Private Markets Sector

Big tech companies are spending massive amounts of cash on artificial intelligence hardware and data centers (computing facilities). For companies like Amazon, this huge spending is okay because their cloud business is growing fast and making money right away. But for companies without a big cloud business, heavy spending drains cash reserves without quick returns, hurting their stock prices and threatening their credit ratings. Going forward, watch whether rising hardware costs shrink profits faster than software sales can grow.

Robinhood just posted its best earnings ever, beating Wall Street's expectations. But underneath the headline success, the company is making a dangerous trade: it's pushing customers toward lower-profit prediction markets (bets on future events) while its cryptocurrency business—which once made the company rich—is collapsing 38% year-over-year. Robinhood is betting it can make money through sheer volume and keeping users loyal (subscription members jumped 39%), but Wall Street noticed the risk: the stock fell 4% despite beating targets. The real question: can Robinhood sustain these new lower-margin businesses, or will it hit a profit wall when market excitement fades?

Morgan Stanley launched new Ethereum and Solana funds. By passing full staking—crypto interest yields—to buyers and charging low fees, the bank turns crypto into income assets like bonds. Because Morgan Stanley’s 16,000 advisors now offer them, crypto moves from risky bets into standard accounts, competing with cash for big money. Watch whether these funds reach $200 million in Q3 faster than their Bitcoin trust did, proving investors are truly reallocating money into crypto.