Past week dominated by corporate earnings stories
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What is the main topic of this episode?
Brian Stewart, our director of news at Seeking Alpha. Welcome back to Wall Street Breakfast. Great to have you.
Great to be here, Rena.
So talk to us about the markets. February 21st, here we are. What do you have top of mind, middle of mind?
What are the highlights from the past week's corporate earnings?
I think this past week was dominated by a few corporate earnings stories. Don't know that there was a firm direction given to the market by macro. I think we're still trying to feel out the Fed, feel out the administration, the Trump administration. So I think that the back and forth of individual stocks was kind of the news for the last week. And in general, the news was relatively good.
What made it good? What was the good news?
Putting out a few of the highlights, Applovin had a brilliant earnings report. It is benefiting from a focus shift to AI and e-commerce. It's a software platform that advertisers use to enhance the marketing in content. And so it's a good kind of B2B platform. play if you're kind of trying to get the temperature of the market in general.
How is AI influencing the stock market?
So the stock surged 24% on the earnings report and continued higher in the following session. It's off 11%, sort of a profit taking. So there are some valuation worries, but in general, its results were kind of a sign that AI is still filtering its way through company results. And so if you're an investor who can kind of pick the next company that's going to see the big AI boost, you can still get in pre-catalyst for some of these stocks. And another one for last week that had a big move was analog devices. It had better inspected earnings and guidance. Its bookings were gradually improving and increased its share buyback program. And that had the stock up 18% over the past week.
Any other names that you would add into the good news list?
What is the significance of Taiwan Semiconductor and Intel's potential deal?
Yeah, I think ADI gives us a good boost to the chip sector in general. So you saw Micron up 14% in the past week and Texas Instruments up 9% in the past week. NVIDIA was up as well. I'm sure we're going to talk about that when we're looking into next week. But looking into the chips, an interesting story in itself was Intel. It got a boost after Taiwan Semiconductor and Broadcom were reported to have interest in buying parts of Intel, so breaking it up. Intel's been a long running turnaround hope. So the company is looking to kind of get off the mat. And the M&A news, I think it's an interesting test of the new administration and what its kind of regulatory oversight will be in terms of approving or not approving M&A.
This one has a lot of complexities, especially with the overseas elements of Taiwan Semiconductor. I mean, there's no deal in place now, so there's really nothing for the Trump administration to say. But I think it's a good litmus test. I think if you're interested in this sector, I think watching the headlines surrounding Intel and possible M&A activity could be a good sign of the feeling for... both players within the space about consolidation as AI becomes more important, and then also what the administration is going to do.
What's the public sentiment around the deal happening?
I think it's still up in the air. Generally speaking, the Trump administration was viewed as pro-business, low regulation. But obviously one of his other tenants is kind of a nationalist bent, a protectionist bent with the tariffs and immigration policy. So... While it might look the other way in terms of general antitrust concerns in terms of dealmaking, the foreign aspect of parts of this deal might be problematic. So that's why I think it's a good test to just sort of see where sentiment actually lies within the administration.
And then any other names to add to the good news list and anybody to include on the bad news or not as good news list?
Yeah, I think Alibaba is one to look at. It was only up 6% in the past week, got a mild boost after its earnings report. It's up 7% post-earnings, but that was after already running up significantly in anticipation to the earnings. It was actually up eight sessions in a row in the days running up to earnings. The earnings announcement is up 67% since mid-January.
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Chapters
6 chapters
1
What is the main topic of this episode?
0:09–0:24
2
What are the highlights from the past week's corporate earnings?
0:24–1:14
3
How is AI influencing the stock market?
1:14–2:03
4
What is the significance of Taiwan Semiconductor and Intel's potential deal?
2:03–6:03
5
Which companies faced challenges in their earnings reports?
6:03–8:13
6
What is the sentiment in the healthcare sector?
8:13–14:19