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Bulls, Bitcoin, & Beyond
Market Moves Yesterday
S&P 500 @ 5,354.03 ( ⬆️ 1.18%)
Nasdaq Composite @ 17,187.90 ( ⬆️ 1.96%)
Bitcoin @ $70,958.62 ( ⬇️ 0.62%)
Hey Scoopers,
Happy Thursday! Here’s what we’re covering today:
👉 Nvidia’s monstrous market cap
👉 Lululemon’s Q1 results
👉 Cipher Mining’s fleet upgrade
So, let’s go 🚀
Market Wrap 📉
Equity indices, including the S&P 500, climbed to a fresh record yesterday, led by big tech companies such as Nvidia and Meta Platforms. Further, weak labor market data provided hope of multiple interest rate cuts in the second half of 2024.
ADP’s private payroll data indicated that hiring slowed to 152,000 jobs in May, below estimates of 175,000, showcasing the weakness in the labor market.
There is now a 70% chance for policymakers to ease interest rates in September, according to the CME FedWatch Tool. Wall Street will also closely watch the weekly jobless claims numbers today and the all-important jobs report on Friday.
The rally in the indices was quite narrow as sectors such as banking pulled back. Investors are worried that the weak economic data could signal a slowdown and outweigh the impact of lower borrowing costs.
Trending Stocks 🔥
Brown-Forman - The alcohol seller dropped over 5% to a 52-week low as fiscal Q4 sales were below estimates.
Taiwan Semiconductors - Shares of the chip manufacturing giant popped over 6% due to strong AI demand.
GameStop - Shares of the gaming retailer surged over 15%, bringing its week-to-date gain to 32%. The rally was triggered by Roaring Kitty, who posted a screenshot of his portfolio holding significant GME shares and call options.
Nvidia Continues to Climb
Nvidia’s scorching rally refuses to abate as the semiconductor heavyweight has returned 154% in 2024 and 217% in the last 12 months. In fact, NVDA accounts for 30% of total S&P 500 returns this year.
Currently valued at $3.1 trillion by market cap, Nvidia just passed Apple in terms of valuation as investors continue betting on the AI boom. It means Nvidia is the second-most valuable company, after Microsoft.
With an estimated 80% market share in AI chips for data centers, Nvidia is raking in billions of dollars in sales as large cloud vendors deploy significant capital to lead the AI race.
In the quarter ended in April, Nvidia’s data center business grew to $22.6 billion, an increase of 427% year over year. This business now accounts for 86% of total sales.
Comparatively, Apple shares are up 5% in 2024 due to slowing hardware sales. In fiscal Q2 of 2024 (ended in March), Apple’s overall sales dropped 4%, while iPhone sales were down 10% year over year.
Lululemon Beats Estimates
Lululemon announced its fiscal Q1 of 2025 (ended in April) results yesterday and reported:
👉 Revenue of $2.1 billion vs. estimates of $2.19 billion
👉 Earnings per share of $2.54 vs. estimates of $2.38
Shares of the athletic apparel retailer have gained over 8% in pre-market trading, even though growth in the Americas appears to be stalling.
Moreover, its full-year guidance suggests Lululemon expects conditions to improve in the second half of fiscal 2025. Both sales and earnings grew 10% year over year in Q1.
Trading near 52-week lows, the retailer announced a $1 billion buyback program, which suggests the management thinks the stock is undervalued.
Lululemon emphasized that while consumer spending is slowing in the Americas, it fumbled by not having the right sizes and colors in its stores for products such as leggings.
Q1 sales in the Americas rose 3%, much lower than the 17% jump in the year-ago period. Weak top-line growth in the U.S. and Canada was offset by strong international sales.
Cipher Mining Upgrades Bitcoin Mining Fleet
Shares of Cipher Mining surged close to 5% after the company said it upgraded its bitcoin mining fleet for 2024 and 2025 to include S21 Pro mining rigs from Bitmain.
Cipher Mining also entered into an agreement to purchase the latest generation of A1566 machines from Canaan, which would be delivered in Q4 of 2024.
Following these investments, Cipher’s hash rate should increase in the next 12 months. A hash rate is a measure of computational power used to process transactions on the Bitcoin network.
A higher hash rate offers BTC mining companies with a better chance of finding a block on the network and earning the associated reward for processing it.
Headlines You Can't Miss!
Salesforce to open new AI data center in London
TSMC-backed Vanguard to build $7.8 billion wafer plant in Singapore
Narendra Modi’s election shortfall leaves Wall Street scrambling
Bank of Canada cuts interest rates by 25 basis points
Bitcoin’s open interest tops $2 billion
Chart of The Day
Amazon has spent a whopping $85 billion in research and development in the last 12 months, more than Meta and Alphabet combined.
The world’s largest e-commerce player continues to innovate and is set to surpass Walmart as the largest company in terms of sales.
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.