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Tesla reported second quarter results Wednesday that missed Wall Street’s profit expectations by a wide margin, and the stock fell 14% the following session as investors weighed the earnings shortfall against the company’s confirmed plan to spend $25 billion on capital expenditures for the full year.

Adjusted earnings per share came in at $0.33, well below the approximately $0.50 analysts had expected, a miss of roughly 34%. Operating margin collapsed to 1.4% from 4.1% a year earlier, and operating income fell 57% to just $398 million. Adjusted EBITDA landed at $3.2 billion versus the $4 billion expected. On the profitability side of the ledger, this was a clear and significant miss.

Revenue told a different story. Tesla reported $28.24 billion, up 26% year over year and above the $26.32 billion Bloomberg consensus estimate. Vehicle deliveries came in at 480,126 units, up 25% year over year and well ahead of the 406,000 consensus. For the first time in company history, Tesla crossed $100 billion in trailing twelve month revenue. The top line beat. The bottom line did not, and it was the bottom line that drove the stock’s decline.

Where the Profit Miss Came From

Part of the shortfall traces back to regulatory credit income. For the first time in many quarters, those credits, which had historically contributed $700 million to $900 million per quarter to Tesla’s bottom line, came in far below that level, removing a cushion that had quietly supported margins for years.

The larger driver is capital spending. Capital expenditures surged 142% year over year to $5.79 billion for the quarter, pushing free cash flow negative at $1.09 billion. Management confirmed on the earnings call that full-year capex will total approximately $25 billion, directed almost entirely at scaling Cybercab production, building out Optimus manufacturing lines, and expanding the company’s Cortex AI compute infrastructure in Texas. CFO Vaibhav Taneja told investors that operating expenditures will continue growing through 2026 and beyond, and that commodity price increases and interest rate changes will keep adding to costs.

The Bet Behind the Spending

Every dollar of that $25 billion is aimed at a future well beyond electric vehicles. Cybercab began production and public-road testing during the quarter at Gigafactory Texas. Robotaxi service is now live in seven US metro areas. First-generation Optimus assembly lines are being installed at the Fremont factory, on space freed up after Tesla decommissioned its Model S and X production lines, with initial production targeted for later this year. Tesla Semi and Megapack 3 remain on schedule to begin production in 2026 as well.

CEO Elon Musk described this as Tesla’s largest and most exciting period of investment, acknowledging that scaling would be non-linear and reiterating a long-term value creation focus over near-term margin optimization.

What It Means for Investors Tracking the Broader Market

Tesla’s quarter fits a pattern that has now repeated across multiple high-profile earnings reports this season. TSMC beat estimates and fell. Netflix missed guidance by roughly 1% and lost $100 billion in value. Tesla beat revenue significantly, missed profit estimates badly, and confirmed a massive year of spending ahead, and the stock dropped 14% because the market is scrutinizing margin quality and cash generation with a level of skepticism it did not apply a year ago.

For companies at every market capitalization, the message from this earnings season is consistent. Strong top-line growth alone is no longer sufficient to satisfy investors who are increasingly focused on whether that growth translates into cash flow and margin durability. Companies funding aggressive expansion through negative free cash flow, regardless of how compelling the long-term vision, are being held to a higher standard of proof than they were earlier in this market cycle.

Research News and Market Data on NNVC

Wednesday, 22 July 2026 08:30 AM

SHELTON, CT / ACCESS Newswire / July 22, 2026 / NanoViricides, Inc. (NYSE American:NNVC) (the “Company”), a clinical stage leader developing antiviral drugs that viruses cannot escape, announces that it has applied to the regulatory agency, ACOREP, for approval to begin a Phase II Clinical Trial of NV-387 Oral Gummies as a Treatment for the Current Bundibugyo Ebolavirus in the Democratic Republic of Congo (DRC).

NanoViricides has retained Om Sai Clinical Research Private Limited, India, as the CRO for this Phase II clinical trial for Ebola in DRC. Om Sai CRO has been instrumental in putting together a team with a renowned Principal Investigator and other renowned experts and with support from a well known University in the Ebola-affected region to lead and execute the clinical trial of NV-387 Oral Gummies as a Treatment for Ebolaviruses in DRC. The Principal Investigator has sent in the application for the clinical trial.

Om Sai is also the CRO leading the Company’s Phase II clinical trial of NV-387 Oral Gummies as a Treatment for Mpox in DRC.

“We believe NanoViricides is well positioned to provide an Oral Ebola treatment to save lives with our NV-387 Oral Gummies drug product that is already in place in DRC,” said Anil R. Diwan, PhD, President of the Company, adding, “This unique and revolutionary oral broad-spectrum antiviral drug deserves to be tested in a clinical trial more than any antibodies or other infusion drugs.” He further commented, “Viruses readily escape antibodies after exposure to them as we know from COVID-19. Infusions are not scalable to combat an outbreak of the size that is seen in DRC.”

NV-387 is the only orally active agent under consideration for clinical trial as a treatment of Ebola to the best of our knowledge. In an epidemic scenario in resource limited settings such as in DRC, oral drug is a highly advantageous feature.

Other treatments require infusions. Infusions are difficult to implement and also are not scalable in a large outbreak scenario if this Ebola virus outbreak continues to grow, as has been widely expected.

A clinical trial of Remdesivir infusion, an antibody cocktail MBP134 infusion, and MBP134 infusion plus Remdesivir infusion, has started as per WHO with first patient having received infusion of the antibody cocktail on July 2, 2026 ¹. Monoclonal antibodies are highly specific to a particular strain of the virus and usually are not very effective against variants of the same virus that arise in the field, nor are they effective against unrelated strains of the same virus.

The Company notes that NV-387 was previously found to be superior to Remdesivir in a lethal animal model of a viral disease. The Company believes this superiority of NV-387 is reasonably expected to extend to the current novel Bundibugyo ebolavirus strain.

Sufficient quantity of NV-387 Oral Gummies Drug Product for starting the clinical trial against Ebola is already available in DRC. This drug product was shipped to DRC for the ensuing Phase II clinical trial of NV-387 for the Treatment of Mpox and also to support a Phase II clinical trial for the Treatment of Ebola if approved by the regulatory agency.

The current 17th Ebola outbreak in DRC has already claimed over 930 lives, with close to 2,400 confirmed cases, in just two months since it was declared on May 15th, becoming the fastest growing Ebola outbreak to date, as per the WHO ². This Ebola outbreak continues to increase in spread and is now present in five provinces in DRC. More concerning is the fact that over 80% of new cases are outside of known contact lists, leading to the projection that the extent of the outbreak is at least two times or more larger than the reported confirmed cases ³.

There is thus a tremendous urgency to validate a drug that works against this ebolavirus in clinical trials for minimizing further spread by treating patients and for saving lives.

There is no approved Treatment or Vaccine for the new variant of the Bundibugyo Ebolavirus (BDBV) that is causing the current rapidly expanding outbreak of the Ebolavirus Disease (EVD) in DR Congo. The rare Bundibugyo strain of Ebola virus causing the current outbreak appears to be its new variant, likely freshly introduced from some animal source ⁴, such as fruit bats.

“We believe NV-387 could be revolutionary in this fight against Ebola, if it is found to be effective,” said Anil R. Diwan, PhD, adding, “It is an oral drug, in contrast to others that are infusions. Thus evaluating if NV-387 treatment works is of paramount importance to combat this and future Ebola and Marburg outbreaks.”

NV-387 is a broad-spectrum antiviral that mimics the host-side features that the virus requires, and is likely to be effective against Ebola viruses because they use the same host-side feature mimicked by NV-387. It is highly unlikely that viruses can escape NV-387, because this drug mimics the features on host cells that the viruses continue to require even as they mutate or evolve in the field.

Additionally, NV-387 Oral Gummies is a drug product readily delivered orally. It does not even require swallowing effort or water, because it dissolves in the mouth by itself, simplifying delivery for even sick individuals with swallowing difficulties.

This oral delivery is an important feature that puts NV-387, a broad-spectrum antiviral, as being superior to the other approaches.

While there is currently minimal risk of Ebola in the USA, the CDC’s mathematical models suggested this Central African outbreak could grow to 10,000 to 20,000 cases and 2,000 to 4,000 deaths within just three months, rivaling the largest outbreak to date in 2014-2016 ⁵. Unfortunately, the outbreak appears to be on track to realize these dire predictions.

The outbreak which was declared a Public Health Emergency of International Concern (“PHEIC”) by the WHO on May 17, 2026, continues to rapidly expand, outpacing containment efforts. The outbreak arose in a high traffic region bordering the Democratic Republic of Congo (DRC), with travel contacts to Uganda, and South Sudan and with 11 more nations in Africa at risk ⁶.

NV-387 is a broad-spectrum antiviral that mimics the host-side feature called heparan sulfate proteoglycan that over 90-95% of human pathogenic viruses require for infecting cells. No matter how much the virus changes in the field, it continues to use HSPG, and therefore it cannot escape the drug NV-387. In contrast, Remdesivir is a small molecule inhibitor of the viral RDRP enzyme needed for making copies of the viral genome, and the virus can possibly escape by small number of mutations.

All Ebola viruses utilize HSPG as the attachment receptor, followed by entry into the cell inside endosomes. The virus substantially dismantles in the endosome and hitches a cognate receptor called NPC1 to enter the cytoplasm where the next steps in its replication begin.

Thus there is a strong rationale that NV-387 could be highly effective against Ebola virus infections, not just Bundibugyo, but also the Sudan and other viruses for which there are no treatments.

NV-387 is available as an oral medication that has excellent stability at room temperature, enabling ease of transport, distribution, and delivery to patient. NV-387 oral gummies dissolve naturally in the mouth and do not require tablet swallowing, which is difficult for children, seniors, and also patients with sore throat.

If NV-387, as a broad-spectrum antiviral, is found to be effective against the Bundibugyo virus, it will likely be effective against all ebolaviruses and possibly all filoviruses; that would be a game changer for pandemic preparedness.

All previous anti-Ebola efforts have been focused on vaccines and antibodies⁷. This has led to approval of therapies that are specific to the Ebolavirus Zaire strain only, albeit with limited effectiveness. This leaves out all other filoviruses of consequence: Sudan, Marburg, and the more rare Bundibugyo with no treatment or vaccine.

The US Government is active in ensuring that suspected or confirmed ebolavirus cases do not enter the general population in the USA. To this end, travel from DRC has been restricted, with pre-travel quarantine requirements imposed, and suspect travelers are directed to screening at specific airports and may be further quarantined.

The case fatality rate of ebolaviruses has generally been around 50% in recent outbreaks, with improvements in care, including hydration therapy, corticosteroids, and other usual symptomatic treatments. Ebola viruses spread via bodily fluid secretions including fomites/sputum, as well as semen/genital secretions. Ebola virus can remain in survivors even as many as 965 days after the disease without symptoms, and can transmit through bodily secretions, suggesting possible latency. Many recent outbreaks have been ignited as a result of such reawakened-transmitted virus from a survivor. Sexual transmission was documented even as late as 482 days after disease. This persistence and possible latency of ebolavirus in immune-privileged organs (e.g. brain, eyes, gonads, where antibodies are not operative) makes it a uniquely serious threat for global transmission and sustained outbreaks.

An irony is that because of the high case fatality rate (CFR) approaching 50%, the spread of ebolavirus remains rather limited. If a variant emerges with a reduced CFR, say in the range of 5-15%, the potential threat of global pandemic from such an outbreak would increase substantially.

So far, BDBV has demonstrated variable CFR ranging from under 15% (in Uganda, 2026), to almost 40% (in DRC, based on current confirmed cases and fatalities numbers, as of July 18, 2026). Therefore, BDBV is of great concern as a potential pandemic disease. However, it is believed that ebolaviruses do not transmit via respiratory droplets or aerosols, and require extensive contact with bodily fluids of an infected person. In addition, within DRC and internationally, certain protective quarantine measures for travel from the outbreak areas have been implemented. Therefore, currently there is no apparent threat of a global pandemic.

With ever-increasing global travel, local outbreaks such as ebola can quickly travel far and wide potentially causing global pandemics, as was the case with COVID-19, if not caught in time. It is not feasible to produce a new vaccine and a new set of antibody drugs to combat every possible virus. Even if vaccines and antibodies are produced, the virus would escape by generating variants, as the world has witnessed during the COVID-19 pandemic.

“Only safe and effective broad-spectrum antiviral drugs that can effectively combat most viral infections will enable the world to combat viruses and defend the global population in the war against known and unknown nanoscopic enemies that are viruses,” commented Dr. Diwan, adding, “NV-387 is the only drug with such potential that is in clinical development today, to the best of our knowledge.”

ABOUT NANOVIRICIDES

NanoViricides, Inc. (the “Company”) (www.nanoviricides.com) is a clinical stage company that is creating special purpose nanomaterials for antiviral therapy. The Company’s novel nanoviricide^™ class of drug candidates and the nanoviricide^™ technology are based on intellectual property, technology and proprietary know-how of TheraCour Pharma, Inc. The Company has a Memorandum of Understanding with TheraCour for the development of drugs based on these technologies for all antiviral infections. The MoU does not include cancer and similar diseases that may have viral origin but require different kinds of treatments.

The Company has obtained broad, exclusive, sub-licensable, field licenses to drugs developed in several licensed fields from TheraCour Pharma, Inc. The Company’s business model is based on licensing technology from TheraCour Pharma Inc. for specific application verticals of specific viruses, as established at its foundation in 2005.

Our lead drug candidate is NV-387, a broad-spectrum antiviral drug that we plan to develop as a treatment of RSV, COVID, Long COVID, Influenza, and other respiratory viral infections, as well as MPOX/Smallpox infections. Our other advanced drug candidate is NV-HHV-1 for the treatment of Shingles. The Company cannot project an exact date for filing an IND for any of its drugs because of dependence on a number of external collaborators and consultants. The Company is currently focused on advancing NV-387 into Phase II human clinical trials.

NV-CoV-2 (API NV-387) is our nanoviricide drug candidate for COVID-19 that does not encapsulate remdesivir. NV-CoV-2-R is our other drug candidate for COVID-19 that is made up of NV-387 with remdesivir encapsulated within its polymeric micelles. The Company believes that since remdesivir is already US FDA approved, our drug candidate encapsulating remdesivir is likely to be an approvable drug, if safety is comparable. Remdesivir is developed by Gilead. The Company has developed both of its own drug candidates NV-CoV-2 and NV-CoV-2-R independently.

The Company is also developing drugs against a number of viral diseases including oral and genital Herpes, viral diseases of the eye including EKC and herpes keratitis, H1N1 swine flu, H5N1 bird flu, seasonal Influenza, HIV, Hepatitis C, Rabies, Dengue fever, and Ebola virus, among others. NanoViricides’ platform technology and programs are based on the TheraCour® nanomedicine technology of TheraCour, which TheraCour licenses from AllExcel. NanoViricides holds a worldwide exclusive perpetual license to this technology for several drugs with specific targeting mechanisms in perpetuity for the treatment of the following human viral diseases: Human Immunodeficiency Virus (HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Rabies, Herpes Simplex Virus (HSV-1 and HSV-2), Varicella-Zoster Virus (VZV), Influenza and Asian Bird Flu Virus, Dengue viruses, Japanese Encephalitis virus, West Nile Virus, Ebola/Marburg viruses, and certain Coronaviruses. The Company intends to obtain a license for RSV, Poxviruses, and/or Enteroviruses if the initial research is successful. As is customary, the Company must state the risk factor that the path to typical drug development of any pharmaceutical product is extremely lengthy and requires substantial capital. As with any drug development efforts by any company, there can be no assurance at this time that any of the Company’s pharmaceutical candidates would show sufficient effectiveness and safety for human clinical development. Further, there can be no assurance at this time that successful results against coronavirus in our lab will lead to successful clinical trials or a successful pharmaceutical product.

This press release contains forward-looking statements that reflect the Company’s current expectation regarding future events. Actual events could differ materially and substantially from those projected herein and depend on a number of factors. Certain statements in this release, and other written or oral statements made by NanoViricides, Inc. are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Important factors that could cause actual results to differ materially from the company’s expectations include, but are not limited to, those factors that are disclosed under the heading “Risk Factors” and elsewhere in documents filed by the company from time to time with the United States Securities and Exchange Commission and other regulatory authorities. Although it is not possible to predict or identify all such factors, they may include the following: demonstration and proof of principle in preclinical trials that a nanoviricide is safe and effective; successful development of our product candidates; our ability to seek and obtain regulatory approvals, including with respect to the indications we are seeking; the successful commercialization of our product candidates; and market acceptance of our products.

The phrases “safety”, “effectiveness” and equivalent phrases as used in this press release refer to research findings including clinical trials as the customary research usage and do not indicate evaluation of safety or effectiveness by the US FDA.

FDA refers to US Food and Drug Administration. IND application refers to “Investigational New Drug” application. cGMP refers to current Good Manufacturing Practices. CMC refers to “Chemistry, Manufacture, and Controls”. CHMP refers to the Committee for Medicinal Products for Human Use, which is the European Medicines Agency’s (EMA) committee responsible for human medicines. API stands for “Active Pharmaceutical Ingredient”. WHO is the World Health Organization. R&D refers to Research and Development.

Contact:
NanoViricides, Inc.
[email protected]

Public Relations Contact:
[email protected]

Source: NanoViricides, Inc.

1 https://www.reuters.com/business/healthcare-pharmaceuticals/trial-bundibugyo-ebola-treatment-starts-drc-who-says-2026-07-02/

2 https://www.aljazeera.com/news/2026/7/20/ebola-death-toll-in-drc-surges-to-at-least-930-as-outbreak-gathers-pace

https://www.aljazeera.com/news/2026/7/16/ebola-spreading-more-quickly-in-drc-while-uganda-is-close-to-being-virus-free

3 https://www.msn.com/en-us/health/other/congos-ebola-outbreak-spreads-to-two-more-provinces/ar-AA27NkjT

4 b https://virological.org/t/initial-genomes-from-may-2026-bundibugyo-virus-disease-outbreak-in-the-democratic-republic-of-the-congo-and-uganda/1032

5 https://www.cdc.gov/media/releases/2026/update-on-ebola-outbreak-in-the-democratic-republic-of-the-congo-and-uganda-6-5-2026.html

6 https://www.forbes.com/sites/maryroeloffs/2026/05/25/african-health-officials-on-ebola-this-is-too-much-live-updates/

7 Substantial work was also performed to develop small chemical potentially broad-spectrum agents. Remdesivir was the only small chemical that entered the PALM clinical trials ca. 2018-2019 but failed to show effectiveness. Small chemicals are readily escaped by viruses often with just single mutations.

SOURCE: NanoViricides

The bond market just erased weeks of progress in a single trading session. The 10-year Treasury yield climbed to 4.64% on Tuesday, its highest level since late May, while yields across the curve rose two to four basis points as a fresh surge in crude oil prices reignited concerns that the Federal Reserve may need to raise interest rates rather than hold them steady. The move wiped out the rally that followed this month’s softer-than-expected inflation report, and it arrives just one week before the Fed’s next policy meeting.

The timing could not be more consequential. Interest rate futures now show traders pricing in roughly a 20% probability of a rate hike at next week’s FOMC meeting, up from levels near zero just days ago. Fed Chair Kevin Warsh has repeatedly emphasized that inflation remains a central concern for the committee, a position echoed by other officials in recent weeks. Policymakers are now in their customary quiet period ahead of the meeting, meaning the bond market is left to interpret incoming data without any fresh guidance from the Fed itself.

What’s Driving the Reversal

The catalyst is energy prices. Brent crude climbed to $91 a barrel Tuesday as the US and Iran exchanged strikes for a tenth consecutive day, with mediators simultaneously working to revive a fragile truce between the two countries. The renewed military escalation has pushed oil prices back toward levels that stoke inflation concerns just as markets had begun pricing in relief following the ceasefire framework from earlier this summer.

Rates strategists have pointed to a technical dimension compounding the move. The 10-year yield broke back above the closely watched 4.60% level, and the two-year yield pushed through 4.20%, both thresholds that traders monitor closely for momentum signals. That technical breakout, combined with typically thinner summer trading conditions, appears to have amplified a move that was already underway on the back of rising energy prices.

Economic data released Tuesday added further support to the case for higher yields. The Philadelphia Fed’s services sector survey showed activity expanding for the first time since October 2024, reinforcing the picture of a resilient domestic economy that gives the Fed less reason to ease and potentially more reason to consider tightening if inflation pressures continue building.

Why This Matters for Small Caps

For companies in the sub-$2 billion market cap space, this reversal is a direct reminder of how quickly the rate environment can shift against smaller, more leveraged businesses. Small and microcap companies carry disproportionately more variable-rate debt than large cap peers, which means every basis point move in Treasury yields translates into real borrowing cost changes for the companies your audience tracks most closely.

The renewed Iran escalation also revives the two-sided energy trade that has defined 2026. Consumer-facing small caps in transportation, logistics, and retail face renewed margin pressure if oil continues climbing toward $95 or higher, while domestic energy producers benefit directly from sustained prices above $90. That dynamic has whipsawed throughout the year as the conflict has cycled through ceasefires, escalations, and renewed negotiations, and Tuesday’s move suggests the pattern is far from finished.

With the Fed entering its quiet period and next week’s meeting now carrying a nontrivial probability of a hike, the coming days will be defined by how oil prices and geopolitical developments evolve, rather than by any new signal from policymakers themselves. The bond market has already cast its vote. The Fed’s response comes next Wednesday.

The community banking consolidation wave just produced one of its most strategically significant deals of the year. First Hawaiian, Inc. (Nasdaq: FHB), parent company of Hawaii’s oldest and largest financial institution, announced today it has entered into a definitive agreement to acquire TriCo Bancshares (Nasdaq: TCBK), parent company of California-based Tri Counties Bank, in an all-stock transaction. The deal creates a combined institution with approximately $34 billion in assets and positions it as the sixth largest bank headquartered in the Western United States.

Under the terms of the agreement, TriCo shareholders will receive 2.095 shares of First Hawaiian common stock for each TriCo share, representing $63.12 per share based on First Hawaiian’s July 10 closing price. Upon completion, First Hawaiian shareholders will own approximately 65% of the combined company and TriCo shareholders approximately 35%. Four current TriCo directors, including CEO Rick Smith, will join First Hawaiian’s board. The transaction is expected to close by the end of 2026, subject to regulatory approvals and shareholder votes from both companies.

Why This Combination Makes Sense

The strategic logic is geographic diversification. First Hawaiian has built a dominant franchise across Hawaii, Guam, and Saipan over its 168-year history, but its mainland presence has been limited. TriCo brings a well-established community banking network throughout California, with deep local market positions, an experienced leadership team, and a strong deposit franchise. The combination gives First Hawaiian a meaningful footprint on the mainland without requiring it to build from scratch in a new market.

Importantly, the two institutions share a similar operating philosophy. Both are relationship-driven, community-focused banks with disciplined credit cultures and strong local reputations. First Hawaiian has committed to retaining the Tri Counties Bank branding on the mainland and has stated there are no expected branch closings associated with the transaction, a signal that the deal is designed to preserve both franchises rather than collapse one into the other.

The Financial Profile of the Combined Company

First Hawaiian released preliminary second quarter results alongside the merger announcement, and the numbers reinforce why the company is in a position to execute an acquisition of this scale. Net income came in at $73.4 million with diluted earnings per share of $0.60, compared to $67.8 million and $0.55 in the prior quarter. Net interest margin expanded six basis points to 3.25%, return on average assets improved to 1.23%, and tangible book value per share grew 3% quarter over quarter to $15.04. Gross loans increased to $14.6 billion from $14.4 billion the prior quarter.

Those are the metrics of a bank operating from a position of strength rather than necessity.

The Broader Community Banking Signal

For investors tracking community and regional banks in the small and microcap space, the First Hawaiian-TriCo deal continues a clear consolidation pattern. Rising funding costs, increasing regulatory burden, commercial real estate exposure, and intensifying competition from larger institutions and fintech platforms are all creating pressure on smaller banks to pursue scale through combination rather than organic growth alone.

The structure of this deal is worth noting. An all-stock transaction with no branch closings, retained branding, shared board representation, and leadership drawn from both organizations reflects a partnership model rather than a hostile takeover. That approach tends to preserve customer relationships and employee retention, both of which are critical for community banks where the value of the franchise is built almost entirely on local trust.

As the cost of remaining independent continues to rise for smaller banking institutions, transactions like this one are likely to become more frequent. The banks that choose their partners wisely and execute clean integrations will be the ones best positioned to compete in an increasingly consolidated landscape.

Friday, July 10, 2026

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

FY 2027 first quarter financial results. AZZ reported adjusted net income of $55.8 million, or $1.85 per share, compared to $53.8 million, or $1.78 per share, during the prior year period. We had forecast adjusted net income of $51.4 million or $1.70 per share. Compared to the first quarter of FY 2026, sales increased 6.3% to $448.5 million. Adjusted EBITDA amounted to $99.5 million compared to our estimate of $96.8 million. Compared to the prior year period, first quarter Metal Coatings sales were up 12.3% to $210.3 million, while Precoat Metal sales increased 1.5% to $238.2 million. First quarter segment adjusted EBITDA margin amounted to 30.3% for Metal Coatings and 21.7% for Precoat Metals.

FY 2027 Corporate Guidance. Management now expects FY 2027 sales in the range of $1.80 to $1.85 billion, compared to previous expectations of $1.725 to $1.775 billion. Adjusted EBITDA is expected to be in the range of $375 to $415 million, compared to prior guidance of $360 to $400 million. Adjusted EPS is now projected to be $6.75 to $7.15 versus prior expectations of $6.50 to $7.00.

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For most of the past five years, the Magnificent Seven traded at a persistent and widening premium to the rest of the S&P 500. That premium has now compressed to its lowest level in more than a decade, and the implications for how capital flows through the broader market are significant.

The price-to-earnings multiple premium for the Magnificent Seven relative to the other 493 companies in the S&P 500 has dropped to approximately 10%, according to Morgan Stanley. That figure held above 30% for most of the 2020s. The collapse in relative valuation is not because these companies are struggling operationally. It is because the market is repricing what it is willing to pay for growth when that growth comes at the cost of massive, accelerating capital expenditure with uncertain near-term returns.

What’s Driving the Compression

All seven stocks have underperformed the S&P 500 in 2026 except Alphabet, which has gained 14.5% year to date versus the benchmark’s 8.8% advance. Nvidia, Microsoft, Amazon, Meta, Apple, and Tesla have all lagged the index. For a group that dominated market leadership for the better part of three years, the collective underperformance is striking.

The primary source of investor frustration is capital spending on artificial intelligence infrastructure. The Magnificent Seven’s combined AI-related capital expenditures are projected to exceed $700 billion in 2026, a 70% increase from the prior year. That level of spending is consuming corporate cash generation at a pace that has pushed the group’s collective 12-month forward free cash flow projections sharply below their 2024 peak. Investors are watching these companies pour hundreds of billions into data centers and GPUs while the revenue return on that investment remains difficult to quantify with precision.

Layer on the prospect of a Fed rate hike later this year, which would increase the cost of financing AI projects, and the math behind the underperformance becomes straightforward. Higher rates, lower free cash flow, and uncertain AI monetization timelines are a combination that compresses multiples regardless of how strong the underlying business remains.

The Mirror Image for Small Caps

What makes this data point particularly relevant for ChannelChek’s audience is what happens to the rest of the market when the Magnificent Seven’s gravitational pull weakens. For most of 2023 and 2024, the concentration of capital in seven stocks starved the rest of the equity universe of institutional attention and flows. The top ten companies in the S&P 500 grew to represent more than 35% of the index’s total weight, up from 18% a decade ago. That concentration meant the other 493 companies, and the thousands of smaller companies outside the index entirely, were competing for a shrinking share of investor capital.

That dynamic is now reversing. The Russell 2000 posted its best first half in 35 years, gaining nearly 22% through June. Market breadth has expanded meaningfully, with advancing stocks consistently outnumbering decliners. The equal-weight S&P 500 has outperformed the cap-weighted version. Capital that was previously locked into mega cap technology is rotating into industrials, consumer companies, energy producers, and the broader small cap universe.

The Magnificent Seven premium compressing to 10% is the quantitative proof of what the price action has been saying all year. The trade that dominated markets for the past three years is losing its hold, and the beneficiaries are the companies that were left behind during the concentration era. Many of those companies trade well below the $2 billion market cap threshold and are only now beginning to see the valuation and capital flow benefits of a broadening market.

The Magnificent Seven are not broken. They are just no longer the only game in town. For investors positioned in the rest of the market, that is exactly the environment they have been waiting for.

Two small-cap biotechs are betting that artificial intelligence can succeed where a decade of drug development has stalled. Chemomab Therapeutics (Nasdaq: CMMB) and Scipher Medicine announced this morning that they have entered into a definitive merger agreement, combining Chemomab’s clinical-stage antibody nebokitug with Scipher’s AI-powered precision medicine platform to attack rheumatoid arthritis from a completely different angle than anything currently on the market.

The numbers explain why this matters. No new mechanism of action has been approved for rheumatoid arthritis since 2012, and no new branded therapy has reached the market since 2019. Only about a third of RA patients achieve low disease activity on current treatments, and the two leading drug classes now carry FDA boxed warnings. It’s a $24 billion market that has effectively been standing still for over a decade while patients cycle through drugs that only partially work.

Chemomab’s contribution is nebokitug, a first-in-class antibody that blocks CCL24, a protein tied to both inflammation and fibrosis. That dual mechanism is the differentiator. Most RA drugs on the market today only address inflammation, leaving the fibrotic, tissue-scarring side of the disease untouched. Nebokitug has already produced positive results across five clinical trials, including a Phase 2 study in primary sclerosing cholangitis that hit its safety endpoint and improved a range of fibrosis-related markers.

Scipher brings the half of the equation that makes this deal genuinely interesting. The company’s AI Network Medicine platform independently ranked CCL24 as the top therapeutic target for RA, arriving at the same conclusion Chemomab had reached through years of bench research, but from a completely different direction. Scipher also owns PrismRA, the only rheumatoid arthritis test with Medicare and Medicaid reimbursement approval for predicting how a patient will respond to treatment. That test will be used to select patients for the upcoming Phase 2 trial, meaning the study isn’t just testing whether nebokitug works. It’s testing whether AI-selected patients respond better than an unselected population, which is precisely the kind of precision-medicine proof point regulators and physicians have been waiting for.

Under the deal terms, the combined company will operate as Scipher Medicine Corporation and trade under the ticker SCIP. Scipher shareholders will hold roughly 68% of the combined entity, with Chemomab shareholders holding about 32% plus contingent value rights tied to nebokitug milestones. A syndicate led by Northpond Ventures, with Khosla Ventures, Blue Owl Healthcare Opportunities, and Neuberger funds participating, is putting in $30 million to fund the combined company. That capital, together with existing cash, is expected to carry operations into the second half of 2028, well past the Phase 2 readout expected in the first half of that year.

The deal values the combined company at $150 million before the new financing, a modest figure for a company sitting on a potential first-in-market precision medicine therapy for a disease affecting more than 20 million people worldwide. Scipher also brings existing revenue through biopharma partnerships and its immunology data business, giving the combined company more than one path to funding its pipeline while the RA trial plays out.

The transaction still needs shareholder approval from both companies and an SEC-cleared S-4 registration statement, with closing targeted for the fourth quarter of 2026.

Mortgage rates dropped again this week, and this time the move came with something the housing market has been missing for a while. Actual data pointing in the right direction.

Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed at 6.43% for the week ending July 1, down six basis points from the prior week and well below the 6.67% reading from a year ago. The 15-year fixed came in at 5.79%. It marks a seven-week low, though rates have now spent seven straight weeks camped out within a hair of 6.5%.

That is the headline. The story underneath it is more interesting.

June nonfarm payrolls came in at 57,000, roughly half of what Wall Street was expecting. Consensus estimates were closer to 115,000. That kind of miss shifts the entire rate conversation. Traders who had been pricing in the possibility of a summer Federal Reserve rate hike, unusual as that sounds, started walking those bets back within minutes of the release. The 2-year Treasury yield fell toward 4.1%. The 10-year, which is what mortgages actually track, followed it lower.

For anyone holding rate-sensitive equities, the removal of near-term hike risk matters more than the six-basis-point weekly move in mortgage quotes. It resets the ceiling.

The Housing Data Is Finally Cooperating

Joel Kan, deputy chief economist at the Mortgage Bankers Association, noted that purchase applications are running ahead of last year’s pace and have posted year-over-year growth for nearly three straight months. Buyers are finding opportunities in markets with rising inventory and easing home price growth.

Danielle Hale, chief economist at Realtor.com, pointed to eight consecutive months of falling home prices and seven consecutive months of rising pending sales. Sellers are pricing more realistically out of the gate. Buyers are showing up. That is what a functioning market looks like.

What It Means for Small-Cap Housing Names

Entry-level homebuilders sit at the center of this setup. LGI Homes, Century Communities, M/I Homes, Green Brick Partners, and Dream Finders Homes serve exactly the buyer cohort that gets squeezed hardest when a 30-year mortgage sits above 6%. Second-quarter earnings from these names begin rolling in later this month, and improving pending-sales data should show up in order books.

Manufactured and affordable housing plays like Legacy Housing, Cavco Industries, Champion Homes, and UMH Properties represent another affordability angle. Small-cap mortgage originators and mortgage REITs including UWM Holdings, Orchid Island Capital, ARMOUR Residential, and Ellington Financial tend to react first to shifts in rate volatility. Micro-cap title insurer Investors Title offers a clean read on transaction volumes.

The Bottom Line

The housing market is not back. Rates are still above 6%. Affordability is still tight. Builder margins are still under pressure from incentives and construction costs. But the direction has changed, and that is the piece that has been missing for two years.

If the 10-year keeps drifting lower and mortgage rates edge toward 6%, the small caps in this space are positioned to catch it first. If a hot inflation print revives the hike narrative, the same names give it back. For now, the tape is telling investors the ceiling just got a little lower.