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Uber raises guidance, Lennar dips amid supply shortage, Nvidia stock caught in Evergrande fears

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Brian Sozzi, Julie Hyman, and Emily McCormick break down Tuesday's stocks on the move, which include: Uber shares seeing a jump in the market as a result of a more optimistic outlook for the company, Lennar stock dipping as supply chain constraints continue to plague the company, and Nvidia getting caught up in the Evergrande crisis.

Video Transcript

- Definitely some good news here that we're seeing from Uber, of course. The stock moving higher in the pre-market holding on to those gains, now extending them up more than 7% in this opening trade here.

And one of the things that the company said that Wall Street is really focusing on is that it now expects adjusted EBITDA to come in between a loss of $25 million or a profit of $25 million for the third quarter. Now that ends in September for Uber. The company also said in its filing that it already had seen monthly adjusted EBITDA profitability in each of July and August.

So it really is going to be September. That's the deciding factor here for Uber in terms of actually hitting that profitability benchmark.

And one thing that I want to highlight here is actually a note from Rohit Kulkarni of MKM Partners. He mentioned in a note this morning that he actually expects to see Uber benefit from the lapse and unemployment benefits that we saw at the federal level nationally on September 6 because that could actually bring down some of those driver incentives here for Uber.

And something to really watch here as we watch Uber pace towards profitability, and try to hit that benchmark that its main competitor here in the US. Lyft already hit in its most recent second quarter results.

- Yeah, and the reason that Lyft hit it is because Lyft does not have the food business. And again, I come back to the narrative with Uber and Lyft that's so fascinating to me, which is the narrative had been that Uber was a more robust business because it was more diversified, right? At one point.

And then that became a disadvantage rather than an advantage. Even during the pandemic, right, where it had still some revenue coming in because the food business. But that the other side of that is that, that food business is less profitable on a margin basis than the rideshare business.

And what's happened now is we start to hopefully come out of the pandemic is that even if people are out and about more, they're still ordering in. And so they're still keeping that low margin relatively lower margin business coming in. So we'll see sort of where that balance is out going forward for Uber, especially as we hear a lot of on an anecdotal basis, a lot of complaints about accessibility of Uber's at this point and price of Uber's at this point. So we're going to have to see how that all shakes out in the next couple of quarters.

- Yeah, I'll just quickly add to before we jump over to Lenore, Julie. Uber noted gross bookings. So slightly raised guidance on the low end for Uber in terms of gross bookings. Now looking for 22.8 billion to 23.2 billion.

They were previously at $22 billion to $24 billion. You know, I think this guidance from them is really reflects them cutting a lot of expenses. It's not that the economy is out there rip roaring.

I would say at least this report reflects just the continued slowdown in the US economy here. It's just that a company like Lyft and an Uber. They've gotten very good at cutting expenses and then guiding the street and analysts to those revised expectations.

But Julie switching gears here to some I would say dour news. Another homebuilder out this morning, or yesterday evening with-- with not-- not a good look. Warning of continued supply chains-- supply chain challenges and that in fact is the norm.

- Yeah, and this comes back again to a theme that we've been talking a lot about, which is that are the challenges going forward for US companies going to meet demand based or supply based. And this one, again, lends evidence to the idea that it's going to be supply based.

Because Lennar says demand is still robust. In fact, the CEO or excuse me, executive Chairman Stuart Miller saying in the statement, despite missing our delivery guidance, new home demand remains strong even as the market reverts back to traditional seasonality. Orders were up 5% from a year earlier.

The company's gross margin was the highest in its history. That said to get back to the more negative part of the news, the company's deliveries 15,199. That is 600 below the lower end of its guidance.

But again, it's because of supply chain issues, it's because of labor shortages as well. It's not because it doesn't have people who want to buy the homes you guys.

- Well, Jillian, I think to your point about people still out there wanting to buy these homes, I think if we take a look at the economic backdrop that we're seeing now. Of course, we had seen a little bit of a dip in housing market activity in late spring, early summer. But just pointing to some of the data that we got out this morning.

We got housing starts and building permits both coming in better than expected. I think this bodes well for a lot of these home builders like Lennar. Of course, being one of the main ones.

But again, housing starts up 3.9% in August. Building permits up 6%. The expectation was for a drop of 1.8%. That had actually been the biggest gain that we've seen here since January, which was, of course, before we start into see those interest rates creep up and some of these supply chain constraints and material shortages come into play.

So again, Lennar are really pointing to some of these company specific, as well as industry wide trends. But if we look at the macro landscape, starting at least to see a little bit of a pickup here from what the economic data on a national level is telling us.

- And switching gears again here guys. I'm also watching in video. Now this has been a top trending ticker for the past 24 hours here on the Yahoo Finance platform. In video getting hit yesterday, I would suspect because they do make mining equipment for cryptocurrency trading.

Of course, Bitcoin continues to be under pressure. And Vidi also has a good deal of exposure to China. And NVIDIA again today coming out of the gate somewhat weak.

Now we have seen we are seeing some renewed weakness in the major industry indices since the market opened a couple of minutes ago. But NVIDIA coming out of the gate. Not a lot of conviction in there to buy that weakness yesterday.

Also now seeing a similar vibe, a vibe. I'm getting this word vibe over for other semiconductors here.

Broadcom ticker-- ticker is AVGO. That is now down slightly AMD under pressure a little bit. So if you are concerned about what's happening in China, you should be paying careful attention to the semiconductor space.