Nike Likely to Report In-Line Fiscal Q4 Results, Morgan Stanley Says

Nike (NKE) is expected to report in-line results for fiscal Q4 on June 27, according to Morgan Stanley, which models a 1% sales growth for the quarter compared with the Street’s 0.6% increase. “4Q is unlikely to shift the thesis on NKE as questions around L-T growth & profitability remain, though it will give us a first look into the P&L impacts of mgmt.’s recent strategy evolution,” the report said. Morgan Stanley said the market will focus more on Nike’s initial guidance for fiscal Q1 and 2025 as strategic changes from the management seem more likely to materialize in fiscal H1 2025 and beyond results. “We anticipate NKE sets a low FY guidance bar given early-days & evolving strategy initiatives, potentially guiding initial ’25e EPS a touch below the Street,” the report said. Morgan Stanley cut Nike’s price target to $114 from $116 while maintaining its overweight rating.

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Nvidia Set for Over 20% Weighting in SPFR ETF, Apple to Drop Significantly

Nvidia’s (NVDA) weighting in the index that the Technology Select Sector SPDR (XLK) exchange-traded fund follows will likely increase to around 21%, displacing Apple (AAPL) as the second top pick next to Microsoft (MSFT), CNBC reported Monday. Apple’s weighting will drop significantly to 4.5% from about 22% while Nvidia is set to rise sharply from just 6% amid Nvidia shares’ outperformance this year, the report said, citing Matthew Bartolini, head of SPDR Americas Research. The major technology ETF will be forced to acquire more than $10 billion worth of Nvidia shares while cutting back dramatically on Apple, the report said. SPDR does not comment on specific trading strategies around rebalances, the report said.

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TSMC Can Maintain Revenue Strength Through 2026, Citi Says

TSMC should see promising surging demand from cloud and edge AI, which will likely drive revenue growth through 2026, Citi research analyst Laura Chen writes in a note. TSMC should be able to reflect its value to customers and it may adjust prices for products given rising demand, Chen says. Given stronger revenue growth, capex intensity should also continue trending downwards, though TSMC will likely lift the range of capex expected in 2024 to US$30 billion-US$32 billion from US$28 billion-US$32 billion, given escalating advanced node demand, Chen adds. Citi raises its target price on the stock to NT$1,150 from NT$1,030 while reiterating its buy rating. Shares closed 0.1% lower at NT$921.00.

TSMC Can Maintain Revenue Strength Through 2026, Citi Says Read Post »

Boeing Informs Suppliers About Three Month Delay in 737 Production Goal

Boeing (BA) has reportedly informed its suppliers of a three-month delay in reaching a key production milestone for its 737 jets, Reuters reported, citing two industry sources. According to the sources, the revised schedule now targets a production rate of 42 jets per month by September instead of June. Boeing expects a gradual increase in output, aiming for 47 jets per month by March 2025 and 52 jets per month by September 2025. Boeing’s decision to delay the production milestone suggests ongoing supply chain constraints, the report said.

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Tesla Gets Approval to Test Advanced Driver-Assistance System in Shanghai, China

Tesla (TSLA) has obtained approval to test its advanced driver-assistance system in Shanghai, China, and could also receive authorization to do the test in Hangzhou, Bloomberg News reported Monday, citing an unnamed source familiar with the matter. According to the report, the source said Tesla staff will conduct the system’s initial tests. Bloomberg said the company previously received approval to deploy the advanced driver-assistance system during a visit by Chief Executive Officer Elon Musk to Beijing.

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Microsoft Stock Price Target Raised. Why the AI Party Is Just Getting Started. — Barrons.com

By Brian Swint Microsoft, one of the three biggest companies by market capitalization, is only just starting to reap the benefits of artificial intelligence. That’s the view of analysts at Wedbush led by Dan Ives, who raised their price target to $550 from $500 in a note published Sunday and maintained an Outperform rating. While Ives is known for his bullish views on technology stocks, the analysts have based their stance on research conducted with Microsoft customers for insight into their future spending plans. “The stock still has yet to price in what we view as the next wave of cloud and AI growth coming to the Redmond story with a strong competitive cloud edge vs. Amazon especially and Google,” said Wedbush. “It has become crystal clear to us that the monetization opportunities around deploying AI and ChatGPT in the cloud is a transformational opportunity.” Microsoft mainly uses AI in

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Lithium Supplies Seen Rising, Weighing on Prices

Lithium supplies are expected to rise and potentially push down prices of the battery metal, Morgan Stanley analysts say. Australia’s spodumene shipments should start to improve in the coming months and African shipments should also recover following the end of the wet season, say the MS analysts. China is likely to record another year of strong production growth after easing environmental restrictions, and Chile’s exports are touching all-time highs, they add. “While the lithium price has held up well year-to-date, a loosening [supply-demand] balance from here brings downside risks,” say the analysts. “The China lithium carbonate price is currently trading close to our base case of $13,500/ton but we see room for it to fall below this, with the price already starting to roll over recently.”

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Oracle Trades One-Time License Revenue for Large Cloud Contracts

Oracle’s results are getting a boost from longer recurring contracts. CEO Safra Catz says on a call with analysts that the company is trading one-time, non-recurring license revenue for larger “strategic customer commitments.” Those deals, which have surged because of strong demand for AI products and training large language models, stretch multiple years, she said, and are expected to lead to accelerating revenue growth. Oracle announces two big wins, one with Google Cloud and one with Microsoft and OpenAI, and those large contracts appear to be showing up in the company’s remaining performance obligations, a proxy for backlog. RPO was up 44% year-on-year in 4Q. Shares rise 9.7% post-market.

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Oracle CEO: Long-Term Targets May Prove Too Conservative

Oracle’s AI momentum is making longer-term financial targets look meager. CEO Safra Catz says on a call with analysts that she is still “firmly committed” to FY26 targets for revenue, margins and earnings. “However, given our strong bookings results, I believe some of these goals might prove to be too conservative given our momentum,” she says. And Oracle seems to be prepared to spend big to keep momentum going: Catz says capital expenditures this fiscal year will likely be double that of the previous fiscal year. Shares rise 8.8% to $134.75 after-hours.

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Oracle Wants A Cloud Deal With AWS

After arrangements to connect its cloud customers with Google and Microsoft, Oracle says that a deal with Amazon Web Services could be next. CTO Larry Ellison says on a call with analysts that the company believes all clouds should be interconnected, making it easier for customers who use multiple cloud services to use them all at once. Oracle already has connections with Microsoft’s Azure and on Tuesday announces a new partnership with Google. Ellison says the company would “love to do the same thing with AWS,” adding that he is optimistic that interconnection will become the status quo. Shares rise 9.3% to $135.35 after-hours.

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CFRA Maintains Hold Recommendation On Shares Of Oracle Corporation

We up our 12-month target to $150 from $142, on a P/E of 22x our CY25 EPS estimate of $6.80, above historical/below peers. We keep our FY25 (May) EPS at $6.29 and start FY26 at $7.08. ORCL posts May-Q EPS of $1.63 vs. $1.67, missing the $1.65 consensus. Sales rose 3%, as 20% growth from cloud services was largely offset by declines in licenses, hardware, and services. Infrastructure-as-a-Service (IaaS) grew +42%, now 14% of sales (run rate doubled in the last seven Qs) and is benefiting from large-scale deals (+30 AI sales contracts for over $12.5B; Open AI deal to train ChatGPT adds credibility). RPO rose an impressive 44% to $98B (+29% in Feb-Q), driving its backlog and will allow ORCL to grow +10% in FY25. Applications decelerated to 10% but Cerner headwinds to ease. The Google Cloud partnership is poised to aid database services revenue, which could add another

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