Month: May 2024

Investing.com — Despite the correction over the last couple of days, May was a nearly perfect month for stock market investors. Those who positioned themselves in the correct stocks were able to bring hefty double-digit returns in their composed portfolios.

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Marathon Digital Holdings Inc (NASDAQ:MARA): +24.70% in may.
Applovin Corp (NASDAQ:APP): +18.30% in may.
NVIDIA Corporation (NASDAQ:NVDA): +33.07% in may.
Perficient Inc (NASDAQ:PRFT): +56.39% in may.
NAPCO Security Technologies Inc (NASDAQ:NSSC): +28.88% in may.
Vistra Energy Corp (NYSE:VST): +37.08% in may.
Louisiana-Pacific Corporation (NYSE:LPX): +24.88% in may.
Wayfair Inc (NYSE:W): +17% in may.

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Tech Titans: +67.09%
Beat the S&P 500: +27.73%
Dominate the Dow: +16.50%
Top Value Stocks: +32.23%
Mid-cap Movers: +17.79%

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S&P 500: +13.95%
Dow Jones Industrial Average: +5.15%
Nasdaq Composite: +17.00%

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Source: ProPicks

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A New York jury convicted Donald Trump in the high-profile hush money trial amid his bid to reclaim the presidency in the ongoing race.

After two days of deliberations, the 12-member jury found Trump guilty on all 34 counts, including falsifying documents to cover up a payment to silence a porn star before the 2016 election.

Sentencing is set for July 11, just days before the Republican National Convention on July 15, where Trump is expected to be formally nominated for president.

In the wake of the verdict, analysts at Evercore ISI shared five key factors they will be monitoring to determine how much the jury’s decision impacts the race.

1) ‘Does Trump get a prison sentence?:’ Following the verdict, Trump was released on his own recognizance, with sentencing set for July 11, just before the Republican convention. He faces up to four years in prison, though penalties could be limited to fines, restitution, and probation, Evercore analysts highlighted. His behavior during the trial may negatively impact his sentencing, as such conduct often leads to harsher punishments.

“Given the appeals processes, there isn’t any real chance that President Trump will start any version of a sentence before November,” Evercore wrote. “However, if the Judge does sentence him to jail, that alone will elicit a particularly strong reaction from the Republican base.”

2) ‘Which base gets more motivation from the verdict overall?:’ According to Evercore, Yesterday’s verdict is expected to energize both political bases, with each side raising significant funds post-announcement.

Democrats, who were unlikely to vote for Trump, may now be more motivated to support Biden to prevent Trump’s reelection. Meanwhile, Republicans could become even more outraged, viewing the trial as unfair persecution of their candidate, further solidifying their support.

“Overall, Biden is the candidate that is more in need of base motivation right now, as his coalition has been fracturing in recent polls due to the war in the Middle East, inflation, and general concern about the direction of the country. So even if Republicans respond with more fervor, Biden probably benefits more from the help,” the analysts continued.

3) ‘How do “disengaged voters” respond?:’ Recent data shows Trump’s lead is partly driven by “disengaged voters,” those who don’t closely follow politics or didn’t vote in 2020.

Yesterday’s historic verdict is likely to catch their attention, Evercore notes, but predicting their response is challenging. If the reactions from Democratic and Republican bases cancel each other out, the impact will heavily depend on how this group of voters processes the new developments.

4) ‘What are the polls going to do – not next week – but next month?:’ Evercore’s team said the news of the verdict delivered somewhat of a shock, adding that the headlines over the weekend will likely be dramatic, with unending speculation on cable news.

“In that regard, it is probably helpful to Biden in the sense that it changes the narrative from his sagging poll numbers. However, it’s not the instant reactions or headlines that matter – it’s about how these fold into a larger narrative that is developing in this race,” analysts said.

5) ‘What happens next in the other cases?:’ The New York case has always been the only one we expected to be fully tried before the election, Evercore’s analysts noted, however, other key legal moments are anticipated in the coming weeks.

“We are still waiting to hear from the Supreme Court on whether the January 6th Federal trial can proceed given the Presidential immunity claims,” they said. “We don’t expect much near-term significant action in Georgia or in the classified documents case in Florida.”

Still, it is important to mention that President Biden’s son, Hunter Biden, also faces a trial starting June 3, potentially distracting the Biden campaign. Some may argue that Hunter’s legal issues make all these trials a wash, continued Evercore.

By Abigail Summerville

NEW YORK (Reuters) – The S&P 500 and the Nasdaq eased on Friday, on track to break their five-week winning streaks, as investors digested an inflation report and assessed when the Federal Reserve might begin cutting interest rates.

The technology sector led declines among the S&P 500 sectors, falling 1.6%, followed by consumer discretionary, which was down 1%.

An index of semiconductors was down 2.6%, while shares of Dell (NYSE:DELL) plummeted 18% after it forecast current-quarter profit below market estimates and signaled that higher costs to build servers that meet heavy AI workloads would dent its annual margins.

The U.S. personal consumption expenditures (PCE) price index increased 0.3% last month, the Commerce Department’s Bureau of Economic Analysis showed, matching the unrevised gain in March.

Consumer spending slowed more than expected, the report added.

“People were pleased that it wasn’t hotly surprising but also underneath the surface, the consumer continues to show a little bit of strain,” said Carol Schleif, chief investment officer at the BMO family office in Minneapolis.

“It’s coming through when you look at the sector performances in the market. … Consumer discretionary is down at the bottom of the list of sector performers today.”

Traders of futures tied to the Fed policy rate added to bets of roughly even odds that the central bank will begin to cut rates in September and boosted the odds of a second rate cut in December to about the same probability.

The Dow Jones Industrial Average rose 265.19 points, or 0.70%, to 38,376.67. The S&P 500 lost 16.37 points, or 0.31%, at 5,219.11 and the Nasdaq Composite fell 210.73 points, or 1.26%, to 16,526.35.

Tech and chip stocks, which have led Wall Street’s recent rally, retreated this week as a spike in Treasury yields pressured riskier assets.

Among gainers, Zscaler (NASDAQ:ZS) jumped 7.1% after the security solutions provider forecast fourth-quarter results above estimates.

Gap surged 28.5% after the apparel maker raised its annual sales forecast and its first-quarter results beat market expectations, in fresh signs that its turnaround strategy was starting to work.

Trump Media & Technology Group fell 5.3% after a New York jury convicted former President Donald Trump of falsifying documents to cover up a hush money payment to a porn star ahead of the 2016 elections.

Advancing issues outnumbered decliners by a 2.03-to-1 ratio on the NYSE and by a 1.24-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and six new lows, while the Nasdaq recorded 48 new highs and 82 new lows.

A recent unanimous guilty verdict on all charges against former President Donald Trump has been described as a “more severe outcome than anticipated,” according to a note from research firm Vital Knowledge.

The firm explained that initially, many expected Trump would be found guilty on some counts, particularly the misdemeanor charges related to falsifying business records, but the comprehensive guilty decision surprised observers, said the firm.

This development has significant political implications. “Dems had reached panic mode (again) in the last several days, and this guilty decision will likely have a State of the Union-like effect on some of the polling figures in the coming days and weeks,” Vital Knowledge noted, suggesting that it may benefit President Biden’s polling numbers.

However, despite multiple polls indicating that a guilty verdict would damage Trump politically, the New York case is considered the least consequential among the four he faces, potentially muting its overall impact.

Vital Knowledge also highlighted that it is unlikely verdicts in the other cases (in DC, Florida, and Georgia) will be reached before the November election, though the DC trial might start before then.

For markets, the immediate impact of the verdict is said to be minimal. “While the verdict is a small positive for Biden, it’s hardly decisive, and the November race will still be very close,” the firm stated. They advised attention to ongoing corporate earnings reports, with companies like Dell (NYSE:DELL), MongoDB (NASDAQ:MDB), and Veeva experiencing significant after-hours trading losses.

Elsewhere, analysts at Raymond James said the verdict immediately raised questions about the impact of the presidential election.

“We view the Presidential election as close, but with Trump with a narrow lead,” wrote the firm.

When it comes to the impact on the market, Raymond James noted that the presidential race has been “remarkably static for most of the year,” and they have not yet seen many investors making bets on the outcome for their portfolio.

“Memorial Day frequently serves as an unofficial start to the election and with this verdict and upcoming debates, we expect greater market reaction to potential 2024 election outcomes,” added Raymond James analysts.

Investing.com — “The next industrial revolution has begun.”

That was the declaration from Nvidia (NASDAQ:NVDA) Chief Executive Jensen Huang following yet another quarter of bumper earnings from the semiconductor group earlier this month.

Revenue in the three months to April 28 soared by 262% from a year ago to $26 billion, beating Wall Street estimates of $24.7 billion, even as California-based Nvidia faces increasing competition from rivals like AMD and Intel (NASDAQ:INTC). Data center revenue, which roughly translates to Nvidia’s all-important artificial intelligence chips, spiked by 427% year-on-year to a record $22.6 billion.

Adjusted earnings per share, meanwhile, came in at $6.12, up from $1.09 a share a year earlier and above analyst estimates of $5.58 a share.

What does Nvidia do?

It was the latest blockbuster return for Nvidia, whose data center graphics processing units (GPUs) have become essential parts of the architecture undergirding the development of generative AI products.

According to analyst estimates cited by Reuters, Nvidia now controls roughly 80% of the market for GPUs, the chips that power the computers that process the data and perform the specific complex mathematics needed to fuel AI. More generic central processing units, such as those made by Intel, can undertake a wider-range of tasks but less efficiently.

The company’s customers reportedly include some of the most high-profile names in Big Tech like electric vehicle manufacturer Tesla (NASDAQ:TSLA) and OpenAI, the maker of the mega-popular AI chatbot ChatGPT.

Nvidia’s performance has become an indicator of the course of future demand for the nascent technology, with the firm’s products sometimes compared to the picks and shovels used by prospectors in California’s gold rush in the mid-1800s. As a result, any earnings and announcements out of the group are now closely monitored on Wall Street.

Nvidia Price Today

Supported by the runaway hype around AI, Nvidia’s share price has spiked by about 132% so far in 2024 and roughly 195% over the past one-year period.

The surge led the business to announce a ten-for-one forward stock split starting on June 7. Nvidia said the move will help make owning its shares “more accessible to employees and investors.”

It also hiked its quarterly cash dividend by 150% to $0.10 per share.

Nvidia Stock Forecast

In the current quarter, Nvidia expects group-wide revenue to continue growing to $28 billion, plus or minus 2%. Analysts had pencilled in a quarterly forecast of $26.8 billion. Adjusted gross margin is expected to come in at 75.5% for the second quarter.

Goldman Sachs analysts said both metrics “met elevated investor expectations.”

Is Nvidia A Risky Investment?

Despite Nvidia’s position at the center of the boom in enthusiasm over AI, its dominance is coming under threat from mega-cap players like Amazon (NASDAQ:AMZN), Google-owner Alphabet (NASDAQ:GOOGL) and Facebook-parent Meta Platforms (NASDAQ:META). These firms have said they plan to increasingly funnel money into building out their AI capabilities.

Nvidia also faces risks from stiffening competition from its more immediate rivals such as Intel and Advanced Micro Devices (NASDAQ:AMD), as well as upstarts like GraphCore, Sambanova and Cerebras, according to Sandeep Rao, Senior Researcher at Leverage Shares.

“While Nvidia’s strong inroads in corporate sales provide some justification for a premium over the price ratio of peers, current price ratio levels indicate heavy overvaluation considering closing competition vis-a-vis average corporate needs,” Rao said.

The wider outlook for GPU purchases by “everyday” consumers is “running flat and trending bearish” and corporate demand is “mixed-to-bullish,” Rao argued.

“Sales cycles will tend to show smaller surges since the sunk cost on existing infrastructure will require rationalization before additional requisitions can be made,” he said. “On the other hand, rising AI deployments are essentially nudging towards price-efficient trillion-parameter computation capabilities, which Nvidia is square in the center of.”

Meanwhile, disruption to Nvidia’s guidance could come from China, which Rao noted is a crucial source of the raw materials needed by Nvidia’s main foundry partner Taiwan Semiconductor, or TSMC. In particular, he highlighted possible issues posed by U.S. restrictions on cutting-edge exports to China.

“A trillion-parameter computation proficiency is “supercomputer” territory, and the U.S. regulatory regime has long been cagey about permitting supercomputer exports to other nations,” Rao said. “Thus, Nvidia’s research excellence – ironically – puts a damper on its potential ability to make sales inroads outside of the Western Hemisphere, which is key for continued sales success.”

Discover more about Nvidia and other AI stocks

Looking to assess the performance of other AI stocks? Our dedicated page offers a comprehensive list of alternative AI companies spanning various industries and technologies. Assess the performance across popular AI stocks including Nvidia (Learn more: What is Nvidia?)

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Donald Trump guilty verdict on charges of falsifying business documents is unlikely to affect his presidential campaign significantly, according to strategists at Capitol Economics.

This is because the resilience Trump has demonstrated in the past, notably surviving two impeachment attempts, indicates that this legal setback may not derail his political aspirations, the strategists said.

“Trump isn’t going to prison for covering up a hush money payment that, technically, amounted to an illegal campaign contribution,” they said.

Capitol Economics points out that despite this, Trump also faces potential federal and state trials for retaining classified documents and election interference.

However, the firm notes that none of these trials have scheduled start dates and could be postponed until after the upcoming presidential election.

In the wake of the conviction, betting markets continue to favor Trump narrowly over Joe Biden for the November election victory.

Capitol Economics finds this outlook reasonable, considering Trump’s polling edge in key swing states.

“We see the New York trial as the least likely of the Trump trials to impact the election, given that voters are more inclined to look past a hush money conviction than other more serious charges,” Evercore ISI policy strategists wrote.

“We think this still holds. However, in a close election, even a tiny shift in attitudes can matter,” they concluded.

Investing.com — Shares in Dell (NYSE:DELL) shed around a fifth of their value in U.S. trading on Friday after the technology group unveiled a lower-than-anticipated current-quarter earnings outlook and indicated that higher spending on building out servers to meet artificial intelligence workloads would weigh on full-year margins.

Texas-based Dell forecast adjusted per-share income of $1.65, plus or minus $0.10, in its quarter ended in July, below Wall Street expectations of $1.88, according to analysts at Evercore ISI.

Adjusted gross margin in its ongoing 2025 fiscal year, meanwhile, is seen declining by around 150 basis points.

Speaking in a post-earnings call, executives at Dell flagged that gross margins have come under pressure from a “more competitive pricing environment and a higher AI optimized server mix.” Chief Operating Officer Jeff Clarke added that the company can “do better” in boosting margins.

The Evercore ISI analysts said they believe the negative stock reaction reflects “very high expectations,” adding that they found Dell’s results for its April quarter to be “fairly solid.”

First-quarter revenue of $22.2 billion marked a 6% increase from the same three-month period last year, surpassing the consensus estimate of $21.65 billion. Adjusted earnings per share came in at $1.27, slightly above the analysts’ projections of $1.25, but 3% down from the previous year.

Dell’s Infrastructure Solutions Group, which houses its storage, software and server offerings, was a standout performer, with revenue climbing 22% year-on-year to $9.2 billion, bolstered by a record 42% increase in servers and networking revenue.

Revenue growth at its Client Solutions personal computing business was flat at $12.0 billion, with commercial client revenue seeing a modest 3% rise.

Chief Financial Officer Yvonne McGill highlighted the company’s execution and cash flow, noting the role of AI in driving new growth.

AI server orders rose by about $500 million from the last quarter to $2.6 billion, although analysts at Goldman Sachs flagged that the number “likely disappointed high investor expectations.”

Senad Karaahmetovic contributed to this report.

Investing.com– The Dow racked up massive gains Friday after data showing that the pace of inflation last month met expectations kept hopes of rate cut later this year alive, offsetting tech weakness.

 At 16:00 ET (20:00 GMT), Dow Jones Industrial Average rose 574 points, or 1.5%, S&P 500 rose 0.9% and NASDAQ Composite fell 0.01%.

Treasury yields fall as stable PCE keeps rate cut hopes alive

Treasury yields fell Friday as data showing the core personal consumption expenditures (PCE) price index, the Fed’s preferred gauge of inflation, rose 2.8% in April, unchanged from a month earlier, matching investor expectations. 

The in-line data restored confidence somewhat that the disinflation trend remains on track following a slew of hawkish remarks recently from Fed members.  

With inflation stubbornly elevated, a “growing number of Fed officials continue to question whether the Committee stopped short of a sufficiently restrictive level to tackle price pressures, or if the current pace of policy is as restrictive as previously thought,” Stifel said in a note.

Dallas Fed President Lorie Logan said on Thursday she is still worried about upside risks to inflation and warned the U.S. central bank needs to stay “flexible” and keep “all options on the table” as it watches the data and determines how to respond.

Tech pares losses even as Dell slumps on weak earnings; Zscaler rises

Tech, continued to drag on the broader as retreats from its record high levels, with chips stock and Dell leading to the downside. 

Dell Technologies (NYSE:DELL) slumped more than 17% after the technology group unveiled a lower-than-anticipated current-quarter earnings outlook and indicated that higher spending on building out servers to meet artificial intelligence workloads would weigh on full-year margins.

But despite the near challenges, UBS said it continues to back the Dell, as the company should continue to benefit from the growing demand for its AI servers. UBS said its price target on Dell to $164 from $141 on expectations that “AI ramp should continue despite the speed bump.”

The woes for enterprise software stocks following a slump in salesforce a day earlier continued, as developer data platform MongoDB (NASDAQ:MDB) plunged more than 24% after cutting revenue guidance amid soft macroeconomic backdrop and slowing deal wins.

Nordstorm, Gap shine on earnings stage 

Apparel retailer Nordstrom (NYSE:JWN) climbed 5% as the company maintained its full-year outlook, though delivered a wider than expected fiscal first quarter loss.

Gap (NYSE:GPS) surged nearly 29% after the clothes retailer raised its annual sales forecast and its first-quarter results beat market expectations. 

Zscaler (NASDAQ:ZS) rose 8% after the cloud security firm reported strong quarterly earnings and also hiked its guidance.

Energy stocks shrug off falling oil prices

Energy stocks were higher even as oil prices turned negative as ongoing demand concerns offset ongoing expectations that OPEC+ is set to maintain its oil production curbs after announcing that its Jun. 2 meeting would now be held in person rather than remotely.  

Data released on Thursday, showed gasoline inventories grew 2 million barrels, more than expected. This raised concerns that demand in the world’s biggest fuel consumer was sluggish going into the travel-heavy summer season.

(Peter Nurse, Ambar Warrick contributed to this article.)