BlackRock
Shares opened up more than 7%, above pre-market signals, and traded up more than 6.5% early. The largest asset manager beat on both the top and bottom line. Adjusted earnings came in at $13.91 per share against a street estimate of $12.60. Revenue topped $7 billion, also a beat.
Assets under management hit a record above $15.3 trillion. In just under three months the firm added almost $1.5 trillion in assets. This runs on more than rising stock prices. Since the firm earns much of its revenue as fees on assets it manages, a bigger asset base means more fees, and new money flowing in matters as much as market gains. Larry Fink said client flows in the first six months of the year more than doubled from a year earlier, with demand across ETFs, index funds, active investments, and private markets. He said he has never been more optimistic about the firm's future growth.
The upbeat tone matched what came from big banks. JP Morgan Chase and Goldman reported strong results, and Morgan Stanley, out today, had built momentum and hit a record the prior day. Citi and Wells pulled back the day before, but overall the numbers were strong.
Aehr Test Systems
The stock ripped higher at the open, up roughly 43%, later holding gains above 40%. The market had expected a loss on adjusted earnings. Instead the company posted a profit of 11 cents per share. Revenue reached $18.83 million versus a street estimate of $18.68 million.
The outlook drove the move. Record quarterly bookings hit $60.7 million, and the effective backlog now tops $100 million. The company makes equipment that stress-tests semiconductor chips before they are deployed, putting it on the AI chip wave. It guided fiscal 2027 revenue to $130 to $150 million, growth of as much as 200% from the prior year, with profit margins expected between 18% and 22%. These are millions, not billions, so the base is small.
IBM
IBM fell 24% to 25% the prior day, its worst day ever, losing a quarter of its value after a preliminary second-quarter report missed across major metrics. Both earnings and revenue in the pre-released figures came in weaker than expected, segment by segment. The company said the results were not what it had modeled and chose to pre-release them. Investors sold first and asked questions later.
Oppenheimer downgraded the stock to perform from outperform and pulled its $350 price target, saying it cannot set a target when it cannot tell where the stock goes from here, and advising the sidelines for now. IBM traded higher this morning as some value investors bought the dip, though it is too soon to call a comeback. Related software names were hit by IBM's slide the prior day.
