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Key points
US indices rise while most stocks fall, with tech and AI-linked names leading Tesla (NASDAQ:TSLA) result seen as cash flow positive but fundamentally disappointing ServiceNow (NYSE:NOW) raises concerns over SaaS margin sustainability amid AI spend Cochlear (ASX:COH) downgrade and CSL (ASX:CSL) de-rating viewed as possible long-term value opportunities
Matt Swartz from Lincoln Indicators views global equity markets as remarkably resilient, with the S&P 500 and Nasdaq posting strong gains even as most underlying stocks decline. Swartz points to a “risk-on” tone led by US technology, semiconductors and hardware linked to the AI capital expenditure thematic. Tesla (NASDAQ:TSLA) initially jumps 4% on better-than-expected margins and strong free cash flow, yet Swartz regards the result as weak on fundamentals, highlighting low delivery growth versus a lofty 185x multiple and describing the stock as driven more by future narratives than current earnings.
In software, Swartz sees ServiceNow (NYSE:NOW) as a key bellwether. He notes solid top-line and earnings beats but weaker guidance, falling operating margins and a free cash flow miss, with management flagging integration costs and heavy AI investment. Swartz suggests this raises broader questions about the sustainability of SaaS margins. He also notes post-market moves in IBM (NYSE:IBM), down 7%, and Texas Instruments ($TXN), up 10%.
Locally, Swartz is focused on the steep sell-off in Cochlear (ASX:COH), down around 40% after a 28–30% earnings downgrade. He cites Medicare eligibility tightening, reimbursement changes, European surgical frictions, Middle East conflict impacts and currency as key pressures and frames the slump in healthcare premiums, including CSL (ASX:CSL), as a potential long-term opportunity for patient investors.
