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Bulls, Bitcoin, & Beyond
Market Moves Yesterday
S&P 500 @ 5,180.74 (⬆️ 1.03%)
Nasdaq Composite @ 16,349.24 ( ⬆️ 1.19%)
Bitcoin @ $64,247.90 ( ⬆️ 0.03%)
Hey Scoopers,
Happy Tuesday! Let’s see what’s moving the markets:
👉 Apple is developing AI chips
👉 Big Tech is driving earnings growth
👉 Can Bitcoin touch $200k in 2024?
So, let’s go 🚀
Market Wrap 📉
Equities advanced for the fourth consecutive session on Monday as Wall Street is buoyed by expectations of multiple rate cuts in 2024.
Semiconductor giant Micron gained 4.7% after Baird upgraded the stock to “outperform” from “neutral.” Other S&P 500 index stocks, such as American Airlines and Super Micro Computer, also gained 5.8% and 6.1%, respectively.
While the peak of the Q1 earnings has passed, key companies such as Walt Disney and Uber will report quarterly results this week.
Trending Stocks 🔥
Palantir - Shares are down over 10% in pre-market after the company issued lighter-than-expected revenue guidance for 2024. In Q1, it reported revenue of $634 million, higher than estimates of $625 million, while earnings stood at $0.08 per share, in line with forecasts.
Lucid Group - The EV maker tumbled 8.5% following Q1 results, in which it beat revenue estimates but posted a loss of $0.30 per share. It also reaffirmed its 2024 production guidance of 9,000 vehicles.
Hims & Hers Health - The health-tech platform spiked 16% after Q2 revenue guidance surpassed estimates. It forecast sales between $292 million and $297 million, up from estimates of $288 million.
Apple Eyes the AI Megatrend
According to the Wall Street Journal, Apple is developing chips to run AI (artificial intelligence) software in data centers.
The project called ACDC (Apple Chips in Data Center) has existed for a few years now where the iPhone maker has partnered with Taiwan Semiconductor for chip design and manufacturing.
Apple’s server chip will focus on AI inference rather than training AI models, a segment currently dominated by Nvidia. In AI, inference is a process used to train machine learning models to draw conclusions from brand-new data.
According to experts, Apple is lagging behind its peers in the AI race as rivals, including Microsoft and Alphabet, have invested billions in AI-powered tech and infrastructure.
Earlier this year, Apple CEO Tim Cook revealed the tech giant is investing heavily in AI and is likely to make a related announcement at the upcoming WDC event next month.
In the March quarter, Apple beat estimates even as revenue was down 4% due to falling iPhone sales. Further, it announced a $110 billion share buyback program, the largest ever in corporate history.
Big Tech is a Key Driver of Earnings Growth
Over 75% of the companies in the S&P 500 index have reported quarterly earnings, with Big Tech leading the way. Among the Magnificent Seven, only Tesla has missed estimates in the March quarter.
The Mag 7 includes companies such as Microsoft, Apple, Nvidia, Amazon, Alphabet, Meta, and Tesla.
In fact, aggregate earnings for the Magnificent Seven are forecast to rise 49% year over year in Q1. Comparatively, earnings for the other 493 companies in the S&P 500 are expected to rise just 0.4%.
Now, all eyes will be on Nvidia, which will report earnings on May 22. Nvidia is expected to increase earnings by over 400%, while sales are on track to increase by 248% in the quarter ended April.
Nvidia will make up more than one-third of the 7% earnings growth the S&P 500 index will see this season.
Investment firm Edward Jones expects earnings for the S&P 500 to grow by 10% in 2024. While Big Tech is the key driver, the broader market will push earnings higher in the second half of 2024.
Can Bitcoin Touch $200k In 2024
Bitcoin has surged more than 120% in the last year, and according to the stock-to-flow (S2F) model, the rally might be far from over.
The S2F model predicts Bitcoin’s price by calculating the digital asset's current stock and dividing it by the annual flow (new supply). A higher ratio indicates increased scarcity, which has been associated with higher prices.
Back in January, we predicted BTC would end April 2024 at roughly $56,000. Here’s where we expect BTC to trade in the next few months.
June: $62,500
July: $71,500
August: $82,000
September: $98,000
October: $113,000
November: $135,000
December: $166,000
End of 2024: $198,000
Headlines You Can't Miss!
Saudi Aramco maintains its dividend despite earnings decline in Q1
Nintendo to announce new flagship console within 12 months
BP misses Q1 estimates due to weaker oil and gas prices
Amazon Web Services to invest $9 billion in Singapore
Crypto losses from hacks and scams hit record low in April
Chart of The Day
The above chart shows us the top 10 dividend stocks of Ronald Reed, a janitor and gas station operator who retired with a net worth of $8 million.
Some of his largest holdings include Wells Fargo, Procter & Gamble, Colgate-Palmolive, American Express, and VF Corp.
In addition to a frugal lifestyle, Reed built his wealth by staying invested in blue-chip stocks to benefit from the power of compounding.
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.