Bulls, Bitcoin, & Beyond

Market Moves Yesterday

S&P 500 @ 5,469.30 ( ⬆️ 0.39%)

Nasdaq Composite @ 17,717.65 ( ⬆️ 1.26%)

Bitcoin @ $61,609.33 ( ⬆️ 1.02%)

Hey Scoopers,

Happy Wednesday! Are you ready to tackle the midweek hustle?

👉 EU takes aim at Microsoft

👉 Volkswagen invests $5 billion in Rivian

👉 Evercore raises price target on Apple

So, let’s go 🚀

Market Wrap 📉

A rebound in Nvidia shares led major indices higher. Nvidia gained 6.7% after the chip maker lost 6% in the previous session, its biggest one-day slide since April.

While the S&P 500 inched higher, a majority of the stocks part of the index traded in the red, showcasing Nvidia’s effect on the broader market.

Wall Street will now shift its attention toward fresh inflation data on Friday when the personal consumption expenditures price index for May will be released.

The Fed will closely watch this inflation metric as investors remain hopeful of at least one interest rate cut this year.

Trending Stocks 🔥

SolarEdge Technologies- Shares tanked over 20% after it emphasized it may not be able to collect the amount owed by PM&M Electric, one of its largest customers.

BYD - Shares fell 1% after Berkshire Hathaway further reduced its stake in the EV maker, now owing less than 6% of the company.

FedEx - The stock is up 14% in pre-market after it reported adjusted earnings that surpassed estimates in fiscal Q4.

EU Accuses Microsoft of Breaching Antitrust Rules

Yesterday, the European Union accused Microsoft of breaching antitrust rules by abusively bundling its Teams and Office products. The EU could eventually ban the conduct and fine the tech giant up to 10% of its global revenue.

While Microsoft has unbundled its Teams from Microsoft 365 to quash antitrust allegations, the EU claimed the changes were insufficient to address these concerns.

The EU initially opened its investigation into Microsoft after a complaint by Salesforce-owned Slack, which offers a rival chat service to Teams.

The commission believes Microsoft may have granted Teams a distribution advantage by not giving customers a choice whether or not to acquire access to Teams while subscribing to its SaaS productivity applications.

This conduct could have prevented competitors from gaining traction in the collaboration market and is viewed as a detriment to customers in the European Economic Area.

Rivian Stock Surges 41%

Rivian shares are up over 40% in pre-market today after Volkswagen announced plans to invest $5 billion in the electric vehicle startup. The two companies will enter into a joint venture to create electrical architecture and software technology.

The investment should help Rivian support its cash burn rates that have dragged its shares lower by 93% from all-time highs. Further, Rivian expects the capital infusion to support the production ramp-up of its R2 SUVs at its Illinois plant starting in 2026.

Volkswagen is the second legacy automaker to take a stake in Rivia, after Ford. Moreover, Amazon also has a sizeable stake in Rivian.

EV stocks have trailed the broader markets in the last two years due to slower-than-expected adoption of battery-powered vehicles.

Due to a challenging macro-environment, Rivian has focused on lowering its costs. In recent months, it has trimmed staff, retooled its Illinois plant, and paused construction of a new multi-billion-dollar factory in Georgia.

Rivian reported a loss of $1.45 billion in Q1 of 2024. It ended the quarter with $7.86 billion in cash and more than $9 billion in total liquidity. Volkswagen's big-ticket investment should considerably help Rivian, given its free cash outflow stood at over $5 billion in the last 12 months.

Evercore ISI is Bullish on Apple

Investment firm Evercore ISI hiked its 12-month price target on Apple to $250, up from its previous target of $220, as it is bullish on an increase in iPhone sales.

Apple stock has gained momentum since its WWDC event after a lackluster start to 2024. The company's decision to limit Apple Intelligence features to the iPhone 15 Pro or the upcoming iPhone 16 lineup could result in strong demand for new iPhones.

The new price target translates to a 19% upside for Apple’s stock, which trades at around $210.

Shares of the iPhone maker are up 12.6% in 2024, valuing it at a market cap of $3.2 trillion.

Headlines You Can't Miss!

European markets move higher as global chip stocks stabilize

Japan’s Nikkei 225 climbs to two-month high

GM’s Crusie appoints ex-Amazon and Microsoft exec at the helm

Nvidia’s $500 billion wipeout leaves chip stocks vulnerable

German authorities move millions in Bitcoin to Kraken and Coinbase

Chart of The Day

Generally, companies initiate a share buyback plan if they think their shares are undervalued and have no other prudent use of excess cash.

A share buyback also reduces the outstanding share count, artificially boosting a company’s earnings per share.

In the last 12 months, Apple has invested $83 billion in buybacks, reducing its outstanding share count by 2.5%. Other companies with sizeable buyback programs include Alphabet, Meta, Microsoft, and Nvidia.

Notably, Amazon has not initiated a buyback since 2022 and continues to reinvest in growth.

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.