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Nvidia is gearing up to announce its Q4 earnings, with the spotlight on its revenue from the Blackwell line of chips and how it's addressing potential tariffs and export controls affecting shipments to China. Despite these challenges, Nvidia continues to dominate the AI chip market, with its technology being integral to the AI data centers of major tech firms like Amazon, Google, Meta, and Microsoft. Analysts expect Nvidia's earnings per share to rise by 63% and revenue by 73% year-over-year, though this might not meet investor expectations given the company's previous year's performance. The company's data center business is expected to be the primary revenue driver, with gaming and other segments contributing less. Nvidia's stock has seen a decline year-to-date, reflecting broader struggles among Big Tech companies. However, Nvidia's CEO, Jensen Huang, remains optimistic, suggesting that the development of advanced AI models by competitors could actually boost demand for Nvidia's top-tier processors. Additionally, concerns about competitors developing their own AI chips and potential trade restrictions loom, but Nvidia's established ecosystem and market position provide some reassurance against these threats.
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Lucid Motors, an electric vehicle manufacturer, experienced a significant after-hours stock surge following the announcement of better-than-expected financial results and a leadership transition. CEO and CTO Peter Rawlinson, who has been with the company for over a decade, is stepping down to become a strategic adviser, with COO Marc Winterhoff taking over as interim CEO. The company also set an ambitious production goal for 2025, aiming to produce approximately 20,000 vehicles, which is more than double the expected output for 2024. Lucid's fourth-quarter performance was strong, with revenue reaching $234.5 million against the expected $212.4 million, and an adjusted loss per share of $0.22, better than the forecasted $0.25. The company also reported a year-over-year increase in production and deliveries, with significant improvements in gross margins and balance sheet strength, supported by investments from the Public Investment Fund (PIF).
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Nvidia's stock experienced a significant decline of 2.8% on Tuesday, influenced by reports of potential delays in the production of its AI Blackwell chips and looming new export restrictions from the Trump administration aimed at curbing China's AI development. The administration's proposed sanctions target specific Chinese companies and aim to restrict international semiconductor maintenance in China. This news follows the introduction of cost-efficient AI models by Chinese firm DeepSeek, which had already unsettled U.S. markets. Over the past five trading days, Nvidia's stock has fallen by over 9%, reflecting investor concerns ahead of the company's fourth-quarter earnings report. Despite these challenges, Wall Street analysts remain optimistic about Nvidia's future, citing strong demand for its current products even if new releases face delays. The company's major customers, including Microsoft, Amazon, Google, and Meta, had previously reduced orders due to issues with Nvidia's Blackwell chips, yet the overall market sentiment leans towards Nvidia maintaining its leadership in AI technology.
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Lowe's, the home improvement retailer, is anticipated to report relatively weak results for the fourth quarter and fiscal year 2024, with expected revenue of $18.3 billion, down from last year's $18.6 billion. Despite this, adjusted earnings per share are projected to increase to $1.84 from $1.77. The company's same-store sales are expected to decline by 1.91%, attributed to a drop in foot traffic, although this is somewhat mitigated by a slight rise in average ticket size. Analysts like Seth Basham from Wedbush are optimistic about Lowe's future, particularly in 2025, due to its exposure to larger discretionary products and the DIY market. However, Lowe's faces headwinds from a consumer shift towards services and persistent high interest rates impacting spending. The company's performance is also compared to Home Depot, which recently reported slightly better than expected results, highlighting the competitive landscape in the home improvement sector.
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Tesla Inc. experienced a significant stock drop of 8.4% on Tuesday following a report that highlighted a 45% decrease in its European sales for January. According to the European Automobile Manufacturers’ Association, only 9,945 Tesla electric vehicles were registered, a sharp decline from the 18,161 registered the previous year. This drop occurred despite a 37.3% increase in overall electric vehicle sales in Europe, suggesting that demand for EVs was robust but not for Tesla's models. Countries like Germany, the UK, and the Netherlands saw substantial gains in EV sales, yet Tesla's sales plummeted in these regions. Factors contributing to this decline include the anticipation of a refreshed Model Y and increased competition from new models by Volkswagen, Renault, and Chinese manufacturers like SAIC Motor. Additionally, Tesla CEO Elon Musk's controversial political engagements in Europe, including his support for Germany's far-right AfD party and perceived Nazi salutes, might be tarnishing Tesla's brand image in the region. Analyst opinions vary, with some seeing Musk's political activities as a potential risk to Tesla's sales, while others believe the impact on the brand can be contained.
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Super Micro Computer, Inc. (SMCI) experienced significant stock price volatility following its efforts to meet regulatory filing deadlines. After a 15.5% surge in after-hours trading, the company successfully submitted its delayed quarterly reports for fiscal year 2024, thus avoiding delisting from Nasdaq. The stock had fallen 11.8% during regular trading hours but rebounded sharply after the filings were made public. This volatility comes in the wake of allegations by Hindenburg Research accusing Super Micro of accounting manipulations, which led to a Department of Justice investigation, the resignation of its accountant, and delayed SEC filings. Despite these challenges, Super Micro has denied the accusations, hired a new accountant, and an independent review found no evidence of misconduct. The stock's recent performance reflects a partial reversal of gains from a February rally, with shares closing at $45.54, significantly below its high of over $120 last March.
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Workday, a provider of enterprise cloud applications for finance and human resources, reported a robust fourth-quarter performance, surpassing Wall Street's expectations. The company's subscription revenue grew by 16% to $2.04 billion, slightly above the anticipated $2.03 billion. This growth was fueled by a resilient job market and cooling inflation, which encouraged businesses to invest in workforce management solutions. Workday's shares experienced a significant after-hours surge of over 9% following the announcement. The integration of generative AI and machine learning into their offerings has not only improved product functionality but also bolstered investor confidence. CFO Zane Rowe highlighted the company's strong performance across various growth areas, including AI-driven products. However, to navigate a challenging economic environment, Workday announced a reduction of approximately 1,750 jobs, representing 8.5% of its workforce, to redirect resources towards AI development. Despite this, the company's total revenue for the quarter was $2.21 billion, beating estimates, and its adjusted earnings per share were $1.92, compared to the expected $1.78.
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Home Depot's CEO Edward Decker expressed a cautious outlook on the housing market during the company's fourth quarter earnings call, stating that while there was a slight uptick in housing turnover in Q4, a significant recovery is not anticipated. The company has been grappling with a challenging housing market, where high homeownership costs have led to a decline in existing home sales and reduced home improvement spending. Despite these issues, Home Depot reported a 0.8% increase in comparable sales for the latest quarter, surpassing analysts' expectations. This growth was driven by strong sales in appliances and power tools, although discretionary projects like kitchen and bath remodels continue to lag. CFO Richard McPhail acknowledged signs of market normalization but highlighted ongoing uncertainties. Despite the tepid sales forecast, Home Depot's shares saw a 4% increase after the earnings release, buoyed by better-than-expected results and optimism from analysts like Wedbush's Seth Basham, who pointed to potential sales boosts from natural disasters and tariffs.
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Tom Barkin, President of the Federal Reserve Bank of Richmond, emphasized the need for a cautious approach to monetary policy, advocating for "modestly restrictive" interest rates until inflation convincingly returns to the 2% target. In his speech, Barkin highlighted the lessons from the 1970s, where premature easing of rates led to a resurgence of inflation. He pointed out the current economic uncertainties due to policy changes from the Trump administration, geopolitical tensions, and natural disasters. Despite recent data showing a slight uptick in inflation, Barkin remains focused on the overall downward trend from its peak, suggesting a wait-and-see approach before any policy adjustments. This stance is echoed by other Fed officials like St. Louis Fed President Alberto Musalem and Fed Chair Jerome Powell, who also advocate for monitoring economic conditions closely before making further policy changes. The upcoming release of the Personal Consumption Expenditures Index (PCE) will provide further insight into inflation trends, which could influence future Fed decisions.
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Hims & Hers Health, Inc. experienced a significant stock drop of 27% after suggesting it might discontinue some compounded versions of weight-loss drugs due to regulatory concerns. Despite reporting better-than-expected fourth-quarter results, the potential revenue loss from the GLP-1 segment, which includes drugs for diabetes and weight loss, caused investor unease. CFO Yemi Okupe reassured that while the weight-loss segment is growing, it constitutes only a fraction of their business, with other services contributing the majority of their $1.5 billion revenue in 2024. The company plans to comply with regulatory requirements, potentially removing semaglutide from their offerings. Despite these assurances, the market remained cautious, with Hims & Hers forecasting a higher revenue for the year than Wall Street's estimates. The stock's decline comes after a surge in 2022 due to the popularity of compounded semaglutide, but recent FDA actions regarding drug shortages have impacted the stock's performance.
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House Republicans are grappling with the challenge of incorporating Donald Trump's extensive list of tax cut proposals into a budget resolution. Speaker Mike Johnson is navigating a delicate balance between deficit hawks demanding fiscal responsibility and GOP moderates wary of the proposed spending cuts, particularly in healthcare. Trump's tax ideas, which range from extending the 2017 Tax Cuts and Jobs Act to new deductions and credits, could add between $10 billion to $18 trillion to the federal deficit over the next decade. However, the budget resolution only allocates $4.5 trillion for tax cuts, paired with $1.5 trillion in spending reductions, which is insufficient to cover Trump's full list. This discrepancy has led to internal party tensions, with some Republicans like Reps. Tim Burchett and Victoria Spartz publicly opposing the bill for not cutting spending enough, while others fear the harshness of the proposed cuts. Democrats are poised to vote against the resolution, criticizing it as a tax benefit for the wealthy. The situation underscores the complex political and economic calculations at play as Republicans strive to fulfill their tax cut promises amidst a national debt of $36 trillion.
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Tesla Inc. is facing significant demand challenges in Europe, with sales plummeting by 45% in January 2025 compared to the previous year. Despite a robust 37.3% increase in overall electric vehicle (EV) sales in the region, Tesla registered only 9,945 vehicles, a sharp decline from 18,161 in January 2024. This downturn comes amidst a refresh of Tesla's Model Y, suggesting that potential buyers might be holding off for the updated version. Additionally, new competitive models from European and Chinese manufacturers like Volkswagen, Renault, and SAIC Motor are capturing market share. Tesla's CEO, Elon Musk, has also stirred controversy with his political activities in Europe, including support for Germany's far-right AfD party and a gesture perceived by some as a Nazi salute, potentially impacting Tesla's brand image. Analyst opinions vary, with some seeing these issues as manageable, while others view Musk's political involvement as a risk to Tesla's sales, particularly in Europe and China. Tesla's first-quarter production and delivery numbers, due in early April, will provide further insight into the company's performance.
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Tesla Inc. has announced its acquisition of certain assets from the insolvent German high-tech parts manufacturer, Manz AG. This includes the transfer of over 300 employees from Manz's site in Reutlingen, Germany, to Tesla Automation GmbH, a subsidiary of Tesla. The move marks a significant expansion of Tesla's operations in Germany, where it already operates a manufacturing facility near Berlin. However, this expansion comes at a time when Tesla's CEO, Elon Musk, has publicly supported the far-right Alternative for Germany (AfD) party, which has caused some political friction. Despite this, Tesla's sales in Germany have seen a sharp decline, with nearly 60% fewer cars sold in January compared to the previous year, possibly reflecting consumer reactions to Musk's political stances. The acquisition deal, which includes movable tangible assets and the use of Manz's property, did not disclose the purchase price, and its completion is subject to merger control law. Meanwhile, around 100 Manz employees will not be transferred to Tesla, and the insolvency administrator is in talks with other interested parties for the remaining assets.
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Home Depot reported a slight improvement in its fourth quarter results, with revenue increasing by 14.1% to $39.7 billion, surpassing Wall Street's low expectations. Adjusted earnings per share also beat estimates, coming in at $3.13 compared to the expected $3.04. Despite economic challenges like high interest rates and cautious consumer spending, same-store sales grew by 0.8%, defying expectations of a decline. This growth was partly due to increased sales in regions affected by hurricanes and a rise in both foot traffic and average ticket size. However, the company remains cautious about future growth, projecting only a 2.8% increase in net sales for fiscal year 2025. The looming threat of tariffs on Chinese imports and potential new tariffs on Canada and Mexico could further complicate Home Depot's cost structure and consumer demand, as noted by CEO Ted Decker. The company's ability to navigate these challenges will be crucial in maintaining its market position.
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Nvidia (NVDA) is highlighted as a top long-term investment due to its impressive profit margins, which have grown from 39.9% in 2021 to an estimated 67.5% in 2024. Louis Navellier, a veteran investor, emphasized Nvidia's unique position in the market, attributing its success to its ability to command premium prices for its innovative semiconductor products, especially in the AI sector with chips like Hopper and the upcoming Blackwell. Despite some cautionary signals, such as a slight decrease in first-quarter EPS estimates and a relatively lower forward PE multiple compared to other AI companies, Wall Street remains optimistic about Nvidia's future. This optimism is fueled by the company's integral role in the expanding AI infrastructure, supported by aggressive capital expenditure plans from tech giants like Amazon and Meta. However, there are concerns about Nvidia's valuation and competition, with some analysts questioning its monopoly status in the market.
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Crypto stocks experienced a significant downturn on Tuesday as Bitcoin's price fell below $90,000 for the first time since November, triggering a broad market sell-off. Leading the declines were major players like Strategy (formerly MicroStrategy) and Coinbase, with Strategy dropping over 5% after revealing it had invested an additional $2 billion in Bitcoin. This decline in Bitcoin's value, which saw a nearly 7% drop to just under $89,000, was exacerbated by macroeconomic concerns including potential inflation and U.S. interest rate uncertainties, as well as industry-specific issues like the massive $1.5 billion crypto heist at Bybit. Other cryptocurrencies like Ether and Solana also saw substantial losses, with Solana dropping nearly 13%. The market's reaction reflects broader economic fears and specific crypto industry challenges, highlighting the volatile nature of digital assets and their related stocks.
