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Meta CEO Mark Zuckerberg speaks with Microsoft CEO Satya Nadella (Charles Platiau/Getty Images)

Morgan Stanley touts a $70 billion boost for megacap tech companies from the One Big Beautiful Bill Act

Tax tweaks are poised to give a huge lift to five of the Magnificent 7’s free cash flows — and they just might send that extra money to another member of the cohort!

Luke Kawa

7/22/25 3:47PM

Morgan Stanley has dotted its I’s and crossed its T’s to figure out just how much of a near-term boost the budget reconciliation bill dubbed the “One Big Beautiful Bill Act” will give to the cash flows of megacap tech companies.

TL;DR: a more than $70 billion improvement to this year’s free cash flow (that is, operating cash flow less capex) for Amazon, Alphabet, Meta, Microsoft, and Apple. If Morgan Stanley’s estimates are in the ballpark, this would be the equivalent of adding more free cash flow than Meta generated in 2024 as a whole ($54 billion).

What’s fueling this?

100% bonus depreciation on qualified property in its first year in service is restored;
Domestic R&D expenses are fully deductible the year they occur, along with allowing retroactive deductions for domestic R&D costs from 2022-24 that were deferred; and
Shifts to how foreign-derived earnings are taxed.

In a note titled “The Big Beautiful Tech Tax Bill,” Morgan Stanley’s team, led by Todd Castagno, suggests that the effects could begin showing up this quarter, while cautioning that the ultimate impact “could vary meaningfully.”

These tax tweaks are intended to spur investment. It’s unlikely that this is a major dial-mover on the hundreds of billions that tech companies are dead set on shelling out to enhance their AI footprints, but hey, it doesn’t hurt.

“Rather than altering core investment and capital return strategies, we think excess capital could be used for reinvestment in AI infrastructure and data centers or added strategic M&A flexibility,” the team wrote.

On the one hand, it’s nice to have more cash as you spend it hand over fist. On the other hand, it’s not like these companies aren’t mulling other options to access money for AI-related capex, and capital markets would likely be happy to finance any such endeavors.

Tasha Matsumoto

Stocks rebound as the price of oil retreats

Every sector traded higher, with tech leading gains on increased optimism that tankers will be able to pass through the Strait of Hormuz.

Luke Kawa

Nvidia briefly spikes after Jensen Huang sees at least $1 trillion in AI chip sales through 2027

The stock then gave it all up and then some.

Luke Kawa4h

Oil’s retreat propels US stocks higher

Front-month West Texas Intermediate futures are down more than 4%, while Brent futures are off more than 2% as of 1:25 p.m. ET as traders glom on to some optimistic signs about the flow of oil through the all-important Strait of Hormuz:

A Pakistani-owned tanker passed through the strait this weekend while broadcasting its signal, per Reuters, “indicating ‌that some countries are able to negotiate safe passage for their vessels despite the U.S.-Israeli war on Iran.”
US President Donald Trump said that some “fairly local” countries would soon be helping ships traverse the strait (while having added that other countries are “not enthusiastic” about the prospect of participating).

First non-Iranian cargo transits Strait of Hormuz with AIS on

The Aframax tanker Karachi, carrying Abu Dhabi’s Das crude, has become the first non-Iranian cargo to transit the chokepoint while broadcasting its AIS signal, suggesting that select shipments may be receiving… pic.twitter.com/Q6j6W3Cxz3
— MarineTraffic (@MarineTraffic) March 16, 2026

The SPDR S&P 500 ETF and Invesco QQQ Trust are both up over 1% amid oil’s retreat.

That being said, the news flow is far from universally positive.

Reuters reports that the UAE’s crude output has been cut in half since the Mideast conflict started; Bloomberg says Kuwait’s production has suffered a similar decline.

Trump urges allies to help reopen Strait of Hormuz as tanker traffic nearly vanishes

A Pakistani-owned tanker passed through the strait this weekend while broadcasting its signal, per Reuters, “indicating ‌that some countries are able to negotiate safe passage for their vessels despite the U.S.-Israeli war on Iran.”
US President Donald Trump said that some “fairly local” countries would soon be helping ships traverse the strait (while having added that other countries are “not enthusiastic” about the prospect of participating).

First non-Iranian cargo transits Strait of Hormuz with AIS on

The Aframax tanker Karachi, carrying Abu Dhabi’s Das crude, has become the first non-Iranian cargo to transit the chokepoint while broadcasting its AIS signal, suggesting that select shipments may be receiving… pic.twitter.com/Q6j6W3Cxz3
— MarineTraffic (@MarineTraffic) March 16, 2026

The SPDR S&P 500 ETF and Invesco QQQ Trust are both up over 1% amid oil’s retreat.

That being said, the news flow is far from universally positive.

Reuters reports that the UAE’s crude output has been cut in half since the Mideast conflict started; Bloomberg says Kuwait’s production has suffered a similar decline.

Matt Phillips4h

Sandisk and memory stocks rip ahead of Nvidia CEO’s speech

Memory stocks such as Sandisk, Micron, and disk drive makers Western Digital and Seagate sprinted ahead Monday, as this week’s big AI conference for tech bellwether Nvidia gets underway with a speech from the CEO slated for this afternoon.

As Luke Kawa pointed out earlier, CEO Jensen Huang’s speechifying at high-profile company announcements or industry events hasn’t always been a good thing for Nvidia shares. (The chip designer is holding its GPU Technology Conference, or GTC, this week.)

But Huang’s pronouncements have, at times, been pretty dang helpful for share prices of some companies in the orbit of the AI gods. Perhaps foremost among them are the memory stocks that have blasted toward the top of the S&P 500 in terms of price performance in recent years.

Case in point: the nearly 30% gain that Sandisk posted on January 6, the day after Huang’s keynote speech at the Consumer Electronics Show in Las Vegas, in which he spotlighted memory as a key bottleneck constraining the AI build-out. (Fellow memory plays Western Digital, Seagate Technology Holdings, and Micron also posted double-digit gains that day.)

Memory stocks have been the highest-profile outlet for bullish AI industry impulses this year, and notable comments from Huang could put the wind back in their sails after they had slowed in recent weeks.

Of course, there are also other things happening in the sector, such as Micron’s announcement Sunday that it completed an acquisition of a new manufacturing site in Taiwan.

Either way, memory stocks are pushing higher after having exhaled a bit lately.

What Wall Street’s looking for from Jensen Huang’s keynote GTC address

Of course, there are also other things happening in the sector, such as Micron’s announcement Sunday that it completed an acquisition of a new manufacturing site in Taiwan.

Either way, memory stocks are pushing higher after having exhaled a bit lately.

Luke Kawa

What Wall Street’s looking for from Jensen Huang’s keynote GTC address

GTC may stand for GPU Technology Conference, but investors are looking for Nvidia to go beyond GPUs.