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Market Moves Yesterday

S&P 500 @ 5,199.50 ( ⬇️ 0.77%)

Nasdaq Composite @ 16,195.81 ( ⬇️ 1.05%)

Bitcoin @ $57,338.40 ( ⬆️ 0.99%)

Hey Scoopers,

Happy Thursday! Here’s what we’re covering today:

👉 Apple’s AI plans

👉 Warner Bros. Discovery slides post Q2

👉 Shopify surges on earnings beat

So, let’s go 🚀

Market Wrap 📉

Equities closed lower on Wednesday as investors remain worried about the possibility of an upcoming U.S. recession and the unwinding of the yen trade.

A rollover in Nvidia and other big tech stocks following an early jump led to the broader indices tumbling in the second half of the day.

Nvidia pulled back by 5%, while shares of Super Micro tanked over 20% as it missed fiscal Q4 estimates. The other major losers were Tesla and Meta Platforms, which fell by 4.4% and 1%, respectively.

Investors will get a fresh look at the labor market as data for weekly jobless claims will be released today. Economists expect 240,000 jobless claims, down from 249,000 in the prior week.

Jobless claims have been trending higher in recent months and today’s report could spark market moves given last week’s disappointing July payrolls report.

Finally, companies such as Eli Lilly and Under Armour will report earnings this morning.

Trending Stocks 🔥

Fortinet - The cybersecurity stock advanced over 25% after it reported earnings of $0.57 per share and revenue of $1.43 billion vs. estimates of $0.41 per share and $1.40 billion, respectively.

Lyft - The stock tumbled over 17% after it posted softer-than-expected Q3 guidance. Lyft forecasts EBITDA between $90 million and $95 million, below estimates of $103.4 million.

Bumble - Shares are down over 36% in pre-market after the dating platform missed consensus revenue estimates in Q2.

All Eyes on Apple AI

According to analysts, Apple could charge up to $20 for its advanced AI features as the iPhone maker looks to boost the growth of its high-margin services business.

The tech giant plans to roll out Apple Intelligence, its upcoming AI system, across devices later this year.

Neil Shah from Counterpoint Research explained that investment in AI is expensive, and Apple would want to pass the cost on to its users.

The AI pack could be part of the Apple One subscription model, which currently costs $19.95 per month and gives users access to services such as Apple Music. Shah believes Apple could charge an additional subscription fee between $10 and $20 for Apple Intelligence’s premium AI features.

Apple’s Services business raked in $24.2 billion in sales in the June quarter, as the hardware behemoth has set a precedent of users paying more to access premium services.

Warner Bros. Discovery Reports $9.1 Billion Write-Down

Shares of Warner Bros. Discovery are down 10% in pre-market after the company reported a $9.1 billion write-down on its TV networks and missed revenue estimates in Q2.

The company announced:

👉 Revenue of $9.7 billion vs. estimates of $10.07 billion

👉 Loss per share of $0.36 vs. estimates of $0.22

Warner Bros. Discovery reported a non-cash goodwill charge primarily related to the merger of Warner Bros. with Discovery two years back. The goodwill was triggered following the reevaluation of the book value of its TV networks segment.

The book was value was higher than market value as legacy TV networks continue to see customers and advertisers shift towards digital and streaming platforms.

Revenue from TV networks fell 8% to $5.27 billion in Q2 due to lower distribution and ad sales. Comparatively, the streaming business, centered around Max, was a bright spot for the company.

Warner Bros. Discovery added 3.6 million subscribers in Q2, ending the quarter with 103.3 million streaming customers. Higher domestic engagement on Max allowed the company to almost double streaming ad sales even as total streaming revenue fell 5% to $2.57 billion.

Total sales were down 6%, while adjusted EBITDA fell by 15% to $1.8 billion. The entertainment giant ended Q2 with $41.4 billion in gross debt and $3.6 billion in cash.

Shopify Surges 18%

Shares of Canada-based e-commerce company Shopify rose almost 18% following its Q2 results, where it reported:

👉 Revenue of $2.05 billion vs. estimates of $2.01 billion

👉 Earnings per share of $0.26 vs. estimates of $0.20

Shopify’s gross merchandise volume, which is the total volume of merchandise sold on the platform, rose 22% to $67.2 billion, above estimates of $65.8 billion.

Shopify sells software for merchants who run online businesses while providing them with other services, such as payment processing and digital marketing.

Further, the company doubled its free cash flow margin in the last 12 months. Shopify expects sales to grow at a low-to-mid 20s percentage rate year over year in Q3, while analysts estimate growth at 21%.

Headlines You Can't Miss!

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Bitcoin whale transactions hit the highest level in four months

Chart of The Day

The CrowdStrike outage last month impacted 8.5 million devices and thousands of customers, making it one of the largest IT disruptions ever.

Moreover a report from Fortune states cumulative insured loss estimates range between $300 million to $1 billion.

Since the outage, CrowdStrike stock has lost 40% in market value.

Meme of the Day

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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.