdown at ServiceNow sparked a contagion effect across the industry, with Salesforce shedding 8% as traders price in similar international deal delays.
• AI Valuation Pressure: Despite strong headline numbers, software giants are being punished for any sign of weakness as the market weighs if AI will eventually commoditize core enterprise platforms.

Paramount Triumphs in WBD Bidding War

11:10 am — PSKY -5.1%

Warner Bros. Discovery (WBD 1.57%) shareholders overwhelmingly approved a $31-per-share acquisition by Paramount Skydance (PSKY 4.49%) on Thursday, moving the blockbuster media merger toward a third-quarter close. The deal follows an intense bidding war involving Netflix (NFLX 0.92%) and Comcast (CMCSA +7.73%). Paramount’s offer includes a $7 billion breakup fee and covers WBD’s previous $2.8 billion penalty to Netflix. While the premium offers certainty in a volatile streaming landscape, investors expressed frustration over non-binding executive payouts. CEO David Zaslav is set to receive an $800 million “golden parachute,” including a controversial $335 million tax gross-up, despite a formal shareholder vote rejecting the compensation package.

• Strategic Consolidation Play: By folding HBO Max, CNN, and the Warner Bros. film studio into its portfolio, Paramount aims to build a “next-generation” scale capable of rivaling Disney (DIS 1.12%) in global streaming dominance.
• Regulatory Hurdles Remain: While investors and proxy firms like ISS are on board, the merger still requires federal sign-off, which could be complicated by the consolidation of major news and sports broadcasting assets.

Top of the Morning

10:25 am — ISRG flat

Intuitive Surgical (ISRG 0.72%) dropped its Q1 2026 results on April 21, and the numbers were hard to argue with. Revenue hit $2.77 billion, up 23% year over year, while non-GAAP earnings per share surged to $2.50, crushing estimates of $2.12. Procedures grew 17% globally, the Ion lung-biopsy platform jumped 39%, and management promptly raised full-year guidance. For good measure, the company bought back $1.1 billion of its own stock in a single quarter, the largest repurchase in company history.

The bull case is compelling. The most important detail in the report wasn’t the topline beat, it was that revenue grew six percentage points faster than procedures. That gap is pricing power made visible, driven by the da Vinci 5 platform commanding higher ASPs and generating ~11% more utilization per system than its predecessor. As the installed base of 11,395 systems churns out high-margin instrument and accessory revenue every quarter, the flywheel keeps spinning faster. Japan’s new reimbursement policy in June 2026 could add another growth leg.

The bear case has teeth too. China, once a promising growth frontier, is now effectively dead money until at least 2027, with domestic competition and policy headwinds showing no signs of abating. Tariffs are trimming roughly 100 basis points from gross margins. And a newly disclosed cybersecurity incident involving unauthorized customer data access introduces a tail risk management hasn’t faced before.

At its current valuation, Intuitive already prices in a lot of perfection. The business is exceptional, the question is whether the stock gives you room to breathe.

Today’s Change

(-0.72%) $-3.47

Current Price

$475.35

Key Data Points

Market Cap

$170B

Day’s Range

$475.04 – $481.27

52wk Range

$427.84 – $603.88

Volume

2.7K

Avg Vol

2M

Gross Margin

66.28%

9:25 am — MEDP -23.2% in pre-market trading

Medpace (MEDP 22.63%) shares are under pressure today after reporting Q1 2026 earnings yesterday that exceeded estimates but left investors concerned over future business. Q1 EPS of $4.28 beat the $3.94 estimates. And revenue of $706.6 million outpaced expectations of $697.6 million. The contract research company also maintained its full-year 2026 guidance with revenues between $2.755 billion and $2.855 billion and EPS between $16.68 and $17.50.

The conference call is just going on as I write this, but some of the concerns are about the book-to-bill ratio, which dipped down to 0.88x from 1.04x last quarter and 0.9x a year ago. Book-to-bill measures future business relative to the current sales. Above 1 is better than not. Medpace’s ratio this quarter was also below analysts’ consensus estimate of 1.04x according to VisibleAlpha, a S&P GlobalMarket Intelligence company. And that estimate has trended down. So this 0.88x result comes as a bit of a surprise.

5:15 am — BNTX -0.69% in pre-market trading

Pancreatic cancer is one of the deadliest. In 2019 and 2020, sixteen patients were treated with a cancer vaccine developed by BioNTech (BNTX 2.74%) and Genentech which was designed to stimulate their immune system to recognize and attack the cancerous cells. Of the sixteen patients treated, eight had a significant immune system response, and of these eight, seven were alive five years after receiving the vaccine. Seven of the total of sixteen patients (44%), and seven of the eight (88%) that had an immune response were alive five years later. This is a dramatic improvement from the typical five-year survival rate for pancreatic cancer, which is 13%. This was a small study with only sixteen patients, but the results are encouraging and the vaccine will now be tested in a larger group of patients in a Phase 2 study.

Opening Bell

9:35 am — TSLA -2.6%, IBM -9.6%, NOW -15.9%

Wall Street is pulling back from Wednesday’s record peaks as heavy-hitting tech earnings trigger a selective sell-off. While the S&P 500 and Nasdaq initially rallied on President Trump’s Iran ceasefire extension, disappointing reactions to corporate results have soured the mood. Tesla (TSLA 0.41%) shares reversed early gains to trade 3% lower after CEO Elon Musk projected a “substantial” surge in capital expenditures — hitting $25 billion for 2026 — to fund its shift into AI and robotics. Meanwhile, enterprise software giants IBM (IBM 0.21%) and ServiceNow (NOW +2.55%) are dragging on the indices, dropping 7% and 13% respectively, as investors question if current profit growth can sustain premium valuations amid ongoing geopolitical “heartburn.”

Netflix’s $25B Buyback Signals Share Confidence

8:00 am — NFLX +1.22% in pre-market trading

Netflix (NFLX 0.92%) is shifting its capital strategy from mega-mergers to shareholder returns, authorizing a new $25 billion share repurchase program following its exit from the $72 billion race for Warner Bros. Discovery (WBD 1.57%). The move comes as the streamer sits on $12.3 billion in cash–boosted by a $2.8 billion breakup fee from Paramount Skydance (PSKY 4.49%)–and looks to soothe investors following a tepid Q2 forecast and the impending departure of co-founder Reed Hastings. With acquisition “noise” behind it, Netflix is pivoting toward internal growth, including the recent purchase of AI film-tech firm InterPositive and a $20 billion content spend targeting live sports and advertising scale.

• High-Yield Confidence: The buyback resumes with $6.8 billion still remaining from a previous 2024 plan, signaling management’s belief that shares are undervalued after a recent 10% post-earnings dip to roughly $94.
• Scaling the Ad Tier: Analysts expect the ad-supported segment to double revenue to $3 billion in 2026, serving as a critical offset to slowing subscriber growth in mature markets like the U.S. and Canada.

Today’s Change

(-0.92%) $-0.85

Current Price

$91.97

Key Data Points

Market Cap

$391B

Day’s Range

$91.91 – $92.59

52wk Range

$75.01 – $134.12

Volume

45K

Avg Vol

47M

Gross Margin

49.44%

This Morning’s Breakfast News

7:30 am — IBM -7.48% in pre-market trading

IBM (IBM 0.21%) fell over 7% ahead of the market open despite quarterly results beating revenue and earnings estimates, as cautious guidance for the full year weighed on sentiment, something CEO Arvind Krishna blamed on broader geopolitical uncertainty.

• “A lot of consumer companies are my clients”: Krishna pointed out that higher inflation could see people spend less at companies such as Walmart (WMT +1.58%), which indirectly impacts IBM from reduced activity.
• “IBM’s consulting business will be both threatened and supported by more sophisticated AI tools”: In late February, TMF chief investment officer Andy Cross explained the Hidden Gems recommendation is under pressure from AI disruption, but “mainframes remain necessary infrastructure for hugely complex computing systems.”

ICYMI: Wednesday’s Scoreboard

6:00 am — AOS unchanged in pre-market trading

A.O. Smith (AOS +0.21%) was the subject of the latest Scoreboard video.

China’s Tech Giants Race to Back DeepSeek

5:30 am — BABA -2.34% in pre-market trading

Chinese internet giants Tencent (TCEHY 3.48%) and Alibaba (BABA 3.46%) are in advanced talks to lead a landmark $300 million funding round for DeepSeek, a move that could value the AI pioneer at over $20 billion. The start-up, owned by hedge fund High-Flyer Capital Management, has gained global recognition for its high-efficiency, low-cost open-source models that rival U.S. leaders like Alphabet (GOOG +0.05%). Tencent has reportedly proposed acquiring up to a 20% stake, though negotiations remain fluid as DeepSeek resists ceding significant control. For the tech titans, the deal is a strategic grab for “agentic AI” leadership and a way to lock in demand for their respective cloud computing and data center services.

• Benchmark Battle: DeepSeek’s target valuation is being compared to MiniMax, another Chinese “super unicorn” recently valued by Goldman Sachs at $38.9 billion due to its extreme optimization of computing costs.
• Agentic Shift: DeepSeek is pivotally expanding into software “agents” capable of autonomous task execution, a sector where Alibaba recently consolidated its AI services into a single business unit to drive 2026 growth.

Today’s Change

(-3.46%) $-4.72

Current Price

$131.70

Key Data Points

Market Cap

$296B

Day’s Range

$129.62 – $133.90

52wk Range

$103.71 – $192.67

Volume

733K

Avg Vol

11M

Gross Margin

40.43%

Dividend Yield

0.80%

Tilray Jumps on Cannabis Rescheduling Hopes

4:45 am — TLRY +2.50% in pre-market trading

Tilray (TLRY 11.82%) shares surged over 11% as cannabis stocks rallied following reports that the Trump administration is expected to move toward reclassifying marijuana to Schedule III. The potential regulatory shift has sparked heavy buying interest across the sector.

• Rescheduling catalyst drives sector rally: Reports indicate the administration is expected to finalize marijuana reclassification, which investors view as a major regulatory catalyst that could ease tax burdens and boost the industry.
• Analyst sees significant upside potential: A Wall Street analyst highlighted over 40% upside for Tilray based on its leading Canadian market share and growing beverage revenue, adding to the bullish sentiment surrounding the stock.

Today’s Change

(-11.82%) $-0.93

Current Price

$6.94

Key Data Points

Market Cap

$809M

Day’s Range

$6.82 – $9.34

52wk Range

$3.51 – $23.20

Volume

441K

Avg Vol

4M

Gross Margin

23.71%

Before the Opening Bell

4:30 am

Stock futures retreated Thursday as a breakdown in U.S.-Iran negotiations overshadowed President Trump’s “indefinite” ceasefire. While the truce holds, a complete naval blockade of the Strait of Hormuz has pushed Brent crude back above $103 per barrel, fueling stagflation fears ahead of April’s manufacturing data. Tesla (TSLA 0.41%) added to the volatility; despite a Q1 earnings beat, shares fell 2% after CEO Elon Musk jacked up 2026 capital expenditure guidance to $25 billion to fund a massive “Cybercab” and AI robotics push. As cash flow concerns mount, investors are pivoting to pre-market results from American Express (AXP 0.40%), Blackstone (BX +0.14%), and American Airlines (AAL +2.44%) to gauge consumer and industrial resilience.

• The $25B Bet: Tesla’s tripled capex run-rate targets six simultaneous production lines, including a dedicated “Optimus” humanoid robot facility in Austin set to begin large-scale output this August.
• Banking on the Premium: American Express is expected to post a 10% earnings jump to $4.01 per share, as its high-net-worth customer base remains largely insulated from war-related energy spikes.