My top 10 things to watch Wednesday, May 22
- Nvidia earnings day. Stock futures are slightly lower after the S&P 500 and Nasdaq closed at record highs Tuesday. The artificial intelligence chipmaker’s report after the bell is dominating the headlines. It’s not a make-or-break report, but expectations are very high.
- Club name Nvidia has had a huge gain so far this year, up 92.6%. That’s more than the combined advance for fellow portfolio stocks Alphabet, Meta Platforms and Amazon. Here are three pressing questions ahead of Nvidia’s report tonight. One nugget including in our preview: Amazon’s cloud unit is not halting chip buying from Nvidia while waiting for next-generation Blackwell products.
- Target shares are down after an earnings miss. Revenue of $24.53 billion and a 3.7% same-store sales decline were roughly in line with estimates. Walmart versus Target is increasingly an apples-to-oranges comparison. Target is in a kind of purgatory with an underwhelming position in food and consumables. Need to drive value. Just now it’s cutting prices on 5,000 items? It is not the consumer. Can’t blame the consumer.
- Shares of TJX Companies have risen more than 2% on earnings. Revenues were in line. Margins strong. The parent of T.J. Maxx lifted its full-year pretax profit margin range and earnings outlook. We’ve liked this stock for the Club for a while.
- Toll Brothers delivered better-than-expected fiscal second-quarter sales and profits. Shares are roughly flat in the premarket. The luxury homebuilder showed good delivery growth and raised its full-year guidance revenue and earnings guide.
- U.S. oil futures fell nearly 1% to just under $78 a barrel and are on pace for their first negative week in three. On Tuesday afternoon, the Biden administration said it will “strategically” release 1 million barrels of gasoline from reserves in the Northeast between Memorial Day and the Fourth of July.
- A very rare round of price target cuts for AutoZone, including at Citi and Morgan Stanley, following a mixed fiscal third-quarter report. Earnings beat, but revenue and same-store sales were light. Choppy weather, tax refunds and disinflation are all factors AutoZone battled in the quarter. But management will be back buying stock, which is what matters.
- UBS slashed its price target on Lululemon to $385 a share from $475. Lulu said Tuesday night its product chief Sun Choe is leaving, which analysts at Jefferies argue is “not a good sign.” Barclays wrote that the athleisure firm’s product issues may not have a quick fix. Lulu is facing competition from the likes of Vuori, Athleta and Carhart. Shares of Lulu down more than 4% Wednesday.
- More downbeat comments on the electric vehicle market: The CEO of EV battery supplier Panasonic told reporters it may delay investments on more production capacity in the U.S. According to Reuters, the executive said Panasonic has seen a “drastic” decrease in orders from a certain company, though he didn’t say which. I’m wondering whether that is known customer Tesla.
- An update on Club name Palo Alto Networks: The cybersecurity company’s third-quarter billings actually topped Wall Street estimates, despite being reported as a miss Monday night. There was some confusion on the numbers FactSet used to compile the consensus estimate, but it’s now been resolved and updated. Actual third-quarter billings were $2.334 billion versus the revised estimate of $2.329 billion.
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