JPM Tech Sketch

This report provides a TMT sector update featuring an NFLX earnings preview, analysis of Meta's new 'Watermelon' AI model, and data on retail trading behavior.

Key Takeaways

• 1.Investors are prioritizing Netflix's bi-annual engagement report over Q2 earnings, with concerns regarding stagnant Y/Y engagement growth as a proxy for long-term subscriber and pricing power.
• 2.Meta's new 'Watermelon' AI model reportedly matches GPT-5.5 performance, suggesting continued aggressive Capex spending.
• 3.Retail investors' 'buy-the-dip' behavior hit record levels in 1H26, purchasing nearly 3.5x the daily average on SPX down days.

Table of Contents

• SCHILSKY'S SNAPSHOT
• NEWS – DESK COLOR – RESEARCH HIGHLIGHTS
• NFLX Q226 Earnings Preview – Engagement Report >>> Earnings Report
• 2026 Guidance Expectations
• Other Issues
• META Watermelon LLM is Equivalent to GPT-5.5
• RDDT Gaining AI Traffic
• UBER Pausing Europe Food Delivery Expansion
• META is Building a Games Business – Sorta, But Not Really
• TSLA Robotaxi Service Rolls Out in Miami
• AAPL Foldable iPhone Production Estimates
• CMCSA Sky to Acquire ITV's Networks & Streaming Businesses for $2.1B
• Buy a Jensen Huang Game-Worn Leather Jacket
• Citadel Securities 1H26 Market Structure Report

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