Bulls, Bitcoin, & Beyond

Market Moves Yesterday

S&P 500 @ 5,625.80 ( ⬆️ 0.16%)

Nasdaq Composite @ 17,754.82 ( ⬆️ 0.16%)

Bitcoin @ $59,415.20 ( ⬇️ 1.48%)

Hey Scoopers,

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

👉 Hindenburg targets Super Micro Computer

👉 Nvidia earnings to drive Wall Street

👉 XPeng launches mass-market car

So, let’s go 🚀

Market Wrap

Equity indices edged higher on Tuesday as investors await Nvidia’s upcoming earnings report, which will be published today.

The S&P 500 index has returned 18.6% year-to-date and can climb another 7% to trade around 6,000 by the end of 2024, according to Capital Economics.

The investment firm explained that since the summer correction in July and early August, tech stocks have been trading below all-time highs. So, if the U.S. economy makes a soft landing and AI enthusiasm rebounds further, the S&P 500 index might surpass the 6,000 milestone in Q4 of 2024.

Moreover, it expects the flagship index to gain another 16.7% in 2025 to reach 7,000. Among other investment banks, only Evercore ISI expects the index to touch 6,000 in 2024.

Trending Stocks 🔥

Nordstrom - Shares are up close to 8% after the retailer reported earnings of $0.96 per share in fiscal Q2, above estimates of $0.71 per share. It, however, reported revenue of $3.89 billion, missing estimates of $3.90 billion.

Ambarella - The semiconductor developer is up almost 20% pre-market after beating revenue and earnings estimates in fiscal Q2. It forecasts Q3 sales between $77 million and $81 million, above estimates of $69 million.

Box - The cloud storage company advanced over 4% after reporting revenue of $270 million and earnings of $0.44 per share, compared to estimates of $269 million and $0.40 per share, respectively.

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Hindenburg Research Short Sells Super Micro

Yesterday, Hindenburg Research disclosed a short position in Super Micro and alleged accounting manipulation at the AI server maker.

Shares of Super Micro were down 2.6% after it doubled year-to-date and more than tripled in the last 12 months.

Hindenburg claimed it found evidence of undisclosed related party transactions and failure to abide by export controls, as its investigation included interviews with former senior employees of Super Micro.

Super Micro Computer is known for its liquid cooling technology for high-power semiconductors, allowing it to capitalize on the growing demand for AI servers.

While its revenue has surged, profit margins have taken a hit due to rising server production costs and pricing pressure from competitors such as Dell.

Analysts are also concerned over Super Micro’s hefty spending on supporting new-gen AI chips, including those sold by Nvidia.

Despite its outsized gains, SMCI stock is down over 50% from all-time highs on worries that Big Tech could scale back AI spending in the future.

Can Nvidia Deliver Again?

The past two years have been a joyride for Nvidia as it was the primary beneficiary of the AI boom. Since the end of 2022, the chip giant has seen a 9x increase in market cap, touching an all-time high in June 2024.

Nvidia is set to report its quarterly results after the market closes today, and it may very well be the most important stock in the world right now.

In the ongoing earnings season, we have seen that Big Tech giants, including Microsoft, Alphabet, and Meta, have spent heavily on Nvidia’s graphics processing units to train AI models and run massive workloads.

Nvidia has more than tripled revenue year over year in the past three quarters, primarily due to its data center business. Analysts expect sales to grow by 112% to $28.7 billion in fiscal Q2 of 2025 (ended in July).

Nvidia’s growth rate is decelerating as it is forecast to grow top line by 75% to $31.7 billion in the October quarter. A better-than-expected guidance will indicate Nvidia’s deep-pocketed clients are willing to spend on their AI build-out.

Nvidia’s profit margin has also been expanding in recent months. In its Q1 earnings call, Nvidia stated that cloud providers, which account for over 40% of sales, would generate $5 in revenue for every $1 spent on Nvidia chips in the next four years.

XPeng Launches the Mona03

Shares of China’s EV maker Xpeng gained more than 6% after it launched the Mona M03, a new mass-market car with prices starting at $16,812.

Within an hour of its launch, the Mona M03 had already received over 10,000 preorders. With cars priced under $20,000, China is cementing its new position as the world center for automotive manufacturing.

XPeng shares extended gains from Monday after a filing showed that the company’s CEO brought over two million shares of the EV manufacturer.

Despite the uptick in share prices, Xpeng has fallen 43% in 2024 and trades 89% below all-time highs.

Headlines You Can't Miss!

Lego revenue rises 13% in the first half of 2024

JD.com announces a $5 billion buyback program

Apple partners with India’s Airtel to gain streaming subscribers

Eli Lilly slashes prices for its weight loss drug

Long liquidations drag Bitcoin prices to below $60k

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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.