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Morrisons workers strike at two warehouses amid pensions row 2024-05-23 13:56:00+00:00 - Almost 1,000 workers at two Morrisons warehouses will strike for the next three days over a cut in company contributions to their pensions which they say is worth up to £10m a year. The warehouse stock controllers, cooks, canteen staff, and administrators at the sites in Gadbrook, Cheshire, and Wakefield, West Yorkshire, who earn between £12 and £13 an hour, say they will lose out by an average of £500 a year each from the company’s plan to reduce how much it puts into their pension pot while forcing workers to pay more. Unite, the union representing the workers, says Morrisons is also ditching a long service pay award and increasing the speed at which goods are expected to be processed in warehouses. Unite’s general secretary, Sharon Graham, has accused the supermarket – which is struggling to cope with high levels of debt after a £7bn takeover by the US private equity firm Clayton Dubilier & Rice in 2021 – of “planning to fleece workers”. She said: “These unmerited changes to workers’ pensions will leave our members worse off every month. Unite will not stand for such behaviour from any employer, let alone one like Morrisons who is raking in massive profits during a cost of living crisis.” Until March, workers paid in 3% of their pay into pensions while Morrisons put in 5%, but Morrisons has moved to a policy of each side paying 4% this financial year. View image in fullscreen Unite members on a picket line outside supermarket chain Morrisons’ distribution centre at Gadbrook, Cheshire. Photograph: Christopher Thomond/The Guardian Morrisons said it would ultimately pay more into workers’ pensions because of the government’s planned changes to pension auto-enrolment rules, and that the loss in pension contributions per worker would be more than offset by the offered pay rise. At present, workers earning less than £10,000 a year are not automatically enrolled on a pension scheme and companies do not have to pay contributions on earnings below £6,240. The government has agreed to abolish those limits, meaning all workers may have to be enrolled. However, it has yet to schedule a time for the new rules to be implemented, with a consultation not reporting until the autumn, when its findings will be considered by whichever party wins the election on 4 July. Morrisons said the two warehouses affected by industrial action were continuing to operate but at “reduced capacity”. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion “We have put in place detailed contingency plans across the business and are confident that our customers, stores, suppliers and partners will not be significantly affected,” a spokesperson said, adding that the company was “open to further dialogue with the union”. They said: “We have made a number of new proposals to Unite, including a 9% pay award, a new service award scheme, and improvements to the planned future pension scheme changes. “Disappointingly, Unite has chosen to reject these new proposals without putting them to its members, and instead are continuing with strike action at two out of our seven logistics sites, initially over three days.” The strikes at Morrisons’ depots follow action at hubs operated by Amazon and Asda stores in recent months over pay and conditions, amid a surge in the cost of living and a squeeze on the availability of warehouse workers since Brexit and the pandemic.
First Quarter Wrap-Up Reveals Retail’s Shifting Sands 2024-05-23 12:55:00+00:00 - Key Points E-commerce continues its rapid growth, forcing retailers to adapt their strategies and invest in digital channels. Consumer preferences shift towards value and experiences, impacting pricing strategies and product offerings. Persistent inflation puts pressure on discretionary spending, increasing competition for value-conscious consumers. 5 stocks we like better than Walmart The retail sector was once characterized by predictable earnings seasons and long-established retail giants seemingly unshakeable in their dominance. However, the sector finds itself in a period of evolution with the rise of eCommerce. Electronic commerce has fundamentally reshaped the retail industry, ushering in an era of volatility and heightened competition. Persistent inflation continues to reshape consumer behavior, driving a heightened emphasis on value and affordability. Simultaneously, spending patterns have started to reflect a shift away from goods, which dominated during the pandemic's peak, toward services, perks and experiences. Despite these evolving sector dynamics, the retail e-commerce arena continues its relentless expansion, intensifying competition and forcing traditional players to adapt or be left behind. The new era of ruthless competition means that companies must constantly evolve their strategies, consumers gain more power and choice than ever, and investors must navigate a landscape of heightened risk and significant opportunity. Get Walmart alerts: Sign Up Walmart: Value-Driven Growth and Omnichannel Power Walmart Today WMT Walmart $64.84 -0.41 (-0.63%) 52-Week Range $48.34 ▼ $65.69 Dividend Yield 1.28% P/E Ratio 27.75 Price Target $68.01 Add to Watchlist is widely considered the undisputed titan of retail. Walmart’s earnings report shows that the company continues to show its strength. Walmart’s financial report showed consolidated revenue of $161.5 billion for the first quarter of 2025, a robust 6% increase compared to last year. This sustained growth underscores the effectiveness of Walmart's unwavering focus on value. The value-oriented strategy resonates deeply with price-sensitive consumers navigating an environment of persistent inflation. A key driver of Walmart's success is its multi-pronged omnichannel approach, seamlessly blending its physical store network with a rapidly expanding digital presence. This strategic synergy is most evident in the remarkable 21% surge in global eCommerce sales, demonstrating the company's ability to capture a growing share of online shoppers. Walmart's well-developed fulfillment system, especially its in-store pickup and delivery options, addresses the increasing consumer demand for convenience. It empowers customers to make purchases based on their preferences, whether in-store, online, or through a blend of both channels. However, even giants face headwinds. While Walmart's overall performance remains strong, comparable sales growth in the U.S. has decelerated compared to the previous year, signaling potential saturation in its core market. Furthermore, while partly attributable to timing factors, a decline in operating cash flow warrants close attention as it could indicate underlying pressures on profitability. Despite these challenges, Walmart remains optimistic, updating its fiscal year 2025 guidance to reflect confidence in meeting or exceeding the high end of its previous projections for net sales and operating income growth. This positive outlook underscores the company's belief in its ability to leverage scale, efficiency and a deep understanding of its customer base to navigate a changing market. Walmart Inc. (WMT) Price Chart for Thursday, May, 23, 2024 Macy's "Bold New Chapter" Macy's Today M Macy's $20.06 -0.06 (-0.30%) 52-Week Range $10.54 ▼ $22.10 Dividend Yield 3.44% P/E Ratio 668.67 Price Target $17.73 Add to Watchlist , the renowned department store chain, is poised at a critical turning point in its corporate journey. Macy’s earnings report revealed a strategic shift for the company as it embarks on a strategic transformation aptly named "A Bold New Chapter." Macy’s ambitious turnaround plan seeks to revitalize the brand by moving away from its traditional discount-driven model and toward a more curated, premium shopping experience. However, as with any significant transformation, the path is rarely linear, and the first quarter's results reflect the inherent challenges of such a strategy shift. Macy’s financial report showed a net sales decline of 2.7%, reaching $4.8 billion for the quarter. The decline indicates the ongoing work needed to win back consumers who have grown accustomed to promotions and discounts. This overall sales decline is further emphasized by a dip in comparable sales, signaling a need to fine-tune the balance between premium offerings and value propositions to resonate with a broader audience. Despite these top-line challenges, hope emerges from specific segments within the Macy's portfolio. The company's "First 50" locations, strategically chosen to pilot this new premium approach, have shown encouraging results. These stores, representing a model for future expansion, achieved a commendable 3.3% growth in comparable owned sales, suggesting that the strategy, while still in its early stages, holds promise. Furthermore, the positive performance of Bloomingdale's and Bluemercury, brands that cater to the more affluent demographic, demonstrate the strength of segments within the broader Macy's brand. Macy acknowledges the considerable work ahead in fully implementing its "Bold New Chapter" strategy. Macy’s revised its full-year earnings guidance for FY 2024. The company now projects earnings per share (EPS) between $2.55 and $2.90, with revenue anticipated to fall between $22.3 billion and $22.9 billion. This revised outlook met with a mix of hold and buy ratings from equities research analysts. The ratings underscored Macy's challenges as it navigates persistent inflationary pressures, evolving consumer preferences, and a dynamic competitive landscape. Despite these challenges, Macy's dividend announcement of $0.1737 per share of Macy’s stock, payable on July 1st, signals confidence in its ability to navigate these shifting sands and deliver returns to its investors. Macy's, Inc. (M) Price Chart for Thursday, May, 23, 2024 Target: Balancing Between Challenges and Strategy Target Today TGT Target $144.41 +1.14 (+0.80%) 52-Week Range $102.93 ▼ $181.86 Dividend Yield 3.05% P/E Ratio 16.17 Price Target $180.41 Add to Watchlist faces a challenging environment as inflation squeezes consumer discretionary spending. This pressure is evident in Target’s earnings report, which reveals a 3.7% decline in comparable sales. Although concerning, the quarterly decline in performance indicates an improvement over the previous quarters, offering investors a glimmer of hope that the most severe challenges might be conquerable. Despite the headwinds in the consumer discretionary sector, Target's digital channels have demonstrated resilience, with digital comparable sales growing by 1.4% in the quarter. This positive trend highlights the enduring importance of e-commerce and Target's ongoing efforts to enhance its online shopping experience. Further emphasizing its commitment to customer engagement, Target successfully relaunched its popular Target Circle loyalty program to cultivate brand affinity and drive repeat purchases. Target aims to solidify its position as a destination for value-conscious consumers by offering personalized deals, recommendations, and an improved digital interface. In addition to the ongoing pressure on discretionary spending, Target is grappling with increased selling, general and administrative (SG&A) expenses. These elevated costs, partly attributable to strategic investments in their workforce and marketing initiatives, could further erode profit margins if not carefully managed. Despite a challenging first quarter, Target projects a return to growth, forecasting a 0% to 2% increase in comparable sales for the second quarter. This cautious optimism is also reflected in their full-year guidance, which anticipates a similar 0% to 2% comparable sales increase and earnings per share ranging from $8.60 to $9.60. Achieving these targets will require adept execution, demanding Target effectively manage rising costs, optimize inventory levels, and strike a delicate balance between price competitiveness, which attracted its core customer base, and the brand desirability it has cultivated in recent years. Target Co. (TGT) Price Chart for Thursday, May, 23, 2024 A Comparative Lens on Performance It is essential to look beyond top-line figures to better understand these retail giants' performance. By examining key financial ratios, we can gain insights into their financial health, efficiency and risk profiles, providing a good comparison for the retail investor. A key indicator of profitability is the gross margin rate, which reflects the percentage of revenue retained after accounting for the cost of goods sold. Walmart maintains a clear advantage in this area, reflecting its scale and efficiency in procuring and distributing goods. In the middle of its strategic shift, Macy's faces pressure on its gross margin as it seeks to balance premium offerings with competitive pricing. Impacted by a higher mix of discretionary goods and increased promotional activity, Target also lags behind Walmart in this metric. Another crucial measure is the operating margin rate, which provides insight into a company's ability to control operating costs and convert revenue into profit. Here again, Walmart's operational prowess shines through, boasting a higher operating margin than Macy's and Target. This superior performance stems from a combination of efficient supply chain management, a lean cost structure and the ability to leverage its vast scale to negotiate favorable terms with suppliers. Inventory turnover is the metric that measures how efficiently a company manages its inventory, revealing another aspect of operational efficiency. A higher inventory turnover ratio generally indicates that a company is selling its products quickly and efficiently, reducing the risk of obsolescence and minimizing storage costs. In this regard, Walmart demonstrates its prowess again, boasting a significantly higher inventory turnover rate than Macy's and Target. This superior inventory management reflects Walmart's sophisticated supply chain capabilities and focus on high-volume, essential goods. Finally, examining the debt-to-equity ratio offers a glimpse into a company's financial leverage and risk tolerance. A lower ratio indicates that a company relies less on borrowed funds and more on shareholder equity, generally signifying lower financial risk. In this aspect, Macy's stands out with the lowest debt-to-equity ratio, suggesting a more conservative approach to financing its operations. While carrying more debt, Walmart boasts a strong cash flow, mitigating some risks associated with higher leverage. Target falls somewhere in between, balancing utilizing debt to fund growth initiatives and maintaining a manageable debt load. The Digital Frontier: Three eCommerce Strategies The digital part of the equation continues to reshape retail, demanding constant adaptation and innovation. Despite its massive size, Walmart has demonstrated remarkable agility, rapidly scaling its e-commerce operations to become a formidable force in online retail. Its strategy centers on leveraging its vast store network for fulfillment, enabling convenient pickup and delivery options that rival dedicated online retailers. Traditionally committed to brick-and-mortar retail, Macy's has been slower in embracing the digital shift. However, its "Bold New Chapter" plan acknowledges the importance of a robust online presence. Macy's is investing in enhancing its website and mobile app, expanding its online assortment and improving the digital shopping experience. Furthermore, the company is exploring marketplace opportunities, allowing third-party sellers to offer products on its platform, potentially expanding its reach and attracting a broader customer base. With its strong digital foundation, Target continues refining its omnichannel approach. The company's investments in store-based fulfillment, including its popular Order Pickup and Drive-Up services, demonstrate its commitment to seamlessly blending its physical and digital channels. Additionally, Target's strategic partnerships with delivery services like Shipt further expand its reach and provide customers with flexible fulfillment options. The Q1 2024 retail earnings illustrate the multifaceted dynamics shaping the retail industry. Despite each company's unique approach, specific commonalities have emerged. These recurring themes encompass the imperative significance of value-oriented offerings, the unstoppable growth of eCommerce, and the imperative for agility and innovative strategies in a constantly changing market sector. The retail earnings season has taught investors that success, despite an uncertain future, belongs to those who can anticipate and adapt to the changing needs and desires of the consumer. Investors seeking to capitalize on the opportunities within this market must stay informed about these evolving trends and carefully assess each company's strategic choices and risk profiles. Before you consider Walmart, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Walmart wasn't on the list. While Walmart currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Toblerone maker Mondelēz fined €337.5m for anti-competitive practices 2024-05-23 12:01:00+00:00 - The owner of Toblerone, Milka and Oreo has been fined €337.5m (£288m) for anti-competitive practices in the EU. The US food group Mondelēz is one of the world’s largest confectionery companies and also owns Ritz and TUC biscuits, Cadbury and Côte D’Or chocolate and the coffee brands JAG, Jacobs and Velours Noir. It was found to have been involved in 22 unfair trade practices, according to the European Commission on Thursday. It meant that wholesalers and shoppers and traders were prevented from buying chocolate bars in another member state where they could be up to 40% cheaper or selling into a market where they could get a higher price for their product. “It is blatantly illegal,” said the EU’s competition commissioner, Margrethe Vestager, adding that the fine sent a “clear signal” the commission would penalise any company that broke the single market rules. “This case is about the price of groceries, which is a key concern to European citizens – and even more obvious in times of very high inflation, where many are in a cost of living crisis.” She said the EU investigation, which started in 2019, showed that Mondelēz had “illegally restricted retailers from sourcing these products from member states where prices are lower” to maintain higher prices. “This harmed consumers who ended up paying more for chocolates, biscuits and coffee,” she said. The restrictive practices breached internal market rules that allowed shoppers to buy from a different member state if products were cheaper or manufacturers or wholesalers to sell in a member state where they got higher prices for their goods. This “parallel trade” was “at the heart” of the concept of the single market, Vestager told reporters. She said the price differences between member states for chocolate ranged between 10% and 40% and “sometimes more”. Vestager said the commission had found that Mondelēz had prevented 11 distributors “from making such sales either by imposing contractual restrictions or by asking them to request permission on a case by case basis”. It also found it had abused its dominant position. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion In one instance Mondelēz took Côte D’Or chocolate bars off the shelves in the Netherlands to “prevent retailers from re-selling them in Belgium” where they were more expensive. In another case it prevented a wholesaler from buying its chocolate in Germany where it was cheaper. Vestager said the breaches were “very serious” but the commission took account of the fact that Mondelēz had cooperated with the investigation. In light of this, and the “efficient resolution” of the case, it had decided to reduce the fine by 15%. The unfair practices had stopped in 2020, the commission said.
Williams-Sonoma Stock Forecast to Hit $500? Here’s How 2024-05-23 11:41:00+00:00 - Key Points Williams-Sonoma had another solid quarter with a strong margin and capital return. The balance sheet is as healthy as even with cash rising, inventory sound, and no debt. The stock broke to a new high and could continue higher by $200 at the low-end of the target range. 5 stocks we like better than Williams-Sonoma Williams-Sonoma’s NYSE: WSM stock price is heading to $500 for three reasons: its market, operations, and technical outlook. All else aside, the technical action has been robust for the last year and shows little signs of slowing. The latest earnings report has the market up to a new high, breaking out of a consolidation range and heading higher, driven by sustainable operations, margin strength, cash flow, and capital return. Because the rally preceding the breakout is worth nearly $200 or 200%, it could advance by those figures again, putting the minimum target at $500 or more than 50% from the $330 level. Get Williams-Sonoma alerts: Sign Up Williams-Sonoma had a Cosy Quarter, Widening Margin and Outperforming Williams-Sonoma Today WSM Williams-Sonoma $284.56 +4.63 (+1.65%) 52-Week Range $109.44 ▼ $348.51 Dividend Yield 1.59% P/E Ratio 19.53 Price Target $258.38 Add to Watchlist Williams-Sonoma’s Q1 results are mixed , with revenue aligning with the consensus and earnings outperforming. The top line contracted by 5.7%, which is not good, but the contraction was expected due to post-COVID normalization and the impact of high interest rates and inflation on retail However, results are mixed segmentally, highlighting the company’s diversification and resilience in core markets. Pottery Barn was the weakest link, with a contraction of 11%. West Elm also contracted by 4%, but the core Willams-Sonoma brand and Pottery Barn Kids grew. WSM grew by 0.9% and PBK by 2.8%, but the big news is the margin. Williams-Sonoma’s earnings results have shown brand strength, pricing power, and consumer resilience for years, but the new data surpasses the high end of expectations. Even when adjusting for an out-of-quarter event, the margin widened at the gross and operating levels on favorable merchandise margin and supply chain efficiency. The GAAP EPS of $4.07 beat by $1.37, including the out-of-quarter addition; adjusted for it, EPS of $3.48 is $0.80 better than last year and nearly $0.80 above the consensus, leading the company to raise its guidance. Williams-Sonoma reiterated its revenue guidance but raised the outlook for earnings. The company now expects an operating margin of nearly 18%, which is at the high end of its long-term goal. The news was well-received because it puts the consensus estimate reported by Marketbeat.com well below the new range and plays into the capital return outlook. Williams-Sonoma is a Fortress That Pays you to Own it Williams-Sonoma Dividend Payments Dividend Yield 1.56% Annual Dividend $4.52 Dividend Increase Track Record 19 Years Annualized 3-Year Dividend Growth 20.88% Dividend Payout Ratio 31.02% Next Dividend Payment May. 24 See Full Details Williams-Sonoma’s cash flow is robust and allows for solid capital returns . The Q1 results provided enough operating capital to pay dividends, repurchase shares, and build cash on the balance sheet. Cash is up roughly 6X compared to last year, with inventory down but only marginally compared to the cash build. Cash and inventory are now equal in size; the company is in lean shape and prepared to invest as it needs. Balance sheet highlights also include increased current and total assets, total liabilities down, no debt, and a 50% increase in equity The dividend is worth about 1.45% with shares at their new high, which is not a large payout but reliable and growing. The company is on track to equal Dividend Aristocrat quality within the next ten years and is increasing the payout at a substantially high 16% CAGR. Repurchases benefit shareholders, reducing the diluted count by a 2% average for the quarter, and are expected to continue through year-end. Williams-Sonoma Hits New High on Margin Strength Williams-Sonoma’s stock price surged more than 5% on the news and hit a new high. The bad news is that profit-taking gripped the market, causing it to sell off from the opening high. The move does not negate the power of the breakout, but sellers may cap gains in the near term. The critical support target is the previous all-time high. If that level holds, a rebound should form soon. If not, WSM stock could fall to $300 or lower before resuming the uptrend. Before you consider Williams-Sonoma, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Williams-Sonoma wasn't on the list. While Williams-Sonoma currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Google's AI search feature suggested using glue to keep cheese sticking to a pizza 2024-05-23 11:30:15+00:00 - Google's AI Overviews feature suggested a user put glue on pizza so the cheese would stay put. The feature uses AI to generate summaries but has produced some inaccurate responses. Google has said such errors are rare and that most summaries provide high-quality information. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time. Advertisement Google's new search feature, AI Overviews, seems to be going awry. The tool, which gives AI-generated summaries of search results, appeared to instruct a user to put glue on pizza when they searched "cheese not sticking to pizza." A screenshot of the summary it generated, shared on X, shows it responded with "cheese can slide off pizza for a number of reasons," and that the user could try adding "about ⅛ cup of non-toxic glue to the sauce to give it more tackiness." This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .
PDD Holdings Earnings Volatility Alerts Buyers 2024-05-23 11:06:00+00:00 - Key Points PDD stock has changed a little, even after tripling its net income for shareholders. The company keeps riding on the Chinese economy's tailwind from a consumer comeback. Analysts still see double-digit EPS growth for the rest of the year despite management's lack of guidance for 2024. Price targets suggest a potential 50% rally from here, and smart money has bought into that idea. 5 stocks we like better than Alibaba Group After a spectacular 36.4% run in the fourth quarter of 2023 earnings, shares of PDD Holdings Inc. NASDAQ: PDD have changed a little as the company released its first quarter 2024 results. However, investors can lean on the run-up to the announcement for a sentiment check, which delivered a 43.5% rally as markets geared up for a solid start to the year. Some may have gotten scared during the pre-market hours following the announcement, as the stock plummeted by nearly 15%. However, as some of Wall Street’s trading desks say, “the first move is always wrong,” as willing buyers came flooding in with orders at those seemingly cheap levels, rescuing the stock and pushing it to trade at a 2% advance throughout the day. Get Alibaba Group alerts: Sign Up That’s a big piece of evidence investors can take home if they still consider China a relatively safe place to invest their capital during this cycle. As PDD belongs to the consumer discretionary sector, arguably one of the first sectors to rally on an overall market recovery, the quarter’s financial results and price actions show a more profound trend at play. China’s Stock Market: Land of The Cheap PDD Today PDD PDD $153.63 +6.54 (+4.45%) 52-Week Range $59.98 ▼ $160.00 P/E Ratio 26.81 Price Target $157.23 Add to Watchlist At least, that’s what Wall Street legend Ray Dalio thought. The multi-billion hedge fund manager saw it fit plow into Chinese stocks through theas early as the third quarter of 2023. Knowing that Dalio is a macro investor looking for relatively undervalued investments, here’s his logic. China’s stock market recently fell to near-decade lows, and the average yield on equities rose to nearly 5.5%. Things get interesting when investors compare this yield to the Chinese 10-year bond yield, which hovers around 2.3% today. Whenever stocks offer a higher yield than the so-called ‘risk-free’ rate from government securities, it typically flashes a strong buy signal for those with the stomach to get in. The same thing happened in 2020 for the U.S. market, when bonds dropped to below 1% while the S&P 500 paid a yield of nearly 2.5%. What followed was a 115% rally for the index over the next 12 months, a run-up to remember for those who were brave enough to buy during the COVID-19 pandemic. Taking another angle into individual stocks, Scion Capital’s Michael Burry (yes, the guy who called the 2008 financial crisis) just made Alibaba Group NYSE: BABA and JD.com Inc. NASDAQ: JD his biggest portfolio holdings today. A direct competitor to Burry’s top holdings, PDD offers investors twice the growth and momentum to take advantage of the potential recovery in the Chinese stock market. PDD Starting 2024, Just Right That’s the pride behind the company’s press release, where management led the announcement with 131% revenue growth over the year, bringing the total to a staggering $12 billion. The juice came from the benefits of achieving economies of scale for PDD, as operating profits soared 275% over the year, outpacing revenue due to increased efficiency within the business. Likewise, net income rose by 246% over the year, which should have been enough to send the stock flying. However, as geopolitical risks are on the list of potential risks for those looking to invest in Chinese stocks, PDD’s price action seemed a bit contained compared to its financials; perhaps the potential growth had already been priced in after the near 50% rally before the announcement came out. Though management provided no guidance or outlooks for the rest of the year, investors can lean on other economic trends to develop their assumptions. One is the Chinese inflation rate, which has been rising for the past quarter to show increasing consumer demand. More than that, Wall Street analysts still think that PDD's earnings per share (EPS) could rise by 26.1% over the next 12 months. These projections could be based on the Chinese consumer's attempt to return, a thought also reflected in analyst price targets. Those at J.P. Morgan Chase were bold enough to slap a $190 valuation for PDD, daring the stock to rally by nearly 30% from where it trades today despite the near 50% recent rally. Benchmark analysts were even bolder in their $220 valuation today. To prove this right, the stock would need to rally by another 50% from today’s prices. So-called smart money is also looking to increase its stakes in PDD’s future, as the Vanguard Group raised its stake in the stock by 0.4% in the past quarter to bring its net investment up to $2.8 billion as a vote of confidence. Before you consider Alibaba Group, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Alibaba Group wasn't on the list. While Alibaba Group currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
NVIDIA’s Rally is Far From Over, Neither is Volatility 2024-05-23 11:00:00+00:00 - Key Points NVIDIA posted another stunning quarter with outperformance driven by increased demand for data center chips and services. Guidance was raised above consensus and will lead the analysts to revise their estimates and price targets. The stock is at a new high and likely to trend higher, but volatility is also expected to rise. 5 stocks we like better than NVIDIA NVIDIA NASDAQ: NVDA produced another beat-and-raise quarter that says one thing: as much hype as there is about the AI industry, the market grossly underestimated the impact and importance of NVIDIA semiconductors. The company’s results are so above the consensus estimate they are mind-boggling without the fact that this is the 5th consecutive quarter for such results. Based on the results, quarterly achievements, and guidance, the next quarter will be just as good. The takeaway is that a revolution in data centers is underway, which centers on NVIDIA and its super-computing chips. The data center industry is growing at a double-digit CAGR and shifting from old chips to new accelerators, providing a dual-tailwind for the business. Get NVIDIA alerts: Sign Up NVIDIA Hits New High on Beat-and-Raise Quarter NVIDIA Today NVDA NVIDIA $1,037.99 +88.49 (+9.32%) 52-Week Range $298.06 ▼ $1,063.20 Dividend Yield 0.02% P/E Ratio 86.93 Price Target $1,002.18 Add to Watchlist NVIDIA had a stunning quarter with revenue of $26.04 billion, growing 262% compared to last year and beating the consensus estimate by 580 basis points. The 580 basis points are a significant margin of outperformance, made more so by the revisions; analysts set the bar high. The strength was driven by growth in all segments led by the Data Center. Data Center grew by 427% to $22.6 billion and accounted for the bulk of revenue, about 87%. Growth was underpinned by demand for generative AI training on the Hopper platform within the DC segment. Automotive was the weakest segment, with a 17% increase. Gaming fell 8% sequentially but rose 18% YOY, while Profesional Visualization increased by 45%. Margin is another strength. The company is spending heavily to meet demand and advance technology, but leverage gained from the top-line strength more than offsets it. The result is high-triple-digit increases in operating income, net income, and GAAP and adjusted earnings. The GAAP EPS is up 630% and adjusted 461% to outpace consensus by nearly 1000 basis points. The results are not a fluke. Demand for the chips is strong and will be sustained due to the upcoming release of new technology, including the Blackwell platform. The Blackwell platform is a new GPU micro-architecture for generative AI following the Hopper platform, which now dominates the market. It is eagerly awaited by companies like Amazon’s NASDAQ: AMZN AWS, Alphabet’s NASDAQ: GOOGL Google Cloud, Microsoft NASDAQ: MSFT, and Oracle NYSE: ORCL, the other four leaders in the AI revolution. NVIDIA Guidance Shocks Market: Analysts Raise Targets, Forecast NVIDIA MarketRank™ Stock Analysis Overall MarketRank™ 4.84 out of 5 Analyst Rating Moderate Buy Upside/Downside 6.0% Upside Short Interest Healthy Dividend Strength Weak Sustainability -1.26 News Sentiment 0.60 Insider Trading Selling Shares Projected Earnings Growth 15.36% See Full Details NVIDIA’s Q1 results are not the end of the market-moving news. Demand for chips and services continues to grow, leading the company to issue guidance far above consensus as the Q1 results. The company forecasts $28 billion in net revenue compared to the $26.5 billion consensus reported by Marketbeat.com, which is about 107% YOY growth and is sufficient to demand revisions from analysts The bad news is that as robust as it is, growth is now forecast to slow versus accelerate, which may become a problem for the market later this year. Until then, the consensus estimate assumes the stock is fairly valued near $1,000, with revisions leading the market. The latest updates include a new high target from Rosenblatt set two days before the release. At the time, they saw the stock at $1,400 or about 40% of upside. NVIDIA Hits New High; Volatility Expected NVIDIA hit a new high following the release and will likely continue to trend higher this year. However, investors should expect volatility and whipsaw action along the way to provide ample opportunity to buy the dips. The stock is up 900% in the last eighteen months, providing an attractive profit for early investors and a stock split is in play. The company approved a 10-for-1 stock split effective June 7th to make the stock price more accessible for employees and a wider range of investors. Record highs split-adjusted pricing and more shares could result in a price correction and entry point for new money. Before you consider NVIDIA, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NVIDIA wasn't on the list. While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Global-e Online is a Must-Own eCommerce Stock 2024-05-23 11:00:00+00:00 - Key Points Global-e Online had a robust quarter and is guiding the market higher. Analysts are raising their targets and seeing this stock return to recent highs. The market is down following the Q1 release and may move lower before the rebound begins. 5 stocks we like better than Global-E Online Global-e Online NASDAQ: GLBE is succeeding because it offers three things merchants need in one place: eCommerce, direct-to-consumer access, and international expansion. eCommerce is entrenched in our lives and a requirement for any business today. International expansion, specifically cross-border transactions, is a critical avenue for businesses to tap because it exponentially expands the addressable market for any business. Direct-to-consumer business models are the new rage in retail, cutting out the middlemen in favor of higher-margin businesses. To put the company and its platform into perspective, consider that brands under its service umbrella include Ralph Lauren NYSE: RL, Disney NYSE: DIS and Netflix NASDAQ: NFLX. Disney and Netflix are two digital powerhouses that use this service. They use it because of its simplicity and the speed at which new markets are opened for retailers. Among the highlights of the services provided are localized advertisements and payment platforms, ensuring businesses and consumers speak the same language and use the same currencies. Get Global-E Online alerts: Sign Up Global-e Had a Solid Quarter; Guides Higher Global-E Online Today GLBE Global-E Online $29.45 -1.35 (-4.38%) 52-Week Range $27.30 ▼ $45.72 Price Target $43.83 Add to Watchlist Globa-e Online had a solid Q1 , growing revenue 24% to $145.9 million. The top line outpaced the consensus estimate by 300 basis points and led to increased guidance. The business was supported by growth in service fees and fulfillment services, leading to a wider adjusted margin. Gross merchandise volume, a leading indicator of results, increased by 32% to set a new record aided by the addition of new brands and launches in new markets. Margin news is good. The company posted another GAAP loss, but it was better than expected and quarterly losses are narrowing. The $0.19 GAAP loss is a nickel ahead of consensus and puts the company on track to reach profitability ahead of forecasts. Adjusted EBITDA is up 50% YOY and positive. Guidance is another strength. The company issued its Q2 guidance and raised guidance for the year. Both are strong relative to the analyst's consensus forecast reported by Marketbeat, and the full-year outlook will likely be raised again. New brands and markets are being opened regularly, and the partnership with Shopify is progressing well. Shopify Markets Pro connects the two platforms, allowing Global-e to handle all cross-border transactions. Global-e Analysts LIft Targets The analysts' activity following the Q1 release is mixed. Still, the net result is bullish for the market, with two maintaining their ratings and price targets, two raising price targets, and one upgrading the stock. The takeaway is that eleven analysts rate this stock at Moderate Buy and are leading the market for it higher. The consensus target has been flattish over the last quarter but is edging higher now and is up 20% compared to last year. The consensus implies a 43% upside at $43, and many recent targets, including two of the post-release revisions, are above it. The price action following the release is also mixed. The stock popped on the initial release but hit resistance at critical levels and is moving lower now. The critical levels coincide with major moving averages and suggest downward price pressure may continue despite the analysts' enthusiasm. There is a floor at $28.50 that may keep the market from falling further, but there is also the risk. In this scenario, a move below $28.50 could lead the market to mid to low-$20s. One factor suggesting that a move below $28.50 is unlikely is institutional activity. A broad representation of institutions has bought this stock on balance for three consecutive quarters. They own 95% of the stock, and their holdings grow. A move to the one-year low would be an opportune time to buy more. The stock also comes with a relatively high 10% short interest, so short-covering could quickly come into play. Again, the critical line is near $28.50. If the market confirms support, the short sellers may close positions and aid in a short-covering rally. Before you consider Global-E Online, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Global-E Online wasn't on the list. While Global-E Online currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
3 High Beta Stocks to Beat a Low VIX 2024-05-23 10:20:00+00:00 - Key Points As the VIX gets lower in this cycle, investors could scramble to find a place for higher returns around the sleepy stock market. Characterized by a high beta, these stocks offer the technical foundation of a more 'exciting' ride for those who need to see a potentially green quarter. Analysts like them, as their price targets and EPS projections show. 5 stocks we like better than PulteGroup Every once in a while, the market's volatility index (the VIX) goes to an extreme. Whether to the upside or downside, these significant swings bring about massive opportunities for investors who know how to ride the market's volatility cycle. Today, the VIX sits between 11.5% and 13.0%, levels not seen before the COVID-19 pandemic. Knowing how little volatility there is today, investors have to improvise new ways to pump up returns within their portfolios since there are no profits without volatility. This is where a savvy eye comes into play. Today, your eye should look to land on high beta stocks. This group is characterized by having more significant moves – on average – compared to the S&P 500, so a high beta is desirable when the market isn't moving much. Get PulteGroup alerts: Sign Up Investors shouldn't lose track of other fundamentals that matter within this list. Starting from high beta and finishing with other attractive factors, stocks like Dutch Bros Inc. NYSE: BROS, Wayfair Inc. NYSE: W, and even RH NYSE: RH could potentially make it into the watchlist of those investors – and traders – looking for a volatility fix. Smart Money Landed on Dutch Bros Stock Dutch Bros Today BROS Dutch Bros $34.26 -1.67 (-4.65%) 52-Week Range $22.67 ▼ $38.41 P/E Ratio 190.34 Price Target $37.33 Add to Watchlist After boosting its stake in Dutch Bros stock by 35% over the past quarter, the Vanguard Group now has $211.6 million running for the stock to deliver some upside through this sleepy stock market. Like analysts at Wedbush, those in charge of valuing stocks for a living saw it fit to place a $45 price target on Duch Bros stock. Calling for a 25.3% upside from where the stock trades today is a sort of 'congratulations' for those asset managers at Vanguard; here's where returns could come from. A beta of 2.4 brings Dutch Bros stock into the upper end of volatility. Now, investors have to determine if this volatility will be upside or downside and whether these analyst targets are correct. With an expected 24.1% earnings per share (EPS) growth in the next 12 months, investors can consider the company's above-average growth rate when making a decision on BROS. Markets offer another angle to build a bullish case for this stock. With a massive 201.6x P/E, Dutch Bros trades at nearly 10 times the 22.1x P/E at which Starbucks Co. NASDAQ: SBUX trades today. Stocks typically trade at these sorts of premiums for a reason, and markets are still willing to pay this premium for Dutch Bros high beta. Analysts bid the stock up to 94% of its 52-week high, another sign of market optimism toward its future. Compared to Starbucks, which fell to 75% of its 52-week high, the technical factors and fundamentals favor BROS stock. A Real Estate Boom is The Least of Wayfair's and RH's Problems Warren Buffett spotted the massive wave in the U.S. real estate sector that will come shortly. He started buying at the top of the value chain, choosing construction stocks like D.R. Horton Inc. NYSE: DHI and PulteGroup Inc. NYSE: PHM, as he started buying in the fourth quarter of 2023. According to the Intercontinental Exchange, most mortgages in the U.S. carry an average interest rate of 3.25%, so homeowners aren't excited to sell their homes just to look for a new one at a 7.3% rate today. More than that, the average home price has risen by 32% since the pandemic, so would-be homebuyers must deal with not only a more expensive home but also twice as expensive mortgage rates. Knowing that a new flux of inventory could hit the residential sector, investors flocked to stocks like Wayfair. Morgan Stanley analysts slapped a $90 price target on the stock, daring it to rally by as much as 45% from where it trades today. RH didn't fall too far from the Wayfair tree, as Wells Fargo analysts liked it enough to announce a $360 price tag. This target would need RH stock to jump by 40.5% from today's price to prove analysts right. Now, with a beta of 3.3, Wayfair stock could set investors up for a wild ride to – hopefully – the upside. So far, analysts agree through price targets and their over 100% EPS growth projections for the stock. Even though RH's beta is lower than Wayfair's, at only 2.5, it's still considered high enough to deliver some excitement. Analysts now project up to 71.4% EPS growth for the company in 2024. Before you consider PulteGroup, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and PulteGroup wasn't on the list. While PulteGroup currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Nvidia forecasts quarterly revenue above estimates, unveils stock split 2024-05-23 05:49:00+00:00 - By Arsheeya Bajwa and Stephen Nellis (Reuters) - Nvidia forecast quarterly revenue above estimates on Wednesday and announced a stock split, lifting its shares to record highs and impressing investors who have tripled the chipmaker's market value in the past year on AI optimism. Nvidia shares jumped 5.9% to $1,005 in extended trade, peaking for the first time above the psychologically important $1,000 mark. The AI poster child's stock has risen more than 90% so far this year. The Santa Clara, California-based company said the ten-for-one stock split would be effective on June 7. It also said it was raising its quarterly dividend by 150% to 1 cent per share, on a post-split basis. "Death, taxes, and NVDA beats on earnings. Even in the face of huge expectations, the company once again stepped up and delivered," said Ryan Detrick, chief market strategist at Carson Group. "The always important data center revenue was strong, while future revenue was also impressive." Wall Street's main event so far this week, Nvidia's earnings report could add fresh fuel to a stock market rally that has lifted indexes to record highs this year. Following Nvidia's results, shares of rival AI-related chipmakers Advanced Micro Devices and Broadcom each rose about 2%. Alphabet, Microsoft, Amazon.com and other technology companies have been competing for a limited supply of Nvidia's high-end chips as they race to dominate AI computing. During a conference call with analysts, CEO Jensen Huang said Nvidia's upcoming Blackwell AI chips will ship in the current fiscal quarter, with production increasing in the following quarter. Chief Financial Officer Colette Kress said demand for Blackwell chips could exceed supply "well into next year." Nvidia's contract chipmaker, Taiwan Semiconductor Manufacturing, has also been working to increase its advanced packaging capacity, a key supply-chain constraint for the processors. The Taiwanese company said in April it expects to more than double its advanced packaging capacity this year. Nvidia forecast fiscal second-quarter revenue of $28 billion, plus or minus 2%. Analysts on average were expecting revenue of $26.66 billion, according to LSEG data. First-quarter revenue surged 262% year-over-year to $26.04 billion, beating estimates of $24.65 billion. Net income soared 628% to $14.88 billion. "Demand for NVIDIA's GPU chips remains white-hot," said Logan Purk, an analyst at Edward Jones. "These results are likely enough to satiate investors' appetites, and reassure the market that AI investment has not seen a slowdown yet." Story continues Dominating more than 80% of the market for AI chips, Nvidia stands in a unique position as both the largest enabler as well as beneficiary of surging AI development. Sales at the data center segment, its largest by revenue, grew 427% to $22.6 billion in the first quarter ended April 28, coming in above estimates of $21.320 billion, according to data from FactSet. Among Nvidia's customers is Meta Platforms, which last month increased the midpoint of its 2024 capital expenditure forecast by about $4 billion. The high performance of Nvidia's chips makes them difficult to replace in present AI data centers. Adding to this lead is its proprietary CUDA software framework that developers use to program the AI processors. While most so-called hyperscalers are also developing their own custom AI chips, analysts do not expect these to eat away at Nvidia's market share. Nvidia expects second-quarter adjusted gross margin to be 75.5%, plus or minus 50 basis points. Analysts on average forecast gross margin to be 75.8%. Nvidia reported first-quarter adjusted gross margin of 78.9% compared with estimates of 77%. Aspiring competitor AMD had recorded an adjusted margin of 52% in its fiscal first quarter. Excluding items, the company earned $6.12 per share in the first quarter, beating estimates of $5.59. (Reporting by Arsheeya Bajwa in Bengaluru and Stephen Nellis in San Francisco; Additional reporting by Noel Randewich in Oakland, California; Editing by Arun Koyyur and Matthew Lewis)
Stock market today: Stocks close lower after Fed minutes, ahead of Nvidia earnings 2024-05-23 05:32:00+00:00 - US stocks slipped from record highs on Wednesday as investors waited for AI bellwether Nvidia's (NVDA) pivotal earnings and digested minutes from the Federal Reserve's May meeting that revealed some officials were willing to hike rates if necessary. The S&P 500 (^GSPC) slid about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) slipped around 0.2%. The blue-chip Dow Jones Industrial Average (^DJI) fell roughly 0.5%. After the close, Nvidia reported its highly anticipated first quarter earnings, which topped Wall Street estimates. The company also announced a 10-for-one stock split set to take effect June 7 and said it plans to raise its dividend from $0.04 per share to $0.10. Its stock rose more than 2% in after-hours trading. Investors were also greeted with the minutes from the Federal Reserve's May meeting on Wednesday. Markets took a notable leg lower as the minutes revealed "various" Fed officials mentioned a "willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate." Read more: How does the labor market affect inflation?
Bird Flu Cases Spur Retail Trader Rush Into Vaccine Stocks 2024-05-23 05:12:00+00:00 - (Bloomberg) -- Mounting cases of bird flu in humans is luring the day trading crowd to snap up stock in vaccine developers. It’s a familiar setup for industry veterans who have witnessed past trading frenzies at the first signs of an outbreak. Most Read from Bloomberg Shares of CureVac NV, which has a bird-flu vaccine in early-stage testing, jumped 15% Wednesday as concerns grow over a potential outbreak of bird flu in humans following reports of a new case in Australia. Novavax Inc. — which recently touted its plans to explore an avian flu vaccine — gained for the third day closing at its highest level since December 2022. Shares of Moderna Inc. rose 2.9% in afterhours trading while Pfizer Inc.’s gained 1.4% following a report that the companies are in talks with the US government about the development of vaccines for bird flu. Moderna and fellow Covid shotmaker BioNTech SE notched double-digit advances in regular trading, while Pfizer rose 3.6%. Read more: Second US Human Bird Flu Infection Reported in Michigan “Bird flu is adding momentum to stocks that were already going higher,” Jared Holz, a health-care specialist at Mizuho said. “A lot of it is probably just big picture — more retail-oriented trading on the back of these headlines linking the problems that are arising with bird flu with the vaccine stocks.” Past outbreaks like Ebola, Zika and monkey pox have spurred similar swings — particularly for smaller players — as companies come out of the woodwork touting their plans for a vaccine or treatment. Day trader chatrooms search for potential winners but only a handful may eventually emerge — if at all — with successful treatments. Even fewer stocks end up becoming household names like Moderna or BioNTech. So far, the stocks’ reactions have been “fairly extreme,” Holz said. He recommended selling into the strength as its as of yet unclear if the illlness will spread or have any impact on revenue, though “the story is definitely catching on more.” Read more: US Bird Flu Surveillance Gets $100 Million Funding Boost Many of the vaccine names had been jumping prior to the newly reported case. Novavax’s stock has been soaring ever since it inked a license pact with Sanofi — and revealed its bird flu plans — two weeks ago. A rally in Moderna shares kicked off after a recent patent win against Pfizer. Story continues --With assistance from Matthew Griffin. (Updates with afterhours trading.) Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.
Nvidia Forecast Shatters Estimates as AI Boom Stays Strong 2024-05-23 05:07:00+00:00 - (Bloomberg) -- Nvidia Corp., the chipmaker at the center of an artificial intelligence boom, gave another bullish sales forecast, showing that spending on AI computing remains strong. Most Read from Bloomberg Second-quarter revenue will be about $28 billion, the company said Wednesday. Analysts on average had predicted $26.8 billion, according to data compiled by Bloomberg. Results in the fiscal first quarter, which ran through April, also beat projections. “The next industrial revolution has begun,” Chief Executive Officer Jensen Huang said in a statement, echoing one of his favorite themes. “AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities.” The upbeat outlook reinforces Nvidia’s status as the biggest beneficiary of AI spending. The company’s so-called AI accelerators — chips that help data centers develop chatbots and other cutting-edge tools — have become a hot commodity in the past two years, sending its sales soaring. Nvidia’s market valuation has skyrocketed as well, topping $2.3 trillion. The shares rose about 4% in extended trading on Wednesday. They had already gained 92% this year through the close, fueled by investor hopes that the company would continue to shatter expectations. The Santa Clara, California-based company also announced a 10-for-1 stock split and boosted its quarterly dividend by 150% to 10 cents a share. Nvidia, co-founded by Huang in 1993, started as a provider of graphics cards for computer gamers. His recognition that the company’s chips were well-suited to developing artificial intelligence software helped open a new market — and gave him a jump on competitors. The release of OpenAI’s ChatGPT in 2022 then sparked a race between major technology companies to build their own AI infrastructure. The scramble made Nvidia’s H100 accelerators a must-have product. They sell for tens of thousands of dollars per chip and are often in scarce supply. But much of this new revenue has come from a small handful of customers. A group of four companies — Amazon.com Inc., Meta Platforms Inc., Microsoft Corp. and Alphabet Inc.’s Google — are Nvidia’s largest buyers and account for about 40% of sales. Huang, 61, is trying to spread his bets by producing complete computers, software and services — aimed at helping more corporations and government agencies deploy their own AI systems. Story continues In the fiscal first quarter, Nvidia’s revenue more than tripled to $26 billion. Excluding certain items, profit was $6.12 a share. Analysts had predicted sales of about $24.7 billion and earnings of $5.65 a share. Nvidia’s data-center division — now by far its largest source of sales — generated $22.6 billion of revenue. Gaming chips provided $2.6 billion. Analysts had given targets of $21 billion for the data-center unit and $2.6 billion for gaming. Nvidia emphasized Wednesday that it wants to sell its technology to a wider market — moving beyond the giant cloud-computing providers known as hyperscalers. Huang said that AI is moving to consumer internet companies, carmakers and health-care customers. Countries also are developing their own systems — a trend referred to as sovereign AI. These opportunities are “creating multiple multibillion-dollar vertical markets” beyond cloud service providers, he said. Still, the hyperscalers remained a critical growth driver for Nvidia last quarter. They generated approximately 45% of the company’s data-center revenue. That suggests Nvidia is in the early stages of diversifying the business. The company’s new chip platform, called Blackwell, is now in full production, Huang said. And it lays the groundwork for generative AI that can handle trillions of parameters. “We are poised for our next wave of growth,” he said. (Updates with more from report in final four paragraphs.) Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.
Nvidia stock pops 4% after earnings beat forecasts, announces stock split and dividend hike 2024-05-23 04:24:00+00:00 - Nvidia (NVDA) reported first quarter earnings after the bell on Wednesday that topped expectations while also announcing a 10-for-1 stock split and an increased dividend, following some of its Big Tech peers in doling out heftier quarterly payments to shareholders. The company reported adjusted earnings per share (EPS) of $6.12 on revenue of $26 billion, a jump of 461% and 262%, respectively, from a year ago. Analysts were expecting adjusted EPS of $5.65 on revenue of $24.69 billion, according to data from Bloomberg. The company reported adjusted EPS of $1.09 on revenue of $7.19 billion in the same quarter last year. In the current quarter, Nvidia expects revenue of $28 billion plus or minus 2%. That’s better than the $26.6 billion analysts had expected. Nvidia stock rose as much as 4% in extended trading on Wednesday. “Our data center growth was fueled by strong and accelerating demand for generative AI training and inference on the Hopper platform," Nvidia CEO Jensen Huang said in a statement. "Beyond cloud service providers, generative AI has expanded to consumer internet companies, and enterprise, sovereign AI, automotive and healthcare customers, creating multiple multibillion-dollar vertical markets." Wall Street analysts have previously raised concerns about the share of Nvidia's Data Center revenue that comes from hyperscalers like Microsoft (MSFT), Google (GOOG, GOOGL), Amazon (AMZN), and other Big Tech names. That's especially true as those companies roll out their own AI accelerator chips. Still, while non-hyperscaler use of Nvidia chips is growing, CFO Colette Kress said in her own commentary that large cloud providers accounted for mid-40% of the company's Data Center revenue. Nvidia's Data Center revenue jumped 427% year-over-year to $22.6 billion, accounting for 86% of the company's total revenue for the quarter. But Kress pointed out that revenue out of China was down significantly in the quarter, since the company was forced to halt shipments of its most powerful chips to the country. What's more, she said she expects the market in the region to remain very competitive going forward. Nvidia's gaming segment, which was previously its most important business, saw revenue of $2.6 billion The company's stock split — in which shareholders will receive 10 shares of every one share of the company they currently own — will be effective June 7, and its new dividend will be paid June 28 to shareholders as of June 11. The stock split will likely fuel speculation Nvidia could be added to the price-weighted Dow Jones Industrial Average (^DJI), joining Big Tech peers like Apple (AAPL), Amazon, and Microsoft. Nvidia stock was trading near $980 per share in after hours trading on Wednesday, meaning the stock would be expected to trade at $98 after the split. Story continues Nvidia's beefed up dividend also follows similar moves announced so far this year from the likes of Meta (META) and Alphabet, which both initiated quarterly dividends for the first time, and Apple, which raised its dividend earlier this month. NVIDIA's CEO Jensen Huang displays products on-stage during the annual Nvidia GTC Artificial Intelligence Conference at SAP Center in San Jose, California, on March 18, 2024. (Photo by JOSH EDELSON / AFP) (Photo by JOSH EDELSON/AFP via Getty Images) (JOSH EDELSON via Getty Images) Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley. Click here for the latest technology news that will impact the stock market. Read the latest financial and business news from Yahoo Finance
How the return of young women buying knickers reshaped M&S 2024-05-22 23:53:00+00:00 - The popularity of M&S lingerie among younger shoppers was boosted by its 'B by Boutique' range Demand for Marks & Spencer knickers among younger women has helped fuel a £1bn sales boost at the retailer, propelling it to its strongest performance since 1997. M&S said more people than ever were buying lingerie in its stores, with one in two women purchasing bras from the retailer. In total, it sold 20 million bras last year and 60 million pairs of knickers. Demand was particularly strong among Millennials and Gen Z customers, M&S said, with shoppers under the age of 30 accounting for a third of underwear sales – double the level a year ago. M&S said the popularity of its lingerie among younger shoppers was boosted by its “B by Boutique” range which is known for bolder and brighter styles. Sales of the range, which launched in 2022, jumped 16pc over the year. M&S’s success in appealing to younger shoppers will be seen as an indication that chief executive Stuart Machin’s turnaround efforts are bearing fruit. Bosses had been battling to revive the clothing division, with previous executives saying the company had been chasing older customers. M&S has been seeking to reverse years of declines within the clothing business by launching new, more fashionable lines. Collaborations with social media influencers have also boosted demand, while the actor Sienna Miller was made the face of its autumn womenswear campaign. It will also design the off-duty suits worn by the men’s England football team at this summer’s European Championship. M&S said it now holds a 10pc share in the clothing and homeware market, after sales across the division jumped 5.3pc over the year. In the FTSE 100 company’s update to investors on Wednesday, Mr Machin said it was “the beginnings of a new M&S”. Shares in M&S surged almost 10pc to 300p following the update, the highest level since 2017. Peel Hunt analysts said there was “virtually nothing not to like” in the results. Ian Lance, of Redwheel, M&S’s third largest shareholder, said: “What is so exciting is that it feels like this turnaround strategy still has some way to go and yet this is not yet being reflected in the share price as many investors remain sceptical of the Marks recovery story.” Mr Machin said M&S had “wind in its sails” after its profits surged 58pc to hit £716.4m in the year to April. Analysts had forecast profits before tax and adjusted items of £684m. The retailer added it had ended the year “in the strongest financial health since 1997”, with cash excluding lease liabilities of £45.7m at the end of March, compared to net debt of £355.6m a year earlier. Story continues However, Mr Machin said “there remains much work to do”, adding he would “never say the transformation is finished at M&S”. He said: “Culture change is a job that is never ‘done’ and it is critically important to reshaping M&S. “We need to move faster and be ruthlessly challenging on the areas where progress has been slower, building a more effective digital and technology infrastructure, accelerating the move to a truly personalised customer experience, and resetting priorities in International.” M&S’s food division was the biggest sales driver during the year, growing by 13pc. Mr Machin said a “virtuous circle of investment in quality and innovation” had encouraged shoppers to buy more with the retailer. M&S has been investing heavily on refreshing its food ranges. The Telegraph revealed earlier this week that the retailer is planning to improve the quality of 1,000 more of its best-selling products including ready meals, sandwiches and cakes this year, having revamped more than 1,000 products last year. However, its online grocery business, which it runs as a joint venture with Ocado, suffered a £37.3m loss, compared to a £29.5m loss a year earlier. M&S offset the blow to profits with cost-saving efforts as well as a 9.3pc jump in revenues in the year, to more than £13bn from £11.9bn a year earlier. While M&S said there had been a marked improvement in revenues at Ocado, it said profitability remained “well below original expectations” for the venture. Tensions between the two retailers have been running high in recent months, with Ocado threatening to sue M&S in February over the final payment for the joint venture. The pair’s £750m joint venture Ocado Retail has failed to meet targets laid out when M&S agreed to set it up in 2019, Ocado said. On Wednesday, Mr Machin, responded to the claims, saying the initial agreement was “pretty clear”. He said: “On the contingent payment, the performance target was binary and it was dependent on earnings, and those earnings and that performance was not met.” He said the “slight disagreement” over the payment with Ocado was not affecting the day-to-day running of the grocery business. “We’re committed to the turnaround strategy for Ocado Retail, and we’re very focused on our delivery of that.” M&S said it has avoided focusing heavily on loyalty card promotions like some of its supermarket rivals. Mr Machin said M&S was not engaging in “tricksy pricing”, where it offers different prices to shoppers if they sign up to their schemes. “The reason I say tricksy is we don’t think that giving customers who are just on Sparks [M&S’s scheme] different special prices, and not giving those to everyone, is being a trusted retailer.” But he said M&S was currently rethinking its loyalty scheme. Broaden your horizons with award-winning British journalism. 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The USPS is repeatedly firing probationary workers who report injuries, feds claim 2024-05-22 22:32:00+00:00 - U.S. Postal Service holds job fair to fill hundreds of open positions U.S. Postal Service holds job fair to fill hundreds of open positions 03:30 The U.S. Postal Service will have to compensate a probationary mail carrier in Oregon who was fired after reporting an on-the-job injury, a scenario that plays out all too frequently at the USPS, federal officials allege. A federal judge has ordered the postal service to pay the worker $141,307 in lost wages and damages for emotional distress following a two-day trial, the Department of Labor announced on Wednesday. The USPS didn't immediately respond to a request for comment. "The U.S. Postal Service has fired probationary employees repeatedly after they reported workplace injuries," Marc Pilotin, regional solicitor of labor in San Francisco, said in the release. "Employees and their families are harmed by these baseless terminations. In fact, the Oregon court found they caused 'significant mental, emotional and financial stress'." Judge Adrienne Nelson of the U.S. District Court for the District of Oregon found the postal service discriminated against and wrongfully terminated the carrier 21 days after they told their supervisor they had injured a leg near the end of their shift while unloading mail from a USPS truck. The worker was fired 11 days before the probationary period ended, the DOL said. Since 2020, the department has filed nine federal lawsuits related to probationary workers fired by the USPS after reporting injuries in California, Oregon, Pennsylvania and Washington state. The DOL has also found a repeated pattern of similar actions during that time, resolving five related investigations in California, Florida, Illinois and New Jersey, it said. Three similar cases are awaiting trial against the USPS in Washington state, the agency added. The DOL alleges that the USPS did not follow its policies in several cases, neglecting to provide timely evaluations of the workers. In the Oregon decision, Nelson determined the USPS' failure to complete probationary reports offered "evidence of retaliatory intent," the department said. In a pending case, a court ordered the postal service to pay the labor department $37,222 for destroying text messages and throwing the personnel records of a probationary mail carrier into the garbage. And last year, a federal court in Tacoma, Washington, found the USPS retaliated against a probationary worker who reported a workplace injury.
Are you spending more money shopping online? Remote work could be to blame. 2024-05-22 22:31:00+00:00 - Why spending to save may be costing you more Why spending to save may be costing you more Why spending to save may be costing you more It's a lot easier to shop online during the workday when you're sitting in the privacy of home — where your boss can't catch glimpses of your computer screen. Other aspects of remote work, like that fact that you don't pass by the grocery store on your daily commute to an office, also make online shopping convenient. That explains why remote work — which became the norm at the height of the pandemic and has stuck around to a degree — helped drive an additional $375 billion in online spending last year, a new report from Mastercard Economics Institute shows. "A huge amount of spending came from the increase in people working from home," labor economist and Stanford University professor of economics Nicholas Bloom, one of the report's authors, told CBS MoneyWatch. "We saw about $400 billion in extra spending and it appears to be related to working from home. If I am at home, it's more convenient, because I can easily order without anyone looking over my shoulder, if your laptop screen is facing out and people see you buying clothes." In U.S. zip codes where a large share of the population works from home, online spending levels were up, the report finds. The reverse was also true of zip codes with few people working remote jobs. The same trend has played out internationally, too. In counties with fewer opportunities to work from home, online spending is about the same as it was before the pandemic, while it's up about 4% in countries with a lot of remote work opportunities. Other lasting effects of the pandemic, like migration away from cities to suburban areas, also contributed to a boost in spending online versus in stores in 2023, according the report. "We saw massive amounts of migration coming out of pandemic, and part of it was moving out of concentrated, urban areas, which perhaps necessitates online shopping," Michelle Meyer, chief economist at Mastercard Economics Institute, told CBS MoneyWatch. Working from home also allows consumers who might have previously been leery of so-called porch pirates stealing pricey deliveries from their doorsteps, to be home to receive such packages. "It's easier to take deliveries for expensive items — you can track them and grab it as soon as it's delivered," Bloom said. Scott Baker, associate professor of finance at Kellogg School of Management, who also worked on the report, said he's observed what he called a "learning effect." People who'd previously never shopped online got used to doing so during the pandemic and have continued to make purchases online. Retailers are increasingly meeting consumers online, too, throwing promotions their way to try to encourage them to spend more. But that 10% off discount code or free shipping coupon that seems like a good deal is oftentimes just a ploy to separate Americans from their money. Personal finance professionals are warning against spending money to save it, or "spaving" as the habit has come to be called.
The CEO behind the world's biggest science and engineering fair says the biggest mistake parents make is putting too much pressure on their kids 2024-05-22 21:48:59+00:00 - By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time. Access your favorite topics in a personalized feed while you're on the go. download the app Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview What's been called the "granddaddy" of science fairs took place last week. With over $9 million in prizes and heaps of prestige, the Regeneron International Science and Engineering Fair (ISEF) attracts some of the best and brightest students from around the world, like Hawaii and California as well as Kildare, Ireland and Shanghai, China. Past winners include Nobel Prize recipients, Rhodes Scholars, and MacArthur Foundation genius grant awardees. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. With that kind of money and acclaim on the line, it's not surprising that the atmosphere surrounding the competition is intense. Advertisement "I think a lot of kids who are here actually — I don't think I'm reading it wrong — are truly excited to be here," said Maya Ajmera, the president and CEO of the Society for Science, which coordinates ISEF. "But they also feel the pressure of wanting to win and the pressure of going to college," she told Business Insider last week. The biggest mistake that parents with ambitious, curious kids can make is adding to that pressure, she said. Besides, between addictive social media, the climate crisis, growing up during the pandemic, and feeling lonelier than ever, Gen Z already has more than enough sources of anxiety. Stepping back and letting the kids do the work Grace Sun holds an OECT device that helped her win the ISEF science fair. Chris Ayers/Society for Science While it can be useful to have a parent invested in helping their kid meet deadlines and make a nice-looking poster, some adults take it too far. Ajmera advises parents to "stand back and let your kid do it." Advertisement "Get out of their way," she said, "and don't pressure them too much." If competing at ISEF is any indication of success, then Ajmera's advice certainly seems to work. Parents of ISEF competitors who spoke with Business Insider shared her philosophy. "We never pressure them," Maria Estrada, whose two children have both competed and won awards at ISEF, told Business Insider. Estrada said she's never expected her children to have 5.0 GPAs, and that she's even asked her daughter to slow down and be a kid. Related stories "I accepted my kids for who they are," she added. "I think it's important for parents to know their kids' abilities." Advertisement Another parent, Alexa Groff, has a daughter, Taylor, who competes in science fairs and is a competitive dancer. She said that a friend recently told her she'd expected Groff to be an intense "dance mom" who showed up early to everything. In reality, the friend told her she was "super-duper chill." "I think it's important for Taylor to explore her passions without my hand in it," Groff said. When her daughter wanted to quit volleyball, for example, she said she let it happen and supported the decision."I want her to figure things out on her own, but know that I'm there for whatever she needs me for," Groff said. Combining passion and hard work to solve problems As part of the ISEF competition, nearly 2,000 students from 49 states and 70 countries gathered in Los Angeles to showcase their research to judges. ISEF pulls the finalists from 400 smaller science fairs from around the world, taking the winners from a pool of 175,000 competitors. Advertisement While not typically at the same level as peer-reviewed scientific research, ISEF students' topics can be as sophisticated as microbial genetics, bone tumors, and microplastic filtration. Far from overly involving themselves, parents are often surprised at what their children accomplish with their projects. "They're kind of amazed, actually," Ajmera said. Students are often inspired to pursue these difficult subjects because of real-world issues and not by their parents' insistence to compete, Ajmera said. "A lot of kids have their own personal stories to share of something that's affected their families or their communities, and they want to go in and solve it," Ajmera said of the Gen Z competitors. Advertisement For example, 18-year-old Maddux Alexander Springer received this year's $10,000 Peggy Scripps Award for Science Communication for his studies on a tumor-causing disease in green sea turtles near his home in Hawaii. Krish Pai, Grace Sun, and Michelle Wei took top prizes home at this year's ISEF. Chris Ayers/Society for Science That kind of interest and enthusiasm can carry a student far, which is important since most winning projects are often complex and time-consuming. For example, 16-year-old Grace Sun won this year's top prize, the $75,000 George D. Yancopoulos Innovator Award, for her project on organic electronic devices. Sun told Business Insider she had to miss hours of school to work in a university lab for her project. For some kids, though, it's all worth it because the time and effort are investments in what they hope will be their future careers. Advertisement "A lot of these kids are going to either land in academia doing research, or they're going to be entrepreneurs and start new companies on the new cutting-edge technologies," Ajmera said.
OpenAI Strikes a Deal to License News Corp Content 2024-05-22 21:41:26.530000+00:00 - News Corp, the Murdoch-owned empire of publications like The Wall Street Journal and The New York Post, announced on Wednesday that it had agreed to a deal with OpenAI to share its content to train and service artificial intelligence chatbots. News Corp said the multiyear agreement would allow OpenAI to use current and archived news content from News Corp’s major news outlets, including brands in the United States, United Kingdom and Australia as well as MarketWatch and Barron’s. The agreement does not include content from News Corp’s other businesses, such as its digital real estate services or HarperCollins. “We believe an historic agreement will set new standards for veracity, for virtue and for value in the digital age,” Robert Thomson, the chief executive of News Corp, said in a statement. He described OpenAI and its chief executive, Sam Altman, as “principled partners” who “understand the commercial and social significance of journalists and journalism.” Mr. Altman described the partnership as “a proud moment for journalism and technology.” The financial terms of the deal were not disclosed. The Wall Street Journal reported the agreement could be worth as much as $250 million over five years, citing unnamed sources. A News Corp spokesman declined to comment on the reporting.
4 totally unverified theories about Vivek Ramaswamy and BuzzFeed 2024-05-22 21:41:23+00:00 - Vivek Ramaswamy ran a failed campaign for the Republican presidential nomination. Now he owns 7.7% of BuzzFeed, the struggling digital media publisher. What's going on? We don't know. So we're guessing here. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time. Advertisement Why is Vivek Ramaswamy buying up shares of BuzzFeed? Let's start by stating the obvious: It is very funny to type the sentence "Why is Vivek Ramaswamy buying up shares of BuzzFeed?" Ramaswamy, as you may recall, was a fringe candidate in the most recent Republican presidential primary, where his platform consisted of praising Donald Trump and promising to "Take America First further than Trump." He dropped out of the race in January, after spending a reported $30 million of his own money on the campaign and coming in fourth in the Iowa caucuses.