Get Ready for a Big Finale to Earnings Season

17 minutes ago

Earnings season is almost done—but a big finale is expected this week. 

More than 90% of reports from S&P 500 companies are in, according to a Monday note from Oppenheimer, which said third-quarter profits are up 6.8% year-over-year—with eight of the benchmark index’s 11 sectors reporting rising earnings—on the back of 5% revenue growth.

Those numbers are a bit higher than FactSet’s “blended” figure, which combines reported results with estimates for those yet to announce; as of Friday, those were at 5.4% for profits and 5.5% for revenue.

Still, some of the biggest events on the calendar remain ahead. Retailers Walmart (WMT) and Lowe’s (LOW) are set to deliver results Tuesday, while Target (TGT) and TJX (TJX) are expected to deliver their numbers a day later. Taken together, the results—and any updates to the companies’ outlooks—could offer fresh perspective on the state of the consumer ahead of Black Friday. 

The main event, however, may come Wednesday after the bell, when chip giant Nvidia (NVDA) is set to report results. Big Tech broadly has so far exceeded Wall Street’s earnings growth expectations in the third-quarter, UBS strategist Jonathan Golub noted last week.

The last of the Magnificent Seven tech giants to report, Nvidia—one of the best-performing stocks in the S&P 500 this year—is expected to both deliver big revenue growth and illustrate the state of ongoing demand for the technology underpinning artificial intelligence. 

Nvidia is “the most dominant stock in the market,” Bank of America analysts wrote in a Sunday note, saying it is responsible for a fifth of the S&P 500’s return over the past 12 months. “With the market taking a breather last week following the election rally, we believe Nvidia earnings can dictate the near-term direction of the market.”

–David Marino-Nachison

Nvidia Slips After Report of Blackwell Chip Snag

1 hr 19 min ago

Nvidia (NVDA) shares fell Monday as reports, citing The Information, said that its next-generation artificial intelligence (AI) Blackwell chips have faced problems with accompanying servers that overheat.

Nvidia’s Blackwell graphics processing units reportedly overheat when connected in server racks designed to hold up to 72 chips. The chipmaker has asked its suppliers to change the design of the racks several times to resolve overheating problems, with some customers worried they won’t have enough time to get new data centers up and running, according to reports.

"NVIDIA GB200 systems are the most advanced computers ever created. Integrating them into a diverse range of data center environments requires co-engineering with our customers,” an Nvidia spokesperson said in a statement to Investopedia.  “While our customers race to be first to market, NVIDIA is working with leading CSPs (cloud service providers) as an integral part of our engineering team and process. The engineering iterations are normal and expected."

Nvidia CEO Jensen Huang has called the Blackwell chip “a complete game changer for the industry.” Nvidia has said it expects to ship several billion dollars worth of Blackwell revenue during the January quarter as production ramps up.

Shares of Nvidia, which will release its highly anticipated earnings report on Wednesday, were down about 1.3% in recent trading, after falling as much as 3.3% earlier in Monday’s session.

–Nisha Gopalan

Supermicro Rallies on Anticipation of Plan to Avoid Delisting

2 hr 6 min ago

Shares of Super Micro Computer (SMCI) jumped in early trading Monday, extending their rally on anticipation the company is preparing to submit a plan to avoid being delisted from the Nasdaq stock exchange.

Citing a person familiar with the situation, Barron’s reported Friday that the server manufacturer expects to be able to meet the deadline set by the Nasdaq by submitting a plan by Monday.

The gains come after the stock took a hit in recent months from concerns about the company’s stock being delisted after it delayed filing its annual report in August. The company said it received a letter from the Nasdaq on Sept. 17 informing Supermicro of a 60-day deadline to file the late report, with a weekend deadline leaving Monday the effective date.

Earlier this month, the company said it “remains unable at this time to predict” when it would file the delayed annual report. Last week, Supermicro said its official first-quarter results would also be delayed, as it hires a new auditor to review its results after accounting firm EY resigned.

EY’s resignation followed months of speculation about Supermicro’s accounting after the annual report was delayed, and a report from short seller Hindenburg Research accused it of “accounting manipulation” and other violations.

Supermicro shares were up over 10% in recent trading, after rising as much as 22% in the opening minutes of Monday's session. The stock is still down more than 80% from its highs in March.

–Aaron McDade

Tesla Jumps on Trump Team Plans to Ease Self-Driving Rules

3 hr 31 min ago

Shares of Tesla (TSLA) moved higher in premarket trading Monday following a report that President-elect Donald Trump’s transition team is planning a federal framework for fully self-driving vehicles, as investors bet on easier rules for the company’s robotaxi.

Tesla CEO Elon Musk, who is part of Trump’s inner circle, benefits under such a framework as he has made the robotaxi, a vehicle that will be able to drive itself without human supervision, a key focus of the EV maker’s future.

According to Bloomberg, Trump’s transition team members have told advisers they plan to make a federal framework for fully self-driving vehicles one of the Transportation Department’s priorities. 

At the moment, companies looking to sell vehicles without steering wheels or foot pedals en masse, something Tesla is planning, face significant regulatory hurdles, the report said. Present U.S. rules also pose big obstacles for Tesla’s plans for a robotaxi, including a cap that limits their deployment, the report added.

Wedbush analysts reiterated their outperform call on the EV maker, saying a federal framework would be "bullish for Tesla" and a "huge step forward in easing US rules for self-driving cars."

Wedbush, which has a $400 price target on the EV maker, said last week that Tesla, which is less reliant on credits than smaller upstarts, could even benefit from less government support for EVs, Investors expect a Trump presidency to roll back EV credits given under the Biden administration.

Tesla shares, which have gained more than 30% since election day, were up 6% in recent premarket trading.

–Nisha Gopalan

Major Index Stock Futures Mixed

3 hr 31 min ago

Futures tied to the Dow Jones Industrial Average were down 0.2%.

S&P 500 futures were up fractonally.

Nasdaq 100 futures were up 0.2%.

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