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Market Moves Yesterday

S&P 500 @ 5,564.41 ( ⬆️ 1.08%)

Nasdaq Composite @ 18,007.57 ( ⬆️ 1.58%)

Bitcoin @ $67,031.30 ( ⬇️ 0.78%)

Hey Scoopers,

Happy Tuesday! Here’s what we’re covering today👇

👉 Berkshire Hathaway reduces BoA stake

👉 Wiz walks away from $23 billion deal

👉 Best Buy’s turnaround plans

So, let’s go 🚀

Market Wrap 📉

All three major equity indices ticked higher on Monday as tech stocks rebounded from last week’s sell-off.

The S&P 500 index was led by the information technology and communication services sectors, which gained 2% and 1.2%, respectively.

Market bellwether Nvidia popped 4.8%, recovering some of its 8% pullback from last week. Tech giants such as Meta and Alphabet also rose over 2%. Meanwhile, CrowdStrike was the worst S&P 500 stock, falling 13.5%. 

The small-cap-focused Russell 2000 added 1.7% yesterday, building on recent gains as traders move capital away from Big Tech names.

As the earnings season ramps up, investors will closely watch quarterly reports from giants such as General Motors, Coca-Cola, Spotify, Alphabet, and Tesla today.

Trending Stocks 🔥

Cadence Design Systems-The electronic design stock slipped 1.8% on the back of soft earnings guidance as it forecast EPS between $1.39 and $1.49, below estimates of $1.61.

Ryanair - Shares of the budget airline fell 14% after its fiscal Q1 net income fell 46%. It also estimates airfares to be lower than expected this summer.

NXP Semiconductors - The chip maker slid 9% in pre-market after Q2 earnings of $3.20 per share missed estimates of $3.21 per share.  

Berkshire Hathaway Sold 33.9 Million BoA Shares

Warren Buffett’s Berkshire Hathaway trimmed its massive stake in Bank of America for the first time since 2019. The conglomerate sold 33.9 million shares of Bank of America worth $1.5 billion at an average price of $43.56.

It was the first time in four and a half years that the Oracle of Omaha reduced the stake in the banking giant. Despite the sale, Bank of Amerca remains Berkshire’s second-largest equity holding after Apple.

It's possible that Berkshire is taking profits, as Bank of America surged over 25% in 2024 and trades at its highest levels since March 2022.

Warren Buffett bought $5 billion worth of the bank’s preferred stock and warrants back in 2011, shoring up investor confidence in the lender as it was then wrestling with losses related to subprime mortgages in the aftermath of the financial crisis.

Wiz Shelves Acquisition Deal With Google

Wiz has reportedly walked away from a $23 billion acquisition deal with Google and is instead pursuing an IPO (initial public offering).

In an employee memo, Wiz co-founder Assaf Rappaport cited antitrust and investor concerns as reasons for abandoning an acquisition deal.

Founded in 2020, Wiz was valued at $12 billion in the private markets and has experienced massive growth. Within 18 months, it touched annual recurring revenue (ARR) of $100 million and ended 2023 with an ARR of $350 million.

Wiz’s portfolio of cloud-based security products includes prevention, active detection and response, which would allow Google to compete with Microsoft.

After years of massive investments, Google’s cloud business turned profitable in 2023 but remains under pressure to keep growing and capture business amid the AI boom.

In 2022, Google acquired cybersecurity company Mandiant for $5.4 billion, which was its largest cybersecurity acquisition. Recently, Google also ended talks to acquire sales software maker HubSpot.

Best Buy Announces Turnaround Plans

Best Buy just announced plans to reverse a two-year sales slump and cash in on a much-awaited replacement cycle of pandemic-era purchases.

The consumer electronic retailer has reported 10 consecutive quarters of declining comparable sales, a key metric that excludes the impact of store openings and closures. In May, the company forecast comparable sales for the full year to be flat or drop by 3% year over year.

It expects revenue to range between $41.3 billion and $42.6 billion, below the $46.3 billion it earned last year. Its falling sales have meant the stock trades 36% below all-time highs.

Best Buy has attributed its falling top-line to a tough macro economy as consumers continue to make value-based decisions.

In the first six months of 2024, consumer electronics lags retail sales, declining 4% in dollars and 5% in units year over year. However, compared to 2019, consumer electronics spending is up 5% in 2024.

Headlines You Can't Miss!

General Motors exceeds estimates in Q2

Airbus unveils new ultra long-haul jet

Coca-Cola hikes full-year outlook

Comcast posts mixed results in Q2

Spot Ethereum ETFs to begin trading today

Chart of The Day

Amazon’s cloud business is a cash cow for the tech giant. In the last 10 years, Amazon Web Services has increased its quarterly revenue from $1.1 billion to $25 billion, indicating an annual growth rate of 37%.

AWS is on track to end the year with $100 billion in sales. Given its EBIT margin of 30%, the cloud business would be worth over $1 trillion as a standalone company.

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.