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Market Moves Yesterday

S&P 500 @ 5,592.18 ( ⬇️ 0.60%)

Nasdaq Composite @ 17,556.03 ( ⬇️ 1.12%)

Bitcoin @ $59,304.44 ( ⬇️ 0.18%)

Hey Scoopers,

Happy Thursday! Are you ready for an exciting newsletter today?

👉 Nvidia beats fiscal Q2 estimates

👉 Salesforce stages a comeback

👉 CrowdStrike lowers its guidance

So, let’s go 🚀

Market Wrap

Equity indices pulled back on Wednesday, pressured by a decline in Nvidia as investors braced for the chipmaker’s latest earnings report.

Trading volume remained light ahead of the Labor Day weekend. However, investors should expect volatility to resume as Nvidia, Salesforce, and CrowdStrike reported their earnings yesterday.

In an investor note, Piper Sandler stated, “Most stocks traded in a tight range on light volume yesterday as the equity market’s upward momentum wanes ahead of several key earnings reports.”

The investment bank remains bullish and believes market growth will diversify as we head into Q4 of 2024. The S&P 500 index has returned 17.9%, while the tech-heavy Nasdaq Composite index is up 18.9% year-to-date.

Trending Stocks 🔥

Super Micro Computer - Shares fell over 19% after the AI server company postponed filing its annual 10-K form for fiscal 2024. Earlier, Hindenburg Research accused the company of accounting manipulation.

Abercrombie & Fitch - While the retailer surpassed fiscal Q2 estimates and raised its full-year sales outlook, shares fell 17% after the CEO warned of an “increasingly uncertain environment.”

Li Auto - Shares of the Chinese EV maker tumbled 16% after it more than halved its net income in Q2, compared to the year-ago period.

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Nvidia Beats Estimates in Q2

Market bellwether Nvidia announced its fiscal Q2 of 2025 (ended in July) results after the bell and reported:

👉 Revenue of $30. billion vs. estimates of $28.7 billion

👉 Earnings per share of $0.68 vs. estimates of $0.64

The chip maker also forecast revenue to rise 80% to $32.5 billion in Q2, higher than consensus estimates of $31.7 billion.

Its top line grew by 122% year over year in Q2 after three straight periods of growth in excess of 200%. Further, net income more than doubled to $16.6 billion from $6.18 billion in the last 12 months.

Nvidia is at the epicenter of the AI boom, and its stock has been up 240% since the start of 2023. Its data center business, which includes AI processors, climbed 154% to $26.3 billion, accounting for 88% of total sales.

Nvidia generates most of its sales from tech giants such as Microsoft, Alphabet, Meta, and Tesla, all of which are investing heavily in building AI capabilities.

Despite its strong results, Nvidia stock is down 7% in pre-market as its gross margins narrowed to 75.1% from 78.4% in Q1 However, it expanded from 70.1% last year.

Notably, Nvidia announced a buyback program worth $50 billion as its free cash flow rose over 100% to $13.48 billion in fiscal Q2 of 2025.

Salesforce Is on the Move

Salesforce shares rose over 4% in pre-market after the business software maker reported solid fiscal Q2 results that beat estimates and raised its full-year profit outlook.

In the July quarter, Salesforce reported:

👉 Revenue of $9.33 billion vs. estimates of $9.23 billion

👉 Earnings per share of $2.56 vs. estimates of $2.36

Salesforce's top line grew by 8% year over year, attributed to higher average revenue per user and a shift towards premium products.

In fiscal Q3, it forecast sales between $9.31 billion and $9.36 billion, lower than estimates of $9.41 billion. However, its earnings of $2.43 per share were in line with consensus forecasts.

Moreover, the enterprise software giant expects sales in fiscal 2025 to rise between 8% and 9% year over year.

Notably, Salesforce announced that Amy Weaver, its chief financial officer, will step down after a successor is appointed but will stay on as an advisor.

Prior to its earnings call, Salesforce stock was down 2% in 2024, trailing the broader markets by a wide margin this year.

CrowdStrike Fails to Deliver

CrowdStrike stock is down 3% in pre-market after the cybersecurity giant reported strong fiscal Q2 results but reduced full-year guidance after a global outage. In the July quarter, it reported:

👉 Revenue of $963.9 million vs. estimates of $959 million

👉 Earnings per share of $1.04 vs. estimates of $0.97

Its sales rose 32% year over year as it ended Q2 with annual recurring revenue of $3.86 billion, above estimates of $3.85 billion.

Last month, CorwdStrike distributed a flawed content configuration update to computers running the Microsoft Windows OS, intending to gather data on new attacks. The update caused millions of computers to crash, leading to flight cancellations and delayed freight deliveries, among others.

In fact, Delta Air Lines claimed it lost $380 million in sales, which cost the company $170 million, and has filed a lawsuit against CrowdStrike.

CrowdStrike lowered its full-year revenue forecast, as it included a negative subscription revenue impact of $30 million each quarter.

Headlines You Can't Miss!

Taiwan Semiconductor falls post Nvidia results

OpenAI could raise funding at a $100 billion valuation

Affirm gains post earnings beat and strong guidance

France charges Telegram CEO for allowing criminal activity

SEC slams OpenSea marketplace with Wells notice

Chart of The Day

Berkshire Hathaway reached a $1 trillion market cap yesterday, becoming the first non-tech company in the U.S. to reach the milestone.

Berkshire’s Class A shares rose 1% in early market trading, hitting an all-time high of over $699,000 and selling for 70% more than the median home price in the U.S.

In 2024, Berkshire stock gained 29% and has returned 241% in the last ten years. Since August 1984, the conglomerate has returned over 50,000%.

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.