Shares Fluctuate Ahead of Nvidia’s Results; TGT, FSLR in the spotlight

Solar first soars after analysts call it an AI play

35 minutes ago

First Solar ( FSLR ) was the top-performing company on the S&P 500 for a second straight day on Wednesday, after UBS analysts on Tuesday said the company could benefit from the proliferation of energy-hungry AI data centers.

“In our view, FSLR is an overlooked direct beneficiary of rising AI-driven electricity demand,” wrote a team of analysts led by Jon Windham.

Artificial intelligence is incredibly energy-intensive, and many of the big tech companies investing in it, such as Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL), have made strong carbon neutrality pledges.

Microsoft, which has pledged to become carbon neutral by 2030, last week said its carbon emissions in 2023 were 29% higher than in 2020, largely due to the company’s massive investments in data centers necessary to train and run artificial intelligence models.

“As part of their 100% renewable energy sustainability policy, large technology companies are aligning their non-renewable energy consumption with power purchase agreements (PPAs),” the analysts wrote.

And First Solar, one of the largest U.S. solar technology companies, stands to benefit. This will be especially visible if – as UBS analysts predict – it continues to increase its share in the domestic market. Analysts believe spending on artificial intelligence, rising U.S. protectionism and tax breaks introduced by the Inflation Reduction Act boost First Solar’s earnings to nearly $37 per share in 2027 from $7.74 in 2023.

First Solar also got support from Piper Sandler analysts, who raised their price target on the company’s stock to $219 from $195 on Monday.

Shares of First Solar were up 17% on Wednesday afternoon and have already gained more than 26% this week.

Analog Devices is poised for an economic recovery, with inventories set to reach record levels

1 hour 20 minutes ago

Shares of Analog Devices (ADI) rose to a record high on Wednesday after the semiconductor maker posted better-than-expected results and guidance as it eases its inventory backlog.

The company reported fiscal second-quarter adjusted earnings per share (EPS) of $1.40, beating estimates. Revenue fell 34% year-over-year to $2.16 billion, but that was also above forecasts.

Chief Executive Officer (CEO) Vincent Roche explained that revenues exceeded the midpoint of the forecast “despite ongoing macro and inventory issues.” Roche added that improving inventories along with an increase in new orders “makes us optimistic that we are at the beginning of a cyclical recovery.”

Analog Devices reports adjusted EPS for the current quarter of $1.50 plus or minus $0.10 on revenue of $2.27 billion plus or minus $100 million. Both midpoints were higher than expected.

Analog Devices shares rose 8% Wednesday morning, up about 18% so far in 2024.

-Bill McCol

Targets move as inflation continues to impact sales, guidance disappoints

2 hours 36 minutes ago

Shares of Target (TGT) fell Wednesday morning after the retailer pointed to inflation and lower discretionary spending weighing on first-quarter sales, overshadowing a modest improvement in earnings.

Target reported total revenue in line with analyst estimates of $24.53 billion, down 3% from the year-ago level of $25.32 billion for the first quarter. Profit fell to $942 million, or $2.03 per share, from last year’s $950 million, or $2.05 per share, but beat expectations of $930.3 million, or $2.00 per share.

The company said it continues to feel the effects of shoppers cutting back on discretionary spending, but added that “discretionary sales trends continue to improve” compared to previous quarters.

For the current quarter and full fiscal year, Target expects comparable store sales to range from flat growth to 2% annually, with second-quarter diluted earnings per share (EPS) expected in the range of $1.95 to $2.35 , with the midpoint below Analysts currently estimate it will be $2.19. Target forecasts full-year EPS of $8.60 to $9.60, with the midpoint also below analysts’ expectations of $9.37.

The stock fell about 8% on Wednesday morning, bringing its annual return to just 1%.

-Aaron McDade

Stocks make the biggest moves at the opening

3 hours 35 minutes ago

Profits:

• Williams-Sonoma (WSM): Shares of this home goods retailer rose more than 7% after its quarterly earnings topped analyst estimates despite a year-over-year revenue decline.
• PDD Holdings (PDD): Shares of the Chinese e-commerce company rose 6% after reporting revenue more than doubled in the first quarter.
• Analog Devices (ADI): Shares of the chipmaker rose 5% after reporting better-than-expected earnings and forecasting current-quarter results ahead of Wall Street estimates.

Losses:

• Target (TGT): Shares of the discount retailer fell 9% after it reported a year-over-year sales decline as consumers spent less on both essentials and discretionary products.
• Lululemon (LULU): Shares of the sportswear brand fell 4% after it announced the departure of chief product officer Sun Choe, adding to the company’s concerns after forecasting disappointing sales for the current quarter in March.
• Freeport-McMoRan (FCX): Shares of the mining giant fell 3% as copper prices fell after a months-long rally that pushed the industrial metal to record highs.

US stock futures decline

4 hours 17 minutes ago

On Wednesday, Dow futures fell 0.2% in pre-session trading.

S&P futures fell 0.2%.

Nasdaq futures fell 0.1%.