As it turns out, “unprecedented disruption” is not inherently bad for business.

At least for Shell, which used the term to describe the Iran War’s impact on global energy markets in its first-quarter earnings report on Thursday, where it also revealed a whopping $6.9 billion in profit. As if you needed any reminder that there was someone on the other side of $120 barrels of oil.

Inside Strait

While Shell is exposed to wartime disruption, it’s not entirely vulnerable. Roughly 20% of Shell’s oil and gas production occurs in the Middle East, though about half of that comes from Oman, which means shipments don’t have to pass through the Strait of Hormuz. Still, outages across the region, mainly in Qatar, caused a 4% dip in output from the prior quarter.

Expect that to get worse. Shell said it expects integrated gas production to fall by more than a third in the current quarter, while LNG liquefaction volumes may fall by up to 14%. The company similarly expects no production from Qatar this quarter, cutting it off from around 300,000 barrels of oil per day. “That’s a material impact,” CEO Wael Sawan told the Financial Times on Thursday. And getting its marquee Qatar facility fully back online will take a year and some half-billion dollars in repairs, CFO Sinead Gorman said during a call with analysts. The company also took a $2.4 billion hit from hedging contracts that went south amid volatile prices.

On the other hand, its wins more than offset its losses:

• Adjusted profit of $6.9 billion marked a roughly 25% jump year over year, trouncing consensus analyst expectations of about $6.1 billion. Its chemicals and products unit, which includes both refining and oil trading, posted profit of $1.9 billion.
• The boom was thanks in large part to rapid price swings, which tend to spark massive demand from major buyers such as airlines and utilities looking to hedge against further increases.

“I think our operational performance, in particular in times of volatility, leveraging our trading, does mean that we are able to create real value and drive cash at times like this,” Sawan said on the analyst call.

Running Low: The good times might not last forever, and Shell warned that prolonged volatility will eventually catch up with it. Shell cut quarterly buybacks from $3.5 billion to $3 billion, warning that the market will probably tighten as heightened prices soften demand. “We have dug ourselves a hole of close to 1 billion barrels of crude shortage at the moment … and of course, that hole is deepening every single day,” Sawan said. “The journey back will be a long one.”

The HAL 9000 nightmare is manifesting as agentic ransomware and AI models capable of sophisticated hacking.

For cybersecurity firms like Fortinet, however, that’s an ideal growth market. Shares in the Sunnyvale, Calif.-based company rose an eye-popping 20% Thursday, a day after executives reported an earnings beat after the bell. Analysts say investors can expect a lot more value where that came from.

Securing Growth

Fortinet makes custom chips and develops software, including firewalls, to secure networks against hackers and viruses. Demand is on the upswing because of the precipitous rise in AI-powered ransomware and malware (for your daily dose of IRL fear, scientists say AI can now help design actual viruses from scratch, not just computer ones).

Fortinet and its competitors are also seeing a surge in demand driven by what’s called Secure Access Service Edge (SASE). Basically, it’s an industry term for cloud-native architecture that combines various IT security services into a single, unified cloud platform. Notably, this means security occurs at the point of connection rather than in a data center, which is useful for companies with remote workers or multiple locations.

The demand growth registered broadly in the company’s first-quarter results, with revenue rising 20% year over year to $1.8 billion and billings, an important investor metric that indicates future cash flow, up 31% to $2 billion. Both bested Wall Street’s estimates, and had some analysts raving:

• BTIG analyst Gray Powell hailed the results Thursday as “outstanding” and underscored executives’ “materially better than expected” 2026 outlook, which now calls for revenue between $7.7 and $7.9 billion, up from $7.5 to $7.7 billion.
• BTIG raised its recommendation on Fortinet to Buy, and its $125 price target implies shares could rise 39% above Wednesday’s close. Arete Research reversed course, changing Fortinet from Sell to Buy and setting a $104 target price on the strength of cybersecurity opportunities beyond legacy technology.

Thoughts for Bedtime: On the subject of AI security, researchers at Berkeley’s nonprofit Palisade Research found that recent AI systems can autonomously copy themselves across devices to prevent themselves from ever being disabled. “We’re rapidly approaching the point where no one would be able to shut down a rogue AI, because it would be able to self-exfiltrate its weights and copy itself to thousands of computers around the world,” Jeffrey Ladish, the group’s director, told the Guardian on Thursday. Anyway, have a nice, nightmare-free sleep tonight.

Despite spiking energy prices from the Iran war, the S&P 500 has climbed 11% in the past month, much to Wall Street’s delight.

It’s a different story on Main Street, however. The latest evidence: McDonald’s, which said Thursday that, when it comes to rising gas prices at the pump, customers are decidedly not loving it.

Running Out of Gas

First, the good news. In the first quarter, McDonald’s managed better-than-expected revenue (up 9% from last year to $6.5 billion) and profit (net income rose more than 5% to $2 billion). Same-store sales rose 3.8% and, in the fast food chain’s US home market, climbed 3.9%, bolstered by customers spending more per visit.

Then, there’s the not-so-good. CFO Ian Borden warned on an earnings call Thursday that the second quarter looks less rosy. Sales fell narrowly in April, he said, as higher gas prices weighed on both lower-income Americans and franchisees’ margins. The average gas price nationwide was $4.56 on Thursday, up from $2.98 on February 28, the day the US and Israel attacked Iran. “When you have elevated gas prices, which is the core issue that we’re all seeing in the press right now — gas prices, inflation on that — that is going to disproportionately impact low-income consumers,” CEO Chris Kempczinski added. Others have issued similar warnings, though McDonald’s has a plan to make the best of what Kempczinski called a “challenging environment” in which consumer spending “may be getting a little bit worse”:

• Other restaurant companies, including Chipotle, Domino’s and Shake Shack, reported softening sales in March, too. Kraft Heinz CEO Steve Cahillane told The Wall Street Journal earlier this week that “consumers are literally running out of money toward the end of the month.”
• McDonald’s mantra is value, something executives hope to leverage in enticing strapped consumers who are increasingly aware of where their money goes furthest. Last month, it added several items under $3 to its McValue menu.

Performance Review: Kempczinski was especially unhappy with himself when it came to McDonald’s company-owned restaurants, where margins fell 25% from a year ago to $59 million. “Either I fix that, or we’re going to find franchisees who could run the restaurant better,” he said.