|Day's Range||4.2800 - 4.2800|
Analog Devices' (ADI) strength in end-markets served should likely aid the upcoming results. However, softness in the consumer market and geopolitical uncertainty may impact its fiscal Q3 earnings.
LitePoint, a leading provider of wireless test solutions, today announced it is the first test equipment vendor to join the FiRa Consortium, a brand new organization launched by industry leaders to facilitate the creation of an Ultra-Wideband (UWB) ecosystem so that new use cases for Fine-Ranging (FiRa) capabilities can thrive. The FiRa Consortium’s mission is to create a broad ecosystem to develop specifications and a certification program to ensure interoperability among new FiRa devices and solutions.
TripAdvisor (TRIP) reports unimpressive second-quarter results due to weaker-than-expected revenues from the Hotels, Media & Platform segment.
SAN JOSE, Calif., Aug. 08, 2019 -- LitePoint, a leading provider of wireless test solutions, today announced it is the first test vendor to join the FiRa Consortium, a brand.
GoDaddy's (GDDY) second-quarter earnings are affected by higher expenses. However, strong performance of its product segments drives revenue growth.
KLA-Tencor (KLAC) reports solid fiscal Q4 results driven by a strong process control market, revenue diversification and customer acceptance of key products.
Nielsen Holdings (NLSN) reports better-than-expected earnings in the second quarter, driven by solid execution and continued focus on operational efficiency.
We are now roughly halfway through the second quarter 2019 earnings season, and the results have been much better than expected, powering the S&P 500 to new all-time highs.Source: Shutterstock To date, 44% of the companies in the S&P 500 have reported earnings. Over 75% of them have reported earnings above expectations (above average), while over 60% have reported sales above expectations (also above average). Further, the magnitude of earnings beats has averaged around 5.4% (above average) and the magnitude of sales beats has averaged 1.2% (above average, too). Broadly, then, corporate sales and earnings have been much better than expected this quarter.Context is important here. Heading into the quarter, Wall Street was expecting fairly ugly results. For the second quarter in a row, earnings were expected to decline, representative of a global economic slowdown. Halfway through earnings season, profits are down year-over-year. But, they are down less than expected, representative of the idea that the global economy is starting to stabilize and pick up steam.InvestorPlace - Stock Market News, Stock Advice & Trading TipsConsequently, investors have broadly interpreted Q2 earnings as a positive catalyst, and stocks have subsequently rallied to all-time highs. * 10 Small-Cap Stocks to Buy Before They Grow Up Amid this Q2 earnings season rally to all-time highs, the market has been led by a few shining stars. Let's take a look at those shining stars, and see if these hot stocks, which smashed Q2 earnings expectations, have what it takes to stay on a winning path for the rest of the year. Snap (SNAP)Source: Shutterstock Post-Earnings Rally: 19%% Gain Since Earnings: 20%Social media company Snap (NYSE:SNAP) crushed second-quarter estimates everywhere it mattered. The company added 13 million new users in the quarter. They were only supposed to add about 4 million. Revenues rose 48%. They were only supposed to rise around 37%. EPS came in at a loss of 6 cents per share. They were supposed to lose 10 cents a share. The third-quarter revenue and EBTIDA guides were also well above expectations.Broadly, Snap crushed it in Q2. The user growth narrative, which was proclaimed dead in late 2018, has come surging back to life thanks to the Android app revamp. Advertisers, who were shunning the platform in 2018 due to limited reach and poor ad capabilities, are now flocking to the platform as the user base expands and as Snap builds out more and smarter ad opportunities. Furthermore, margins, which have been ugly for a long time, continue to make meaningful upward progress. Losses are narrowing.Everything is moving in the right direction for SNAP stock. Q2 earnings confirmed that. But, with shares having more than tripled in 2019, one must reasonably ask: How much of this improvement is already priced in? A lot of it. The reality is, though, that in today's low rate environment, any growth stock with a good growth narrative will head higher. Snap's growth narrative is really good right now, so it is fairly likely that this stock continues to power higher for the foreseeable future. Alphabet (GOOG)Source: Shutterstock Post-Earnings Rally: 10%% Gain Since Earnings: 10%After a string of disappointing and sluggish earnings reports, global internet giant Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) finally hit a home run with its second-quarter earnings report. Revenues topped expectations, and revenue growth accelerated from the prior quarter (on the heels of big revenue growth deceleration last quarter). Margins also came in ahead of expectations, and compressed only 100 basis points year-over-year (the smallest compression in recent memory). Profits topped expectations by the most they've ever topped expectations.In a nutshell, Alphabet's Q2 earnings report checked off the boxes it need to (revenue growth isn't permanently decelerating and margins are finally starting to stabilize) while preserving the strength of the company's long-term drivers (YouTube is firing on all cylinders, the Cloud business is rapidly expanding share, the smartphone business is starting to gain traction and Waymo continues to build momentum in the self-driving space). * 10 Companies I'd Love to See Go Public GOOG stock should continue to move higher. The growth narrative here was "fixed" by strong Q2 numbers. Investors will now adopt a more optimistic attitude about the company's long-term profit growth prospects. This sentiment pivot will push the multiple higher. At the same time, analysts will raise estimates as Alphabet's numerous non-ad businesses continue to build momentum. This combination of multiple expansion and higher estimates will keep GOOG stock on a winning trajectory for the foreseeable future. Teradyne (TER)Post-Earnings Rally: 20%% Gain Since Earnings: 16%Renewed semiconductor market strength propelled test equipment giant Teradyne (NASDAQ:TER) to report stellar second-quarter numbers which blew estimates out of the water. Revenues were supposed to simply inch higher this quarter by less than 2%. Instead, Teradyne reported a robust 7% revenue growth rate in Q2, led by reinvigorated semiconductor test equipment demand. Profits topped expectations, too, and management delivered above-consensus revenue and profit guides for Q3.Zooming out, TER stock has been adversely impacted over the past few months by a global semiconductor market slowdown. But, signs are starting to emerge that this slowdown is reversing course. Global semiconductor sales rose month-to-month in May for the first time this year. Multiple semiconductor companies reported much better than expected Q2 numbers. Many of those same companies delivered above-consensus Q3 and full-year 2019 guides.Broadly, sentiment across the whole semiconductor market is dramatically improving. So long as U.S.-China trade tensions continue to cool and central banks globally remain supportive of the current economic expansion, semiconductor market sentiment and fundamentals should continue to improve into the back half of 2019. As they do, Teradyne's growth trends should similarly improve, and TER stock should stay in rally mode. Skechers (SKX)Source: McArthurGlen Designer Outlet via FlickrPost-Earnings Rally: 12%% Gain Since Earnings: 13%Athletic apparel brand Skechers (NYSE:SKX) smashed expectations in its Q2 earnings report, and in response, SKX stock rallied by more than 10% to new 2019 highs. Revenues easily cleared expectations, led by significant revenue growth acceleration from Q1 (5.2%) to Q2 (13.7%), 25%-plus growth in the international business, and a multi-quarter high 4.9% comp. At the same time, profits easily cleared expectations, too, driven by 260 basis points of SG&A leverage and 160 basis points of operating margin expansion.Zooming out, SKX stock is now up more than 70% year-to-date. That big rally can be attributed to the fact that -- for the first time in a long time -- revenues and margins are heading higher together. Skechers has never had a problem with revenue growth. This company has been a consistent double-digit revenue grower over the past several years, mostly because it dominates the mid-price athletic sneaker niche. But, the niche isn't terribly high margin, and Skechers has been having to spend an arm and a leg to grow global awareness. Thus, over the past few years, consistent revenue growth has been accompanied by choppy margin performance.In late 2018 and into 2019, however, margins have turned a corner. In each of the past three quarters, operating margins have risen by over 100 basis points year-over-year. Revenue growth trends have remained healthy, too. Thus, big revenue growth is now being accompanied by big profit growth. Investors are consequently readjusting their long-term profit growth outlooks here, and SKX stock is rallying on those favorable readjustments. * 7 Scorching Software ETFs Will the stock go higher? At $40, the stock seems fully valued. As such, while the narrative here is gaining momentum, valuation friction may ultimately cap further upside in the near term. Micron (MU)Source: Shutterstock Post-Earnings Rally: 13%% Gain Since Earnings: 46%Memory giant Micron (NASDAQ:MU) hit a home run with its third-quarter earnings report, and ever since, MU stock has been on a huge uptrend, to the tune of a near 50% gain in about a month.Micron's third-quarter numbers were much better than expected. Everything was down in the quarter -- revenues, margins and profits. But, everything was down by less than expected. Revenues fell less than expected. Margins compressed less than expected. Profits didn't fall by as much as expected. The fourth-quarter guide wasn't great. But, it also wasn't as bad it could've been.The broad takeaway from Micron's Q3 report was that a light is starting to form at the end of the tunnel for this memory giant. Since then, that light has only become brighter. Multiple signs have emerged that global semiconductor market fundamentals are reversing course and improving, headlined by a month-to-month global semi sales gain in May and multiple favorable Q2 reports and Q3 guides from several semiconductor companies.As that light has grown brighter, MU stock has stayed in rally mode. The reality is, this stock was priced for death. Death isn't happening. Instead, it appears that EPS is bottoming out, and that profit growth will come back into the picture sometime within the next few quarters. As this reality of renewed profit growth gains mainstream traction, investors will continue to flood back into MU stock. Nokia (NOK)Source: Shutterstock Post-Earnings Rally: 10%% Gain Since Earnings: 10%Finland-based Nokia (NYSE:NOK) inspired confidence into its investor base following a strong second-quarter earnings report that affirmed favorable growth trends heading into arguably this company's biggest catalyst in recent memory -- the mainstream roll-out of 5G coverage and infrastructure.Nokia topped Q2 revenue and profit estimates, with a fairly strong 5% constant currency revenue growth rate. But, that wasn't the important part of the earnings report. Instead, the important part was that management maintained its aggressive full-year 2019 and full-year 2020 revenue and profit guides, which call for significant operating margin expansion and huge EPS growth. That can all be attributed to what management is calling favorable 5G trends.If those favorable 5G trends play out, Nokia has a realistic opportunity to net somewhere around 45 cents in EPS by fiscal 2021. Based on a market average 16 forward multiple, that implies a fiscal 2020 price target of over $7. NOK stock trades below $6 today. Thus, upside potential over the next several quarters is compelling. * 7 Stocks to Buy With Over 20% Upside From Current Levels It's also likely to materialize. Nokia's second-quarter print and management commentary seem to affirm that the widespread roll out of 5G coverage is kick-starting a new cycle of network upgrades. Those network upgrades should drive Nokia's EPS towards 45 cents over the next two years, leading NOK stock to prices above $7. Starbucks (SBUX)Source: Shutterstock Post-Earnings Rally: 8%% Gain Since Earnings: 8%Shares of global coffee giant Starbucks (NASDAQ:SBUX) rallied big this earnings season after the company reported third-quarter numbers that came in well ahead of expectations. Global comps were supposed to rise 4%. They rose 6%, led by above-expected comparable sales growth in every geography. Revenues were supposed to grow less than 6%. They grew by more than 8%. Margins were supposed to fall 60 basis points. They only dropped 20 basis points. Further, management hiked its full-year revenue and profit guides.The big story here is that that traffic growth is back for Starbucks. Although comparable sales growth has been consistently positive for Starbucks for the past several years, those positive comps have been driven entirely by price hikes. Before this quarter, Starbucks hadn't reported a positive global traffic gain since the fourth quarter of 2017, and hadn't reported a traffic gain in excess of 1% since the second quarter of 2016.But, in the third quarter of 2019, Starbucks reported positive traffic growth. More than that, they reported 3% global traffic growth, and the traffic gains were broad-based. The Americas segment reported its biggest traffic gain since the second quarter of 2016, while China/Asia-Pacific reported its biggest traffic gain since the first quarter of 2017.With the return of traffic growth, Starbucks' long-term growth narrative got a big boost. Now, prices and customers are going up at a steady rate. That implies steady revenue and profit growth going forward. A lot of that is priced in today, with SBUX stock trading at an above-average 35-times forward earnings. But, not all of it. As such, going forward, SBUX stock will be defined by a tug-of-war between valuation and growth, which should ultimately produce tepid gains.As of this writing, Luke Lango was long GOOG and NOK. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Small-Cap Stocks to Buy Before They Grow Up * 7 Stocks to Buy With Over 20% Upside From Current Levels * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk The post 7 Hot Stocks That Killed It This Earnings Season appeared first on InvestorPlace.
As trade talks get underway this week after a nearly three-month break, the PHLX Semiconductor Index (SOX) charged ahead. It surpassed the 2019 highs set back in April, and now is up a remarkable 31% from the May 29 intraday low set after U.S. and China negotiations froze earlier that month. China is only one reason.
It's been a wild few months for shares of Qualcomm (NASDAQ:QCOM), as the global chip giant has found itself in the middle of a lot of noise - ranging from corporate deals, to legislation, to geopolitical tensions - the sum of which has slung Qualcomm stock from $50, to $90, back to $65, and up to $75.Some of that noise has been very positive for QCOM stock. Qualcomm recently signed a huge deal with Apple (NASDAQ:AAPL) wherein Apple licensing revenue will come back into the Qualcomm ecosystem for the next several years. Some of it has been negative. The FTC recently ruled that Qualcomm's licensing agreements violated antitrust law, and need to be renegotiated.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut, if you zoom out, the fundamentals underlying Qualcomm stock are favorable. In the big picture:* Global semiconductor market fundamentals are starting to improve.* Qualcomm's standing in that market is likewise improving thanks to the landmark Apple deal.* Recent developments with respect to Qualcomm's licensing business imply that Qualcomm won't see any hit on its licensing business anytime soon.* Qualcomm stock is still pretty cheap relative to its now very big near term growth prospects. * 7 Oversold Stocks To Buy Right Now Net net, then, Qualcomm stock - which is already up more than 30% year-to-date - should stay in rally mode for the foreseeable future. Global Semiconductor Market Fundamentals Are ImprovingThe global semiconductor market has been in free fall in 2019 as rising geopolitical tensions and economic uncertainty have weighed on global demand, against the backdrop of sky-high inventory levels, resulting in depressed sales and margin figures for semiconductor players like Qualcomm.But, the market is finally starting to show signs of life. While still down big year-over-year, global semiconductor sales improved month-over-month in May for the first time in several months, including a month-over-month gain in the all-important Americas and China markets.Further, Texas Instruments (NASDAQ:TXN) recently reported Q2 revenue and profit beats as operations improved sequentially. Teradyne (NASDAQ:TER) also reported Q2 revenue and profit beats amid strong 5G and networking demand. Mellanox (NASDAQ:MLNX) topped Q2 revenue estimates as the company reported sustained strong cloud and AI demand. Intel (NASDAQ:INTC) reported strong Q2 numbers, too.Net net, global semiconductor market fundamentals are stabilizing and improving, and this dynamic provides an increasingly favorable backdrop for QCOM stock. Qualcomm's Competitive Positioning Is ImprovingImportantly, Qualcomm's competitive positioning in the soon-to-be resurgent global semiconductor market is improving.This comes back to the fact that Apple is once again a Qualcomm customer. For several years, Apple was one of Qualcomm's biggest and most important customers. Then, the two started arguing over licensing agreements and royalty fees. Apple stopped paying the disputed licensing fees.In April, though, the two companies came to a deal. They dropped all litigation, Apple paid Qualcomm a huge lump sum fee for missed payments, and the two agreed to a multi-year partnership wherein Apple has essentially been locked in as a Qualcomm customer into 2025.That's big news for two reasons. First, it means one of Qualcomm's biggest and most important customers is back, and locked in for the next several years. Two, it means Qualcomm should get a huge boost when Apple launches its 5G phone next year.Broadly, thanks to the Apple deal, Qualcomm's profit growth outlook over the next several years is quite favorable. Qualcomm's Licensing Business Won't Get Hit Anytime SoonOne of the biggest risks to the QCOM growth narrative has been the concern that Qualcomm's licensing business will take a big hit over the next few years as the government forces Qualcomm to renegotiate such deals on less favorable terms.This concern was birthed out of an FTC ruling which found that Qualcomm's licensing practices violated antitrust law. But, since then, the U.S. Justice Department has requested that the enforcement of this antitrust ruling be put on pause.Citing support from the Energy Department and Defense Department, the DoJ basically stated that the ruling was incorrect and that disrupting a company as important to the nation's energy and defense services as Qualcomm would have broadly adverse implications.The DoJ's request for a pause here certainly isn't the last chapter in this book. But, it does imply that over the next few chapters, no hammer will be brought down upon Qualcomm, meaning that the company's mobile licensing business should remain healthy for the foreseeable future. Qualcomm Stock Has Valuation UpsideGiven the company's robust profit growth potential over the next few years, QCOM stock seems slightly undervalued at current prices.Qualcomm's depressed revenue and profit trends will improve in the back-half of 2019 thanks to renewed Apple revenue. In 2020 and 2021, Qualcomm's revenue and profits will get another big boost thanks to the widespread roll-out of 5G coverage and 5G smartphones. Thus, between now and 2021, Qualcomm's revenue and profits stand to rise by a lot.According to YCharts, the consensus revenue estimate for fiscal 2021 is $28.4 billion, up 25% from last year's $22.7 billion revenue base. The consensus EPS estimate for fiscal 2021 is $6.80, up 85% from last year's $3.60 EPS base.Thus, when contextualized with the fact that EPS is expected to nearly double over the next few years, QCOM stock's elevated forward earnings multiple of 20 makes sense.If you apply this stock's historically average 13-times forward multiple to the fiscal 2021 projected EPS base of $6.80, you arrive at a fiscal 2020 price target of over $88. Discounted back by 7% (three points below 10% to account for the 3% yield), which equates to a fiscal 2019 price target of just under $83. Bottom Line on Qualcomm StockThere has been a lot of noise surrounding QCOM stock over the past several months. But, zooming out, the core fundamentals underlying this stock are favorable, and project to remain favorable for the foreseeable future. All things considered, then, Qualcomm stock has fundamentally supported runway to prices above $80 over the next few months.As of this writing, Luke Lango was long QCOM and INTC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Oversold Stocks To Buy Right Now * 7 Stocks to Buy Upgraded by Wall Street * 7 Marijuana Stocks With Critical Levels to Watch The post Four Big Reasons Why Qualcomm Stock Can Stay in Rally Mode appeared first on InvestorPlace.
Shares of GPU giant Nvidia (NASDAQ:NVDA) have been on a roller coaster ride over the past year. A year ago, Nivida stock was an untouchable AI stock closing in on $300.Source: Shutterstock At the end of 2018, though, Nivida plummeted to $130 on global semiconductor market meltdown concerns. Those concerns eased in early 2019. NVDA stock shot up to $190 by April. Then, by June, it had dropped to $130 again as semi market meltdown concerns came back to the forefront. They have since eased, and Nvidia stock has rebounded to $170.Net net, over the past 12 months, the Nvidia stock price has traveled from $300, to $130, to $190, back to $130, and up to $170.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Sell This Summer Earnings Season That's a wild ride. But, I think this wild ride is set to end soon. Specifically, I think global semiconductor market fundamentals are showing signs of stabilizing and improving. As those fundamentals do stabilize and improve, NVDA stock should similarly stabilize into a more normal medium to long term uptrend.That's why I'm bullish on NVDA stock here. I've reiterated time and time again that late 2018 and early 2019 weakness in the stock was a byproduct of temporary market weakness. That market weakness is now passing. Taking its place will be longer-running secular tailwinds.Ultimately, those secular tailwinds create a visible pathway for NVDA stock to climb back towards $300 in the long run. Market Fundamentals Are ImprovingThe bull thesis on NVDA stock is that the company's core fundamentals are finally starting to improve, after a multi-quarter stretch of temporary but ugly turbulence.The semiconductor market has been hit hard over the past few quarters. There have been a few things at play here, including sky-high inventory levels, weak demand in the face of go-forward economic uncertainty, and rising geopolitical tensions. Nvidia has not been exempt from these headwinds. Over the past few quarters, the company's revenues, margins, and profits have been in free fall.But, the semiconductor market is showing early signs of bottoming out and turning around. From a macro perspective, global semiconductor sales improved month-over-month in May. While still down big year-over-year this was the first time that has happened in several months, including a month-over-month gain in the all-important Americas and China markets.Further, the forecast calls for a 2019 year-over-year sales decline of 12% (less than the first quarter's 13% drop), and a 2020 year-over-year sales gain of over 5%.Broadly, then, global semiconductor sales trends are finally turning a corner, and are expected to improve into the back half of 2019 and 2020.The microdata confirms this macro outlook. Texas Instruments (NASDAQ:TXN) recently reported Q2 revenue and profit beats as operations improved sequentially. Teradyne (NASDAQ:TER) also reported Q2 revenue and profit beats amid strong 5G and networking demand. Mellanox (NASDAQ:MLNX) topped Q2 revenue estimates as the company reported sustained strong cloud and AI demand. Intel (NASDAQ:INTC) reported strong Q2 numbers, too.Net net, global semiconductor market fundamentals are stabilizing and improving, and this dynamic should power NVDA stock higher for the foreseeable future. Nvidia Stock Has Runway HereThe valuation underlying NVDA stock, coupled with this company's robust long term profit growth potential through numerous AI and data verticals, implies that at $170, the stock has a lot of long term upside potential.Nvidia has broad exposure to all of tomorrow's most important markets. The company is a big player in the hyperscale data-center space. They are also the leaders when it comes to supplying chips for machine learning, AI, self-driving, cloud gaming, augmented reality, and much, much more.All of those markets have huge growth potential in the long run. The company also has very little price competition in those markets, implying that margins have room to move higher in the long haul. Consequently, Nvidia should continue to fire off double-digit revenue and profit growth rates over the next few years.Nvidia stock trades at 32-times forward earnings. Sure, that's a big multiple for a semiconductor stock (the average forward earnings multiple in this space is 16). But, the average long term projected earnings growth rate across the semiconductor space is 11%. For Nvidia, it's 15%, according to YCharts.Indeed, my modeling suggests that $13 in EPS is achievable for Nvidia by 2025, assuming double-digit revenue growth and steady margin expansion. Based on a growth-average 20 forward multiple, that yields a long term price target for NVDA stock $260. Bottom Line on Nvidia StockNvidia stock has undergone immense turbulence over the past year, mostly due to immense turbulence in the global semiconductor market. But, fundamentals in that market are starting to stabilize and improve. As they continue to do so over the next few months, NVDA stock should move higher with less volatility.As of this writing, Luke Lango was long NVDA and INTC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 5G Stocks to Connect Your Portfolio To * 7 Stocks to Sell This Summer Earnings Season * 6 Upcoming IPOs for July The post It Looks Like Nvidia Stock Is Shaking out of its Downturn appeared first on InvestorPlace.
The forecast for a chip industry recovery in the second half of 2019 is in doubt at the start of second-quarter earnings season. Chip stocks have rallied lately on hopes for a recovery.