- Asian Stocks Slip on Nvidia Results Letdown: Markets Wrap
(Bloomberg) — Stocks in Asia tracked their US peers lower after underwhelming earnings from Nvidia Corp.
dampened the outlook for the tech sector. South Korea’s Kospi Index slid more than 1% as chipmakers
Samsung Electronics Co. and SK Hynix Inc. slumped. Japanese shares also opened lower. Futures on the
Nasdaq 100 Index were down 1% in Asia as Nvidia slumped more than 8%. - S&P 500, Nasdaq close lower Wednesday, Nvidia tumbles before earnings
Stocks pulled back Wednesday, pressured by a decline in Nvidia, as investors braced for the chipmaker’s
latest earnings report. The Nasdaq Composite fell 1.12% to close at 17,556.03, while the S&P 500 slipped
0.6% to end at 5,592.18. The Dow Jones Industrial Average lost 159.08 points, or 0.39%, settling at 41,091.42.
Wall Street is keeping an eye on Nvidia to gauge the sustainability of the broader tech and artificial
intelligence trade. The semiconductor giant, slated to report after the close, has surged more than 150% in
2024, raising questions of how much more room there is for the stock to run. On Wednesday, Nvidia fell
2.1%, contributing to the information technology sector’s 1.3% decline. - Oil steady as smaller-than-expected U.S. stock draw counters Libya supply disruption
Oil prices held mostly steady on Thursday as a smaller-than-expected draw in U.S. crude inventories and
continued worries over China demand countered supply disruptions out of Libya. Brent crude futures
were down 1 cent, or 0.01%, at $78.64 a barrel at 0043 GMT, while U.S. West Texas Intermediate crude
futures were up 8 cents, or 0.1%, to $74.60. Both contracts lost over 1% on Wednesday, after data showed
that U.S. crude inventories dropped by 846,000 barrels to 425.2 million barrels last week, less than analyst
expectations in a Reuters poll for a draw of 2.3 million barrels. Losses were limited, however, by worries over
disruption to supplies out of Libya, a member of the Organization of the Petroleum Exporting Countries. - Gold falls on firmer dollar as U.S. data takes spotlight
Gold prices dropped on Wednesday, hurt by a stronger U.S. dollar as investors focused on key inflation data
from the world’s largest economy for clues on the size of the Federal Reserve’s potential interest-rate cut in
September. Spot gold was down 0.8% at $2,505.03 an ounce, having slipped as much as 1.1% earlier in the
session. U.S. gold futures settled 0.6% lower at $2,537.80. The dollar climbed 0.6%, making gold more
expensive for other currency holders. - Fed’s Bostic Wants More Data to Confirm Need to Cut Next Month
(Bloomberg) — Federal Reserve Bank of Atlanta President Raphael Bostic said it may be time to cut but he’s
still looking for additional data to support lowering interest rates next month. Bostic reiterated that his
timeline for anticipated cuts had moved up after inflation fell more quickly than he expected and the
unemployment rate increased more rapidly. - Warren Buffett Sells More BofA Shares, Reaping $982 Million
(Bloomberg) — Warren Buffett sold an additional $982 million of Bank of America Corp. stock as his conglomerate continues to shrink its investment in the second-largest US bank. His Berkshire Hathaway Inc. has trimmed the stake by a total of almost 13% in a series of sales since mid-July, generating $5.4 billion in proceeds. - Emerging Assets Edge Lower as Dollar Gains on Rate Speculation
(Bloomberg) — Emerging-market currencies edged down on Wednesday as the dollar rebounded from the
near eight-month low it hit at the end of last week, while equity traders awaited cues from Nvidia Inc.’s
results later in the day. Most currencies in the MCSI Inc.’s emerging-market gauge were down on the day. - Nvidia Corp. failed to live up to investor hopes with its latest results, delivering an underwhelming
forecast and news of production snags with its much-awaited Blackwell chips
The company’s quarterly report met or beat analysts’ estimates on nearly every measure. But Nvidia
investors have grown accustomed to blowout quarters, and the latest numbers didn’t qualify. Moreover,
Nvidia’s next big cash cow, the new Blackwell processor lineup, has proven more challenging to manufacture
than anticipated. Shares fell 6.9% afterhours. Third-quarter revenue will be about $32.5 billion, the company
said. Though analysts had predicted $31.9 billion on average, estimates ranged as high as $37.9 billion.
Heading into the announcement, there was concern that Nvidia was having problems with its new Blackwell
design. The company acknowledged that there were issues with production, saying that it was making
changes to improve its manufacturing yield, the number of functioning chips that come out of factories. At
the same time, the company said it expects to bring in several billion dollars of revenue in the fourth quarter
from the product. - Berkshire Hathaway became the first US company outside of the tech sector to surpass $1 trillion in
market value
Shares of Warren Buffett’s conglomerate rose 0.9% on Wednesday. The stock has rallied this year on strong
insurance results and economic optimism. The company joins the ranks of a small group to crack the
milestone, dominated by technology giants like Alphabet Inc., Meta Platforms Inc. and Nvidia Corp.
Berkshire’s rally this year has outpaced the S&P 500’s gains, with the company off to one of its best annual
starts in a decade. It’s gained 30% in 2024, while the market benchmark is up 17%. The company isn’t that far
behind the so-called Magnificent Seven: a gauge of the biggest tech stocks is up 34% this year. - Super Micro Computer shares tumbled 19% after the maker of servers said it expects that it will not timely file its Annual Report on Form 10-K for the fiscal year ended June 30, 2024
The news follows a report from Hindenburg Research, which wrote that an investigation into the company revealed glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues. CFRA downgrades to hold from buy, PT to $454 from $729. While we believe the evidence presented does not conclusively demonstrate significant accounting malpractice or verifiable sanction evasions, SMCI’s delayed 10-K filing and potential reputational damage raises concerns. CFRA continues to have a positive view of the company’s fundamentals and long-term prospects related to AI, but the unrefuted allegations and risk of customer erosion warrant caution. - Salesforce Inc. gave an earnings forecast for the fiscal year that topped analysts’ estimates, trying to
satisfy investors who have concerns over slowing sales growth at the software giant
Profit will be $10.03 a share to $10.11 a share in the year ending in January, compared with an earlier
forecast of as much as $9.94. Analysts, on average, estimated $9.91. The company affirmed its fiscal-year
revenue outlook of $37.7 billion to $38 billion. We continue to deliver disciplined profitable growth and this
quarter, operating margins closed at record highs, Chief Financial Officer Amy Weaver said. Salesforce raised
its annual forecast for adjusted operating margin slightly to 32.8%, compared with a previous forecast of
32.5%. Shares rose 4.3% in afterhours trading. Many large software makers are struggling to show new
revenue from AI products. At Salesforce, new higher-priced product tiers with AI are starting to help boost
sales, but the contribution remains pretty nascent, said investor relations chief Mike Spencer. - CrowdStrike shares fell 2.7% in afterhours trading, after the security software company reported
second-quarter results that beat expectations but cut its full-year forecast. However, some analysts said
the reduction was better than feared, as it comes in the wake of a CrowdStrike update that crashed
computers worldwide
SECOND QUARTER RESULTS: Revenue $963.9 million, estimate $958.2 million. Adjusted EPS $1.04, estimate
97c. Annual recurring revenue $3.86 billion, estimate $3.84 billion. Net new annual recurring revenue $217.6
million, estimate $195.5 million. Adjusted operating income $226.8 million, estimate $206.2 million. 2025
YEAR FORECAST: Sees revenue $3.89 billion to $3.90 billion, saw $3.98 billion to $4.01 billion, estimate $3.96
billion. Sees adjusted EPS $3.61 to $3.65, saw $3.93 to $4.03, estimate $3.91. Sees adjusted operating income
$774.7 million to $783.9 million, saw $890.1 million to $916.5 million, estimate $886.4 million. - HP Inc. fell 4.5% in afterhours trading after cutting its full-year profit outlook on a continued downturn
in its printing unit
The disappointing profit forecast overshadowed the company’s first revenue gain in two years, suggesting an
end to a long slump in demand for personal computers. Profit, excluding some items, will be $3.35 a share to
$3.45 a share in the fiscal year ending in October, HP said. That’s down from its previous outlook of as much
as $3.60. Printing unit sales fell 3% to $4.14 billion, a steeper loss than expected by analysts. Despite
providing a smaller portion of total revenue than PCs, the printing business is much higher-margin and makes
up a disproportionate share of the company’s earnings. Printer supply revenue is HP’s leading profit driver,
said Woo Jin Ho, an analyst at Bloomberg Intelligence. - Chewy shares rose 11.1% on Wednesday, after the online retailer of pet products reported its second- quarter results and gave an outlook. Analysts are positive on the report, and singled out active customer growth as a particular positive
SECOND QUARTER RESULTS: Net sales $2.86 billion, estimate $2.86 billion. Adjusted Ebitda $144.8 million, estimate $111.6 million. Adjusted Ebitda margin 5.1%. Number of active customers 20.00 million, estimate 19.97 million. Net sales per active customer $565, estimate $564.45. Adjusted EPS 24c, estimate 17c. 2025 YEAR FORECAST: Sees adjusted Ebitda margin 4.5% to 4.7%, saw 4.1% to 4.3%. Still sees net sales $11.6 billion to $11.8 billion, estimate $11.76 billion. - Abercrombie & Fitch shares slumped 17% as the apparel retailer’s second-quarter report and outlook
failed to reach investors’ high expectations
SECOND QUARTER RESULTS: Adjusted EPS $2.50, estimate $2.20. Net sales $1.13 billion, estimate $1.1
billion. Comparable sales +18%, estimate +15.3%. Gross margin 64.9%, estimate 65.4%. THIRD QUARTER
FORECAST: Sees operating margin 13% to 14%, estimate 14.6%. Sees net sales up low double-digits y/y.
2025 YEAR FORECAST: Sees net sales +12% to +13%, saw about +10%. Sees operating margin 14% to 15%. - China’s electric car race is becoming more about chip prowess as companies focus on tech
Price wars aside, Chinese electric car companies are now competing on driver-assist and other tech powered
by semiconductors. It’s hard to point to your product being superior when your competitors use the exact
same silicon to power their infotainment and intelligent driving systems, said Tu Le, founder of consulting
firm Sino Auto Insights. Over the last few years, Nvidia has already built a $300 million business in automotive
chips, with many of the major Chinese electric car companies as partners. - OpenAI is in talks to raise a funding round that would value the artificial intelligence startup at more
than $100 billion, CNBC has learned
Thrive Capital is leading the round and will invest $1 billion, according to a source with knowledge of the
matter who asked not to be named because the details are confidential. Earlier this year, OpenAI was valued
at a reported $80 billion from $29 billion the prior year. Annualized revenue reportedly surpassed $2 billion
earlier this year. Growth took off in late 2022 after the company launched its ChatGPT chatbot and has
continued as it rolled out products for businesses and expanded into AI-generated photos and videos.
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