Check out the companies making headlines in midday trading.
Logitech — The computer peripherals maker jumped 11.8% after Logitech reiterated its full-year guidance, which was lowered in July. Logitech has struggled with weaker demand after a boom in sales during the height of the pandemic.
Upstart — Shares surged 9.8% even after Mizuho initiated Upstart with an underperform rating, saying that there are more challenges ahead for the consumer lending company.
Stem — The stock rose 12.3% after UBS initiated Stem as a buy, saying that AI-driven energy storage company is a market leader that will get a boost from the Inflation Reduction Act.
Hibbett — The sporting goods stocks advanced 9.2% following an upgrade from Bank of America to a buy rating. The bank highlighted the company relationship with Nike and product availability among its reasons for liking the stock.
Xerox — Shares plunged 15% after the seller of print and digital document products and services reported disappointing earnings and cut its full-year revenue guidance. Xerox CEO Steve Bandrowczak said in a release that “profitability remains challenged by persistently high inflation and continued supply chain constraints.”
Brown & Brown — Shares of the insurance company dropped 11% after Brown & Brown missed earnings expectations. Brown & Brown posted earnings of 50 cents per share on revenue of $927.6 million. The company was expected to report earnings of 60 cents per share on revenue of $945.8 million, according to consensus estimates on FactSet.
Qualtrics International — Shares of the customer feedback software company jumped 7.7% after Qualtrics reported earnings that exceeded expectations, and raised its full-year outlook.
Ross Stores — Shares of the off-price retail jumped 5.8% following an upgrade to overweight from Wells Fargo. The bank called Ross Stores one of the “best ways” to trade the sector.
SAP — Shares of the German business software company advanced 6% after SAP reported quarterly results that topped expectations and maintained its full-year forecast.
PulteGroup — The home construction company jumped 5.9% despite disappointing earnings expectations. PulteGroup posted earnings of $2.69 per share on revenue of $3.94 billion. Analyst surveyed by Refinitiv were expecting earnings of $2.82 per share on revenue of $4.17 billion.
JetBlue — The airline slid 3.6% after a third-quarter earnings miss of 21 cents per share, versus a Refinitiv consensus estimate of 23 cents. Revenue was in line with estimates, at $2.56 billion. JetBlue had a quarterly profit of $57 million, due to elevated travel demand and higher fares, which helped offset rising costs.
Planet Fitness — The gym stock jumped 4.5% after Piper Sandler upgraded Planet Fitness to overweight from neutral, saying that shares are attractive and will get a boost from participation from younger generations.
General Motors — Shares of General Motors rose 3.6% after the automaker handily beat third-quarter earnings expectations. The company also maintained its full-year outlook.
United Parcel Service — Shares of the delivery company gained 1% after UPS reported stronger-than-expected earnings for the third quarter. The company earned an adjusted $2.99 per share, 15 cents better than analysts expected, according to Refinitiv. Revenue fell short of expectations, however, as its supply chain solutions segment declined year over year. UPS did maintain its full-year guidance.
General Electric — The stock declined 1.8% after General Electric cut its full-year outlook because of supply chain issues. The company otherwise posted stronger-than-expected revenue.
— CNBC’s Michelle Fox, Jesse Pound, Carmen Reinicke and Samantha Subin contributed reporting.
Stock futures were little changed early on Wednesday as investors looked ahead to a key inflation report set to be released Wednesday.
Dow Jones Industrial Average futures were flat. S&P 500 and Nasdaq 100 futures were fractionally lower.
The moves come after the S&P 500 and Nasdaq fell for a third straight day on Tuesday. The Nasdaq Composite led the declines, falling 1.19% after Micron, Novavax and Upstart warned that future earnings and revenue may come in lower than previously thought. The S&P 500 fell 0.42%, and the Dow Jones Industrial Average shed 0.18%.
Inflation report looms
Investors are awaiting the latest consumer price index report, which could confirm or dash hopes that rising prices have leveled off. Economists expect the report to show that inflation has cooled slightly, led by slipping oil prices.
“In terms of reactions, the market will initially get more excited by a downside core CPI surprise than an upside surprise, especially as it relates to risk appetite,” Alan Ruskin of Deutsche Bank wrote in a Tuesday note. “A downside surprise plays to ‘hopes’ that an oil/food commodities peak, plus slower demand, will filter quickly into US inflation data.”
The Federal Reserve will weigh the report, along with other key economic data, ahead of its September meeting where it is slated to hike interest rates again.
Earnings season also continues, with Disney’s quarterly results due after the bell Wednesday.
Take a look at some of the biggest movers in the premarket:
Novavax (NVAX) – The drugmaker’s stock plummeted 32.3% in the premarket after posting an unexpected quarterly loss and cutting its full-year revenue guidance in half. Novavax said it did not expect any further U.S. sales of its Covid-19 vaccine this year amid soft demand and a supply glut.
GoodRx (GDRX) – GoodRx soared 39.6% in premarket trading after the provider of prescription drug comparison software reported better-than-expected quarterly results, and also said an issue with a major grocery chain had been resolved.
Allbirds (BIRD) – The sneaker maker’s shares dived 11.8% in the premarket after it cut its full-year forecast, with the company saying external headwinds could pressure consumer spending in the back half of 2022.
Micron Technology (MU) – The chip maker said it expected negative free cash flow for the current quarter, as well as declines in revenue and profit margins. Chip shipments are falling due to weakening demand from PC and video game companies. Micron lost 3.7% in premarket action.
Take-Two Interactive (TTWO) – Take-Two fell 3.4% in the premarket after the video game publisher issued a weaker-than-expected revenue forecast. Take-Two is the latest company to see its results impacted by a general slowdown in gaming following a pandemic-era boom.
Occidental Petroleum (OXY) – The energy producer’s stock added 2.3% in the premarket following news that Berkshire Hathaway (BRK.B) had increased its stake in Occidental to more than 20%. That means that Berkshire can record part of Occidental’s profits as its own.
Signet Jewelers (SIG) – The jewelry retailer announced a deal to buy online jewelry seller Blue Nile for $360 million in cash. Signet shares added 2% in the premarket.
Upstart (UPST) – Upstart stock tumbled 12.2% in premarket trading after the cloud-based lending platform company missed Wall Street’s estimates on both the top and bottom lines for its latest quarter. It also issued a weaker-than-expected revenue forecast, saying that banking partners have turned more cautious due to the uncertain economy.
CarGurus (CARG), Vroom (VRM) – Both online used car sellers saw their stocks plunge in premarket action after reporting weaker-than-expected quarterly results. CarGurus sank 14.9% while Vroom slid 11.4%.
SoFi (SOFI) – The online financial services company’s stock fell 3.4% in premarket trading after Japan’s SoftBank said it would some or all of its 9% stake in SoFi.
A woman holds a small bottle labeled with a “Coronavirus COVID-19 Vaccine” sticker and a medical syringe in front of displayed Novavax logo in this illustration taken, October 30, 2020.
Dado Ruvic | Reuters
Check out the companies making headlines after hours.
Novavax — The biotech stock dropped 32% after Novavax cut its full-year revenue guidance due to poor demand for its Covid vaccines.
Take-Two Interactive Software — Shares dropped 6% after the video game company behind titles such as Grand Theft Auto reported weaker-than-expected earnings. Take-Two reported $1 billion in revenue, less than the $1.09 billion projected by analysts surveyed by Refinitiv.
Upstart — Shares fell 7% after the consumer lending company posted disappointing second quarter results. Upstart earned 1 cent per share on revenue of $228.2 million. Analysts surveyed by Refinitiv were estimating earnings of 10 cents per share on revenue of $241.6 million.
Allbirds — The footwear stock dropped 12% after Allbirds cut its outlook for the year and announced cost-cutting efforts, citing weaker consumer spending. The footwear and apparel company otherwise beat expectations in its second-quarter results, compared with consensus estimates from Refinitiv.
Hims & Hers Health — Shares gained more than 4% after the telehealth company reported quarterly results and raised its full year outlook, citing continued momentum in the number of net new subscriptions.
A security guard stands next to a Bed Bath & Beyond sign at the entrance to a New York City store location.
Scott Mlyn | CNBC
Check out the companies making headlines in midday trading.
Bed Bath & Beyond — Shares of the retailer plummeted about 21% after the company missed revenue estimates and posted a wider-than-expected loss in the recent quarter. Bed Bath & Beyond also announced it is replacing CEO Mark Tritton.
Carnival — Shares of the cruise line operator fell more than 14% after Morgan Stanley cut its price target on the stock roughly in half and said it could potentially go to zero in the face of another demand shock, given Carnival’s debt levels. The call dragged other cruise stocks lower. Royal Caribbean and Norwegian Cruise Line Holdings each dropped more than 10%.
Upstart — Shares of the AI lending platform dropped roughly 10% after Morgan Stanley downgraded the stock to underweight from equal weight. The Wall Street firm said rising interest rates and a troublesome macroenvironment is hurting Upstart’s growth trajectory.
Bath & Body Works — The retailer’s stock fell nearly 8% after JPMorgan downgraded shares to neutral from overweight. The firm lowered its second quarter and full-year earnings estimates for Bath & Body Works after reducing second quarter average unit retail estimates by 4% year over year.
Teradyne — Shares of the semiconductor testing company slid 6% following a downgrade to neutral from buy from Bank of America. The firm said Teradyne’s exposure to Apple could ding the stock in the near term, given uncertainty around iPhone demand.
Tesla — Shares declined about 4% following a Wall Street Journal report that said Tesla is closing its San Mateo, California office and laying off 200 workers. CNBC confirmed the report.
General Mills — The stock jumped 5.7% after General Mills reported an earnings beat on the top and bottom lines. Still, the cereal company’s full-year profit estimates were weaker than expected, because of a consumer shift to cheaper brands.
O’Reilly Automotive — The auto parts company traded up more than 1% following an upgrade to buy from neutral from D.A. Davidson. The firm said O’Reilly is their “preferred way” to play the auto parts theme compared to AutoZone and Advance Auto Parts. Auto parts companies, which typically sell non-discretionary products, are expected to weather downturns better than other retailers.
McDonald’s — Shares climbed 1.5% following an upgrade to overweight by Atlantic Equities. The firm said hamburger chain will hold out as consumer spending slows.
Goldman Sachs — Shares rose 1.3% after Bank of America upgraded Goldman Sachs to a buy from a neutral rating and said the bank will thrive even in an economic slowdown.
Traders work on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters
Technology stocks have been far from a sure bet since 2021 began its stretch run in mid-November. Inflationary concerns and fears of rising interest rates pushed investors out of software and internet companies, sending scores of prior outperformers into correction territory.
Despite the sell-off and the volatility across wide swaths of the tech industry, investors have made a bundle of money betting on specific companies and stories. Certain areas of the semiconductor market ballooned this year, as demand soared for processors that could speed crypto mining, aid game development and connect more devices to the internet.
Fintech, cloud software and cybersecurity had their share of standouts as well, even if buying baskets of those stocks and holding them for the year would not have been a particularly lucrative investment.
Here are the five biggest gainers in 2021 among U.S. tech companies valued at $5 billion or more. The list excludes companies that went public this year. Prices are as of Thursday’s close.
Upstart
When Upstart held its stock market debut in mid-December of last year, the company was valued at about $1.5 billion. Just over a year later, it’s a $12 billion company.
Upstart shares are up 264% since the beginning of 2021, including a gain of 171% over a wild three-day stretch in March.
The company uses machine learning to underwrite consumer loans and provides its technology to banking partners who can then better target customers.
Revenue in the third quarter soared 250% to $228 million. In addition to rapid growth, Upstart is giving investors something that’s unusual from a newly public tech company: profits. Upstart has generated earnings for five straight quarters, including net income of $29.1 million in the latest period, up from $9.7 million a year earlier.
Upstart said in its earnings call in November that it now provides technology services to 31 banks and credit unions, up from 10 a year ago. In the third quarter, the company powered 362,780 loans, up 244% from a year earlier.
Top tech stocks of 2021
CNBC
CEO David Girouard said on the call that the company is now moving beyond personal and auto loans and into small-dollar loans for consumers with “immediate cash needs.”
“Our bank partners rightly feel pressured to better serve low-to-moderate income Americans, and we want to help them do that right,” Girouard said. “The interest in the small dollar product from our bank and credit union partners is off the charts and we hope to bring it to market before the end of 2022.”
Synaptics
Synaptics was founded in 1986 and went public 16 years later. But it took until 2020 for investors to start getting excited about the stock. This year it took off, soaring 189%.
Synaptics grew up in the heart of Silicon Valley, developing touchpads and scroll pads for PCs as well as biometrics. Its touch technology then gained resonance with smartphones. Now, with more devices acting like computers, Synaptics has positioned itself at the center of the “Internet of Things” (IoT) boom.
The company’s technology can be found in connected cars, virtual reality headsets, set-top boxes, drones and gaming systems. It focuses on low-power consumption for all sorts of wireless devices.
“We’ve done really really well with that business — it’s outperformed our best expectations,” CEO Michael Hurlston told CNBC’s Jim Cramer in July. “I think it’s because we didn’t go after what everybody else was chasing. We repositioned it to go after an interesting market that has turned out to be a great grower.”
Earlier this month, Synaptics completed its $549 million acquisition of DSP Group, which provides voice processing and wireless chipsets.
Asana
Asana CEO Dustin Moskovitz
Asana
At its peak in mid-November, Asana was up almost five-fold for the year, far outpacing all other U.S. tech stocks. It’s lost almost half its value since then, falling alongside a bunch of other high-priced cloud software stocks.
Still, the provider of software that helps marketing, operations and sales teams manage projects and collaborate remotely is up 164% in 2021, driven by year-over-year revenue growth of at least 70% in the second and third quarters.
Like Upstart, Asana went public in 2020 but its coming-out party with investors took a few months to get rolling. Dustin Moskovitz, the company’s billionaire co-founder and CEO, has been buying along the way.
Moskovitz has purchased about $293 million worth of Asana shares in December, taking advantage of the dip to bolster his position. He now controls about 44% of the company’s Class A and Class B combined shares, up from 36% before the company’s New York Stock Exchange debut in September 2020.
Converting free users to paying customers is key to Asana’s future growth and profitability. In its third-quarter earnings report earlier this month, Asana said paying clients increased by 7,000 to over 114,000 and said revenue from customers spending more than $5,000 annually jumped 96% from a year earlier.
Fortinet
Fortinet Inc. headquarters in Sunnyvale, California.
Tony Avelar | Bloomberg | Getty Images
With two straight quarters of revenue growth above 30%, Fortinet is expanding at its fastest rate since 2016. A flurry of ransomware attacks along with a more complex security environment created by a sudden surge in remote work led to a spike in demand for Fortinet’s technology this year.
Shares are up 133%, closing on Thursday at $349.02. That’s lifted the company’s market cap past $57 billion, surpassing rival Palo Alto Networks, which is valued at $55 billion after its stock climbed 58% in 2021.
Following Fortinet’s better-than-expected earnings report and upbeat forecast last month, analysts at Wedbush increased their price target to $400 from $350. One reason, the firm cited, was the company’s free cash flow, which jumped to $329.8 million from $185.7 million a year earlier.
“In a nutshell, Billings growth upside, strong FCF, and a healthy pipeline should be the trifecta to drive this stock higher,” wrote the Wedbush analysts, who kept their buy recommendation on the stock.
Nvidia
Nvidia GeForce Now on iPhone
Nvidia
Chipmaker Nvidia was the best-performing mega-cap tech stock of the year. The shares soared 127% in 2021, pushing the company’s market cap to $741 billion, seventh highest among U.S. tech companies, behind the five Big Tech names and Tesla.
Revenue growth has topped 50% in each of the last five quarters, proving that Nvidia’s high-performance graphics processing units remain in hot demand. Within the data center, Nvidia’s technology bolsters artificial intelligence and data-intensive workloads, while gaming systems continue to require heftier processing power.
Earlier this year, Nvidia released new processors specifically for crypto mining. They’ve generated $526 million in revenue so far, but crypto is proving to be a volatile market for Nvidia. The company said last month that sales of the products plunged 60% sequentially from the second quarter to the third and are expected to be “very negligible” in the fourth quarter.
Investors aren’t expressing much concern. The stock climbed more than 8% after the earnings report, largely because gaming processors, Nvidia’s core business, generated $2.76 billion in revenue, an increase of 106% from last year.
“We continue to believe the company’s long-term prospects are some of the best in the semiconductor industry,” analysts from Piper Sandler wrote in a note after third-quarter earnings. They maintained their buy rating and raised their price target to $350 from $260.
WATCH: Nvidia could be a $10 trillion stock one day, says Jim Cramer
Some of the nation’s largest traditional banks are reporting earnings this week, prompting CNBC’s Jim Cramer on Wednesday to review the investment case for the tech-driven companies that are seeking to disrupt legacy players in finance.
The “Mad Money” host dubbed the following six companies “nouveau banks”: PayPal, Square, Upstart, Affirm, Robinhood Markets and SoFi Technologies.
“It’s a good time to get some … nouveau bank exposure,” Cramer said, because expectations for Wall Street banks are high coming into earnings season. That means their stocks could get hit if results don’t smash expectations, he said, like JPMorgan Chase on Wednesday.
“If the rest of them go like JPMorgan … then it’s possible we could have still one more exodus from the straight financials and one more love affair with the fintechs,” Cramer said.
Here’s how Cramer would play the landscape:
Buy it now
The PayPal app shown on an iPhone.
Katja Knupper | DeFodi Images | Getty Images
Cramer said PayPal and SoFi are worth buying right here.
PayPal has done a great job expanding its products to include new offerings such as adding a buy now, pay later platform, Cramer said, as well as offering cryptocurrency trading and high-yield savings accounts through a Synchrony Bank partnership.
“While the stock remains expensive here, I think it’s worth buying now that it’s down 17% from its highs, which is why we added some for the charitable trust last week.”
SoFi, led by CEO Anthony Noto, also has a range of services that now includes selling insurance policies, brokerage accounts and mobile cash management, Cramer said. “SoFi is well on its way to obtaining a banking charter, too,” he added.
However, SoFi’s stock has struggled to gain traction since the company completed a reverse merger to start trading on the Nasdaq in June. Even as SoFi benefited from Morgan Stanley analysts rating its stock a buy, “it’s still down nearly $10 from its highs earlier this year,” Cramer said.
The other guys
Vlad Tenev, CEO and co-founder Robinhood Markets, Inc., is displayed on a screen during his company’s IPO at the Nasdaq Market site in Times Square in New York City, U.S., July 29, 2021.
Brendan McDermid | Reuters
Cramer said he finds Square “enticing” now that the company — which offers peer-to-peer payments, small business loans and equity and crypto trading — has seen its stock fall about 16% from its August highs.
However, he said, “I like PayPal more than Square because it’s cheaper.”
Upstart, a loan originator that uses artificial intelligence to facilitate the process, should be on investors’ shopping lists, Cramer said. But with the stock up 746% year to date, “wait for a pullback and then you pull the trigger,” he said.
Similarly, Cramer said he believes investors should wait for a bit of decline in shares of Affirm , a leader in the increasingly popular buy now, pay later space that’s scored high-profile deals with Amazon, Walmart and Target.
Robinhood, a pioneer in zero-commission trading, has big ambitions to become a “single money app” for consumers, Cramer said. Even so, Cramer said it’ll take time to get there, plus the top U.S. securities regulator is looking into its core business model of payment for order flow.
“While Robinhood is not my favorite, it’s way too important to ignore,” Cramer said.
Disclosure: Cramer’s charitable trust owns shares of Amazon, Morgan Stanley and PayPal.
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