|Day's Range||7.49 - 8.07|
Nvidia (NASDAQ:NVDA) has pleased investors with its latest earnings report. Nvidia stock traded sharply higher to close the week, with shares advancing more than 7%. The sector also got help with peer Applied Materials (NASDAQ:AMAT) posting solid earnings as well.Source: Hairem / Shutterstock.com How much will this earnings report matter to Nvidia's longer-term trajectory, however? I argue that these results will do little to shake Nvidia out of its recent funk. As we'll see, Nvidia is making the best of a bad macroeconomic environment. But make no mistake, it will be hard for NVDA stock to rally given the factors that are outside of its control. Gaming Powers a Solid QuarterFor the second quarter, Nvidia beat both earnings and revenues estimates. Revenues topped expectations by a fairly modest $40 million, however, earnings came in hot at $1.24 against the market's outlook for just $1.15 per share. As you might have guessed, the big earnings beat came largely from stronger profit margins rather than better than expected sales.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Undervalued Stocks With Breakout Potential The stronger profit margins line up with another encouraging trend: declining inventories. Nvidia's inventories fell to $1.2 billion from $1.43 billion previously.Importantly, Days Sales of Inventory "DSI", a metric that tracks how many days of inventory a company has ready to go, plummeted from 140 to 106. This indicates that conditions within the industry appear to be returning toward average and that the chip glut is largely behind us.Nvidia scored big in gaming in particular. It pulled in more than $1.3 billion in gaming revenues for the quarter. Yes, that figure still slumped 27% from the same quarter last year. But it rebounded 24% from the previous quarter of 2019 as Nvidia notched record gaming laptop sales and launched new product lines for desktop gamers, and video creators.Nvidia expects this positive momentum to continue as a line of highly-anticipated games using ray tracing technology. This should push consumers to upgrade to the latest available Nvidia chips. Not All Great News, HoweverApart from gaming, however, there were significant weaknesses for Nvidia. For one thing, data center revenue rose just 3% sequentially and is still down double digits from last year. Management sees continued weakness in spending trends from large customers.And let's back up for a minute. Nvidia set a really low bar going into this quarter. Sure, they managed to beat guidance, but guidance was atrocious. We're still looking at huge drops in both data center and gaming revenues from last year. Competition from the likes of AMD (NASDAQ:AMD) is clearly pressuring Nvidia's prospects.Going forward, Nvidia posted lower guidance than analysts had expected. Bulls had been hoping for a big gaming turnaround this quarter and that leading to forward momentum going forward.Gaming turned up, but not enough to lift Nvidia's overall prospects. Without things looking a lot better from auto and data centers, NVDA stock will at best chop around if not resume going downward. Nvidia Faces Serious HeadwindsThe elephant in the room remains the trade war. Numerous semiconductor companies have reported that the trade freeze has hit demand. Clearly, it's put a damper on results for both Nvidia and competition such as AMD and Intel (NASDAQ:INTC) as well. And the trade war appears to be escalating, witness all the concerns about the Yuan slumping earlier this month.Combine that with more weak guidance from Nvidia, and the outlook for NVDA stock simply isn't good. You have to suspect that analysts are going to lower their revenue and EPS outlooks for 2020 in the coming weeks now.Without growth in data center or spectacular results from auto, there's really not much to get excited about.The gaming revenues are good. That's a solid step for NVDA stock. But shares are still trading at more than 8x sales. You'd normally mark a semiconductor company like this closer to 5x sales, which would put NVDA stock down around $90 to $100 per share.Nvidia investors have priced a whole lot of growth ( along with higher profit margins) from emerging product lines into Nvidia's stock price. This quarter did little to back up those optimistic assumptions. Nvidia Stock VerdictNvidia has been trading in a narrowing range in recent months. On numerous occasions, Nvidia stock has found support between $130 and $150 per share. On the upside, it made a decent run to try to get back over $200 in April, but each subsequent rally has been weaker and weaker.Will Nvidia be able to get out of its declining trading range and resume making gains? While this earnings report certainly was a positive, it's not a game-changer for the firm.Nvidia stock investors don't have to worry about the share price plunging to new lows just yet. But don't expect this earnings rally to be the start of anything much until the trade war is resolved and the company can raise guidance again.At the time of this writing, Ian Bezek owned INTC stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post This Earnings Pop Is a Great Opportunity to Start Dumping Nvidia Stock appeared first on InvestorPlace.
SANTA CLARA, Calif., Aug. 22, 2019 -- Applied Materials, Inc. announced today that Dan Durn, Senior Vice President and CFO, will participate in a question-and-answer session at.
The Zacks Analyst Blog Highlights: Estee Lauder, Becton, Dickinson, Applied Materials, Regeneron and HollyFrontier
U.S. stock futures are adding to Friday's sharp rebound. The recovery is likely being aided by the action in the bond market. Bond prices are weakening, and yields are starting to snap-back from their record low levels.Source: Shutterstock Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.1.09% and S&P 500 futures are higher by 1.06%. Nasdaq-100 futures have added 1.33%.In the options pits, call volume led the way ahead of the weekend while overall volume racked up to above-average levels. Approximately 21.2 million calls and 19.2 million puts changed hands on the session.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith buyers returning to the field, the CBOE single-session equity put/call volume ratio plunged back down to 0.67. Friday's market recovery and this morning's strong follow-through proves once again that spikes seen in this metric like last week are reliable signals that fear is overdone and a bottom is nigh. The 10-day moving average dropped to 0.76.Options activity was hopping in companies reporting quarterly reports. Applied Materials (NASDAQ:AMAT), Alibaba (NYSE:BABA) and Nvidia (NYSE:NVDA) all saw heavy volumes amid volatile trading sessions.Let's take a closer look: Applied Materials (AMAT)Applied Materials shares saw a sharp uptick in volatility Friday after the release of third-quarter earnings. Early morning weakness took AMAT stock down as much as 5.4% before buyers emerged and pushed it back to finish down 1.1%. * 10 Best High-Growth Stocks to Buy for Young Investors The semiconductor company posted earnings per share of 74 cents on sales of $3.56 billion. Although both metrics marked a double-digit, year-over-year decline (29% and 14%, respectively), they still beat the Street's estimates.AMAT bulls should be pleased with Friday's price performance for two reasons. First, the stock rallied back to close above the 50-day moving average, which kept its intermediate uptrend intact. Second, it also closed above its prior pivot low after trading below it throughout the morning. Both successes suggest buyers aren't ready to relinquish control, and the path of least resistance remains higher.On the options trading front, puts outpaced calls by over two to one. Total activity swelled to 299% of the average daily volume, with 92,107 contracts traded; 67% of the trading came from put options alone.Premiums were baking in a gap of $2.54 on earnings so with the stock closing down only 53 cents, volatility sellers came out victors. Implied volatility dropped to 19%, and premiums are only pricing in daily moves of 99 cents or 2.1%. Alibaba (BABA)Alibaba stock is on the mend after reporting earnings numbers worth celebrating last week. For the fiscal first quarter, China's e-commerce juggernaut posted revenues of $16.74 billion, marking a 42% increase versus the year-ago quarter. The robust top-line growth helped drive adjusted income per share to $1.83.Wall Street analysts were forecasting earnings of $1.46 per share on revenue of $15.8 billion.A strong two-day rally carried BABA stock into the weekend and shares are up another 1.8% premarket. Its price trend has been a hot mess for months, but it's at least now back above all major moving averages. Overhead resistance looms close at $180, so that's the ceiling that needs to be smashed for the upside momentum to really fire up.On the options trading front, traders came after calls with a vengeance. Activity swelled to 192% of the average daily volume, with 346,809 total contracts traded. Calls claimed 76% of the session's sum.With earnings now in the rearview mirror, implied volatility sank to 31% placing it at the 19th percentile of its one-year range. Premiums are pricing in daily moves of $3.46 or 2%. Nvidia (NVDA)Nvidia shares have spent much of 2019 mired in a trading range, but improving earnings may finally give bulls much-needed firepower. The graphics-chip giant released second-quarter earnings for fiscal 2020 after the bell Thursday and investors were pleased with the performance.Although the year-over-year numbers saw double-digit percentage declines, they surpassed the Street's estimates. For the quarter, revenue came in at $2.58 billion, and EPS arrived at $1.24. * 15 Growth Stocks to Buy for the Long Haul The beat was enough to push NVDA stock up by 7.3%. Unfortunately, the price trend remains as uninspiring as ever. NVDA remains in the middle of its range and needs to break through $180 resistance before a bona fide uptrend takes root. Friday's rally was a big first step, but many more are required before it can reclaim its former uptrend's glory.On the options trading front, traders favored calls throughout the session. Activity rose to 246% of the average daily volume, with 95,629 total contracts traded. Calls added 64% to the day's take.Implied volatility plunged to 38% or the 17th percentile of its one-year range. Premiums are now pricing in daily moves of $3.79 or 2.4%.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Monday's Vital Data: Applied Materials, Alibaba and Nvidia appeared first on InvestorPlace.
Stock futures soared amid President Trump's China trade comments. The choppy stock market rally is hard to handle, with Microsoft and other breakouts struggling. Apple and Zscaler lack bases.
Shares of Micron (NASDAQ:MU) have been volatile, which is no surprise given the current landscape of the stock market right now. Take virtually any news headline and it's easy to see its impact on the stock market.Source: Shutterstock The yield curve, slowing national economies like Germany, the market and currency implosion in Argentina and of course, the trade war, can all impact stocks. But the trade war is the big one for Micron stock because the conflict has a huge impact on semiconductor companies.In the case of MU, sometimes the impact of the conflict is direct and other times it's indirect. But if MU's semi, memory and chip peers -- like Applied Materials (NASDAQ:AMAT), Lam Research (NASDAQ:LRCX), Advanced Micro Devices (NASDAQ:AMD) and Western Digital (NASDAQ:WDC) -- are struggling, there's a good chance that MU stock will struggle too.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMoreover, supply/demand issues have weighed on memory manufacturers like MU as well. That's why we've slowly seen estimates for MU's top and bottom lines dwindle over the last nine months. * 10 Cheap Dividend Stocks to Load Up On There has been optimism that MU and its peers have reached a bottom. If that's the case, it would be quite a powerful positive catalyst for MU stock price. Valuing Micron StockThe one thing investors have always pounded the table on when it comes to MU is its low valuation. But that low valuation is there for a reason; specifically, MU operates in a boom-bust business cycle. When the climate is right, its sales and earnings surge. But when demand dries up or supply builds too much (or both), its earnings and revenue are hammered.No one wants to pay an average price=earnings multiple for that, let alone a premium. Some analysts, however, have said that if Micron stock traded with the same multiple as the S&P 500, then MU stock price would be much higher than it is.But modeling a price target on a stock based on the assumption that investors will dramatically raise its valuation is a fool's game. That doesn't happen often and when it does come to fruition, there's no way of knowing what the final valuation will be. Investors really need to analyze each stock based on its own merit and history.In Micron's case, it has a low valuation, and that probably won't change unless a modification of its underlying business alters its outlook. Analysts, on average, expect MU to generate earnings per share of $6.22 this year, leaving Micron valued at 6.75 times the average EPS estimate.However, the average EPS estimate for 2020 is just $2.50. If the average estimates prove correct, MU's EPS will sink 60% year-over-year in 2020, and MU stock is trading at 16.8 times its 2020 EPS. Moreover, the average estimates call for MU's sales to fall 24% this year and another 15% in 2020.The average estimates for 2020 may be too bearish, but that emphasizes exactly what we're talking about: Micron's business is too volatile to command a higher valuation. Trading MU Stock Click to EnlargeThe wild swings of MU's earnings and revenue are too much for many investors. For those who do want to buy Micron stock, perhaps it's best to accumulate it when the news has worsened considerably and sell the shares when it seems like blue skies for MU.On Tuesday, MU stock fired higher, briefly eclipsing $45. However, the prior resistance zone between $44 and $45 held it in check. It didn't help that Micron's 38.2% retracement level is near $44 as well, while its declining 20-day moving average was $43.11.We have been highlighting this resistance zone for months now, and there's currently a lot of resistance in this area.The rhetoric about MU is improving, but investors are still pretty cautious on the name. Luckily for the owners of Micron stock, the charts have somewhat definitive levels.Bulls either need to see Micron stock price overcome its resistance or get cheaper before buying Micron stock. Bulls who are waiting for the shares to overcome resistance should look for a close north of the $44-$45 zone. If that happens, MU stock can reach its July highs near $49.Aggressive bulls waiting for MU to get cheaper may feel confident near $41. There, MU stock price will be near the 50% retracement level and the 50-day moving average, which is trending higher. Conservative bulls may wait for a correction down into the $39 area. There it will encounter prior support from July, as well as the 200-day moving average. Further, the 61.8% retracement level near $38 should help boost MU stock.In either scenario, buyers need to use extreme caution below $38. If this level give way, MU can decline into the low- to mid-$30s.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post A Low-Risk Way to Trade Micron Stock appeared first on InvestorPlace.
Applied Materials, Inc. (NASDAQ: AMAT) reported strong results for the fiscal third quarter and reiterated its full-year guidance. Despite the strong results and unchanged 2019 guidance, there is concern around the low gross margin outlook, Twigg said in the note. Applied Materials’ strong quarterly results were backed by better-than-expected demand for semiconductor equipment.
Applied Materials (AMAT) shares have fallen more than 4% on Friday. The company announced its third-quarter results after the market closed on Thursday.
Craig-Hallum downgraded Applied Materials Inc. to hold from buy on Friday and said shares are fully valued given the lack of clarity on the timing or magnitude of the company's recovery. Analyst Christian Schwab cut his stock price target to $46 from $50. The company beat estimates for its fiscal third quarter late Thursday and reiterated guidance for 2019 wafer fab equipment to be down in the mid-to-high teens from 2019 but to gradually recover in 2020. "However, management remained hesitant to call Q3 the bottom given the current macro-economic environment," the analyst wrote in a note. "With management's limited visibility into the timing or magnitude of an expected gradual recovery as well as higher than expected OpEx we believe shares are fairly valued and are moving to the sidelines." Shares were down 2.3% Friday, but have gained 41% in 2019, while the S&P 500 has gained 15%.
Despite strong third quarter results, Applied Materials shares moved lower after management suggested that a recovery remains elusive.
Applied Materials' (AMAT) solid momentum in U.S. and Taiwan benefits its fiscal third-quarter results. However, softness in semiconductor and display markets were major concerns.
Deere & Co., Nvidia, Applied Materials and Facebook are the companies to watch on Friday, August 16, 2019.
The major stock indexes were sharply higher early Friday, as they looked to end a volatile week with solid gains. Nvidia stock jumped 7%.
AMAT stock was in buy range from a 45.85 point ahead of earnings, but shares turned lower in after-hours trading despite an earnings and sales beat.
Applied Materials executives decline to call the chip gear maker's fiscal third-quarter results the bottom of the current down cycle, citing the unsettled global economic environment.
Applied Materials shares slide despite beating earnings for its fiscal third quarter on the top and bottom lines. The semiconductor company says it is facing significant headwinds from the U.S.-China trade war. Yahoo Finance's Akiko Fujita and Dan Howley discuss.