2023 Nov 21, US Market
NVIDIA Q3 2023 Earnings $NVDA
Adjusted EPS $4.02, est. $3.36
Revenue $18.12b, est. $16.09b
Data center revenue $14.51b, est. $12.82b
Gaming revenue $2.86b, est. $2.7b
Automotive revenue $261m, Est. $266.9m
Sees 4Q revenue is expected $20.00b plus or minus 2%, est. $17.9B
Signs of Fatigue Show in The $6 Trillion S&P500 Rally
Stocks, Treasuries, and the dollar scarcely moved after the Federal Reserve minutes restated the central bank's dovish stance on interest rates, with traders anticipating Nvidia Corp.'s earnings.
The bar was set high for the world's most valuable chipmaker, whose shares have more than tripled this year, leaving little room for error. As the earnings season winds down, questions about the sustainability of the advance led by the "Big Seven" group of megacaps have resurfaced, with Nvidia declining from a record. The Nasdaq 100 underperformed and the S&P 500 edged lower after reaching "overbought" levels.
Some $6 trillion in market capitalization has been added to the US equity benchmark in 2023 in a rally fueled by the artificial intelligence boom. Corporate America’s resilience and bets the Fed will pivot to rate cuts next year. The gains left the index about 5% away from reclaiming its all-time high.
Oppenheimer upgraded Cloudflare (NET) to Outperform from Perform with an $85 price target. The firm thinks the company is well-positioned to offer edge compute at scale, consolidating compute/security/networking on one infrastructure enabling one common developer platform.
Goldman Sachs upgraded Western Digital (WDC) to Neutral from Sell with a price target of $48, up from $31, citing improving NAND supply/demand, a cyclical recovery in the nearline HDD market and the introduction of a sum-of-the-parts component to the firm's valuation framework after Western management concluded that spinning off its NAND business would be the best, executable option as it looks to unlock value.
Oppenheimer upgraded C3.ai (AI) to Outperform from Perform with a $40 price target. Since Oppenheimer's initiation report on June 29, C3.ai has reset guidance, worked through a model transition to usage-based, and shown real-world customer benefits, the firm tells investors in a research note.
Oppenheimer upgraded DigitalOcean (DOCN) to Outperform from Perform with a $37 price target. AI demand is "clearly strong," and enterprise adoption is set to surge as the market moves past "the network grooming phase of cloud services," says the firm, which thinks growth is set to accelerate and is increasing outer-year estimates.
Oppenheimer upgraded Equinix (EQIX) to Outperform from Perform with an $875 price target. The firm thinks "AI-focused names," like Equinix, are set to outperform as evidence accumulates that AI can lead to both major new revenue sources and massive productivity improvements.
BTIG downgraded Foot Locker (FL) to Neutral from Buy without a price target. The shares have rebounded over 30% off the August lows post the Q2 report, and as such, the firm is taking this opportunity to step to the sidelines.
RBC Capital downgraded Hershey (HSY) to Sector Perform from Outperform with a price target of $213, down from $239. RBC's latest channel work suggests the competitive landscape in 2024 is likely to be just as intense, if not more, than 2023 across Hershey's chocolate and confection categories in the U.S., as it appears that Mars and Ferraro/Ferrera will likely elevate their marketing, promotional spend, and innovation in the upcoming year, the firm tells investors in a research note.
Rosenblatt downgraded Six Flags Entertainment (SIX) to Neutral from Buy with a price target of $25, down from $32, in anticipation of the merger with Cedar Fair (FUN) completing.
Nomura downgraded Trip.com Group (TCOM) to Neutral from Buy with a price target of $41, down from $48, after Q3 earnings beat and Q4 guidance missed expectations.
Goldman Sachs downgraded Incyte (INCY) to Neutral from Buy with a price target of $65, down from $98. The firm sees continued uncertainty around Jakafi lifecycle management ahead of the losses of exclusivity in mid-2027 and late-2028.
Deutsche Bank initiated coverage of Zillow Group (ZG) with a Buy rating and $50 price target. The firm sees Zillow as the market leading platform for beginning a home buying journey with over twice the website traffic of Realtor.com and over twice the daily app users of Redfin (RDFN).
Citi reinstated coverage of Royal Caribbean (RCL) and Carnival (CCL) with Buy ratings and price targets of $127 and $18, respectively. Citi's most recent work on the cruise industry points to ongoing strength in October and November.
B. Riley initiated coverage of Boot Barn (BOOT) with a Buy rating and $92 price target. The firm says the Boot Barn story is a "throwback to the days of a proven category-killing concept consolidating a large, attractive, fragmented market with no existing national player."
Deutsche Bank initiated coverage of Opendoor Technologies (OPEN) with a Hold rating and $2.80 price target. With an increasingly challenged affordability backdrop, the firm is concerned that pricing compression could be an ultimate outcome of elevated rates.
Wedbush initiated coverage of VinFast Auto (VFS) with an Outperform rating and $12 price target. The firm believes the company is well positioned to generate a durable product portfolio for electric transportation globally while creating a "strong ecosystem to generate profitable growth over the coming years."
Lowe's (LOW) reported upbeat Q3 earnings but cut its FY23 earnings and revenue guidance
Dick's Sporting (DKS) provided a "beat and raise" report for Q3
Best Buy (BBY) reported mixed Q3 results, with Q4 comp sales down 3%-7%
Jacobs (J) reported better-than-expected Q4 results, provided FY24 earnings guidance and announced a definitive agreement to merge its CMS and C&I businesses with Amentum
Minutes from the last FOMC meeting show that members agree that policy should remain at a restrictive stance for "some time"
Apple (AAPL) aims to manufacture nearly $1T worth of iPhones in India by the end of March 2024, Economic Times reports
A U.S. Senate's Permanent Subcommittee on Investigations sent out a subpoena to Live Nation (LYV) last week requesting documents related to ticket prices and fees listed Ticketmaster, Rolling Stone says
Daniel Kan, the co-founder and chief product officer of GM's (GM) Cruise unit, has resigned, Reuters reports
Citron said that Geo Group (GEO) "should have no problem going back to $15"
Sonos (SONO) will make a long-awaited push into headphones, Bloomberg reports
Symbiotic (SYM) higher after reporting quarterly results and provided guidance for Q1
Golden Ocean (GOGL) and Agilent (A) increase in New York after reporting quarterly results
Gen Digital (GEN) gains after Morgan Stanley upgraded the stock to Overweight
MorphoSys (MOR) declines in New York after announcing results from its Phase 3 MANIFEST-2 study
American Eagle (AEO) falls after reporting quarterly results
Medtronic (MDT) provided a "beat and raise" report for Q2
Zoom Video (ZM) reported Q3 results and provided guidance for FY24 and Q4, with Barclays commenting the result were better than expected but the path forward remains uncertain
Kohl's (KSS) reported Q3 results and narrowed its FY23 guidance
Burlington Stores (BURL) reported Q3 results and narrowed its FY23 guidance, with CEO Michael O'Sullivan commenting "We were pleased with our performance during Q3"
Hibbett (HIBB) reported Q3 results, with CEO Mike Longo commenting "Our solid financial results for 3Q24 reflect our ability to consistently execute our strategy"
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