- 3 Big Scoops
- Posts
- AMD Tanks 9%
Bulls, Bitcoin, & Beyond
Market Moves Yesterday
S&P 500 @ 5,018.39 (⬇️ 0.34%)
Nasdaq Composite @ 15,605.48 ( ⬇️ 0.33%)
Bitcoin @ $57,417.50 ( ⬆️ 2.1%)
Hey Scoopers,
Happy Thursday! Let’s have a great day.
👉 AMD tanks almost 9%
👉 Is Big Tech under pressure?
👉 Tether’s net profits total $4.5 billion
So, let’s go 🚀
Market Wrap 📉
It was a volatile day for the stock market, as Federal Reserve Chair Jerome Powell largely ruled out the possibility of a rate hike to combat sticky inflation. The central bank opted to hold rates steady as it remains focused on bringing inflation back toward its 2% goal.
Notably, the Fed explained it would slow the pace at which it allows maturing bond proceeds to roll off its balance sheet without reinvesting them, a process known as quantitative tightening.
Wall Street is coming off a losing month. All three major indices fell more than 4% in April despite strong earnings reports from the majority of S&P 500 companies.
Trending Stocks 🔥
Viking - Shares of the luxury cruise operator popped 8% following its IPO. The company targeted a $10.4 billion valuation, making it the third largest cruise operator after Royal Caribbean and Carnival.
Super Micro Computer - The server vendor slumped 14% after missing revenue estimates for fiscal Q3. However, it beat earnings estimates and hiked revenue guidance for fiscal 2024.
CVS Health - Shares of the healthcare giant sank 16.8% and headed for their worst day in almost 15 years as Q1 results fell short of estimates. The drugstore heavyweight also slashed its outlook for 2024 due to elevated medical costs.
AMD Falls Post Q1 Results
Advanced Micro Devices reported Q1 results that beat Wall Street estimates. In the March quarter, AMD reported:
👉 Revenue of $5.47 billion vs. estimates of $5.46 billion
👉 Earnings per share of $0.62 vs. estimates of $0.61
The chipmaker said it expects sales of $5.7 billion in Q2, which is in line with estimates and indicates a 6% year-over-year growth rate.
AMD emphasized it is closely watching its data center segment. Revenue from the business grew 80% in Q1 to $2.3 billion due to sales of MI300X AI chips, which are used by Microsoft, Meta, and Oracle. AMD has sold over $1 billion of these chips since their launch in Q4 of 2023.
AMD expects AI chip sales to total $4 billion in 2024, up from its earlier estimate of $3.5 billion. Comparatively, Nvidia, the undisputed leader in the market, grew data center sales to $18.4 billion in Q1.
AMD’s data center growth was offset by weak sales in the gaming segment, which fell 48% to $922 million due to lower chip sales for consoles and PCs. Further, its legacy business, also known as the client segment, rose 85% to $1.4 billion.
Carvana Reports Record Q1 Sales
Carvana shares are up more than 30% in pre-market trading after the used car retailer reported record Q1 results.
Source: Getty Images
It ended the March quarter with revenue of $3.06 billion and earnings of $0.23 per share. Comparatively, Wall Street forecast sales at $2.67 billion with a loss per share of $0.73.
The company also reported an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $235 million, compared to a $24 million loss last year.
Carvana attributed its strong Q1 performance to operational efficiency and expects to further grow EBITDA margins going forward.
Short Interest in the “Magnificent Seven” Surges Higher
A report from S3 Partners showed the short interest in the “Magnificent Seven” climbed to a record $127 billion in April.
Bets against the seven (Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta, and Tesla) are expected to be high as they offer a low-cost way to hedge against the tech aspect of a portfolio.
However, in the last five years, the short interest for these stocks averaged $86 billion a month and fell to a low of $57 billion in 2022.
Investors accumulated $5.6 billion by shorting Tesla in 2024 and earned $2.4 billion by betting against Apple. Alternatively, they lost $9.8 billion by shorting Nvidia and are down $2.3 billion and $2.1 billion on Meta and Amazon, respectively.
Tether Report $4.5 Billion in Q1 Profits
Stablecoin coin issuer Tether just released its attestation report for Q1 of 2024. Here are the key numbers that matter:
Net profit stood at $4.52 billion
Direct and indirect ownership of U.S. Treasuries is over $90 billion
90% of Tether tokens are backed by cash or cash equivalents
Net equity rose to $11.37 billion, up from $7 billion in Q4 of 2023
Excess reserves totaled $6.3 billion, an increase of $1 billion
A majority of its profits were attributed to gains from U.S. Treasury assets, while $1 billion came from operational profits. Tether also reported gains from positions in Bitcoin and gold.
Headlines You Can't Miss!
Microsoft to open new data center in Thailand
Qualcomm provides better-than-expected forecast
Lower consumer spending is impacting major restaurant brands
Are regional U.S. banks at risk of failure?
Tether posts a profit of $4.5 billion in Q1
Chart of The Day
Inflation remains elevated as the consumer price index (CPI) rose 3.5% in March, up from 3.2% in February. But which products are driving inflation higher?
The above chart shows that “video disc and other media” prices rose 30.1% year over year. Vinyl sales were up 21.7% in the first half of 2023, driven by artists such as Taylor Swift and Lana Del Rey.
In fact, Swift’s latest album, Midnights, sold around 500,000 vinyl copies in 2023.
The juice and drinks was another category that rose 27.5% due to higher transportation costs and sugar shortages.
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.