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Morning Brew: Nvidia Impresses, OpenAI Drama, and Deere's Forecast Dips

Shares of Nvidia (NASDAQ:NVDA) rose nearly 1% in premarket trading on Wednesday as Wall Street was impressed with the semiconductor giant's third-quarter earnings and guidance, in spite of the exceptionally high expectations going into the print. Bank of America analyst Vivek Arya said he thinks the Jensen Huang-led company is still in the first 25% of converting the roughly $250B global compute infrastructure to accelerated and artificial intelligence-centric computing. He now believes the company could earn as much as $40 per share in 2027, up from $32 per share prior to the results. Arya boosted his price target to $700 from $650 after the results, but acknowledged the stock "could go through some near-term churn" after the 240% run year-to-date. "Valuation at just 24x CY24E PE (and 10x [long-term] EPS power) seems remarkably low, in our view, relative to 30-35% CY23-27E sales and [earnings per share compound annual growth rate] potential, and

HP (NYSE:HPQ) fell 1.4% premarket on Wednesday after its fourth-quarter results failed to inspire Wall Street. Analysts were lukewarm on the results, concerned mainly with the future of printing while the PC space makes something of a recovery. Bernstein sees a balanced near-term risk-reward with some upside potential amid a recovery in PC demand. The long-term health of printing, however, is concerning, analysts led by Toni Sacconaghi, Jr. wrote in a note. Printing represents about 60% of the company's operating profits and is secularly challenged. HP (NYSE:HPQ) noted that the macro environment remains challenging, in particular in China. That said, according to Bernstein, the company's tone was notably more constructive than last quarter. For the fiscal 2024 first quarter, HP (NYSE:HPQ) expects adjusted earnings to be within a range of 76 to 86 cents per share, with the mid-point below the estimate of 85 cents per share. Full-year adjusted earnings

Nomura upgraded Baidu (NASDAQ:BIDU) to Buy with a $145 price target on 'cheap' valuation and AI initiatives. The analysts said they had been less enthusiastic, than those market bulls, about the outlook of Baidu's (NASDAQ:BIDU) AI initiative, Ernie Bot due to its lackluster execution track record, which it feared may blunt its competitiveness in yet another promising field. Baidu's American depositary receipt, or ADR, had retreated 14% in the past three months versus 1% to 5% gain for most of its big-cap Chinese internet peers. The analysts believe this cheap valuation plus the company's resolution to buy back shares aggressively (as per the management) from now on seem to warrant the benefit of doubt about its AI initiative. The incremental downside risks appear limited at current levels, which is additionally protected by its USD4.6B (11.7% of its latest market cap) outstanding repurchase authorization, valid till December 2025, the analysts noted.

The return of Sam Altman as Chief Executive of OpenAI after a bizarre five-day period that saw him fired, hired by Microsoft (NASDAQ:MSFT) CEO Satya Nadella and attempting to return to OpenAI, has resulted in a "Cinderella ending" for the Nadella-led tech giant, Wedbush Securities said. "For Microsoft this all ends up like a Cinderella ending as OpenAI will be stronger from an innovation and governance perspective and the MSFT relationship will be even firmer as Redmond and Nadella was the bedrock in backing Altman and OpenAI during this almost week long saga," analyst Dan Ives wrote in a Wednesday investor note. "Microsoft from the beginning wanted to keep this [ongoing] structure but ultimately had to pull the grandmaster chess move when the OpenAI board pulled out their kids checker set Friday night and began this Twilight Zone nightmare," Ives added. Microsoft (NASDAQ:MSFT) invested multiple billions of dollars in OpenAI

Deere (NYSE:DE) on Wednesday fell 7% in premarket trading after the maker of agricultural machinery said it expects its profit next year to decline. The company forecast net income of $7.75 billion to $8.25 billion in fiscal-year 2024, down from $10.17 billion in 2023, as sales volumes "return to mid-cycle levels." Wall Street analysts on average forecast net income of $9.31 billion for next year. The company forecast that sales in its small agriculture and turf segment will fall 10% to 15% in fiscal 2024. It also estimated a sales decline of 15% to 20% in its production and precision agriculture segment, and a roughly 10% drop for construction and forestry. While our end markets will fluctuate, we remain focused on disciplined execution and strategically investing in solutions that drive customer value, John May, chairman and chief executive of Deere, said in a statement. As evidenced by our guidance for

Walmart (NYSE:WMT) disclosed in a filing that Rachel Brand, Executive Vice President of Global Governance, Chief Legal Officer and Corporate Secretary, sold stocks worth $2.6M at a price of $156 per share on Nov. 17. In the last 3 months, Walmart (NYSE:WMT) has seen 15 sell transactions, and 7 open market buys. Filing More on Walmart Walmart Post Earnings: Facing Tough Comps Through Mid '24 Walmart: Dissecting Q3 Results And The Growth That Lies Ahead Walmart Inc. 2024 Q3 - Results - Earnings Call Presentation Walmart to speed online order deliveries through parcel stations Consumers plan to buy same amount for Thanksgiving, but pay more

Oil prices on Wednesday tumbled after OPEC and its allies said they had delayed a meeting as discussions on output levels reached an impasse with Saudi Arabia. The meeting among oil officials will start on November 30, OPEC said on its website. Front-month December Brent crude (CO1:COM) slumped as much as 4.4% before trimming its loss. Saudi Arabia, which cut output by an additional 1 million barrels a day starting in July, was said to be dissatisfied that other members of the Organization of Petroleum Exporting Countries weren't scaling back production, Bloomberg News reported, citing unnamed delegates. More on The United States Oil ETF USO: Geopolitical Circumstances Could Lift Crude To Over $150/Barrel The Bullish Case For Oil Is Still Compelling Global Energy Offers Changing Investment Theses Energy official said to foresee oil surplus despite OPEC+ cuts Crude oil bounces as further OPEC+ production cuts said to be on the

In an interview for the BBC Sounds podcast Dua Lipa: At Your Service, hosted by singer Dua Lipa, Apple (NASDAQ:AAPL) CEO Tim Cook revealed the company has "very detailed" succession plans when the time comes to replace him as chief executive, but he also said he has no intention of going anywhere just yet. "Because something unpredictable can always happen. I could step off the wrong curb tomorrow. Hopefully that doesn't happen; I pray that it doesn't," he said. However, when asked if there was any succession plan, Cook continued: "I can't say that, but I would say that my job is to prepare several people for the ability to succeed, and I really want the person to come from within Apple (NASDAQ:AAPL). So that's my role: there's several for the board to pick from." "I love it," he said, reflecting back on 25 years at the company. "I can't

This article first appeared on GuruFocus.