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T-Mobile is doubling down on cutting back free offers just as the carrier begins seeing signs that its efforts to improve customer retention are paying off. After its postpaid phone churn (the percentage of customers who canceled their service) increased last year following several price hikes, T-Mobile began ramping up its efforts to attract and retain price-conscious customers.For example, it rolled out several lower-priced phone plans earlier this year, including its “Better Value” phone plan, which starts at $46 per line. T-Mobile later dropped a free iPhone 17 deal and a “Galaxy S26 Ultra on Us” deal to encourage customers to upgrade their devices.T-Mobile later touted progress in strengthening customer loyalty in its wireless business, revealing during an earnings call on July 23 that its postpaid phone churn hit 0.85% in the second quarter of this year, down from 0.9% reported for the same period in 2025. T-Mobile CEO defends dialing back free phone offersAs T-Mobile sees improvement in retention, it is standing firm in its decision to reduce the number of free phone deals/device subsidies it offers customers. When asked about how this decision will play out during the upcoming holiday season, T-Mobile CEO Srini Gopalan said during the earnings call that the company has given consumers 250 reasons to switch to its network, extending beyond free phone offers. “Our effort really is to broaden out the reasons why people should choose T-Mobile rather than purely a free phone,” Gopalan said. “Of course, we’ll be competitive on things like subsidy, but that’s not what we’re leaning in on.”He also acknowledged that smartphone prices are rising as memory prices surge. This is mainly due to rising demand for artificial intelligence infrastructure, component shortages, and shifts in supply. “What we’re seeing is clearly the memory price increases are resulting in higher prices for smartphones across the board,” Gopalan said. “Our intention, consistent with what we’ve said, is not to increase our subsidy levels. That’s going to mean that customers will have to pay more. That’s just the result of that dynamic.”Related: T-Mobile customers face new restriction when paying billsAccording to research and advisory firm Gartner, prices for memory chips DRAM and SSD are estimated to climb by 130% by the end of 2026. This is expected to result in smartphone prices increasing by 13% this year compared to 2025 levels, likely having a ripple effect on demand. “This is the steepest contraction in device shipments witnessed in over a decade,” saidRanjit Atwal, a senior director analyst at Gartner, in a press release. “Higher prices will narrow the range of devices available, prompting buyers to hold on to devices for longer, fundamentally altering upgrade cycles.”T-Mobile Chief Financial Officer Peter Osvaldik clarified during the call that the company isn’t “moving away completely from device subsidies” but is “more rounding off the value proposition.”“The ability for us to attract customers beyond a subsidy-driven promotional environment, that’s that flow of the current, because customers see the totality of the value that they’re getting inclusive of more and more so the network, the significant reliability, the significant network experience, and (we’re) starting to see a flow of network seekers coming our way,” said Osvaldik.

T-Mobile isn’t budging on its decision to reduce free phone offers as it sees churn improve. Shutterstock

T-Mobile is responding to shifting customer behaviorThe comments from Gopalan and Osvaldik come after the company first warned earlier this year about its plan to cut back on free phone offers. “(We) can’t make iPhones any freer than they are today,” said Mike Katz, then-chief business and product officer at T-Mobile, during an earnings call in February. “And the truth is, customers’ phone purchase is a point in time, you know, happens once every couple three years.” “And between those times, they’re living with their wireless service every single day,” he continued. “And we think customers expect and demand more from us than just a free phone deal every three years.”More T-Mobile News:T-Mobile adds new internet plan restriction customers will feelT-Mobile drops new free perks for customers as pressure buildsT-Mobile quietly expands a convenient service for customersT-Mobile isn’t the only company straying away from offering free phones to customers. Verizon CEO Dan Schulman said during an earnings call in April that the company is pulling back on device subsidies as part of plans to reduce spending on promotional offers to drive more robust revenue growth.“The era of just the free handset, that’s gone right now,” Schulman said. ‘We are looking at what does the customer need. They have a handset that is last year’s model that’s been refurbished. Do they need a new handset? Many of them, because of the economy, are keeping their handsets longer right now.”As more wireless carriers reduce their free phone deals, Americans are holding onto their devices for longer periods to save money. A survey from Reviews.org in September last year found that Americans keep their phones for nearly 2.5 years on average, which is far longer than the annual upgrade cycle. Also, 29% said in the survey that they plan to upgrade their phones in the next 6 to 12 months.T-Mobile expects a spike in customer lossesAmid T-Mobile’s plan to scale back free phone deals, the carrier expects to see a temporary spike in churn and a slowdown in postpaid account additions in the third quarter of this year.T-Mobile said this is mainly due to its decision in June to discontinue several older phone plans and push customers on these plans to newer ones that, in some cases, have higher price points.“As part of our full-year plan and guidance, we anticipated our Q3 (third quarter of 2026) rate plan modernization would result in a temporary elevated account churn profile and expect Q3 net postpaid account additions to be approximately 250,000,” said Osvaldik during the company’s earnings call. Benchmark analyst Matthew Harrigan said in a recent analyst note obtained by Benzinga that his firm is confident in T-Mobile’s pricing power despite its recent wireless plan changes, noting that over 60% of new customers are enrolling in its premium plans.”We remain optimistic on pricing power, with average monthly 2Q26 ARPA (average revenue per account) up 2% to $152.91 and ~60% of new account customers opting for the most premium plans with especially high lifetime value,” said Harrigan.Related: T-Mobile puts new limits on 2 wireless offers for customers

There is a particular kind of business decision that only looks brilliant in hindsight, and only after everyone who made the opposite call has finished writing off the difference. It rarely feels brave at the time. It usually feels like being the last person in the room who did not get the memo.The American electric vehicle market spent most of the past decade running on a subsidy. That credit, worth $7,500 per car, expired on Sept. 30, 2025, and the correction arrived exactly on schedule. Automakers sold 462,892 all-electric vehicles in the first half of 2026, down 23.8% from the same period a year earlier, according to Cox Automotive.The industry response was a stampede for the exits. Carmakers have booked nearly $70 billion in write-downs as they scrap and postpone electric programs, reported Automotive News. Honda alone canceled three North American electric projects and now expects its first annual net loss since 1957.One automaker did not flinch. Toyota (TM) confirmed this month that it will keep rolling out new battery-electric models through the rest of the year, even as it trims spending elsewhere in the lineup.Why Toyota kept spending on electric vehiclesThe company will “slow its product interventions in some model lines to save money,” reported Automotive News, while continuing its EV rollout and leaning harder into hybrids.Read that carefully, because it is a resource-allocation decision wearing a product plan as a costume. Toyota is not spending more. It is spending the same money on different things, and the electric column is the one that survived the knife.More Automotives:GM displays Q2 growth in key areas Tesla would be jealous ofDown 99%, popular EV stock is ripe bankruptcy candidateElon Musk just got a new rival on three frontsThe 2027 Highlander makes the point better than any executive quote could. Toyota redesigned its three-row family hauler as an electric-only vehicle, with a launch window running from later this year into the first quarter of 2027, according to Automotive News.That is not a compliance car parked in a corner of the showroom. The Highlander is a school-run vehicle for suburban families with two kids and a dog. Committing it to batteries only, in the same quarter rivals were canceling flagship EVs, tells you what Toyota believes about where demand lands in 2028. 

Toyota confirms new EVs this year while slowing other updates to protect cash.Bloomberg / Getty Images

What Toyota hybrid sales reveal about real demandElectrified vehicles accounted for 57.4% of Toyota’s U.S. volume in June on sales of 122,063 units, a 35% jump from a year earlier, according to Toyota. More than half of everything the company sold in America last month had a battery in it somewhere.When I ran those figures against Cox Automotive’s quarterly data, what emerged was not a company hedging between two technologies. It was a company using one to underwrite the other. Hybrids carry a price premium, they get built on existing lines at existing plants, and they ask nothing of the buyer in the way of charging habits. That margin pays for the electric development everyone else is now expensing, and Toyota has been reinforcing it.Related: Toyota is spending $3.6B to undo a move from 5 years agoThe pure EV side is working, too. Toyota sold 21,855 battery-electric vehicles in the United States in the first half, up 136% year over year, according to InsideEVs, citing Cox Automotive figures. Toyota now trails only Tesla, Chevrolet, and Hyundai in U.S. EV volume.Growing 136% in a market that shrank by nearly a quarter is the kind of divergence that shows up in a case study a decade later.How much the retreat cost Toyota’s rivalsThe write-downs deserve an investor’s attention because they are permanent. Cash spent on canceled factories does not come back when demand returns.Here is the scoreboard as it stands.U.S. electric vehicle sales fell 23.8% in the first half of 2026 to 462,892 units, according to Cox Automotive.EV share of new-vehicle sales sat near 5.8% in the second quarter, well below the record 10.6% notched in the third quarter of 2025, Cox Automotive noted.Automakers have booked close to $70 billion in write-downs on canceled and delayed electric programs, Automotive News confirmed.Toyota’s U.S. electric vehicle sales rose 136% in the first half to 21,855 units, according to InsideEVs.Honda’s chief executive, Toshihiro Mibe, said the company needed to “stop the bleeding,” reported Autoblog, as it braced for losses that could top $15 billion for the fiscal year.My read on the write-down math is that it measures something more expensive than money. It measures institutional whiplash. A company that builds a battery plant, idles it, converts it to gas trucks, then rebuilds it in 2029 has spent the same capital three times and surrendered four years of engineering learning curve.Toyota skipped that cycle by never fully joining the first one.What Toyota’s electric bet means for your next carThe practical version of this story is sitting on a dealer lot near you right now.If you are shopping in the next 18 months, Toyota is the one large automaker whose electrified lineup is expanding rather than contracting. That matters for resale value, for parts availability in year eight, and for whether the model you buy still exists when you go to trade it in.The market read Toyota made is that most American buyers want better fuel economy without changing how they live. No new charging routine, no trip planning around a map, no home electrical upgrade. Hybrids deliver that. The credit’s expiration did not change what people wanted; it removed the money that had been persuading them to want something else.Cox Automotive described the first quarter as reflecting “a necessary reset,” and the second quarter suggests the floor has been found rather than fallen through.For shareholders, the question is whether Toyota’s advantage compounds or gets copied. Rivals can add hybrids, and most are trying, but powertrain engineering and plant conversion run on multi-year clocks. Toyota has roughly a three-year head start on hybrid manufacturing scale, and it is spending that cushion on electric vehicles, while competitors spend theirs on write-downs.The next test arrives with the electric Highlander. If a mainstream three-row EV from a brand suburban families already trust can sell without a federal subsidy propping up the sticker, the argument that American EV demand was never real gets considerably harder to make.Cox Automotive’s director of industry insights, Stephanie Valdez Streaty, called 2026 “a year of the market really finding what natural EV demand is,” in comments to Inside Climate News.Toyota appears to have found it first.Related: Toyota’s global dominance faces new test

Investors were betting the S&P 500’s next leg higher would come from a broader rally, with more cyclical and speculative stocks joining the biggest winners.Morgan Stanley sees something else. Instead of spreading the risk, investors are apparently retreating toward high-quality businesses with stronger balance sheets, steadier earnings, and cash flow.Though Wall Street was expecting broader participation, the market is becoming more selective.The shift echoes a pattern seen in 2021, when investors scurried toward dependable megacaps as inflation and policy risks started to build. Though not a clear bearish signal, Morgan Stanley’s warning suggests the easy phase is potentially over.What is Morgan Stanley’s main argument about the S&P 500? According to a MarketWatch report, Morgan Stanley believes the market is entering a more selective phase after a strong early-cycle rally. Instead of rewarding every risky stock, the focus is on companies with dependable earnings, strong balance sheets, and high profit margins.That shift favors businesses with high free cash flow yields and less volatile earnings. At the same time, these businesses are better placed to continue investing, protect margins, and weather any headwinds from higher borrowing costs. AI is becoming another dividing line. Morgan Stanley argues that businesses that are able to use AI to reduce costs, raise productivity, or strengthen pricing will continue growing margins. Those spending heavily without offering clear returns will lag.Related: S&P 500 surge triggers critical 401(k) pivotHigh-quality megacap stocks already represent nearly 42% of the S&P 500. Their sheer size means they can continue to steer the index moving higher, even while weaker companies struggle.The S&P 500 can remain in a healthy state even when multiple smaller stocks fall, as the largest companies carry so much weight. That could make the index look a lot stronger than the wider market. Hence, investors need to watch market breadth, including the equal-weighted S&P 500, and earnings upgrades across more sectors.The equal-weighted S&P 500 rose 2.2% through July 24, which shows that the gains are spreading beyond the biggest stocksStill, investors need more evidence that the broader market is truly strengthening.Why does the 2021 S&P 500 comparison matter?In early 2021, investors loaded up on stocks best described as economically sensitive and speculative as the economy reopened. Later, as growth slowed and inflation climbed, the money rotated into larger, more dependable businesses with robust profits, steady cash flow, and healthier balance sheets.The S&P 500 gained26.9% in 2021 and consistently struck record highs. More Wall Street:Wall Street sends strong 4-word verdict on the stock marketWall Street’s $200 billion IPO wave threatens sell-offWall Street flees software plays for triple-digit chipmaker boomHowever, those safer stocks weren’t able to protect the broader market once inflation stayed high and the Federal Reserve began raising interest rates. The index then delivered an 18% negative total return in 2022.The takeaway for investors is that a move into quality is not automatically a bearish signal.It could help the bull market continue for longer, but it might also cause investors to become a lot more cautious. Put simply, the market may still rise, but fewer stocks are likely to lead it.Wall Street’s latest price targets for the S&P 500According to CNBC, these targets are based off the S&P 500’s latest completed close of 7,411.98 on July 24, 2026.Citigroup raised its 2026 year-end S&P 500 target to 8,100, implying 9.3% upside, backed by healthier earnings and the AI investment supercycle.Morgan Stanley bumped its year-end target to 8,000, implying 7.9% upside, citing resilient earnings, AI-driven capital spending, and improving operating leverage.Goldman Sachs lifted its year-end forecast to 8,000, implying 7.9% upside, expecting profit growth instead of valuation expansion to power the market higher.Wells Fargo raised its year-end target to 7,950, implying 7.3% upside, backed by stronger corporate earnings and easing macroeconomic risks.JPMorgan raised its year-end target to 7,800, implying 5.2% upside, although it warned that the path higher could be uneven on the back of tighter monetary policy and elevated stock issuance.

A quality rotation is reshaping S&P 500 leadership as inflation risks return.Scott Olson/Getty Images

Why Apple, Micron, and Coca-Cola fit Morgan Stanley’s quality testMorgan Stanley identifies Apple (AAPL), Micron Technologies (MU), and Coca-Cola (KO) as examples of high-quality businesses, but the three offer very different forms of protection.Apple represents high-margin megacap quality.The stock trades at nearly 38 times forward earnings, according to Seeking Alpha, making it the most expensive of the three. However, Apple ended its most recent reported quarter with $146.6 billion in cash andmarketable securities against $84.7 billion in debt, giving it nearly $1.73 in liquid assets for every $1 of debt. Its pricing power and cash generation are its major strengths, but the premium valuation makes the stock sensitive to interest rates and to Apple’s ability to translate AI spending into meaningful revenue.Micron represents a more cyclical version of quality. Its stock trades at around 12.5 times forward earnings, according to Seeking Alpha, reflecting concern that today’s AI-driven memory boom might not last. Yet Micron ended its latest quarter with$30.2 billion in cash, marketable investments, and restricted cash, while total debt stood near $6.4 billion. That gives it over four times as much liquidity as debt. Its quality rests on its balance sheet, its positioning in the AI memory race, and future cash generation, rather than on predictable earnings.Coca-Cola represents traditional defensive quality. It trades at roughly 25 times forward earnings according to Seeking Alpha and has $13.8 billion in cash and investmentsagainst $44.7 billion in debt, yielding a cash-to-debt ratio of about 0.31. However, its dependable demand, pricing power, and $12.6 billion in trailing free cash flow make that debt easier to manage.Also, it doesn’t hurt that Coca-Cola pays a growing dividend, one that it has paid for the past 63 years.Related: Cathie Wood buys $50.1 million of tumbling megacap stock

Every industry gets one moment when the crowd changes its mind all at once.It gets written up later as strategy. Up close it looks more like relief, a room full of executives who spent three years promising one future finally allowed to say out loud that the math never worked. The write-down gets forgiven because everyone is taking one.The car business had that moment last fall.The $7,500 federal clean vehicle credit expired on Sept. 30, 2025, and the demand that had been yanked forward into the third quarter stopped showing up. Battery-electric vehicles made up roughly 6% of U.S. sales in the second quarter of this year, down from a peak near 11% during the pre-deadline scramble, according to Cox Automotive figures cited by Inside Climate News.What followed was one of the fastest strategy reversals American manufacturing has produced. At least 18 automakers have canceled, delayed, or scaled back electric plans in the U.S., reported Autoblog. Ford (F) converted a Tennessee plant built for EVs into a gas truck plant. General Motors (GM) idled battery lines in Ohio and Tennessee.Almost nobody wanted to be caught holding an electric product plan.Subaru (FUJHY) kept building one anyway.How the EV pullback reshaped every showroomThe retreat was not subtle, and it was not cheap. The charges landed on balance sheets fast enough that most buyers never registered them, but they explain why the crossover a family shopped in 2024 may not exist in 2027.Here is what walking away actually cost, and what one holdout did instead.Ford took a $19.5 billion charge in December as it scaled back EV programs, according to Steel Market Update.General Motors recorded $7.6 billion in EV-related charges in the second half of 2025 and another $1.1 billion in the first quarter of 2026, per the same tally.Honda dropped its 0 Series SUV, 0 Series Saloon, and the Acura RSX from U.S. plans, reported Autoblog.Subaru finished among the small group of brands posting EV sales gains in the first half of this year, according to Cox Automotive data.That last bullet is the one that stopped me. I went back through Subaru of America’s monthly releases to check it, because a gain in this market reads like a typo.Honda chief executive Toshihiro Mibe framed the industry’s thinking plainly, saying hybrids will “continue to be the key to addressing environmental challenges until around 2030,” Steel Market Update noted. It seemed like a reasonable position, and most of the industry took it. 

The three-row Getaway is Subaru’s fourth EV, approved as rivals booked billions in write-downs.Josh Lefkowitz / Getty Images

What Subaru is actually putting in dealershipsSubaru will have four EVs available to U.S. consumers by early next year while continuing to invest in gas and hybrid models, and it has approved a redesign of the Ascent three-row crossover, according to Automotive News. The Impreza survives, too, in a segment most rivals mothballed years ago.More Automotives:GM displays Q2 growth in key areas Tesla would be jealous ofDown 99%, popular EV stock is ripe bankruptcy candidateElon Musk just got a new rival on three frontsThe fourth EV is the three-row Getaway, a 420-horsepower, seven-seat SUV with more than 300 miles of range and a native NACS charging port, according to Subaru of America. It is the most powerful production vehicle the company has built.Read the strategy sideways, and it is less about electricity than about coverage. Subaru of America chief operating officer Jeff Walters described the goal as “expanding our versatile lineup of models offering gas, hybrid, and fully electric options,” the company’s year-end sales statement explained. Subaru sold 643,591 vehicles in the U.S. in 2025.That is the whole bet. Let buyers pick the powertrain, and refuse to guess which one wins.Why the Getaway delay complicates the storyFour days after the product plan surfaced, the company confirmed the Getaway is slipping. “The start of production for the Getaway is expected to be delayed,” Subaru said in a statement provided to Carscoops, with no revised date offered.The Getaway shares a Kentucky assembly line and most of its hardware with the electric Toyota Highlander, which flagged its own eight-week slip early in July. Related: Top Toyota exec urges Japan’s automakers to uniteMy read is that this makes Subaru’s position more interesting, not less. A company panicking would have used the Toyota delay as cover to quietly shelve the model. Subaru confirmed a schedule change and kept the vehicle.The broader market may be turning toward that patience. U.S. EV sales rose 14.2% from the first quarter to the second, and Cox Automotive said the market “now appears to be stabilizing after the anticipated correction,” reported InsideEVs.What Subaru’s bet means for your next car paymentStrip out the strategy talk, and this lands on a practical question. When you finance a vehicle for 72 months, you are betting the manufacturer still cares about that product line in 2032.Buyers who purchased a canceled model this cycle are finding out what the other answer feels like. Software updates thin out. Dealer expertise drifts elsewhere. Resale takes the hit that shows up on the trade-in sheet, not in a press release.Subaru’s calculation is that keeping the Impreza, redesigning the Ascent and shipping four EVs costs less than guessing wrong. It is an expensive way to stay flexible, and it is the reason a Subaru shopper in 2028 will probably still have a choice.Watch the third-quarter EV numbers and the Getaway production date. If both hold, the brand that refused to fold will have bought something the write-down crowd cannot get back quickly, which is a lineup already in showrooms when demand returns.Related: Toyota sends mixed message on its EV future

Hollywood runs on multi-year contracts for a reason. Networks and studios lock executives into fixed terms so campaigns, budgets, and succession plans don’t collapse the moment a bigger offer appears elsewhere. That system assumes everyone treats the paper as binding.Warner Bros. Discovery says Amazon didn’t. On July 21, WBD and its subsidiary WarnerMedia Services filed suit against Amazon in Los Angeles Superior Court, according to Deadline.The case centers on Pia Barlow, HBO Max’s former EVP of originals marketing, who left for a newly created head of series marketing role at Amazon MGM Studios.Barlow’s WBD contract wasn’t set to expire until Oct. 31, 2027, according to The Hollywood Reporter.She told WBD she intended to leave on May 26, submitted formal resignation on June 5, and exited on June 26, according to Outlook Business. That is roughly 16 months of contract left on the table.WBD’s language leaves little room for interpretation. The suit accuses Amazon of running a “lawless employee shopping spree” and states plainly that “Amazon must be stopped,” according to The Hollywood Reporter. That is not the hedged phrasing of a routine contract dispute.Amazon allegedly offered a lawyer along with the jobThe complaint’s more unusual claim involves legal defense, not employment terms. WBD alleges Amazon selected a Seattle law firm with long-standing ties to the company to represent Barlow, and is paying or reimbursing her legal fees, according to Outlook Business.In effect, WBD is arguing Amazon budgeted for litigation before it happened.Related: Amazon’s FTC settlement window is about to closeThat detail matters more than the headline hire. It suggests Amazon anticipated exactly this lawsuit and treated potential legal exposure as a cost of doing business, rather than a deterrent.For a company already scaling MGM’s production slate, indemnifying recruits against their former employers is a signal about how much Amazon is willing to spend to build a studio workforce fast.WBD says this is not an isolated incidentThe lawsuit claims Amazon made a similar attempt weeks before Barlow’s departure, targeting another WBD employee under contract until Dec. 2027, according to The Hollywood Reporter.That attempt reportedly failed. WBD is asking the court for damages and an injunction barring Amazon from hiring any WBD employee before their term contract expires.An injunction of that scope would be unusual. It would not just resolve Barlow’s case. It would restrict how Amazon recruits from one specific competitor going forward, which is a far bigger ask than the damages claim suggests this is really about.

Warner Bros. Discovery sued Amazon, alleging it induced Pia Barlow to break a contract running until 2027.Leon Bennett / Getty Images

The dispute lands while WBD is fighting for its own futureThe timing compounds the pressure on WBD. Paramount Skydance’s $110 billion acquisition of WBD is currently paused after a federal judge froze the deal amid a multistate antitrust challenge, with the halt extended until at least Aug. 17.WBD shares fell roughly 3.8% on the pause news, closing near $25.86.A company mid-acquisition, with its own leadership pipeline in flux, is precisely when a rival poaching senior talent does the most damage. That context helps explain why WBD is litigating an executive departure as aggressively as it might litigate a merger threat.There’s also an irony most coverage has missed. WBD isn’t only fighting Amazon in court. It runs agentic advertising technology built on Amazon’s AWS cloud, a partnership announced earlier this month.More Entertainment:Disney weighs new free offering as consumers ditch paid streamingNetflix’s move to buy Letterboxd sends a key signal to investorsHollywood’s next streaming gamble stars an actor who isn’t humanThe two companies are simultaneously commercial partners and courtroom adversaries, which says something about how entangled Big Tech and legacy media have become even as they compete for the same talent.This isn’t the first time a legacy media company has sued a tech platform over an executive hire. Disney sued YouTube last year over its hiring of former Disney executive Justin Connolly, a case that settled out of court, according to The New York Times.Warner’s suit reads as an attempt to avoid that outcome by seeking a court order rather than a settlement.The real question the case raises extends beyond Barlow or even Amazon. As streaming platforms, tech companies, and legacy studios compete for the same small pool of experienced executives, fixed-term contracts are becoming a battleground rather than a formality.How California courts handle this claim could shape whether those contracts still mean anything the next time a bigger paycheck comes calling.Related: Paramount’s Warner deal is suddenly in real trouble

Retirement with a healthy IRA balance can make a large lump-sum withdrawal feel reasonable, whether it’s for a home renovation, a family gift, or a gap-year expense. What most retirees don’t anticipate is that one distribution can trigger costs far beyond the income tax owed. Medicare uses a two-year lookback to set premiums, and a single income spike can push monthly Part B costs from $202.90 to as high as $689.90 per person, the Centers for Medicare and Medicaid Services confirmed in its 2026 premium schedule. The surcharge behind that jump is called the Income-Related Monthly Adjustment Amount, or IRMAA, and it operates on a cliff structure that penalizes retirees for crossing a threshold by even one dollar.How a large IRA withdrawal triggers Medicare’s IRMAA surchargeEvery dollar pulled from a traditional IRA counts as ordinary income, feeding directly into modified adjusted gross income. Medicare uses MAGI from two years prior to set current-year premiums, so a large 2024 distribution determines what retirees pay throughout 2026.More Medicare/Medicaid:Medicare’s costliest gap threatens retirement savingsMedicaid’s 5-year rule catches families off guardMedicare Advantage lawsuit could affect 2027 benefits, plan choicesFor married couples filing jointly, the first IRMAA tier activates when MAGI exceeds $218,000, with surcharges escalating through five brackets up to $750,000, CMS data show. The jump to the first tier costs a couple $2,297 per year in added premiums, and moving to the second adds another $3,475, bringing the combined surcharge to $5,772, Taylor Schulte of Define Financial reported in his 2026 IRMAA playbook.”IRMAA is based on MAGI from two years ago,” Clifford C. Cornell, a financial advisor at Bone Fide Wealth, told Moneywise. “So, a large distribution this year might not impact someone immediately, but two years down the line, those surcharges can show up.”Social Security taxation compounds the IRA withdrawal problemThe damage from an oversized IRA withdrawal extends beyond Medicare premiums. The same income that triggers IRMAA also determines how much of a retiree’s Social Security benefit becomes taxable.The IRS calculates provisional income by adding adjusted gross income, tax-exempt interest, and half of the Social Security benefit. Once that total crosses $25,000 for single filers or $32,000 for joint filers, up to 50% of the benefit becomes taxable. Above $34,000 (single) or $44,000 (joint), the taxable share rises to 85%, according to the Social Security Administration. Those thresholds have remained unchanged since the 1980s and 1990s, meaning a retiree with moderate income in 2026 can easily find 85% of their Social Security subject to federal tax. A $40,000 IRA withdrawal on top of Social Security and a pension can push a household past both the taxation threshold and an IRMAA tier simultaneously, creating compounding costs no single line item on a tax return fully reveals.

A large IRA withdrawal can trigger higher Social Security taxes and Medicare premiums, creating unexpected retirement costs that quickly reduce income.Morsa Images/Getty Images

Required minimum distributions add forced income once retirees hit their RMD ageThe risk grows once required minimum distributions begin. Under the SECURE 2.0 Act, RMDs start at age 73 for most retirees, and individuals born in 1960 or later will see that age shift to 75.The IRS calculates the required amount as a percentage of your year-end tax-deferred account balance, and that percentage increases with age. On a $1 million traditional IRA, the initial RMD falls in the range of $36,000 to $40,000, and the amount grows each subsequent year, regardless of whether you need the funds for living expenses.Because RMDs count as ordinary income, they stack on top of Social Security benefits, pensions, and investment income when determining both your tax bracket and your IRMAA tier. A recent analysis from UBS Wealth Management warned that layered retirement income can push a retiree’s effective tax bracket higher than it was during their peak earning years.The pre-RMD window between retirement and age 73 offers a planning opportunityThe years between retirement and age 73, when required minimum distributions begin, represent the period when income is typically lowest, and tax brackets are most favorable for strategic action. Schulte wrote in Define Financial’s IRMAA guide that retirees can reduce future surcharges by spreading Roth conversions across multiple lower-income years rather than completing one large conversion. Schulte noted that converting portions of a traditional IRA to a Roth during this window shrinks the balance subject to future RMDs, lowering the provisional income that triggers both Social Security taxation and IRMAA costs later.Wade Pfau, founder of Retirement Researcher, told GOBankingRates that retirees in their 60s who delay Social Security have the best window to run conversions at low rates before required distributions begin.Roth conversions provide a great opportunity to pay taxes when it can be done at the lowest possible rates. The best window for this is for individuals who retire in their 60s and delay claiming their Social Security benefits until closer to age 70.”People don’t know what IRMAA is,” Nancy Gates, lead educator and financial coach at Boldin, told Kiplinger. “They could pay three times what everyone else pays for Medicare.”Qualified charitable distributions offer a separate tool for retirees 70½ or older. The IRS allows up to $111,000 per year in direct IRA-to-charity transfers in 2026, Fidelity’s QCD guidance confirms. That amount satisfies the RMD requirement without appearing as taxable income, protecting against both Social Security taxation increases and IRMAA tier jumps.IRMAA’s cliff structure punishes retirees who miss a threshold by one dollarIRMAA does not work like federal income tax brackets, and crossing a threshold by even one dollar triggers the full surcharge for that entire tier, not just on the excess amount. A married couple reporting $218,001 in MAGI pays $284.10 per person per month in Part B premiums instead of $202.90, adding roughly $1,950 in annual Part B costs when both spouses are enrolled.Schulte recommended running a MAGI projection before completing any large transaction to identify which surcharge tier the additional income would trigger, and whether a modest adjustment to the withdrawal amount or timing can avoid crossing the boundary entirely.Related: Medicare’s costliest gap threatens retirement savings

The artificial intelligence (AI) buildout has entered a new phase. Companies are no longer just buying chips in bulk. They now hunt land, power, and financing on a scale the tech industry rarely attempts.Nvidia (NVDA) sits at the center of that shift, and its next move could reshape how AI infrastructure gets funded for years to come. A recent report shows how far the chipmaker may go. The details point to one of the largest financial arrangements tied to AI infrastructure to date, and it involves one of Nvidia’s closest and most important partners.Nvidia’s $250 billion guarantee takes shapeNvidia is reported to provide roughly $250 billion worth of financial support for OpenAI, according to a Wall Street Journal report published on July 26, 2026, confirmed by Reuters. The guarantee would support a massive data center lease project rather than a direct cash payment upfront, and represents one of the most ambitious financial transactions yet in America’s AI boom.The arrangement centers on a 10-gigawatt data center project in southern Ohio. SoftBank’s (SFTBY) energy subsidiary is developing the site, and Nvidia’s backing would help OpenAI secure debt financing on far better terms, the report said.More Nvidia:Bank of America sees Nvidia’s next $20 billion businessMorgan Stanley says Nvidia stock remains top pick despite headwindCiti sends strong signal to Nvidia investors amid rumorsThe backing matters because OpenAI still lacks an investment-grade credit rating. The company remains unprofitable despite its scale and its 900 million weekly active ChatGPT users. A guarantee from Nvidia, whose balance sheet carries far more weight with lenders, would allow the project to proceed on terms OpenAI could not secure alone. Without that support, lenders would likely demand a steeper rate or additional collateral before committing capital of this size.Including the Nvidia chips destined for the facility, the full project is estimated to cost more than $500 billion. That would make it the largest data center project announced anywhere to date, eclipsing even Nvidia’s own $100 billion OpenAI investment pledged in September 2025, which is being deployed progressively as infrastructure comes online.The Ohio megaproject and its power struggleSouthern Ohio was chosen partly because of an existing decommissioned uranium enrichment site nearby. Electricity for the campus would come from a natural gas facility backed by a $33 billion Japanese investment, which is tied to a recent trade agreement between the U.S. and Tokyo, according to Reuters.The first phase of the project, which is roughly 800 megawatts of capacity, is expected online by 2028. Reaching the full 10 gigawatts will take years and multiple stages of construction, reflecting how much longer power buildouts now take compared with chip deployment schedules. That gap between hardware readiness and available electricity has become one of the industry’s most persistent bottlenecks.The power allocation is effectively controlled by the U.S. government’s arrangement. Commerce Secretary Howard Lutnick is involved in deciding which companies gain access to the site’s capacity, underscoring how political AI infrastructure has become in 2026.OpenAI is described as the frontrunner for the site after weeks of advanced talks. Microsoft (MSFT), Google parent Alphabet (GOOGL) and Anthropic have also spoken with officials about the project, showing how contested Ohio’s power capacity has become among rival AI labs. Nvidia itself has recently pulled back from smaller equity bets in AI startups, choosing instead to concentrate its firepower on arrangements of this size.

Southern Ohio was chosen as a site for OpenAI’s data center project partly because of an existing decommissioned uranium enrichment site nearby.David/Getty Images

Chip financing deal could add $350 billion moreThe report says the $250 billion guarantee covers only the project’s lease and construction debt financing tied to the Ohio campus. It does not include the Nvidia processors that will eventually fill the facility. That brings a separate financing conversation into play, one that has drawn its own scrutiny after earlier reports of OpenAI exploring custom chips to diversify away from Nvidia hardware entirely.Nvidia is also discussing a chip purchase financing arrangement for OpenAI that could reach as much as $350 billion, based on the same Journal reporting. Combined with the data center backstop, Nvidia’s total financial exposure to one customer could approach $600 billion.Related: Nvidia stock is doing something it hasn’t done in yearsThat scale has already drawn sharp reactions online. Investor Michael Burry, known for his bet against the 2008 housing bubble, wrote on social media that Nvidia would effectively be guaranteeing OpenAI’s own spending on Nvidia chips. Tech commentator Ed Zitron raised similar doubts about where the underlying capital would originate. The concerns echo an earlier debate after OpenAI began building its own chips to reduce its dependence on Nvidia hardware for certain workloads.What comes next for Nvidia investorsNvidia has increasingly positioned itself as more than a chip supplier. Recent deals, including Rubin architecture agreements tied to government-backed projects abroad, show the company acting as financier, matchmaker, and equipment vendor all at once, a shift analysts at Bank of America have flagged as a multi-year revenue driver worth watching closely.That expanded role carries real earnings weight behind it. According to a TheStreet report, Nvidia posted $215.9 billion in fiscal 2026 revenue, up 65% from the prior year, and its data center business remains the primary driver behind that growth, even as the company works to keep gaming revenue from slipping further down its list of priorities.Shares closed Thursday, July 23, down 0.92% at $206.84 before slipping further another 0.02% to $206.80 in after-hours trading. Investors must now weigh whether guaranteeing hundreds of billions in financing for a single customer strengthens Nvidia’s grip on the AI trade, or concentrates its risk in ways past chip cycles never did. Neither Nvidia nor OpenAI has commented publicly on the reported talks so far. For now, the arrangement remains a proposal rather than a signed deal.More on Nvidia & its stock:History of Nvidia: Company timeline and factsWho owns Nvidia? Top insiders & institutional investorsDoes Nvidia pay dividends? Payouts & yield amid the AI boomNvidia’s stock split history: Everything you need to knowHow many employees does Nvidia have? From R&D to salesNvidia’s headquarters: An ode to space and 3D rendering

Tesla’s vehicle sales recovered in the second quarter, but negative free cash flow, declining margins and increasing AI spending present new threats for TSLA investors.Tesla (TSLA) finally gave investors the car comeback they’ve been waiting for. But the profits and cash flow never came.Revenue jumped 26% to $28.24 billion in the second quarter from a year earlier, with automotive revenue rising 23% to $20.52 billion. Tesla delivered 480,126 vehicles, up 25%, following two consecutive quarters of improving sales.First, those advances look optimistic for a corporation whose main electric-vehicle industry has been beset by softer demand, rising competition, and pricing pressure.The rest of Tesla’s report offers a tougher narrative.Excluding one-time charges, earnings fell to 33 cents a share from 53 cents a year ago. Analysts polled by FactSet had forecast 53 cents per share, MarketWatch noted. Operating income fell 57% to $398 million, Tesla’s operating margin shrinking to 1.4% from 4.1% a year ago. Shares slumped 4.1% in after-hours trade after the announcement.Most significantly, Tesla generated negative free cash flow of $1.09 billion as quarterly capital expenditures surged 142% to $5.79 billion.This leaves Tesla shareholders with a big problem: The company’s auto industry is recovering just as its artificial intelligence, Robotaxi, and robotics ambitions are starting to burn much more cash.“This is a massive capex year, but I’m confident all the things we’re investing in will yield incredible returns,” CEO Elon Musk told investors, as The Wall Street Journal reported.Tesla’s vehicle rebound did not protect its marginsTesla’s record second-quarter deliveries prove there is demand for its automobiles.Deliveries of Model 3 and Model Y jumped 25% to 467,762. Global vehicle inventories declined to 15 days of supply from 24 days a year before. Automotive sales revenue, excluding leasing and regulatory credits, jumped 27% to $20.01 billion.The company’s profitability didn’t grow at the same pace.Related: Tesla now has a serious software rivalAutomotive gross margin decreased to 16.9% from 17.2% a year ago. Average vehicle costs were basically unchanged, as the negative sales mix and currency impact outweighed warranty advantages and decreased tariff expenses, Tesla said.Another headwind was regulatory credit revenue. Credit sales down 67% to $146 million from $439 million. Those credits cost little, so their loss can hit Tesla’s earnings disproportionately hard.Key numbers for Tesla investors$28.24 billion: Second-quarter revenue480,126: Vehicles delivered33 cents: Adjusted earnings per share1.4%: Operating marginNegative $1.09 billion: Free cash flow$5.79 billion: Capital expenditures$43.52 billion: Cash and short-term investmentsTesla’s energy sector also had mixed results. Storage installations rose 41% to 13.5 gigawatt-hours, while the segment’s gross margin decreased to 20.4% from 30.3% as revenue gained 13% to $3.14 billion.Tesla is asking investors to fund a different companyTesla’s cash-flow problem is a change in spending deliberately, not plummeting car revenue.Research and development costs rose 49% to $2.37 billion, largely due to higher spending on AI and other new programs. Tesla forecasts more than $25 billion in capital expenditures in 2026 as it expands data centers, computer infrastructure, production lines, Robotaxis, and the Optimus humanoid robot.More Tesla:Tesla merger with SpaceX won’t save investors, top analyst saysTesla stock gets a surprising SpaceX resetTesla’s $1.4 trillion valuation rests on what happens next in one cityThat spending is altering the investing thesis for Tesla.The business is increasingly trying to get investors to value it not as a car producer, but as an emerging AI, robotics, and autonomous-transportation platform. But its core automotive business still accounts for a large share of the profit that supports such endeavors.The Full Self-Driving subscriptions are a positive indication for Tesla. Active subscriptions rose by 56% to 1.48 million, possibly giving a substantial stream of recurring software revenue. The company also announced it has begun production of its Cybercab and grown its Robotaxi business.The question remains whether the company can obtain real returns.Tesla indicated capital spending could continue to increase over the next two to three years, the Associated Press reported. Its regulatory filing also cautioned that periods of increased investment may necessitate financing beyond cash from operations.

Tesla’s strongest sales signal masks a cash-flow warning.Alex Wong / Getty Images

The stock takeaway from Tesla’s earnings missTesla’s quarter does not indicate that its automobile business is in free fall.Revenue and deliveries rebounded, inventory fell, and the corporation had $43.52 billion in cash and short-term investments. Those considerations give Tesla plenty of financial capacity to keep investing.The problem is that the increased sales are not creating the operating leverage that investors had hoped for.Lower regulatory-credit income, lower margins, and a quick increase in research and capital spending meant Tesla had negative free cash flow, even in a quarter of record deliveries.The positive argument is that Robotaxis, AI software, and Optimus will eventually create businesses with better margins and more recurring revenue than car-making.The pessimistic thesis is that Tesla invests tens of billions of dollars in such items before they generate enough cash flow to justify the investment.Tesla has proven that it can bring automobile consumers back. Its next challenge is more difficult: to prove its revived automotive industry can pay Musk’s costly technology goals without gradually eroding the financial results that underpin the stock.Related: Bank of America revamps Tesla forecast before earnings

Casual restaurant chains, such as Applebee’s, are battling industry headwinds, including rising labor and food costs, increased rents, and declining traffic that has led to the closing of underperforming locations.Applebee’s Restaurants Inc., which has over 1,500 casual dining establishments, closed its 30-year-old location in Ballwin, Mo., on July 24 after the restaurant’s landlord raised the rent by about 30%, according to the St. Louis Business Journal.The restaurant closed permanently after selling all of its food, according to an employee. The property where the Applebee’s is located in Ballwin is owned by landlord NNN REIT of Orlando, Fla., according to the Business Journal.The property owner’s spokesperson was not immediately available for comment on July 27.

A 30-year-old Applebee’s location in Ballwin, Mo., permanently closed.M. Suhail / Getty Images

Applebee’s location sales declinedIn addition to the rent increase, the Ballwin Applebee’s franchise operator said shrinking sales combined with rising costs had made the location unsustainable, according to Hoodline. The franchise owner said that employees would be offered transfers to nearby Applebee’s locations.The owner did not say how many employee jobs were affected by the closure.The Applebee’s location at 14830 Manchester Road in Ballwin had been advertised for sale or lease by the landlord prior to the closure.Restaurant chain has closed 15 locationsThe closing of the Ballwin restaurant amounts to at least 15 Applebee’s closings so far in 2026, based on news reports. The restaurant chain’s owner Dine Brands Global confirmed that it planned to close 20 to 35 locations in 2026, according to CREHQ.In addition to the Ballwin restaurant closing, Applebee’s shuttered restaurants in Columbia, Mo., on Feb. 18, two in Evansville, Ind. on Feb. 19, Glenville, N.Y. on April 12, and one in Calexico, Calif. on June 16, according to Finance Buzz.Applebee’s company facts:Locations: Over 1,500Planned closures: 20-35 in 2026Closures so far: About 15Parent company Dine Brands GlobalFounded: 1980Days before the Ballwin closing, Applebee’s closed its location in Houghton, Mich., on July 13, according to The Daily Mining Gazette.Also, franchisee Neighborhood Restaurant Partners LLC, whose website says it operates 50 Applebee’s in Alabama, Florida, and Georgia, has closed seven locations since March 2026 when it had 57 locations, according to its website at the time as TheStreet’s Daniel Kline reported.Applebee’s franchisee filed for bankruptcyNeighborhood Restaurant Partners Florida LLC and two affiliates filed for Chapter 11 bankruptcy on March 24 to reorganize. Applebee’s corporate owner Dine Brands Global did not file for bankruptcy.The closing of Applebee’s locations follows a recent trend of dining chains shuttering restaurants.Casual restaurant chains close locationsCasual restaurant chain Ruby Tuesday has closed 771 underperforming locations since its peak of 945 units in 2007, according to Restaurant Business.The Maryville, Tenn.-based restaurant chain, which listed 174 operating locations on its website as of July 20, closed locations at 2504 Augusta Road and at 7490 Garners Ferry Road, both in Columbia, in the last month, according to The Post and Courier.The 54-year-old dining chain filed for Chapter 11 bankruptcy on Oct. 7, 2020, according to PacerMonitor, suffering the effects of the Covid-19 pandemic, which had led to the closing of 185 company-owned restaurants.The company closed 27 more of its 236 company-owned restaurants during bankruptcy. The company exited bankruptcy on Dec. 16, 2021.Another Applebee’s competitor, Red Robin Gourmet Burgers Inc., said it plans to close 20 restaurants in 2026 as leases expire after closing 23 locations in 2025. Originally, the company said in 2024 that it would close up to 70 locations but removed 20 restaurants from its closing list.The company is not certain of the total number of restaurants it will close.“At this time there is no confirmed number for potential closures, as the company is continuing to work on performance and could continue to see that number decrease,” a Red Robin spokesperson told TheStreet in an email.Related: 30-year-old beer brand that sold for $1 billion closes locations

International Business Machines — more commonly known as IBM or “Big Blue” — is far older than most of its peers in the computing technology industry. But while it was founded more than a century ago, its current operations span the gamut of cutting-edge technologies, from cloud-based enterprise software to AI and quantum computing. Standing out from some of its younger peers in the tech space, IBM is a mature, blue-chip stock, a component of the Dow Jones Industrial Average (America’s oldest and most exclusive stock market index), and a consistent dividend payer.Over the years, Big Blue has rewarded its long-term shareholders by sharing its profits through quarterly dividend payments — and raising these payments consistently over time. In fact, IBM has paid dividends 445 times, beginning way back in 1913, when it was known as the Computing-Tabulating-Recording Company and had yet to go public. Here’s a closer look at IBM’s dividend, including its yield, payout ratio, history, and future prospects. IBM dividend quick factsDividend: $1.69 Paid: QuarterlyAnnual dividends per share: $6.76Trailing 12-month yield: 3.13%Dividend payout ratio: 58.42%Most recent dividend: June 10, 2026First dividend: April 10, 1913Total dividend disbursements: 445Years of consecutive annual dividend increases: 31When and how often does IBM pay dividends? IBM currently pays a quarterly dividend of $1.69 per share. Typically, these payments land in the brokerage accounts of IBM shareholders on or around the 10th of March, June, September, and December.  Annually, IBM’s dividend comes out to $6.76 per share per year at the current level. This means that an investor with 100 shares of the stock could expect to receive $676 in dividends over the next year. What is IBM’s dividend yield? A company’s dividend yield is the ratio of its annual per-share dividend to its share price, so it can vary considerably depending on how that company’s stock price moves in the open market. When a stock’s price goes down, its dividend yield goes up, and vice versa. As of this article’s last update, IBM’s trailing 12-month yield (the sum of its last four dividend payments divided by its current stock price) was around 3.1% based on a stock price of around $216.  Related: Is IBM a good investment in 2026? Its buy-and-hold prospects explainedWhen did IBM raise its dividend? Will it raise it again?IBM most recently raised its quarterly dividend by 1 cent — from $1.68 to $1.69 per share — beginning with its June 10, 2026, dividend distribution (payable to shareholders of record as of May 8, 2026). In fact, Big Blue has raised its quarterly dividend by one cent per share each year since 2020. Prior to this, the company was more aggressive with its dividend increases. For instance, in 2015, it bumped its quarterly payout by 20 cents from $1.10 per share to $1.30. Despite the company’s smaller annual dividend increases over the past several years, continued annual dividend increases are considered likely, as they signal strength to investors and help the company maintain its elite status as a dividend aristocrat, a category of stocks that is popular among income investors.More on dividend stocks in the Dow: Is Nike’s dividend safe? Yield, payout ratio & historyDoes Salesforce pay a dividend? Its yield and payouts explainedHow much does Home Depot pay in dividends? Yield & payouts explainedWhat makes IBM a dividend aristocrat? Dividend aristocrats are stocks that have raised their dividends each year for 25 years or more. Since IBM boasts 31 years of consecutive dividend increases, it’s a member of this elite group.IBM is not, however, one of the so-called dogs of the Dow. This term refers to the 10 stocks in the Dow Jones Industrial Average with the highest dividend yields. As of late July 2026, IBM ranks 13th out of the 30 stocks in the Dow by dividend yield. What is IBM’s dividend payout ratio?A stock’s dividend payout ratio refers to the portion of a company’s profits that are paid out to shareholders as dividends. For 2025, IBM’s payout ratio was around 79.8%, meaning that the company returned almost 80% of its net income to shareholders. IBM’s payout ratio for Q2 of 2026 is lower, at around 58%, based on a quarterly dividend of $1.69 and an adjusted EPS of $2.93. Related: IBM’s stock split history: Why Big Blue stopped splitting sharesIs IBM’s dividend safe? Despite recent volatility in its stock price, most investors and analysts consider IBM’s dividend reliable. The blue-chip company’s payout ratio is high enough to indicate that company management values returning profits to shareholders, but not so high that the company doesn’t have enough cash left over for its operations. In fact, the company’s free cash flow over the last year or so is about twice what it paid in dividends over the same period.IBM’s dividend aristocrat status and 31-year history of annual dividend increases further demonstrate the company’s commitment to its long-term shareholders, many of whom value the stock specifically for its growing dividend. When the company reported somewhat disappointing Q2 earnings, CFO James Kavanaugh assured shareholders that IBM’s dividend remains a priority, saying, “In a quarter like this, it is critical that our financial and operational discipline remains strong and that we continue to invest for growth while returning value to shareholders through our dividend.”How much does IBM CEO Arvind Krishna make in dividends?  IBM CEO Arvind Krishna owned 371,894 of the company’s shares as of February 2026. With the company paying $6.71 per share in dividends in 2025, Krishna’s payout would have totaled almost $2.5 million.More on IBM & its stock: History of IBM: Company timeline, milestones & factsIs IBM a good investment in 2026? Its buy-and-hold prospects explainedIBM’s stock split history: Why Big Blue stopped splitting sharesIBM’s logo over the years: A timeline of ambition