BUSINESS

Nio (NIO) just reported its first-ever quarterly profit, signaling a potential shift from a cash-burning EV story to one driven by operating leverage.This milestone drew Jim Cramer to flip his stance on the company from bearish to bullish, saying Nio stock could be a good speculative play:Keep in mind that on an episode on October 20, 2025, a caller mentioned Nio stock, and Cramer responded, “I don’t know. NIO is a, look, it probably goes to $10. Then you have to sell it, OK?”Here’s what investors need to know.What Nio’s first-ever profit means for the stockNio’s Q4 results showed strong top-line growth and improving profitability. Revenue rose 83.6% year over year to $4.95 billion, while adjusted net profit came in at $103.9 million.More importantly, adjusted operating profit reached $178.9 million. That figure gives a clearer view of the core business.In the auto industry, net income can be influenced by one-time items and accounting adjustments. Operating profit provides a cleaner view of the underlying business, showing whether scale, cost control, and vehicle economics are improving.That’s where Nio stands out. The company benefited from higher deliveries and stronger gross margins, suggesting each vehicle sold is contributing more meaningfully to profits.The market responded quickly with shares jumping more than 15% following the results.Analysts expect Nio’s revenue to grow from about $12.7 billion in 2025 to $18.7 billion in 2026, marking a 47% increase.Related: Rivian, Uber robotaxi deal may (finally) kickstart sharesFull-year trends also improved. Revenue rose 33%, while net losses narrowed. Nio remains unprofitable on an annual basis, but the Q4 result didn’t come against a weakening backdrop.For many investors, this marks a potential inflection point. Revenue growth may finally be flowing through to earnings instead of being absorbed by fixed costs.Nio has yet to reach full-year profitabilityGrowth is then expected to slow but remain solid, with analysts expecting revenue to reach roughly $21.7 billion in 2027, up another 16%.Management remains confident this momentum can continue, with CEO William Li saying the company expects “a year-over-year volume growth of 40% to 50%,” for fiscal year 2026. That kind of expansion is important in a capital-intensive business. Higher volumes allow Nio to spread fixed costs like factories and R&D across more vehicles, supporting margin improvement.Margins are already expected to move in the right direction.As CEO William Li noted in Nio’s Q4 earnings call on March 10th, “the continuous improvement in margin was mainly driven by strong sales growth, a higher mix of high-margin models and also continued vehicle cost optimization.”

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The company’s gross margin is projected to rise from 13.6% in 2025 to 16.5% in 2026, then to 17.1% in 2027 and 17.8% in 2028.GAAP operating margins show an even clearer shift. Operating margins are expected to improve from -16.0% in 2025 to -3.4% in 2026, then to roughly breakeven at -0.4% in 2027. By 2028, analysts expect operating margins to turn positive at about 2.1%.That timeline points to a key inflection point. While Nio has already posted a profitable quarter, consensus analyst estimates suggest full-year GAAP operating profitability may not arrive until around fiscal year 2028.Nio’s Onvo push could drive growth, but execution mattersNio has been increasing deliveries, and its new Onvo brand is a key part of that strategy.Onvo targets a more mass-market customer base, which could expand Nio’s reach and improve plant utilization.If Onvo succeeds, it could help accelerate revenue growth while improving cost absorption across Nio’s production base. More Automotive:Hyundai admits deadly defect caused more injuries than previously knownConsumer Reports names 5 popular EVs with the best real-world rangeUber targets 50,000 robotaxis in major Rivian, Nvidia dealsNio’s battery-swap network adds another potential advantage. The system offers convenience and could strengthen customer loyalty, which may support pricing power over time.As CEO William Li put it, “the continued expansion of the power swap network will enhance the EV user experience and provide a unique defensible competitive advantage.”A profitable quarter makes these investments look more strategic. If Nio can continue growing deliveries while maintaining pricing discipline, both revenue and gross margins could trend higher.Nio still faces pressure in China’s brutal EV marketEvery growth story comes with some risk.China remains one of the toughest EV markets globally. Rivals like BYD and Li Auto continue to push pricing lower, and even small price cuts can have an outsized impact on margins.Onvo itself introduces execution risk. While it can drive volume, lower-priced vehicles may pressure per-unit economics if Nio is forced to compete more aggressively on price.The battery-swap network also comes with meaningful costs. It requires ongoing capital investment, and its long-term value depends on whether it can drive enough adoption to justify that spending.For now, investors are watching a few key metrics closely.Adjusted operating profit shows whether the business is improving, but it doesn’t stand alone. Revenue growth and gross margins matter just as much.If Nio can grow deliveries, maintain pricing, and expand margins at the same time, the business may begin to look more durable.If not, the recent rally could prove short-lived.Investors have long discounted Nio for ongoing losses and dilution risk. A single profitable quarter starts to change that narrative, but only sustained execution will confirm it.The next phase will determine whether this marks a true turning point or just a temporary step forward.Related: UBS has a message for Tesla stock investors

The “video game winter” might be thawing, but survival of the fittest has never been more brutal in the gaming industry.Epic Games, the developer of the renowned game Fortniteand the architect of the industry-standard Unreal Engine, confirmed a massive workforce reduction on March 24, affecting over 1,000 employees. In a candid memo to its employees, CEO Tim Sweeney laid bare Fortnite’s declining prominence since 2025 and the financial pressures facing the company. Sweeney noted that the company has been struggling to consistently deliver “Fortnite magic.”The Fortnite Paradox: High revenue, shrinking marginsWhile Fortnite remains a cultural behemoth, the latest data from Business of Apps illustrates the volatility the game, and consequently its maker Epic Games, is navigating. After a 2018 peak of $5.4 billion in annual revenue, Fortnite saw several fluctuations, dipping to $3.5 billion in 2023 before attempting a recovery through adjustments and expansions, including mobile.Fortnite is a major revenue generator for the company, and with a “downturn in Fortnite engagement”, visibly a huge plunge, CEO Sweeney posted that the layoff of 1000 employees, together with “$500 million of identified cost savings” in contracting and marketing, has helped put the company in a more stable position.ore Layoffs:Major grocery store supplier delivers harsh message to workers4 signs your company is quietly planning layoffsLuxury retail giant cuts more than 1,200 jobs after bankruptcy filingDespite the game’s massive footprint, Sweeney noted that the company had been spending significantly more than it was making, necessitating the cuts to keep its head above water.This is not the first time for Epic Games. Back in 2023, after a successful pandemic jump, the company laid off 830 employees, 16% of its workforce, in a similarly labelled move to become financially stable.And once again, as the company is grappling through the “winter” of the gaming community, Sweeney said that some challenges are unique to Epic.

Epic Games layoffs 1,000 employeesShutterstock

The return to mobile here refers to Epic’s earlier beef with the iOS App Store and Google Play Store, during which the company claimed that Apple and Google took 30% cut of in-app sales, which was unfair. As a result, Epic Games lured customers away from the app with purchase discounts. It resulted in being pulled from these app stores.And only recently, on March 19, Fortnite returned to the Google Play Store.A strategic pivot from developer to platformAt the core of Epic’s financial strain is the evolving nature of its player base.According to a report from Boston Consulting Group (BCG), the past three years have been “winter” for the gaming community. But a transition is underway, and BCG projects the total market to reach $353 billion by 2030, a 6% increase from the 2026 estimate of $281 billion.But the path implies a platform shift, and BCG expects growth to come from these places:Cloud gaming revenue.User Generated Content (UGC): BCG notes that UGC payouts from platforms like Roblox and Fortnite will exceed $1.5 billion this year.The AI (dis)connect: While many layoffs in 2026 have been linked to AI, Sweeney has been quick to state that was not the case at Epic Games.To better understand this, in the gaming industry, UGC refers to content created by users, such as playable maps and virtual worlds, rather than the social media content we often consume as gaming advertisements.So when games like Fortnite rely on UGC, they are investing in wider audiences and increased player engagement while cutting down on money spent on in-house developers. Effective December 2025, Fortnite has changed some of its earlier guidelines, increasing its bet on UGC. According to it, creators can:Sell durable and consumable goods from Fortnite islandsIncentives for players when they bring new or previously inactive playersCreators get an ad-revenue share of 100% for creations for a yearThe Unreal Engine and the Disney factorDespite the layoffs, Epic remains a strategic player in the tech sector due to its Unreal Engine. BCG predicts that cloud gaming revenues will grow from $1.4 billion in 2025 to around $18.3 billion in 2030. And with Epic’s transition from Unreal Engine 5 to Unreal Engine 6, Epic stands to benefit from its proprietary 3D engine, which is a gold standard for developers, Hollywood studios, and industrial designers alike.While the platform is free to use and open source, Epic does take a 5% royalty on all lifetime gross revenue above $1 million. Thus, it stands to benefit more based on BCG’s projection of rising cloud gaming revenue, as developers continue to make gaming more phone-centric and accessible.Furthermore, Epic’s $1.5 billion partnership with The Walt Disney Company, which effectively gives it 9% stake in the game developer, is integral to its next era of growth. This partnership opens up avenues for a Disney universe in Unreal Engine, unlocking intellectual property ecosystems, and has helped affirm Epic’s reputation.What happens to the employees?CEO Sweeney has been upfront in clarifying that the layoffs are not related to AI and that the company takes pride in hiring the best developers in the world.The company is ensuring that its employees leave happy despite the setback with these terms for the severance package:Four months of base payMore salary based on the tenure of service. Extended Epic-paid health coverage, 6 months in the US.Accelerated stock options vesting through Jan 2027 and extend equity exercise options for up to two years.

For many years, Amazon had a massive infrastructure lead over Walmart. The online company often plunged its profits back into building its shipping and warehousing network — at first to deliver two-day shipping and later to offer, in many cases, one-day delivery.That’s something Walmart clearly opted to fix back in 2016, when it decided to spend $3.3 billion to acquire Marc Lore’s Jet.com. As part of the move, Lore, a digital pioneer who also sold Diapers.com to Amazon, took over the chain’s digital and infrastructure operations.”The acquisition will build on and complement the significant foundation already in place to serve customers across the Walmart app, site, and stores and position the company for even faster e-commerce growth in the future by expanding customer reach and adding new capabilities,” the company shared in a press release.Those efforts worked, and you can now argue that Walmart’s delivery ability now rivals Amazon’s.Walmart leaned on its storesLore helped shift the mindset at Walmart from being a brick-and-mortar store to being an omnichannel retailer. He talked about those changes during a 2019 Walmart shareholders’ meeting.”Today, they [customers] have so many options to save money AND time. They can shop in our stores, order online and pick it up…OR they can get free 2-day delivery to their door,” he said.Lore also laid out future plans for the chain.”But, we’re not stopping there. A few weeks ago we announced NextDay delivery. It allows customers to quickly receive up to two hundred thousand of our top items. The incredible thing is, it costs us less to deliver orders the next day, because items come from a single fulfillment center located near the customer, and orders arrive in one box,” he added.Now, seven years later, Walmart’s current executives shared just how far the chain has come during its fourth-quarter earnings call.Walmart has become a digital playerWalmart leveraged its existing store and warehouse assets to grow its digital business.The chain’s CFO John David Rainey shared how much digital sales have grown globally during the quarter. “E-commerce sales were strong across markets, with growth up 24%. We’re using our unique assets, stores and clubs, distribution centers and fulfillment centers, and last-mile delivery networks to get orders to customers faster and more efficiently,” he said.More WalmartWalmart’s new partner brings iconic brand to the retail giantWalmart shares disturbing news about its customersWalmart fires OpenAI in playbook-changing moveRainey explained how the company achieved that growth.”Remove friction from the experience, and accelerate our sales momentum,” he added.The proof of that success is in the numbers. “In Walmart U.S., e-commerce sales grew 27%, with 35% of store fulfilled orders delivered in under three hours. In China, e commerce grew 28% and represented more than 50% of the sales mix in that market. Flipkart is delivering orders in less than fifteen minutes across more than 30 cities in India. And Sam’s Club US doubled their growth in club fulfilled delivery sales,” he said.

Walmart can ship from its stores.Icatnews/Shutterstock.com

Walmart has built on its strengthsWalmart has had this capacity for years, but has struggled to communicate the depth and breadth of its offering.“If I could change anything about how we’re perceived today, it’d be that more people know about our breadth of assortment online and our increasing delivery speed,” former CEO Doug McMillon said on its fourth quarter 2025 earnings call regarding the company’s delivery fulfillment program.The chain uses all of its assets to support digital sales. “Walmart uses stores, and store delivery is practically all of their same-day deliveries; Amazon doesn’t have stores, so it is optimizing its fulfillment network,” said Juozas Kaziukėnas, founder and CEO of business intelligence firm Marketplace Pulse, SupplyChainDive reported.The retail chain’s growth has been strong and steady.”Walmart delivered five billion items on the same day they were ordered last year, double the number delivered in 2023. It can now deliver most of the 120,000 products in its sprawling supercenters, including meat, eggs and milk, to 93% of U.S. households the same day, sometimes in hours,” The Wall Street Journal reported.Amazon still controls 41% of all U.S. e-commerce, while Walmart has 9%, according to The Journal.Walmart may never catch up to Amazon, but it can be competitive.”I don’t think that Walmart will ever really get to the sheer size Amazon has online,” Blake Droesch, retail analyst for Emarketer, which tracks e-commerce told The Journal. “But Walmart is one of the only retailers that’s had the capital and strategy to marshal a true defense.”Related: Walmart sees troubling shift in consumer behavior