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https://www.barrons.com/articles/stock-market-movers-98396473
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Funds associated with Cathie Wood’s ARK Investment continued to cull shares of Coinbase Global Inc. and Tesla Inc. on Monday, according to recent trade disclosures.
The ARK Fintech Innovation ETF
ARKF,
dumped 76,788 Coinbase shares
COIN,
on the day, while the ARK Innovation ETF
ARKK,
sold 127,266 and the ARK Next Generation Internet ETF
ARKW,
sold 44,784 shares.
Those were worth $26.3 million based on Coinbase’s Monday closing price of $105.55, and the sales follow ARK’s move to dump about $50 million in Coinbase’s stock Friday.
Coinbase represents 0.78% of the Fintech Innovation ETF, along with 0.15% of the Innovation ETF and 0.30% of the Next Generation Internet ETF. ARK disclosed the transactions and weightings in the daily trade notifications it posts to its website.
Read: Coinbase’s spectacular stock surge after Ripple ruling sparks fierce debate
Meanwhile, the ARK Innovation ETF shed 38,329 Tesla shares
TSLA,
on Monday, while the ARK Next Generation Internet ETF sold 6,855. Those shares were worth $13.1 million based on Tesla’s Monday closing level of $290.38. Tesla represents about 0.12% of both funds as they continue to unload shares.
Don’t miss: Tesla is looking at its best sales quarter ever
ARK scooped up 455 shares of Meta Platforms Inc.
META,
within its Next Generation Internet ETF and bought up 3,729 shares within the ARK Innovation ETF. That amounted to $1.3 million worth of stock based on Meta’s $310.62 Monday close.
Two ARK funds bought a combined $790 million in Robinhood Markets Inc.’s stock
HOOD,
with the fintech fund scooping up 25,641 shares and the Next Generation Internet ETF buying 37,630 shares. ARK added 4,608 shares of SoFi Technologies Inc.
SOFI,
to the fintech fund, worth $43,683 based on Monday’s close.
See also: SoFi’s stock catches another downgrade as analyst says it ‘needs to be valued more like a bank’
ARK was also active in shares of Twilio Inc.
TWLO,
buying 15,702 within the Fintech Innovation ETF, 133,499 within the Innovation ETF and 22,748 within the Next Generation Internet ETF. That amounted to $11.4 million in Twilio’s stock based on Monday’s $66.47 closing price.
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Shares of AT&T Inc. were falling again Monday after a Citi Research analyst weighed in with a more cautious view in light of recent reporting on legacy use of lead-sheathed cables within the telecommunications industry.
Citi’s Michael Rollins cut his rating on AT&T’s stock
T,
to neutral from buy Monday, writing that it was among names that could see an “overhang” following The Wall Street Journal’s recent reporting on risks related to industry’s historical use of lead-sheathed cabling as Wall Street works to understand potential financial implications.
He also downgraded shares of Frontier Communications Parent Inc.
FYBR,
and Telephone & Data Systems Inc.
TDS,
to neutral from buy, and he already had a neutral rating on Verizon Communications Inc.’s stock
VZ,
“First, copper network deployed with possible lead sheathing could be a significant percentage of the legacy network deployed nationally with varying exposures for each firm,” Rollins wrote. He said he was “unable to specifically quantify financial risks (if anything material)” for wireline telecommunications companies stemming from these issues, though “the timing to receive more information could take at least a couple months and full resolution could take years.”
AT&T’s stock was off 3.8% in Monday morning action, to a recent $13.95, and on track to close at its lowest level since March 24, 1993, according to Dow Jones Market Data. The stock is on pace to spend a ninth-straight session without a daily gain, factoring in one day of flat performance last week alongside a string of daily losses.
“We still expect the company to display forward progress on cash flow generation and setting the stage to reduce net debt leverage over the next two years before considering any potential liabilities, if anything material, associated with lead sheathed cables,” Rollins wrote, though he called out “uncertainty from the industry’s use of lead-sheathed cabling” as a key reason for the downgrade.
Frontier shares were down 8.2%, while TDS shares were off 5.0%. Verizon’s stock was down 1.6% and on pace for its eighth consecutive losing session.
USTelecom, a trade association that counts AT&T and Verizon as members, said in a statement that the telecommunications industry “has a long tradition of closely following science and evidence as it relates to public health, environmental protection, and worker safety issues,” while “safe work practices within the industry have proven effective in reducing potential lead exposures to workers.”
There are “many considerations” that go into deciding whether to remove legacy cables, “including those regarding the safety of workers who must handle the cables, potential impacts on the environment, the age and composition of the cables, their geographic location, and customer needs as well as the needs of the business and infrastructure demands,” the spokesperson continued.
The trade group said in a prior statement that it had “not seen, nor have regulators identified, evidence that legacy lead-sheathed telecom cables are a leading cause of lead exposure or the cause of a public health issue.”
Representatives from Frontier and TDS couldn’t immediately be reached for comment.
Rollins noted in his report that “Verizon and AT&T indicated their expectation as that the exposure should be small,” though he said that “for Verizon, we learned the term ‘small’ could be as much as 20% of its copper network infrastructure.”
Don’t miss: Verizon CEO says the wireless market isn’t such a bad business after all
He joined JPMorgan’s Philip Cusick, who downgraded AT&T’s stock Friday and mentioned potential lead-cable liabilities as a concern.
SVB MoffettNathanson analyst Craig Moffett weighed in on the issue as well Monday, calling out heavy uncertainty.
“The unsatisfying, but honest, answer is that at this point we have nothing but unknowns to work with and no real way to quantify the companies’ exposures,” he wrote. “Lead risk is clearly not a good thing, but we don’t know how bad it will ultimately be. It would be disingenuous to try putting firm numbers around it.”
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Shares of Rivian Automotive Inc. were being driven toward a third-straight loss Monday, after Tesla Inc.’s first Cybertruck was rolled off the assembly line over the weekend.
“We see competitive pricing and specs for the Cybertruck as a fundamental and headline risk to [Rivian],” wrote Baird analyst Ben Kallo in a note to clients.
Rivian’s stock
RIVN,
dropped 2.5% in premarket trading. It has shed 4.2% over the past two sessions, after closing July 12 at a seven-month high.
Tesla shares
TSLA,
gained 2.0%, putting them on track to open at a 10-month high.
Rivian’s R1T electric truck has a starting price of $73,000 and the R1S sport-utility vehicle (SUV) starts at $78,000, while reports have the Cybertruck starting at around $40,000.
Tesla Chief Executive Elon Musk said in early 2023 that volume production of the Cybertruck would start in 2024. The Cybertruck was first unveiled in 2019, but faced a number of production delays since then.
Meanwhile, Baird’s Kallo also said despite Rivian’s (RIVN) strong second-quarter deliveries report, he was “cautious” about Rivian’s stock ahead of second-quarter results, which are due out Aug. 8, given concerns over the costs of the development of the electric vehicle maker’s Georgia facility.
“As both a positive and a negative, RIVN will need to raise capital in the near to medium term in order to fund the project and note that the recent stock appreciation may create an attractive opportunity for RIVN to execute an equity raise,” Baird wrote.
Rivian’s stock has run up 80.8% over the past three months through Friday, while Tesla’s stock has run up 50.4% and the S&P 500 index
SPX,
has gained 7.1%.
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Shares of Delta Air Lines Inc. surged toward a more-than two-year high Thursday, after the air carrier reported second-quarter profit and revenue that rose above forecast, and boosted its full-year outlook citing continued “robust” travel demand.
Delta
DAL,
said net income more than doubled to $1.83 billion, or $2.84 a share, from $735 million, or $1.15 a share, in the year-ago period.
Excluding nonrecurring items, adjusted earnings per share of $2.68 beat the FactSet consensus of $2.40.
Revenue grew 12.7% to $15.78 billion, well above the FactSet consensus of $14.44 billion,
For 2023, the company raised its EPS guidance range to $6 to $7 from $5 to $6, and increased its outlook for free cash flow to $3 billion from $2 billion.
The stock jumped 3.5% in premarket trading, putting it on track to open at the highest price seen during regular-sessions hours since April 2021.
“Consumer demand for air travel remains robust,” said Chief Executive Ed Bastian.
Traffic increased 18.0% to 60.80 billion revenue passenger miles while capacity grew 17.1% to 68.99 billion available seat miles. Load factor improved one percentage point to 88%, to beat the FactSet consensus of 87.2%.
The stock has run up 42.1% over the past three months through Wednesday, while the U.S. Global Jets exchange-traded fund
JETS,
has climbed 22.1% and the S&P 500 index
SPX,
has gained 9.3%.
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The stock of Mediterranean-style fast-casual restaurant chain Cava Group Inc. soared 11% Monday, after analysts initiated coverage on the stock which made its debut on public markets in mid-June with a flurry of buy ratings.
At least four of the banks that were underwriters on the initial public offering — JP Morgan, Stifel, William Blair and Jefferies — assigned the stock a buy rating or the equivalent.
FactSet shows one bank has a hold rating but it’s a restricted listing so it’s not clear who it’s from.
The company
CAVA,
raised $317 million in its initial public offering, which priced above its proposed range at $22 a share and immediately rallied on opening. The company issued 14.4 million shares at a valuation of $2.45 billion. The stock was last trading at $43.83.
The company is not profitable and has high cash burn and just $23 million in cash and cash equivalents on its balance sheet, according to its IPO filing documents.
But analysts were unfazed, with William Blair analysts calling it a clear leader in a fast-growing category with proven geographic appeal.
“CAVA has hit upon a winning formula with its customizable menu of bowls and pitas featuring bold Mediterranean flavors that can fit in any dietary preference,” wrote analysts led by Sharon Zackfia.
“CAVA’s customer appeal is evident in average unit volumes (AUVs) of roughly $2.5 million and a 44% five-year revenue CAGR through 2022.”
The company accelerated its growth with the 2018 acquisition of Zoës Kitchen, “which provided immediate access to attractive real estate in new markets while enabling capital-efficient densification in top-tier trade areas (Zoës conversions roughly half the cost of a typical greenfield CAVA),” they wrote.
That has set the company up to end 2023 with roughly triple the number of locations as it had in 2020.
William Blair estimates that there’s room for at least 1,200 domestic Cava restaurants based on the population per restaurant already achieved in Virginia, where it’s still adding locations.
That supports management’s target of 1,000-plus locations by 2032.
“We also see the potential for digital drive-thrus to further lengthen CAVA’s growth runway while lifting AUVs (and potentially returns), with about one-third of this year’s new units having drive-thrus, ramping up to about half in 2024 (versus roughly 20 drive-thrus today),” they wrote. William Blair initiated coverage with an outperform rating.
JP Morgan launched coverage with an overweight rating and a December 2024 $45 stock price target. Analysts cheered the entrepreneurial sprit of Founder and CEO Brett Schulman with help from Chairman Ron Shaich, the founder of Panera Bread.
“In-store design/operational procedures and back-end support for the network allows CAVA to be efficient, safe and consistent as the brand leverages these systems for its goal national brand penetration,” they wrote in a note to clients.
Mediterranean cuisine covers many types of food and occasions, so the end-market is large, topping out at more than $1 trillion in U.S. sales.
While bowl builds priced at $10.95 to $16.95 will likely limit a high frequency of lower-income consumers, “we believe the brand has an enduring appeal to a very broad customer base for at least occasional usage.”
And suburbs are 82% of the site mix and are expected to remain a key location base, they added.
Stifel and Jefferies analysts initiated coverage with a buy rating and $48 price target. Stifel analysts led by Chris O’Cull also cheered the wide appeal of the food and compelling unit-level returns and highlighted the company’s healthy balance sheet.
“The company is in strong financial condition with no funded debt and roughly $340M in cash on hand following the company’s IPO,” they wrote in a note to clients. “We project the company’s average quarterly cash balance will remain above $200M with no funded debt for the foreseeable future. We project positive annual free cash flow starting in 2026.”
Still, not everyone is convinced the company is a buy. David Trainer, chief executive of New Constructs, an independent equity research firm that uses machine learning and natural-language processing to parse corporate filings and model economic earnings, published a series of critical reports before the IPO.
Trainer questioned Cava’s ability to reach profitability and its high valuation. He even compared it to WeWork
WE,
the infamous startup created by Israeli entrepreneur Adam Neumann, that at its peak was valued at $47 billion, but is now trading at just 26 cents a share, or a market cap of $521 million.
The Renaissance IPO ETF
IPO,
has gained 32% in the year to date, while the S&P 500
SPX,
has gained 15%.
For more, see: Fast-casual restaurant chain Cava Group’s IPO documents raise some red flags: analyst
Read now: Cava Group CFO is confident restaurant chain will be profitable—but she won’t say when
Related: 5 things to know about the fast-casual Mediterranean restaurant chain Cava
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Shares of Mullen Automotive Inc. rocketed on massive volume for a second-straight day, after the electric vehicle maker announced plans to buy back a chunk of its shares.
The company
MULN,
said it believes its stock is “significantly undervalued,” given its current cash position of about $235 million. Therefore, the board of directors have authorized the repurchase of up to $25 million worth of its outstanding shares through the end of this year.
The buyback amount represents 17.1% of Mullen’s current market capitalization of about $145.8 million.
“We are initiating this buyback program as an attractive opportunity to deploy capital and return value to our shareholders,” said Chief Executive Officer David Michery.
The stock soared as much as 88.2% intraday, before paring gains to be up 32.8% in afternoon trading. Trading volume swelled to an already record 1.78 billion shares, compared with the full-day average over the past 30 days of about 205.0 million shares.
On Wednesday, the stock blasted 69.4% higher, the biggest one-day gain since it ran up 145.6% on Feb. 28, 2022, on then-record volume of 1.39 billion shares. That followed the company’s announcement that it retained a law firm to combat illegal naked short selling.
A short sale is a way for investors to bet that prices will fall. The short seller must pay to borrow stock owned by another investor so they can sell it with the hope of buying the stock back at a lower price. If the investor who originally owned the stock sells their stock, the borrower must cover their short so they can return the stock.
“Naked” short selling refers to the illegal act of shorting a stock without borrowing it first. While that is often blamed for what companies believe are unwarranted declines in their stock, market structure experts have often refuted those claims.
Read: Short sellers are not evil, but they are misunderstood.
Before the stock’s two-day bounce, it had closed Monday at a record low of 10.1 cents, even after the company reported last week that it recorded revenue for the first time, and that it received additional financing that put it in the “best financial position” in its history.
Mullen had said on Wednesday that it “believes it may have been” targeted by naked short sellers, and therefore decided to investigate any “potential wrongdoing.”
The latest exchange data showed that the percent of Mullen’s public float, or shares freely available to trade, that have been shorted was 16.2%, according to FactSet data. That’s less than half what the percentage was a month ago.
In comparison, fellow “meme” stock AMC Entertainment Holdings Inc.
AMC,
has 23.6% of its float shorted and 20.8% of GameStop Corp.’s
GME,
float is shorted.
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Shares of United Parcel Service Inc. dropped for the first time in seven sessions Wednesday, after the union representing more than 340,000 employees said the delivery giant “walked away” from the bargaining table after its labor contract offer was unanimously rejected.
The International Brotherhood of Teamsters said, following “marathon” negotiations, that UPS UPS refused to give the union a “last, best and final offer,” as the company said it had nothing more to give.
“This…
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Shares of electric vehicle makers got a broad boost Monday, after upbeat delivery and production data from a host of companies, including industry leader Tesla Inc. and those based in China.
The Global X Autonomous and Electric Vehicles exchange-traded fund
DRIV,
jumped as much as 1.7% intraday, before paring gains to close up 1.1%. It has climbed 5.7% amid a five-day win streak. The ETF outperformed the broader stock market by a wide margin, as the S&P 500 index
SPX,
inched up 0.1% and the Nasdaq Composite
COMP,
edged up 0.2%.
The ETF’s most-active component was Tesla’s stock
TSLA,
which climbed 6.9% to $279.82, the highest close since Sept. 28, 2022. It has run up 16.1% amid a five-day win streak.
The rally comes after Tesla revealed over the weekend a blowout deliveries report, in which the EV leader said it delivered a record 466,000 vehicles in the most recent quarter, well above expectations of 449,000.
The ETF’s second-most active member was Rivian Automotive Inc.’s stock
RIVN,
which shot up 17.4% to its highest close since Feb. 17, and rocketed 45.4% amid a five-day win streak.
The company reported second-quarter EV production that was more than triple that of a year ago, and deliveries that nearly tripled.
Nio Inc.’s U.S.-listed stock
NIO,
rallied 3.5% to $10.03, the first close above the $10 mark since March 31, after the Shanghai-based EV maker reported June deliveries that jumped 74% from May, but were down 17.4% from a year ago.
Among its China-based peers, the U.S.-listed shares of Xpeng Inc.
XPEV,
advanced 4.2% to the highest close since Sept. 26, 2022, of Li Auto Inc.
LI,
hiked up 3.4% to the highest close since July 21, 2022 and of Boyd Co. Ltd.
BYDDY,
rose 3.1%.
Elsewhere, Lucid Group Inc. shares
LCID,
charged 7.3% higher to a record sixth-straight gain and the highest close since May 31, as the EV sector’s rally helped offset an effective downgrade at Citi Research.
Mullen Automotive Inc.’s stock
MULN,
bucked the trend, as it sank 6.3% toward a record low close of 10.1 cents, even after the EV maker reported last week that it recorded revenue for the first time, and that it was in the “best financial position” in its history.
In an interview on YouTube channel “Financial Journey,” as disclosed on Friday, Mullen Chief Executive Officer David Michery said he doesn’t believe the stock’s price reflects the true value of the company.
He said he expects manufacturing of the Mullen One class 1 last-mile delivery cargo vans to begin in August with “sellable” vehicles available in September.
For the Mullen Three class 3 trucks, with a gross vehicle Weight Rating (GVWR) of 11,000 pounds, Michery said manufacturing will start “right around the corner” in July, with sellable vehicles in August and September.
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Tesla Inc. delivered a record number of vehicles in the second quarter, beating market estimates after the electric-car maker increased discounts and incentives, the company reported Sunday. The news sent the stock up more than 6% in premarket trade Monday.
The Elon Musk-led electric vehicle manufacturer delivered 466,140 vehicles in the three months ended June 30 and produced 479,700 vehicles. The second quarter of 2023 marked the fifth period in a row when Tesla reported a higher level of vehicles produced compared to deliveries.
Analysts on average had expected Tesla to deliver 445,000 cars, according to analysts polled by Refinitiv. Tesla delivered 254,695 vehicles in the year-ago quarter.
“This was a massive delivery beat and will send the Tesla bears back into hibernation mode,” Wedbush analyst Dan Ives tweeted Sunday. “This was a trophy case quarter for Musk & Co.”
Deliveries are a carefully watched number by Tesla shareholders and are the closest approximation of sales disclosed by the company.
Tesla said total production rose 85.5% to nearly 480,000 vehicles in the three months ended June 30, from a year earlier.
The company delivered 446,915 Model 3 compact cars and Model Y sport-utility vehicle, as well as 19,225 of its Model S and Model X premium vehicles.
Tesla increased discounts for vehicles to a $1,600-to-$7,500 range and made all of its Model 3s eligible for full federal credits of $7,500 starting in June in the U.S.
Earlier this year, Tesla cut prices globally by as much as 20% after missing Wall Street delivery estimates for 2022.
Tesla is expected to achieve record sales yet again in China, its second-largest market after North America, despite competition from market leader BYD.
The company said it will post financial results for the second quarter after the market close on Wednesday, July 19.
Earlier this year, Ford Motor
F,
and General Motors
GM,
as well as fast-charging equipment makers, agreed to adopt Tesla’s North American Charging Standard (NACS).
Tesla
TSLA,
shares closed at $261.77 on Friday ahead of the second-quarter deliveries report, and are up more than 112% year to date.
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Major U.S. banks including Morgan Stanley and JPMorgan Chase & Co. announced dividend increases late Friday, in the wake of the results of the Federal Reserve’s latest bank stress tests earlier this week.
JPMorgan
JPM,
said it plans to raise the bank’s dividend to $1.05 a share, up from $1 a share, for the third quarter, subject to board approval.
The stress tests “show that banks are resilient — even while withstanding severe shocks — and continue to serve as a pillar of strength to the financial system and broader economy,” JPMorgan Chief Executive Jamie Dimon said in a statement.
“We continue to maintain a fortress balance sheet with strong capital levels and robust liquidity,” Dimon added.
Morgan Stanley
MS,
said it will increase its quarterly dividend to 85 cents a share from the current 77.5 cents a share, beginning with its third-quarter dividend. The bank also said that its board reauthorized a multiyear share buyback totaling as much as $20 billion, without an expiration date, beginning in the third quarter.
Don’t miss: Fed stress tests see large banks able to handle recession and slide in commercial-real-estate prices
See also: Wall Street upbeat on banks after ‘mostly positive’ Fed stress tests results
“The results of the Federal Reserve’s stress test demonstrate the durability of our transformed business model. We remain committed to returning capital to our shareholders and are raising our dividend by 7.5 cents,” Chief Executive James P. Gorman said in a statement.
Wells Fargo
WFC,
for its part, said it will increase its dividend to 35 cents a share, up from 30 cents a share, subject to board approval. It said it has the capacity to undertake a share buyback, “which will be routinely assessed as part of the company’s internal capital adequacy framework that considers current market conditions, potential changes to regulatory capital requirements, and other risk factors,” without elaborating further.
Goldman Sachs Group Inc.
GS,
said it would raise its dividend, to $2.75 a share from $2.50 a share, starting July 1.
Market Pulse: Goldman Sachs reportedly looking to exit Apple partnership
Citigroup Inc. C said its board had approved an increase in its quarterly dividend to 53 cents a share, from 51 cents, also for the third quarter.
Citi Chief Executive Jane Fraser said that, while the bank “would have clearly preferred not to see an increase in our stress capital buffer, these results still demonstrate Citi’s financial resilience through all economic environments, including the severely adverse scenario envisioned in the Federal Reserve’s stress test.”
Citi’s “robust capital and liquidity position, as well as the diversification of our funding and our business model, allow Citi to continue to be a source of strength for our clients and navigate challenging macro environments securely,” Fraser said.
The bank bought back $1 billon in shares in the second quarter and will continue to evaluate its capital actions, the chief executive said. “We are completely committed to simplifying Citi, improving returns and delivering value to our shareholders.”
Shares of Morgan Stanley and Wells Fargo rose 1.5% and 0.1%, respectively, in the after-hours session after ending the regular trading day up a respective 0.2% and 0.5%. JPMorgan shares edged up 0.2% in the extended session after closing 1.4% higher on Friday. Citigroup shares were up 0.2%, while Goldman’s were largely unchanged.
Bill Peters contributed.
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Banks Boost Dividends After Passing Stress Test. Their Stocks Are on the Rise.
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Apple Inc. closed out the June quarter with a bang, clinching a $3 trillion valuation for the first time.
Shares of Apple
AAPL,
advanced 2.3% in Friday trading, given them a market capitalization above $3 trillion. The company previously hadn’t ended a trading session at the milestone mark, though it got close Jan. 3, 2022, when it traded intraday at levels that would have amounted to that valuation level but failed to close there.
The smartphone giant became the first U.S. company to secure a $3 trillion valuation. Its market capitalization alone is larger than the market caps of the S&P 500 Utilities, Real Estate and Materials sectors combined, according to Dow Jones Market Data.
Apple’s close in $3 trillion territory comes 719 trading days after it crossed the $2 trillion threshold, also according to Dow Jones Market Data.
Read: Apple’s march toward a $3 trillion valuation, shown in one chart
Citi Research weighed in late Thursday with a vote of confidence in the stock’s ability to run ever higher from here, with analyst Atif Malik initiating coverage of the shares with a buy rating and $240 target price.
See more: Buy Apple’s stock because it’s more than just a hardware play, Citi says
“We believe the Street is underestimating continued gross margin expansion,” Malik wrote in his note to clients, while adding that he anticipates the “trend of premium iPhones grabbing more share to continue.”
His bullish note came as Apple shares surged 46% so far in 2023 amid a strong first half of the year for Big Tech players.
More from MarketWatch: The Nasdaq-100 is headed for its best first half on record. But the rally faces a high-stakes test in July.
Wedbush analyst Daniel Ives chimed in that Apple shares could come to fetch a higher multiple as the company nears $100 billion in annual services revenue for fiscal 2024, compared with about $50 billion in fiscal 2020.
“Herein lies the key to the valuation re-rating that we believe will continue to take place around Apple’s stock as the Street further appreciates the sheer massive potential of this services revenue that we now assign a valuation in the $1.4 trillion range,” he wrote.
Ives said he thinks a fair valuation for Apple would be about $3.5 trillion by fiscal 2025, though his bull case contemplates the potential for a $4 trillion valuation by that point.
Don’t miss: These are the best-performing stocks in the 2023 bull market — and the worst
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AMC Entertainment Holdings Inc.’s stock ended Wednesday’s session up 7.6% on the eve of a key hearing in the company’s push to convert its AMC Preferred Equity Units into common stock.
Shares of AMC
AMC,
had their largest single-day percentage gain since April 6, when they rose 21%. Earlier this week, the stock snapped its longest losing streak in 18 months. The APE
APE,
units ended Wednesday’s session down 3.4%.
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Shares of Nvidia Corp. and Advanced Micro Devices Inc. slumped in the extended session Tuesday following a report that the Biden administration is considering a new ban on sales of AI chips to China.
Nvidia shares
NVDA,
A fell 3% after hours, following a 3.1% gain to close at $418.76, while AMD shares
AMD,
also fell 3%, after a 2.7% gain in the regular session to close at $110.39.
Late Tuesday, the Wall Street Journal reported the Commerce Department could further block sales of AI chips to China unless U.S. companies first obtain a special license.
The ban would follow upon similar actions last year that threatened $400 million in Nvidia sales, but the company found a workaround in supplying a version of products that avoided the ban.
Read: AMD launches new data-center AI chips, software to go up against Nvidia and Intel
Both Nvidia and AMD have launched new AI chips this year: Nvidia in March and AMD earlier in the month. Last year’s release of Open AI’s ChatGPT generative AI — with billions of dollars invested by Microsoft Corp.
MSFT,
— resulted in an explosion of interest in artificial-intelligence technology, prompting luminaries to herald the technology as the biggest thing in tech since … you name it.
Read: Bill Gates says AI is only the second revolutionary tech advancement in his lifetime
News of the possible ban happened to follow a claim earlier in the day from Baidu Inc.
BIDU,
on the Chinese search company’s blog, which said its Ernie 3.5 version AI outperformed ChatGPT’s earlier version “in comprehensive ability scores,” and its latest iteration, GPT-4, which was released in mid-March, “in several Chinese-language capabilities.”
Baidu’s claim appeared to be based upon performance metrics published in China Science Daily. On Wall Street, ADRs of Baidu were down 0.7% after hours, following a 3.1% gain to close at $143.90.
As of Tuesday’s close, Nvidia shares were up 187% in 2023, and AMD shares were up 70% for the year.
Read: Snowflake adds partnerships with Nvidia and Microsoft for AI double play
Shares of Super Micro Computer Inc.
SMCI,
which have benefited from AI, also declined 3% after hours, while shares of Intel Corp.
INTC,
which supplies chips to data centers, saw shares decline 1% after hours.
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https://www.barrons.com/articles/nvidia-stock-price-ai-tesla-5af5041c
Shares of newly minted $1 trillion company
Nvidia
were taking it on the chin Monday, and investors searching for a reason should look to
Tesla
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Stock futures were falling following three straight days of losses for Wall Street. Federal Reserve Chairman Jerome Powell again will be delivering testimony before Congress. His comments on Wednesday that the central bank likely would be raising rates further this year pushed markets lower.
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Shares of Tesla Inc. ended more than 5% lower Wednesday in the wake of a downgrade by Barclays.
The electric-vehicle maker’s
TSLA,
stock notched its worst one-day percentage drop since April 20, when it fell 9.75%.
Earlier Wednesday, analyst Dan Levy at Barclays said that for all that Tesla has been a momentum stock often “driven by more than fundamentals,” the surge that started in April, in which Tesla shares have gained about 70%, is likely “too sharp” against “challenging” near-term trends.
The analyst downgraded his rating on Tesla shares to the equivalent of hold.
Tesla shares have been on a tear in recent weeks, boosted by news that major U.S. automakers such as Ford Motor Co.
F,
and General Motors Co.
GM,
have forged agreements that will allow their EV owners to use Tesla’s fast-charging network, which has stations located alongside major highways.
On Tuesday, EV startup Rivian Automotive Inc.
RIVN,
announced a similar deal. The agreements have made Tesla’s EV fast-charging connector type, which it calls the North American Charging Standard, or NACS, the de facto standard in North America.
See also: Tesla’s EV charging standard is becoming widely adopted, in another boost for the stock
Shares of Tesla have more than doubled this year, up 111%, compared with gains of around 14% for the S&P 500
SPX,
in the same period. The stock is also in the black for a 12-month span, up 10%, while the S&P 500 has advanced 16%.
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https://www.barrons.com/articles/stock-market-movers-fb3791aa
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Investors who are buying into the post-Covid recovery of commercial aerospace will get an important update about the industry, including the hot issues of sustainability and supply-chain snags, when the Paris Air Show kicks off on Monday.
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