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Nike Q2 Earnings: Revenue Beat, EPS Beat, Shares Jump — 'Nike Being Nike Again'

Benzinga News — Thu, 19 Dec 2024 17:35:13 -0500

Nike Inc (NKE ) reported second-quarter financial results for fiscal 2025 after the market close on Thursday. Here's a rundown of the athletic footwear and apparel company's report.

Q2 Earnings: Nike reported second-quarter revenue of $12.35 billion, beating analyst estimates of $12.13 billion. The company reported second-quarter earnings of 78 cents per share, beating analyst estimates of 65 cents per share.

Total revenues were down 8% year-over-year. North America sales were down about 8%, Greater China sales were down about 8%, European sales fell 7% and Asia Pacific and Latin American sales were down 3%.

Nike Direct revenues were $5 billion in the quarter, down 13% year-over-year. Nike Brand revenues totaled $12 billion, down 7%, and Wholesale revenues fell 3% to $6.9 billion.

Inventories came in at $8 billion, flat on a year-over-year basis. The company ended the quarter with $9.8 billion in cash, equivalents and short-term investments.

"After an energizing 60 days of being back with my Nike teammates, our clear priority is to return sport to the center of everything we do," said Elliott Hill, president and CEO of Nike.

"We're taking immediate action to reposition our business, so we can get back to driving long-term shareholder value. Our team is ready to go, and I'm confident you will see more moments of Nike being Nike again."

Hill, a longtime Nike veteran, took over for former CEO John Donahoe in October. Executive vice president and CFO Matthew Friend noted the company is accelerating pace and reigniting brand momentum under Hill's leadership.

Nike noted it returned approximately $1.6 billion to shareholders during the quarter, including $557 million in dividends and $1.1 billion in share repurchases. As of Nov. 30, Nike had approximately $6.7 billion remaining under its four-year buyback approved in June 2022.

NKE Price Action: Nike shares were down approximately 29% year-to-date heading into the print. The stock was up 8.24% in after hours, trading at $83.50 at the time of publication Thursday, according to Benzinga Pro.

FedEx Stock Rallies On Better-Than-Expected Q2 EPS, Freight Spin-Off Announcement

Benzinga News — Thu, 19 Dec 2024 17:35:08 -0500

FedEx Corp. (FDX ) reported its second-quarter results after Thursday's closing bell. Here's a look at the key figures from the quarter.

The Details: FedEx reported adjusted earnings of $4.05 per share, beating the $3.91 consensus estimate. Quarterly revenue came in at $22 billion, missing the $22.11 billion analyst consensus estimate.

The company said its consolidated operating results were negatively affected by lower-than-expected FedEx Freight revenue and profit, as sustained weakness in U.S. industrial production continued to pressure less-than-truckload industry demand.

The lower FedEx Freight results were mostly offset by cost reduction benefits at Federal Express through its DRIVE program initiatives and higher base yields at each transportation segment.

FedEx Freight segment operating results decreased during the quarter due to fewer shipments, lower fuel surcharges and reduced weight per shipment and were partially offset by higher base yield.

"Our second quarter results demonstrate that our efforts to transform our operations are working. The Federal Express segment delivered operating profit growth despite several headwinds, including the continued weak U.S. domestic demand environment as well as the expiration of our U.S. Postal Service contract," said Raj Subramaniam, FedEx Corp. president and CEO.

FedEx Freight Spin Off: FedEx also announced that it has decided to pursue a full separation of FedEx Freight through the capital markets, creating a new publicly traded company. FedEx said the separation is expected to be achieved in a tax-efficient manner for FedEx stockholders and executed within the next 18 months.

"This is the right time to pursue a separation as we respond to the unique dynamics of the LTL market," said Subramaniam.

"This announcement is a testament to the strength of the business our team has built, and to our dedication to doing what's best for our customers, our team members, and our stockholders. Through this process, we will unlock value for our Freight business and position FedEx to create even greater value for stockholder," Subramaniam added.

Outlook: FedEx now expects approximately flat revenue year-over-year, versus its prior forecast of a low single-digit percentage increase.

FDX Price Action: According to Benzinga Pro, FedEx shares are up 7.29% after-hours at $296 at the time of publication Thursday.

Disney Hits $2 Billion Domestic Box Office, Earns Top Honors

Benzinga News — Thu, 19 Dec 2024 17:30:22 -0500

The Walt Disney Company (DIS ) takes top honors for domestic box office in 2024 and could be in store for a strong 2025 with a new analyst forecast calling for box office revenue to grow 8% in 2025, which is likely music to the ears of movie theater executives.

2024 Box Office Winners: Disney is the only movie studio to hit the $2 billion figure for the domestic box office in 2024, led by hits like "Inside Out 2," "Deadpool & Wolverine" and the recently released "Moana 2."

This marks the second time that Disney hit the $2 billion figure since 2019, with the most recent milestone achieved in 2022, as reported by Deadline. Since 2010, Disney has reached $2 billion domestically seven times.

Disney will add to its year total with the release of "Mufasa" in theaters this weekend.

Here is a look at the top-grossing movies domestically in 2024 and the public company behind the respective studio.

"Inside Out 2": $653.0 million, Disney
"Deadpool & Wolverine": $636.7 million, Disney
"Wicked": $365.2 million, Comcast Corporation (CMCSA )
"Despicable Me 4": $361.0 million, Comcast
"Moana 2": $342.1 million, Disney
"Beetlejuice Beetlejuice": $294.1 million, Warner Bros. Discovery (WBD )
"Dune: Part Two": $282.1 million, Warner Bros. Discovery
"Twisters": $267.8 million, Comcast
"Godzilla x Kong: The New Empire": $196.4 million, Warner Bros. Discovery
"Kung Fu Panda 4": $193.6 million, Comcast

"Inside Out 2" is the 11th highest-grossing movie domestically of all time and the highest-grossing animated film of all time domestically. "Deadpool & Wolverine" set records for R-rated films and is the 12th highest-grossing film domestically of all time.

The top 10 list was led by Disney, Comcast, and Warner Bros., three companies that took home top scores in Variety's movie studios' year-end grades.

Disney earned an A rating, following a challenging 2023 in which the company failed to produce a $1 billion global grosser for the first time since 2014, excluding the pandemic years. The media giant has seen two films surpass the $1 billion mark globally this year and could add a third with "Moana 2," which is projected to reach the milestone in December or January.

Comcast's Universal brand received an A- score thanks to the hits in the top 10 list and "The Wild Robot," which grossed over $300 million worldwide.

"Universal pulled off the seemingly impossible: Making musicals seem cool to moviegoers," Variety writes of the success of "Wicked."

Variety hands Warner Bros. a B+ rating with several hits among the top 10 grossing films, but a couple of films that underperformed including "Joker: Folie a Deux" at $206 million worldwide, calling it a "costly flop."

Here were the other Variety grades for movie studios:

Paramount Global (PARA ) : B
Sony Group Corp (SONY ): B
Amazon MGM (AMZN ): C
Apple Inc (AAPL ): D
Lionsgate (LGF.A ): D

Tech giants Amazon and Apple scored among the worst, as sometimes they have movies that flop in theaters but later break streaming records.

2025 Projections: News of Disney hitting the $2 billion domestic milestone comes with more potential good news for the movie sector and movie theater companies like AMC Entertainment Holdings and Cinemark Holdings .

Gower Street Analytics projects the global box office will reach $33 billion in 2025, an 8% increase from the estimated $30.5 billion total expected for 2024.

While the 2025 figure is expected to grow, it will be 14% behind the average of the 2017, 2018 and 2019 years before the COVID-19 pandemic, as reported by Deadline.

Gower Street Analytics predicts the North American box office will hit $9.7 billion in 2025, up 9% from the predicted 2024 year-end figure. The domestic box office stands at $8 billion currently, as reported by BoxOfficeMojo.

The $9.7 billion estimate is 16% below the 2017-2019 average.

Overall, many regions are expected to see higher box office figures in 2025 compared to 2024, but the estimates in most regions are still below the averages from the pre-pandemic era.

"2025 is set to be a strong year for the global box office, fueled by robust studio slates and independent productions," Gower Street Analytics CEO Dimitrios Mitsinikos said.

Mitsinikos said the domestic box office could potentially surpass the $10 billion figure and get "closer to pre-pandemic norms."

The 2025 release slate includes films in the Avatar, Mission: Impossible, Jurassic World, John Wick, Zootopia, Superman and Wicked film franchises.

Market Update: Dow Breaks Longest Losing Streak in 50 Years

Rachel Hemple — Thu, 19 Dec 2024 17:30:15 -0500

The Dow Jones Industrial Average broke its longest losing streak in 50 years on Thursday, closing slightly above the flatline, as market participants digested the Federal Reserve's latest policy decision. The S&P 500 Index and Nasdaq Composite, while, fell below the flatline.

Here's how the market settled on Thursday:

S&P 500 Index (SPY ): -0.09% or -5.08 points to 5,867.08

Dow Jones Industrial Average (DIA ): +0.04% or +15.37 points to 42,342.24

Nasdaq Composite Index (QQQ ): -0.10% or -19.92 points to 19,373.77

In Economic News:

U.S. Gross Domestic Product (GDP) grew at a faster pace than previous estimated in the third quarter, the Commerce Department's third and final estimate released Thursday showed. The economy expanded at a 3.1% seasonally adjusted annualized rate during the July-through-September period, 0.3 percentage points above the previous estimate and Dow Jones consensus estimate of 2.9% growth.

On the Earnings Front:

Micron Technology (MU ) shares declined Thursday even as the chipmaker reported better-than-expected fiscal first-quarter earnings as its current-quarter guidance disappointed analysts. The company expects second-quarter revenue of $7.9 billion, plus or minus $200 million, with adjusted earnings per share of $1.43, plus or minus $0.10 -- far below analyst estimates for revenue of $8.98 billion and earnings per share of $1.91, according to LSEG data.

"While consumer-oriented markets are weaker in the near term, we anticipate a return to growth in the second half of our fiscal year," said CEO Sanjay Mehrotra in a press release. "We continue to gain share in the highest margin and strategically important parts of the market and are exceptionally well positioned to leverage AI-driven growth to create substantial value for all stakeholders."

Darden Restaurants (DRI ) shares rose on Thursday as the restaurant conglomerate posted strong fiscal second-quarter earnings, driven by better-than-expected same-store sales growth at its Olive Garden and LongHorn Steakhouse brands. Olive Garden, which accounts for more than 40% of Darden's revenue, saw same-store sales grow by 2% during the quarter, while LongHorn Steakhouse posted same-store sales growth of 7.5%.

"It looks like the consumer is starting to feel a little bit better than they were in prior quarters," CEO Rick Cardenas said during the company's earnings call with analysts.

Darden now expects total sales of $12.1 billion for its fiscal 2025, up from its prior guidance range of $11.8 billion to $11.9 billion. The company also reiterated its nest earnings per share forecast from continuing operations of $9.40 to $9.60.

In the News:

Shares of Eli Lilly (LLY ) rose Thursday after the U.S. Food and Drug Administration said the active ingredient --tirzepate -- in its popular weight loss drug Zepbound is no longer in shortage, ending the two year period where compounding pharmacies could make, distribute or dispense unapproved versions of the key ingredient without facing legal repercussions. These pharmacies most halt the production of tirzepatide in the next 60 to 90 days, the agency said.

Amazon Shares Rise As Company Says Operations Remain Unaffected Despite Workers At Seven US Facilities Going On Strike Amid Peak Holiday Shopping

Benzinga News — Thu, 19 Dec 2024 16:30:46 -0500

Amid peak holiday shopping, Amazon.com (AMZN ) has announced that its operations will remain unaffected despite a strike initiated by workers at seven of its U.S. facilities. The strike is part of a broader effort by the workers to push for contract negotiations with the company.

What Happened: Workers at seven Amazon facilities in the U.S. initiated a strike on Thursday. The action is part of a push to engage the company in contract negotiations with their union.

The International Brotherhood of Teamsters, representing approximately 10,000 Amazon workers across 10 facilities, labeled this as the "largest" strike against the company. Employees from cities such as New York, Atlanta, and San Francisco are participating in the walkout, Reuters reported on Thursday.

Despite the strike occurring during the peak holiday shopping period, Amazon has stated that it anticipates no disruptions to its operations. The company accused the Teamsters of misleading the public and attempting to coerce employees and drivers into joining the strike.

Unions represent a mere 1% of Amazon's workforce, which is one of the largest in the U.S. by market value. The union had set a deadline of December 15 for Amazon to commence negotiations, following a vote by warehouse workers to authorize the strike.

Why It Matters: The strike threat was initially announced on Dec. 16, when the Amazon Teamsters declared their readiness to strike over what they described as unfair labor practices. The union emphasized the need for Amazon to negotiate a union contract addressing issues such as low pay and unsafe working conditions.

This labor action follows a vote by workers at two New York City facilities, JFK8 and DBK4, to authorize a strike, setting a Dec. 15 deadline for Amazon to engage in contract talks. The ongoing labor dispute highlights the growing tension between Amazon and its workforce, as the company continues to face scrutiny over its labor practices.

Price Action: Amazon was up by 1.40% during pre-market hours on Thursday, according to Benzinga Pro.

4 Micron Analysts Size Up Q1 Earnings: 'An Opportunity To Add'?

Benzinga News — Thu, 19 Dec 2024 16:30:39 -0500

Micron Technology Inc (MU ) analysts lowered near-term price targets on Thursday following the company's first-quarter earnings results. Despite the disappointing quarter, analysts generally remain optimistic for the long term, especially in the High-Bandwidth Memory market.

Micron Q1 Earnings: Micron reported mixed first-quarter results, beating adjusted earnings estimates of $1.76 per share by 3 cents, but narrowly missing on revenue.

Micron also issued weak guidance for the current quarter. The company said it expects second-quarter revenue of $7.9 billion, plus or minus $200 million, versus estimates of $9 billion. Micron sees second-quarter adjusted earnings of $1.43 per share, plus or minus 10 cents per share, versus estimates of $1.92 per share.

Although the company noted that consumer-oriented markets were weaker in the near term, Micron laid out expectations for a return to growth in the second half of its fiscal year.

Goldman Sachs Reiterates Buy: Goldman Sachs analyst Toshiya Hari reiterated Buy following the print, but cut the price target from $145 to $128.

The analyst acknowledged that he was wrong on Micron over the past six months and cut estimates accordingly. However, Hari expects strength in High-Bandwidth Memory and resiliency in server DRAM to more than offset weakness in other areas moving forward.

"We see the stock's recent pullback, if anything, as an opportunity to add to positions as we continue to envision a) growth in AI compute ... initially in the core Data Center but ultimately at the Edge, b) market share gains for Micron in the high-margin HBM and eSSD markets, and c) supply-side discipline on the part of Micron and its peers," the Goldman analyst said.

Wedbush Maintains Outperform: Wedbush analyst Matt Bryson maintained Micron with an Outperform and lowered the price target from $140 to $125

The Wedbush analyst believes demand headwinds due to Blackwell delays slowing AI server installations and customers moderating pricing will be short-lived. Bryson noted that he believes demand is set to improve in the second quarter.

"While MU's FQ2 outlook is clearly disappointing, we see many of the factors weighing on MU's guidance as short-term in nature," the analyst said.

Bryson's new target is based on a price-to-earnings multiple of 9x applied to the firm's fiscal year 2026 estimates.

Rosenblatt Reiterates Buy: Rosenblatt analyst Hans Mosesmann reiterated Micron with a Buy rating and maintained a Street-high price target of $250, despite acknowledging that the company's near-term outlook was "significantly below" the firm's expectations.

"We are buyers of MU shares on the likely reset today, which is driven by the more non-strategic storage area and NAND," Mosesmann said.

The Rosenblatt analyst expects Micron to continue to gain share in the High-Bandwidth Memory segment as power efficiency becomes increasingly important.

Mosesmann's Street-high price target is based on a mid-teens price-to-earnings multiple on fiscal year 2026 earnings estimates of $18 per share.

BofA Downgrades To Neutral: BofA Securities analyst Vivek Arya took the most negative view of Micron's earnings, downgrading shares from Buy to Neutral and lowering the price target from $125 to $110.

"We were below consensus heading into MU's FQ1 (Nov) results, but are reducing estimates again as GM expected to stay weak in Q2 and even Q3," Arya said.

Although the analyst highlighted strong data center and High-Bandwidth Memory trends, he's concerned that weakness in PC and phone markets will continue to put pressure on memory pricing.

The BofA analyst lowered fiscal year 2025 estimates by 5% and fiscal year 2026 estimates by 11%, and arrived at a new price target of $110 by putting a 2x multiple on 2026 price-to-book estimates.

MU Price Action: Micron shares were down 16.50% at $86.76 at the time of publication Thursday, according to Benzinga Pro.

Block Positioned For Margin Expansion And EPS Growth: Goldman Sachs Analyst

Benzinga News — Thu, 19 Dec 2024 16:30:13 -0500

Goldman Sachs analyst Will Nance reiterated a Buy rating on Block, Inc. (SQ ) with a price target of $102.

The analyst said that he hosted a call with Block investor relations, and the company remains committed to achieving Rule of 40 performance by 2026, with mid-teens gross profit growth, margin expansion, and GPV acceleration expected in 2025.

SQ's stock has surged post-election, benefiting from SMB exposure, pro-cyclical trends, deregulation, and crypto market involvement, alongside a previously attractive valuation, adds the analyst.

Nance is optimistic about its trajectory, with investments in go-to-market strategies and products likely to boost Seller results, while Cash App continues to lead as a diversified U.S. consumer fintech asset with strong growth potential.

The analyst's bull-bear analysis of 2026 GAAP EPS shows SQ is positioned for strong fundamentals, supporting potential multiple expansion.

In the Bear case, Nance estimates GAAP operating expense growth of around 6%, leading to Non-GAAP margins of approximately 26% after amortization adjustments.

This results in projected GAAP and Non-GAAP EPS of ~$3.46 and ~$3.74, respectively, adds the analyst.

In the Bull case, the analyst assume GAAP operating expense growth of about 8%, reflecting increased spending on go-to-market initiatives.

After amortization adjustments, Non-GAAP margins are expected to reach 28%, with projected GAAP and Non-GAAP EPS of ~$4.17 and ~$4.46, respectively, adds the analyst.

Investors can gain exposure to the stock via VanEck Digital Transformation ETF (DAPP ) and ARK Fintech Innovation ETF (ARKF ).

Price Action: SQ shares are up 0.37% at $87.62 at the last check Thursday.

Birkenstock's High-end Lifestyle Positioning Provides Competitive Edge That Is Difficult To Replicate: Analyst

Benzinga News — Thu, 19 Dec 2024 16:29:44 -0500

Telsey Advisory Group analyst Dana Telsey reiterated the Outperform rating on Birkenstock Holding plc (BIRK ) with a price forecast of $70.

Yesterday, the company reported fourth-quarter fiscal 2024 results, with revenue growing 22% year over year on a reported and constant currency basis to 456 million euros.

The analyst notes that management is observing positive momentum across the entire closed-toe category, ranging from clogs to boots.

In the U.S., Birkenstock is experiencing strong demand for clogs, particularly for the Boston and Tokyo silhouettes, as well as the newly introduced Lutry, which continues to perform well.

The solid demand for clogs has also positively impacted sales of the Zermatt slipper, which, despite being part of the product line for over five years, is now seeing increased demand due to the halo effect from the popularity of clogs.

In Europe, lace-up styles and boots are outpacing other product categories. However, the analyst highlights that while closed-toe shoes are performing strongly, sandals still experienced double-digit growth during the same period.

Despite a challenging global macroeconomic environment, the brand continued to experience solid demand across various geographies and sales channels, successfully executing its strategy, Telsey notes.

The company sees FY25 revenue growth of 15% - 17% in constant currency, adjusted EBITDA margin of 30.8% - 31.3% (up 50 basis points) and capital expenditures of around 80 million euros.

The analyst highlights that the company's FY25 outlook aligns with the long-term expectations initially communicated during its IPO process in late 2023.

With consumers becoming more selective in their purchases, the analyst views Birkenstock as a brand well-positioned to maintain its success in the market due to its high-end lifestyle positioning, offering comfort and a frictionless walking experience, which creates a competitive edge that is difficult to replicate.

The analyst states that the sales estimate for FY24 has been updated to 2.12 billion euros, reflecting a 17.2% year-over-year increase, slightly higher than the previous estimate of 2.09 billion euros, which represented a 15.9% increase.

Additionally, the forecast for FY24 adjusted EBITDA has been revised to 661.5 million euros, a slight increase from the prior estimate of 654.2 million euros.

Price Action: BIRK shares are trading lower by 0.98% to $56.60 at last check Thursday.

Astronauts Sunita Williams, Butch Wilmore's Return From ISS Further Delayed: Now Expected No Earlier Than Late March

Benzinga News — Thu, 19 Dec 2024 16:29:38 -0500

NASA on Tuesday said that it has further delayed the return of astronauts Sunita Williams and Butch Wilmore back to Earth from the International Space Station to at least late March 2025, prolonging their stay at the station for over nine months.

What Happened: Williams and Wilmore launched to the International Space Station aboard Boeing Co's (BA ) Starliner spacecraft in June and were supposed to return in about eight days.

However, technical issues identified with the spacecraft while docking delayed a return, and the space agency subsequently decided to scrap bringing back the two astronauts on the Starliner spacecraft.

The Starliner subsequently returned without the astronauts on Sept. 6. The two astronauts, NASA then said, will return with Crew 9 members Nick Hague and Aleksandr Gorbunov when they return home in February 2025 aboard a SpaceX Dragon spacecraft.

Crew-9 can return to Earth only after Crew-10 arrives at the station. NASA on Tuesday delayed the Crew-10's launch to ISS to no earlier than late March 2025, subsequently delaying Crew 9's return. The agency did not specify a date for the team's return.

The delay to launch Crew-10, NASA said, was made to allow NASA and SpaceX time to complete processing on a new Dragon spacecraft for the mission.

"Fabrication, assembly, testing, and final integration of a new spacecraft is a painstaking endeavor that requires great attention to detail," said Steve Stich, manager of NASA's Commercial Crew Program.

Streamers Max, Paramount+ Won November: Here's Why Analyst Expects Netflix, Amazon To Win December

Benzinga News — Thu, 19 Dec 2024 16:29:32 -0500

A new analyst report that looks at downloads and user data could show the winners and losers and what's ahead for the streaming sector.

The Media and Internet Report: JPMorgan analysts led by David Karnovsky released a report on streaming downloads and user data using data from Sensor Tower, the iOS App Store (AAPL ) and Google Play (GOOG ) (GOOGL ).

"Results in November were generally positive, with global downloads and DAUs mostly up on a sequential basis," the analyst report said.

Here's a look at some of the companies highlighted in the report.

The Walt Disney Company (DIS ): Disney+ downloads were down 6% month-over-month in November, which marked an improvement after two straight months of double-digit declines. The premiere of "Deadpool & Wolverine" on the platform was the key release and may have led to some of the improved figures. The analyst said December includes the premieres of "Star Wars: Skeleton Crew," "Dream Productions" and "Doctor Who: Joy to the World." The ESPN tile being added to Disney+ could also help boost usage on the streaming platform, the analyst said, with some sports content available to Disney+ users without having a subscription.

"We think this is a positive step for the service and should boost overall engagement while potentially creating a new audience," the report noted.

Hulu, which is majority owned by Disney, saw downloads drop 5% month-over-month in November and daily active users fall 1% month-over-month, which came after two straight months of increases.

Paramount Global (PARA ): The media company is highlighted as a winner in the report with Paramount+ global downloads up 32% month-over-month in November, marking the platform's largest sequential gain since February 2024. The premiere of "Landman" and "The Agency" may have contributed to the gains. "Landman" was the biggest series launch on Paramount+ in two years according to the report.

Netflix Inc (NFLX ): Global downloads were up 14% year-over-year in November, an improvement from a -2% year-over-year decline in November. The increase may have been attributed by new content that included the Jake Paul vs. Mike Tyson live boxing event. The figures could get even better for the month of December.

"We believe content builds into year-end and 2025," the report said.

The report also cites several new movies and series along with the highly anticipated return of "Squid Game" and two NFL games on Christmas Day.

Amazon.com Inc (AMZN ): Streaming platform Prime Video saw downloads down 7% year-over-year and daily active users down 8% year-over-year. The analysts expect a strong December for the platform with the premiere of "Beast Games" on Dec. 19 and several other series.

Comcast Corporation (CMCSA ): Streaming platform Peacock saw November downloads up 31% month-over-month, which may have been thanks to 2024 election day coverage and the debut of "Twisters" during the month. A Black Friday special of $19.99 per year for Peacock may have also attributed to the better numbers, the analyst said.

Warner Bros. Discovery (WBD ): Max downloads were up 20% month-over-month in November, with the launch of the streaming platform in Indonesia, Malaysia, Philippines, Singapore, Thailand, Taiwan and Hong Kong the likely reason. Downloads were down 5% month-over-month for the United States and Canada and up 29% in the other territories. Daily active users and monthly active users were also up month-over-month, including in the United States and Canada region.

Why It's Important: Based on the findings of the report, Paramount+ and Max are singled out as having strong Novembers. Prime Video and Netflix could be set for strong Decembers thanks to the release of "Beast Games" for Amazon and "Squid Game" and NFL games for Netflix.

Amazon Has 20,000 Rivian Electric Delivery Vans In Fleet: Here's What Could Be Next For Both Companies

Benzinga News — Thu, 19 Dec 2024 16:29:12 -0500

Amazon.com Inc (AMZN ) and Rivian Automotive (RIVN ) have been partners in an electric delivery van deal since the EV company went public in 2021. Here's a look at the recent milestone hit and what's next for both companies.

What Happened: Amazon partnered with Rivian, a company it invested in prior to the 2021 IPO, on a deal for 100,000 electric delivery vehicles with a goal to have all the vehicles on the road by 2030.

With six years left to go, Amazon is one-fifth of the way to that goal, which is part of an overall Climate Pledge to have net-zero carbon emissions by 2040.

Amazon had its first Rivian EDV on the road in 2022 and now has over 20,000 of the Rivian vehicles in its fleet, according to a report from Teslarati.

While the majority of the vehicles are operating in the United States, Amazon is also using the electric delivery vans in Europe.

For Amazon, the use of the electric delivery vans gets the company closer to its goal of net-zero carbon emissions, while also making things more efficient for drivers.

In 2024, over one billion Amazon packages have been delivered using the Rivian electric delivery vans.

What's Next: Though the 20,000 milestone may only be one-fifth of the way to the 100,000 goal, it has been rapidly increasing. In March 2023, Amazon had only 3,000 of the Rivian vans in its fleet according to the report.

Amazon will continue to anticipate deliveries of the Rivian vehicles to meet its climate goals and to streamline driver efficiency.

For Rivian, the Amazon 100,000 unit order remains a key priority and can help provide a strong cushion of production and delivery unit figures as it awaits its new consumer vehicle models.

Rivian CEO RJ Scaringe shared earlier this year that the electric delivery vans for Amazon rolled out slower than anticipated.

Back in November 2023, Rivian announced that it had amended its deal with Amazon to no longer be exclusive.

"We have amended our Amazon agreement with terms and conditions, which provide the opportunity to sell commercial vans to other customers, helping more companies reduce their CO2 emissions," Scaringe said at the time.

Rivian also said at the time that it was in "active discussions" with other potential EDV fleet customers. In December 2023, Rivian announced a deal with AT&T Inc (T ).

Amazon remains a large shareholder in Rivian with a reported stake of around 16%. The e-commerce leader will continue to collect deliveries of Rivian EDVs.

For Rivian, the company will deliver vehicles to Amazon and also look to diversify to other customers as it grows its EDV segment alongside its consumer vehicle division.

RIVN Price Action: Rivian stock is down 1% to $12.98 on Thursday versus a 52-week trading range of $8.26 to $24.61. Rivian stock is down 39% year-to-date in 2024 and down around 90% since its market debut in 2021.

Trump's Rejection Of Bipartisan Deal Fuels Government Shutdown Fears: How Markets Historically React To Political Turmoil

Benzinga News — Thu, 19 Dec 2024 16:29:05 -0500

President-elect Donald Trump unexpectedly dismissed a bipartisan proposal on Wednesday, increasing the possibility of a U.S. government shutdown ahead of Christmas.

However, according to research firm Edward Jones, markets tend to look through the noise, with U.S. stocks staying positive half the times during the past 20 government shutdowns since 1976.

What Happened: "The uncertainty that a potential government shutdown introduces can lead to a short-term uptick in volatility. But as with most political events, government shutdowns have historically had little lasting impact on equity performance," said Angelo Kourkafas, an investment strategist at Edward Jones.

Recent years have witnessed recurring government shutdowns, though they have been relatively short-lived. Since 1976, the U.S. has experienced 20 such shutdowns lasting at least a day. The most prolonged shutdown, occurring in December 2018, lasted for 35 days, setting a historical record.

The following table shows how the markets have reacted to the previous shutdowns. According to this data, the stocks were positive half the time during the government closures and were higher in most cases three and six months later.

"More broadly, market performance tends to be driven more by the outlook for economic growth, earnings and interest rather than the political landscape," added Kourkafas.

Why It Matters: The impact of a shutdown could be different on various kinds of government functions. It differs from a debt-limit default in that it doesn't hinder the government's capacity to meet its debt obligations to bondholders, meaning it doesn't directly influence borrowing costs or credit ratings.

While Treasury interest payments and Social Security benefits continue as usual, millions of federal workers go without pay during the shutdown. Although this situation affects households, furloughed employees will receive backpay once Congress restores funding.

What's Happening With The Bill? After scrapping the bipartisan proposal, Trump urged House Speaker Mike Johnson and Republican lawmakers to renegotiate, just days before federal funding was set to expire.

Speaker Johnson has to now come up with an alternative plan to prevent the government from closing ahead of Friday's deadline.

In a statement, Trump and Vice President-elect JD Vance urged Republicans to "get smart and tough."

Trump's proposal, which was seen as highly ambitious, called for continued government funding alongside a contentious provision to raise the national debt ceiling-something that typically faces strong opposition from his own party. "Anything else is a betrayal of our country," they declared.

Department of Government Efficiency co-lead Elon Musk, on the other hand, also supported the Republicans in turning down the bill.

Nvidia, Apple Team Up To Supercharge ChatGPT-Like LLMs With ReDrafter Technique

Benzinga News — Thu, 19 Dec 2024 16:28:58 -0500

Apple Inc. (AAPL ) and Nvidia Corporation (NVDA ) have announced a collaboration for the improvement in the performance of large language models.

What Happened: The partnership focuses on integrating Apple's Recurrent Drafter (ReDrafter) technique with Nvidia's TensorRT-LLM, to boost text generation speeds.

ReDrafter, which Apple open-sourced earlier this year, combines beam search and dynamic tree attention to improve LLM performance.

The collaboration with Nvidia has led to the integration of ReDrafter into TensorRT-LLM, a tool designed to accelerate LLMs on Nvidia GPUs.

This integration involved adding new operators to improve TensorRT-LLM's ability to handle complex models and decoding methods.

Benchmarking results show a 2.7x increase in token generation speed for greedy decoding on Nvidia GPUs, significantly reducing latency and power consumption.

Apple's machine learning researchers noted that this advancement could lower computational costs and improve user experience by reducing latency in production applications.

Why It Matters: In October earlier this year, Apple reported fourth-quarter revenue of $94.9 billion, surpassing analyst expectations of $94.56 billion.

Last month, Nvidia reported third-quarter revenue of $35.1 billion, marking a 94% increase compared to the last year, and exceeding the Street consensus estimate of $33.12 billion, as per Benzinga Pro data.

Together these two tech giants are worth about $7 trillion, with Apple being the most valuable company in the world and Nvidia ranking third.

Price Action: Apple shares fell 2.14% to $248.05 on Wednesday, and dipped further to $247.19 in after-hours trading. Meanwhile, Nvidia shares gained 2.01% to $131.50 in after-hours trading, recovering from a 1.14% decline to $128.91 during the regular session.

'Santa Came Early' But Fed Brings 'Coal Next Year': Experts Weigh In On Interest Rate Cut, 2025 Projections

Benzinga News — Thu, 19 Dec 2024 16:28:51 -0500

The Federal Reserve announced a widely anticipated 25-basis-point interest rate cut at its December meeting Wednesday, lowering the federal funds rate to a range of 4.25% to 4.5%.

The cut is the third consecutive reduction in borrowing costs following a 50-basis-point cut in September and a 25-basis-point move in November and brings rates to the lowest level since January 2023.

The Fed now projects two additional 0.25% rate cuts in 2025, a meaningful revision from the full percentage point of cuts expected in September. Markets reacted sharply lower following the Fed's decision with the SPDR S&P 500 (SPY ) ending the session 2.98% lower at $586.28 and the Invesco QQQ Trust (QQQ ) closing 3.61% lower at $516.47.

Expert Ideas: Chris Zaccarelli, chief investment officer for Northlight Asset Management, said that markets are forward-looking and reacted to the Fed's 2025 projection and not the quarter-point cut that it also delivered.

"Santa came early and dropped a 25-bps rate cut in the market's stocking but accompanied it with a note saying that there would be coal next year," Zaccarelli said.

Bill Adams, chief economist for Comerica Bank, said the Fed is reacting to the incoming Trump administration's policies, which it sees as most likely to boost growth and inflation, as well as tighten the job market.

Trump does not have much control over the pace of rate cuts in the near term, Adams said, but "that could change in 2026 if President-elect Trump gets the Senate to confirm a new Fed chair who is more sympathetic to his policy goals."

Charlie Ripley, senior investment strategist for Allianz Investment Management, highlighted the growing concerns around inflation and the Fed's dot-plot, which shows shallower rate cuts ahead in both 2025 and 2026.

"The main takeaway from today's Fed meeting was that inflation risks are back, and the Fed is clearly concerned," Ripley said.

"The Fed has been able to maneuver 100 basis points of cuts so far in this cycle but given the trajectory of the economy and the recent uptick of inflation, it is going to be more difficult for the Fed to provide basis to continue cutting rates at the same pace," he added.

CVS Faces DOJ Lawsuit Alleging Violations Of Controlled Substances Act And False Claims Act Over Opioid Prescriptions

Benzinga News — Thu, 19 Dec 2024 16:27:17 -0500

The U.S. Department of Justice filed a civil complaint against CVS Pharmacy Inc owned by CVS Health Corp (CVS ), alleging the nation's largest pharmacy chain violated the Controlled Substances Act by filling unlawful prescriptions for dangerous opioid combinations and quantities from 2013 onwards.

The complaint also accuses CVS of violating the False Claims Act by seeking federal reimbursement for these prescriptions.

The legal action follows McKinsey & Company's recent settlement over its role in Purdue Pharma's OxyContin sales.

CVS strongly disputes the allegations, with spokesperson Amy Thibault emphasizing that all prescriptions were FDA-approved and written by government-licensed practitioners, according to the Associated Press.

The company faces potential civil penalties for each unlawful prescription and additional damages for federally reimbursed prescriptions.

Price Action: CVS Health Corp's stock closed at $45.28 on Wednesday, up 2.82% for the day. In after-hours trading, the stock gained an additional 0.24%. Year-to-date, the stock has declined 44.00%.

CVS stock has traded within a 52-week range of $43.93 to $83.25 and currently has a price-to-earnings ratio of 11.50, according to data from Benzinga Pro.

OpenAI Takes A Page From Google's 2007 Playbook, Turns Phones Into AI Hotlines With 1-800-CHATGPT

Benzinga News — Thu, 19 Dec 2024 16:26:59 -0500

OpenAI has unveiled a new feature that lets users call ChatGPT for free, offering a 15-minute call per month through the toll-free number 1-800-CHATGPT.

What Happened: The feature was announced by OpenAI's chief product officer, Kevin Weil, during a livestream on Wednesday as part of the "12 Days of OpenAI" event.

The service is powered by OpenAI's Realtime API and GPT-4o mini through WhatsApp (META ) API integration.

It is currently available to users in the U.S., while international users can access it via WhatsApp at 1-800-242-8478 - OpenAI has coded "CHATGPT" as 242-8478 on a phone keypad.

Users don't need to have an account, paid or otherwise, to avail the benefits of this service.

Interestingly, this move mirrors Alphabet Inc. Google's (GOOG ) (GOOGL ) 2007 launch of GOOG-411, a free voice directory service.

The toll-free service was discontinued in 2010. Google said it was more of a testing ground for the company's broader voice recognition goals.

Why It Matters: The ChatGPT-parent has emerged as a leading player in generative AI, with a valuation of $157 billion and significant investments, such as $14 billion from Microsoft Corporation (MSFT ).

As part of its "12 Days of OpenAI" event, the AI startup also extended the ChatGPT Search engine to all users, including those on the free tier.

The Sam Altman-led company also debuted its text-to-image model, Sora, along with a $200 monthly ChatGPT Pro subscription.

OpenAI has also been battling with some legal troubles. Last week, the company countered Elon Musk's legal attempts to block its shift to a fully for-profit model.

EPA Greenlights California's Plan To Ban Sale Of New Gas Cars By 2025

Benzinga News — Thu, 19 Dec 2024 16:26:43 -0500

The U.S. Environmental Protection Agency (EPA) gave California the green light on Wednesday to ban the sale of new gasoline-powered light-duty vehicles by 2035.

What Happened: The agency granted a waiver to California under the Clean Air Act to implement its plan mandating that all new light-duty vehicles delivered in the state by 2035 be plug-in hybrids, battery electric, and hydrogen-powered vehicles.

The EPA also granted a waiver for the state's "Omnibus" low-NOx (nitrogen oxides) regulation aimed at reducing harmful emissions from heavy-duty trucks.

"California has longstanding authority to request waivers from EPA to protect its residents from dangerous air pollution coming from mobile sources like cars and trucks," said EPA Administrator Michael S. Regan. "Today's actions follow through on EPA's commitment to partner with states to reduce emissions and act on the threat of climate change."

The EPA said in a statement that the opponents of the two waivers failed to show how either program is inconsistent with the Clean Air Act.

Why It Matters: "Clean cars are here to stay. The Biden-Harris Administration reaffirmed what we've known for decades - California can rise to the challenge of protecting our people by cleaning our air and cutting pollution," California Governor Gavin Newsom said.

"Naysayers like President-elect Trump would prefer to side with the oil industry over consumers and American automakers, but California will continue fostering new innovations in the market."

The California Governor, however, clarified in his statement that the rules are not aimed at gas vehicles already on the road but only attempt to regulate new cars. "We expect to see internal combustion engine vehicles on California roads past 2050...," he said.

Last month, Newsom also outlined a new proposal to offer incentives for EV buyers in California if Trump gets rid of the federal $7,500 tax break for EV buyers when he returns to the White House early next year.

Trump has previously said that he would repeal the approvals granted by the EPA to California for its push towards electrification of transport.

Apple Watch Faces Tough Competition As Huawei Drives 20% Surge In Wearables

Benzinga News — Thu, 19 Dec 2024 16:25:51 -0500

Chinese tech giants are making substantial gains, challenging the dominance of established players like Apple Inc. (AAPL ) in the global wrist-worn device market.

What Happened: According to an IDC report released on Wednesday, the global wrist-worn device market, including smartwatches and wristbands, saw shipments reach 139 million units in the first three quarters of 2024.

Despite a 1% decline due to market saturation in key regions like the U.S. and India, China emerged as a leader with 45.8 million units shipped, marking a 20.1% year-on-year increase.

Huawei Technologies led the global market with 23.6 million units shipped, capturing a 16.9% market share. The brand's GT5 series and Watch D2 were particularly popular.

Apple followed with 22.5 million shipments, holding a 16.2% market share. The tech giant experienced a 12.8% decline from the last year due to intense competition.

Xiaomi Corp. (XIACY ) ranked third with 20.5 million shipments and a 14.7% market share.

Samsung and the BBK Group, the parent company of brands like Oppo, Vivo, OnePlus, and Realme, followed with 11.5 million and 7.8 million units, respectively.

Looking forward, IDC anticipates a 3.2% year-on-year growth in the Chinese market, with 62.5 million shipments expected in 2025, driven by diversified sales channels and improved health sensor accuracy.

Why It Matters: Apple's troubles with its Chinese counterparts are not limited to just wrist-worn devices. Earlier this year in July it was reported that Apple's position in the Chinese market dropped from third to sixth place in the second quarter of 2024.

Previously it was also reported that China is making intense efforts toward achieving technological self-reliance as a direct reaction to U.S. limitations on semiconductor exports to the country.

The country is also making waves in the field of AI. Earlier this month, Clem Delangue, co-founder and CEO of Hugging Face, predicted that in 2025, China will take the lead in the AI race, because of open-source AI development.

Waymo Completes 4 Million Autonomous Rides In Key US Metropolitan Areas In 2024 Ahead Of Tokyo Launch

Benzinga News — Thu, 19 Dec 2024 16:25:43 -0500

Alphabet Inc.'s (GOOG ) (GOOGL ) autonomous driving unit Waymo said on Wednesday that the company served over four million fully autonomous rides in 2024, taking the total number of rides to over 5 million.

What Happened: Waymo's robotaxi rides are open to the public in Phoenix, Los Angeles, and San Francisco.

While the popular destination for riders in Phoenix was the Sky Harbor International Airport, the most popular destination for riders in San Francisco was The Ferry Building. In Los Angeles, The Grove shopping center was most popular among Waymo riders, the company said.

Waymo now serves over 150,000 trips to riders every week, the company added.

Why It Matters: Waymo is now working to commercially launch in Austin and Atlanta on the Uber (UBER ) app next year. It also intends to launch its services in Miami with fleet partner Moove in 2026.

The company also said earlier this week that it will start testing its robotaxis in Tokyo, Japan, beginning in early 2025, in its first step towards international markets.

All-electric Jaguar I-PACEs equipped with Waymo's autonomous driving technology will arrive in Tokyo in early 2025 and learn to adapt to left-hand traffic and other driving nuances of the city, the company said.

The company, however, did not provide a timeline for when it intends to provide autonomous paid rides to members of the public.

Market Update: Dow Drops 1,100 Points as Fed Outlook Disappoints

Rachel Hemple — Wed, 18 Dec 2024 16:48:40 -0500

The Dow Jones Industrial Average sank over 1,100 points on Wednesday, as the index posted its 10th straight losing session as the Federal Reserve's rate cut outlook disappointed market participants. The broader market index S&P 500 also dropped nearly 3%, while the tech-heavy Nasdaq Composite lost about 3.6%.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY ): -2.95% or -178.45 points to 5,872.16

Dow Jones Industrial Average (DIA ): -2.58% or -1,123.03 points to 43,326.87

Nasdaq Composite Index (QQQ ): -3.56% or -716.37 points to 19,392.69

Moving Markets:

The Federal Reserve lowered its key interest rate by a quarter percentage point on Wednesday -- its third consecutive -- and issued a cautionary tone towards further cuts in the medium-term.

The Federal Open Market Committee reduced its overnight borrowing rate to a target range of 4.25% to 4.5% in a move widely expected by Wall Street. Policymakers also signaled for two more reductions in 2026 and another in 2027 in its meeting statement.

"With today's action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive," Chair Jerome Powell said in its post-meeting remarks Wednesday afternoon. "We can therefore be more cautious as we consider further adjustments to our policy rate."

Separately, Powell said that future rate cuts next year will be based on economic data, not current conditions.

"I think the actual cuts that we make next year will not be because of anything we wrote down today," Powell said. "We're going to react to data; that's just the general sense of what the committee thinks is likely to be appropriate."

"But as for additional cuts, we're going to be looking for further progress on inflation as well as continued strength in the labor market," Powell added. "And as long as the economy and the labor market are solid, we can be cautious as we consider further cuts."

In Economic News:

U.S. Housing Starts fell and Building Permits rose in November as threats of tariffs on imported goods and potential labor shortages from looming mass deportations are expected to impact new construction in 2025.

The number of new home constructions fell 1.8% to 1,289,000 for November, the Commerce Department reported Wednesday, as single-family homebuilding fell 10.2% annually. Permits for construction, meanwhile, rose 6.1% from October last month to a seasonally adjusted annual rate of 1.505 million.

For Thursday:

Market participants will turn their attention towards earnings reports from companies including Micron Technology (MU ), Lennar Corporation (LEN ) and Darden Restaurants (DRI ).

Nike Q2 Earnings Preview: Analyst Says Athletic Brand Early In 'Turnaround Journey' With New CEO

Benzinga News — Wed, 18 Dec 2024 15:53:06 -0500

Nike Inc (NKE ) will likely provide more color on what the future looks like under new CEO Elliot Hill when the apparel and footwear company reports second-quarter financial results after the market closes on Thursday.

Earnings Estimates: Analysts expect Nike to report second-quarter financial revenue of $12.13 billion. That's down from $13.39 billion in last year's second quarter, according to data from Benzinga Pro.

The company has missed analyst revenue estimates in two straight quarters and four of the last five quarters. Over the last 10 quarters, Nike beat analyst revenue estimates six times.

Analysts expect the company to report second-quarter earnings per share of 64 cents. That's down from $1.03 per share in last year's second quarter. The company has beaten analyst estimates for earnings per share in five straight quarters and nine of the last 10 quarters.

What Analysts Are Saying: Traffic and promotion trackers could signal a mixed second quarter from Nike, according to Goldman Sachs analyst Brooke Roach, who has a Buy rating and $97 price target.

Promotionality remains a key item to watch in the report, Roach said in a new investor note.

"On balance, our conversations with investors have been more muted on the stock in recent weeks, and our trackers largely demonstrate missed trends in F2Q," Roach said.

Commentary from retail partners suggests higher promotional activity during the holiday season and higher inventory levels, Roach said.

"We believe that recent data points suggest that it is still early in Nike's turnaround journey, and that we have yet to see signs of material brand heat improvement."

The focus in Wednesday's report will likely center on the future path to stronger innovation and top-line growth, Roach added.

Roach said they were looking forward to hearing from Hill in his fist official quarter. The 30-year Nike vet rejoined the company and became CEO on Oct. 14.

"We believe Mr. Hill will provide initial commentary around the forward strategy of the company including any material changes to his approach."

Telsey analyst Cristina Fernandez also shared a desire to hear about Nike's product innovation pipeline and new plans from Hill.

The analyst maintained an Outperform rating on Nike and lowered the price target from $96 to $93.

"Overall, Nike is in a period of transition and a return to growth could take a few quarters," Fernandez said in a recent investor note.

The analyst said the Nike turnaround could take around a year to show changes play out.

Here are other analyst ratings on Nike and their price targets:

Wells Fargo: Maintained Overweight rating, lowered price target from $95 to $92
Evercore ISI: Maintained Outperform rating, lowered price target from $105 to $97
Deutsche Bank: Maintained Buy rating, lowered price target from $92 to $82
Morgan Stanley: Maintained Equal-Weight rating, lowered price target from $82 to $80

Key Items to Watch: All eyes and ears will be on Hill when the company reports results Thursday.

One item to watch could be the company's focus on value or being a premium brand and product.

A recent YouGov 2024 value survey showed that Nike was the biggest gainer in the most improved score as a better deal in 2024 versus 2023 with an 8.5-point gain year-over-year. The survey suggests that consumers see Nike products as more affordable compared to what they were years ago or in comparison to peer brands.

Nike will likely not comment on President-elect Donald Trump's threat to impose tariffs on China. The company could be asked about this impact by analysts as many other companies have in recent weeks.

Investors might also focus on the geographical breakdown of revenues in the quarter. The last quarterly report showed overall revenue down 10% year-over-year with North America being one of the weakest regions at -11% year-over-year. China sales, by comparison, were down 4% year-over-year.

Price Action: Nike stock is up 0.4% to $78.33 on Wednesday versus a 52-week trading range of $70.75 to $123.39. Nike stock is down 26% year-to-date in 2024.

Instagram's Ad Revenue Could Hit $32 Billion by 2025, Driving Meta's Growth: Report

Benzinga News — Wed, 18 Dec 2024 15:50:26 -0500

Meta Platforms Inc's (META ) Instagram has the potential to generate 50% of the company's advertising revenue in the U.S., Bloomberg cites from Emarketer estimates.

Instagram could breach $32 billion in U.S. advertising revenue in 2025, up over 24% in 2024, as its short-form video product Reels gain traction, Bloomberg cites Emarketer. The video-sharing app boasts over 148 million American users.

By early 2022, Instagram accounted for nearly 30% of Meta's global business from 27% in 2021, Bloomberg cited court filings.

Reels competes with ByteDance's TikTok and Alphabet Inc YouTube Shorts.

Meta's focus on video content has been instrumental to its growth, as users devoted nearly 67% of their Instagram time to surfing videos, Bloomberg cited Jasmine Enberg of Emarketer.

The TikTok ban could serve as a tailwind for Instagram, helping it win over 20% of reallocated TikTok ad dollars in the U.S, Reuters cites Enberg.

Meta previously told Instagram Reels accounted for over 50% of the time people spend on the app.

In 2024, 53.7% of Instagram's ad revenue primarily came from its Feed features and 24.6% from Stories features. With Reels' revenue boost, the combined revenue share from Instagram Explore, Reels, and Threads could rise 9.6% in 2025.

In October, BofA Securities analyst Justin Post projected Meta's upside from ramping up Messaging and Reel monetization powered by new artificial intelligence tools and CRM integration.

Meta Platforms stock surged 79% year-to-date. Investors can gain exposure to the stock through Vanguard Communication Services ETF (VOX ) and The Communication Services Select Sector SPDR Fund (XLC ).

Is Meta A Good Stock To Buy?

An investor or trader's decision to buy or sell a stock is unique to their time horizon and risk tolerance. Many typical investors evaluate earnings growth and valuation on a particular stock before making a decision.

For example, for Meta Platforms , you'll notice that earnings in its last quarter grew 14.86% source. As an investor, you'll want to decide whether that's better or worse than what you'd like to see among stocks in your portfolio.

On the valuation side, Meta Platforms's price to earnings ratio - a measure of how much an investor pays for the company's earnings - is compressed 15.56% in the current quarter when compared with last year. That places it below similar businesses Alphabet (GOOG ) (GOOGL ), Baidu (BIDU ), Pinterest (PINS ) in its sector. You'll need to decide whether that makes it more or less attractive based on how you think the company will perform over time.

There are many different valuation metrics that may help you make a decision. Find more on Meta Platforms's quote page, or if you'd like a deeper dive in an advanced program, try Benzinga PRO for free.

Price Action: META stock is up 1.15% at $626.545 at the last check on Wednesday.

Tesla Design Chief Says EV Giant Was Looking To Create 'Future Version' Of NYC's Yellow Cabs With Gold Cybercab: 'It Feels Right'

Benzinga News — Wed, 18 Dec 2024 15:50:10 -0500

Tesla Inc. (TSLA ) head of design Franz von Holzhausen explained the choice of gold paint on the company's recently debuted 2-seater robotaxi model called Cybercab, terming it an attempt to create a future version of a New York City yellow cab.

What Happened: "We chose the color gold and it's really a special color. It really reflects kind of a future version of the idea of a New York City Yellow Cab... we've taken that iconic yellow and created something more expressive and more up to-date. The gold is just - it feels right," Holzhausen said.

Holzhausen shared the thought behind the choice of color in a video shared by Petersen Automotive Museum. The Cybercab will be up on display at the museum until early January 2025.

The particular Cybercab on display at the museum is one among the few pre-production Cybercabs showcased by Tesla at its event on Oct. 10 at Warner Bros. Discovery Inc.'s (WBD ) movie studio near Los Angeles.

Why It Matters: The company unveiled its two-seater Cybercab, complete with butterfly wings that open upwards, in addition to a Robovan that can accommodate up to 20 people at the event in October.

Both vehicles are designed for autonomous driving, so they don't have pedals or steering wheels.

At the end of the official announcements by CEO Elon Musk at the event, the company opened the chance to the guests assembled to experience autonomous driving around the studio in a fleet of 19 Cybercabs and 29 autonomously operating Model Ys.

Musk then said that the Cybercab would be priced under $30,000 and use inductive charging instead of a charging plug. He also said that the vehicle would enter production "before 2027."

Amazon, Meta, Alphabet, Spotify Lead JPMorgan's 2025 Tech Picks For AI Potential

Benzinga News — Wed, 18 Dec 2024 15:50:04 -0500

JPMorgan analyst Doug Anmuth has rolled out an optimistic internet 2025 outlook, emphasizing mega-cap tech leaders as top picks. The big winners? Amazon.com Inc (AMZN ), Meta Platforms Inc (META ), Alphabet Inc's Google (GOOG ) (GOOGL ), and Spotify Technology SA (SPOT ).

Despite "heavy capex investments," Anmuth expects "increasing returns" as artificial intelligence shifts to practical applications, driving growth in advertising, cloud, and software tools.

Why 2025 Looks Promising

Anmuth highlights three transformative AI trends reshaping the tech landscape:

A 30% boost in engineering efficiency across major companies.
Billions in AI revenue for AWS and Google Cloud.
Accelerated ad and search growth for Meta and Google, driven by improved targeting and conversions.

These advancements, coupled with a pro-business political backdrop and stabilized macro trends, are set to support strong revenue growth across the Internet sector in 2025.

Capex Surge: A Long-Term Play

Big tech is gearing up for significant infrastructure spending in 2025, exceeding market expectations.

Anmuth projects capex of $97 billion for Amazon, $64 billion for Meta, and $62 billion for Alphabet. While these investments may weigh on margins, the long-term outlook remains bullish.

Amazon and Alphabet are forecasted to expand margins and free cash flow, while Meta's outlook is steadier, despite double-digit revenue and EPS growth expectations.

Stock-Specific Highlights

Amazon (Target Price: $280): Amazon's dominance in e-commerce and cloud markets positions it for multi-year margin and free cash flow expansion. With high-growth AWS and advertising streams, the company is poised to capitalize on untapped potential in IT and retail digitization.
Alphabet (Target Price: $232): Alphabet's ad business and AI-driven innovation keep it ahead of the pack. Search, YouTube ads, and cloud services present robust growth opportunities, while its "Other Bets" businesses like Waymo and Verily add optionality.
Meta Platforms (Target Price: $725): Meta's dual focus on AI and the metaverse underscores its commitment to long-term growth. Despite increased infrastructure spending, Meta's unmatched reach and targeting capabilities ensure sustained profitability and value for advertisers.
Spotify (Target Price: $555): Spotify continues to ride the audio streaming wave with solid user growth, cost discipline, and profit gains from podcasts and marketplace contributions.

As AI matures, these mega-cap tech leaders are well-positioned to reap the rewards of their massive investments.

While elevated capex may challenge short-term margins, the broader narrative of innovation, efficiency, and market dominance paints a bullish picture for 2025.

For investors, JPMorgan's favorites-Amazon, Meta, Alphabet, and Spotify-stand as compelling opportunities to capitalize on the next phase of tech evolution.

Fed Slashes Interest Rates By 0.25% As Predicted: December Dot Plot Flags Only 2 Potential Cuts In 2025

Benzinga News — Wed, 18 Dec 2024 15:49:43 -0500

The Federal Reserve closed out the year with a widely anticipated 25 basis-point interest rate cut Wednesday, lowering the federal funds rate to a range of 4.25%-4.5%.

This marks the lowest level since January 2023 and is the third consecutive reduction in borrowing costs, following a 50-basis-point cut in September and a 25 basis-point move in November.

The decision to lower interest rates was not unanimous, as Cleveland Fed President Beth M. Hammack voted to maintain the target range unchanged at 4.5%-4.75%.

The Fed's statement showed a meaningful language change, with the addition of the words "extent" and "timing" in reference to future policy adjustments. This shift signals a more cautious approach to further rate cuts in 2025.

"In considering the extent and timing of additional adjustments, to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks," the December Federal Open Market Committee statement said.

Economic Projections Signal Fewer Rate Cuts, Higher Inflation

The Fed's December dot plot, which illustrates each policymaker's projected path for interest rates, indicates a median expectation for the federal funds rate to decrease to a midpoint of 3.9% by the end of 2025.

This projection suggests the potential of only two additional 0.25% rate cuts during next year, a meaningful revision from the full percentage point of cuts expected in September.

For 2026, the Fed projects the fed funds rate to fall to a midpoint of 3.4%, up from 2.9% in September.

The Fed materially raised its inflation expectations for 2025, projecting headline Personal Consumption Expenditure inflation at 2.5% compared to 2.1% in September. Core PCE inflation, which excludes volatile food and energy prices, is now forecast to reach 2.5% in 2025, up from the prior estimate of 2.2%.

The Fed reaffirmed that economic activity remains "solid" and said that, despite some easing in labor market conditions, the unemployment rate continues to be low.

Economic growth for 2025 was upwardly revised by 0.1 percentage points from September.

Leading into the December Fed meeting, money markets priced in an 80% probability of a rate pause in January, followed by a 60% likelihood of a rate cut in March.

Overall, CME FedWatch data reflected a 70% probability of at least three rate cuts by the end of 2025.

In contrast, the CFTC-regulated betting platform Kalshi showed a more aggressive outlook, with a 98% chance of four rate reductions next year.

Apple's iPhone 16 Stumbles On 'Intelligence' Awareness, But Pro Max Shines Bright: Analyst

Benzinga News — Wed, 18 Dec 2024 15:49:37 -0500

Apple Inc (AAPL ) may be riding high with a $253.48 stock price, but the iPhone 16 cycle is showing signs of stumbling, according to JPMorgan analyst Samik Chatterjee.

The latest Wave7 Research survey paints a mixed picture, with iPhone market share trailing behind the iPhone 15 and iPhone 14 cycles during the critical October to November period. Despite a seasonally better month, the iPhone 16 cycle's market share clocks in at 66%, down from 69% in 2023 and 70% in 2022.

The likely culprit? There is a lack of buzz around Apple Intelligence, the tech giant's much-touted new feature. Carrier store reps say consumer awareness is still alarmingly low-67% of reps surveyed reported "low" awareness, while just 10% called it "high." So much for artificial intelligence leading a real upgrade cycle.

Apple Pro Max Powers Ahead, Leaving The Plus In The Dust

While the overall iPhone 16 cycle may be underwhelming, the high-end iPhone 16 Pro Max is stealing the spotlight, leading sales across all carriers with an impressive 19% share. It's clear that Apple's premium strategy is paying off at the top end of the spectrum, even as the 16 Plus struggles with a mere 7% share.

The Samsung S24 Ultra outshone Apple's iPhone 16 Pro/Max in photography chops, with its superior range and resolution earning 50% of the votes. Apple trailed with 30%, barely edging out Google's (GOOGL ) (GOOG ) Pixel 9 Pro/XL at 18%.

What's Next For Apple?

While Apple Intelligence hasn't captured the public imagination yet, Apple's loyal base and robust sales of high-end models suggest the potential for a second wind.

Disney's Marvel Rivals Game Hits 20 Million Players, Proves Superhero Power Still Reigns

Benzinga News — Wed, 18 Dec 2024 15:49:31 -0500

On Tuesday, Marvel Rivals posted on X (formerly Twitter) that it has hit 20 million players in less than 2 weeks after launch.

Marvel Rivals is a superhero team-based player versus player (PVP) shooter developed by Walt Disney Co (DIS ) Marvel Games and NetEase Inc (NTES ) NetEase Games in the Marvel Universe.

On December 9, the video game company said it reached 10 million players globally following its launch on PC, PlayStation 5 (SONY ), and Xbox Series X/S (MSFT ).

The game features Marvel Cinematic Universe (MCU) heroes like Iron Man, Hulk, and Scarlet Witch, alongside comic book favorites like Cloak and Dagger, Iron Fist, and Squirrel Girl.

On December 6, Marvel Rivals debuted on Steam with 444K players featuring heroes like Iron Man and Wolverine.

The success of the games bears testimony to the popularity of the Marvel superheroes. Disney acquired Marvel in 2009 for $4 billion.

Marvel Studios emerged as the highest-grossing film franchise of all time, crossing the $30 billion mark at the global box office as of July 2024, backed by the massive successes of Avengers: Endgame, Black Panther, Iron Man, and Deadpool & Wolverine.

According to Box Office Mojo, Marvel Studios' Deadpool & Wolverine became the second-highest-grossing movie of 2024 ($1.34 billion), trailing only "Inside Out 2" ($1.7 billion).

The popularity of video games prompted Walt Disney and Netflix Inc (NFLX ) to tap the sector's frenzy.

Walt Disney reported fiscal fourth-quarter 2024 revenue growth of 6% to $22.57 billion, beating the consensus estimate of $22.35 billion. Adjusted EPS of $1.14 beat the analyst consensus of $1.10. The stock surged 25% year-to-date.

NetEase reported a fiscal third-quarter revenue decline of 3.9% to $3.73 billion, topping the consensus estimate of $3.65 billion. The adjusted EPADS of $1.67 beat the analyst consensus estimate of $1.61. The stock is up over 1% year-to-date.

Consumer Finance Watchdog Cracks Down on Credit Card Sneaky Fees and False Promises

Benzinga News — Wed, 18 Dec 2024 15:49:09 -0500

On Wednesday, the Consumer Financial Protection Bureau (CFPB) announced significant measures to protect consumers from deceptive credit card practices and help them save money on interest and fees.

These efforts include issuing a circular to law enforcement agencies, publishing new research on retail credit cards, and launching a comparison tool to aid consumers in navigating the credit card market.

Investors will closely watch credit card companies, including Visa Inc (V ), Mastercard Inc (MA ), American Express Co (AXP ), Affirm Holdings, Inc (AFRM ), Corpay, Inc (CPAY ), Global Payments Inc (GPN ) and Shift4 Payments, Inc (FOUR ).

According to the CFPB, some credit card issuers may be engaging in illegal practices such as devaluing rewards points or miles, making it difficult for consumers to redeem promised benefits.

The agency highlighted that companies could face penalties if they fail to deliver advertised rewards, mislead users with hidden terms, or revoke rewards through unclear policies.

The circular aims to deter companies from engaging in bait-and-switch tactics and to encourage fair competition within the credit card industry.

As part of its ongoing research, the CFPB discovered that retail credit cards often charge higher interest rates than general-purpose cards. According to the study, more than 90% of retail cards carry a maximum annual percentage rate (APR) above 30%, compared to just 38% for non-retail cards.

Retail cards, frequently promoted during peak shopping seasons, also account for a disproportionate share of late fees, highlighting potential consumer risks.

The CFPB unveiled its "Explore Credit Cards" tool to address these concerns, designed to provide unbiased information about over 500 credit cards. Unlike traditional comparison sites, this platform enables users to compare cards based on interest rates, fees, and rewards without pay-to-play promotions.

Earlier this year, the CFPB revealed that larger credit card issuers charge significantly higher interest rates than smaller banks and credit unions. By making average interest rate data publicly accessible, the CFPB aims to empower consumers to make informed decisions and find the best rates tailored to their needs.

The CFPB plans to continue monitoring the credit card market and welcomes voluntary data contributions from additional issuers to enhance its comparison tool further.

In October, the CFPB ordered Apple Inc (AAPL ) and Goldman Sachs Group Inc (GS ) to pay $89 million in fines for deceptive practices regarding the Apple Card.

In December, Morgan Stanley (MS ) Wealth Management agreed to pay a $15 million fine after the SEC found the firm failed to prevent financial advisors from using client funds to cover personal credit card bills. The SEC investigation uncovered gaps in supervisory practices between 2015 and 2022, allowing unauthorized Automated Clearing House (ACH) transfers to advisors' accounts.

Match Group Analyst Flags Tinder Woes, Industry Challenges For Stock Downgrade

Benzinga News — Wed, 18 Dec 2024 15:48:55 -0500

JPMorgan analyst Cory Carpenter downgraded Match Group (MTCH ) from Overweight to Neutral and lowered the price target from $40 to $33.

Match is the leading online dating platform with an estimated ~50% share of global dating users across its portfolio of brands. Tinder is the largest and most profitable dating app globally and Hinge is the fastest-growing scaled dating brand.

The rerating reflects Carpenter's expectation for muted growth in the online dating industry in 2025 and limited visibility in the timing and magnitude of the Tinder turnaround. The analyst noted the downside is limited due to undemanding valuation, low investor expectations, dividends and share buybacks, and activism.

Heading into 2024, Carpenter expected Tinder payers to stabilize as the focus shifted from price optimizations to product and marketing.

However, the Tinder turnaround has proven more difficult than expected, and much work remains to return Tinder to sustainable growth.

The analyst noted Tinder user and revenue trends need to improve for Match shares to rerate higher, which appears increasingly unlikely in 2025.

Indeed, Tinder revenue and users will likely worsen before improving, with a return to growth not forecasted until 2027.

Carpenter updated his model following the investor day last week, with his Tinder direct revenue estimate reduced by 10% in 2026. This reflects a revenue decline of 6% in 2025, flat in 2026, and up 2% in 2027. The analyst still noted Tinder stability is possible over time through AI-driven product innovation, but it remains early, and execution is critical.

The price target is based on nine times Carpenter's 2025E AOI of $1.3 billion, which is a discount to Grindr Inc (GRND ), which trades at 18 times, but a premium to Bumble Inc (BMBL ), which trades at six times.

MTCH Price Action: Match Group stock is up 0.57% at $31.76 at publication Wednesday.

Microsoft Scoops Up 485,000 Nvidia AI Chips, Twice As Many As Its Closest Rival Meta: Report

Benzinga News — Wed, 18 Dec 2024 15:48:40 -0500

Microsoft Corp. (MSFT ) has reportedly acquired nearly twice as many Nvidia Corp. (NVDA ) AI chips as its closest competitors. This strategic investment is aimed at bolstering its AI capabilities, particularly for its Azure cloud services.

What Happened: Analysts at technology consultancy Omdia estimate that Microsoft has purchased approximately 485,000 of Nvidia "Hopper" AI chips this year.

This acquisition is significant as it doubles the number acquired by its nearest rival, Meta Platforms Inc. (META ), which bought 224,000 chips, Financial Times reported on Wednesday.

The demand for Nvidia's advanced GPUs has surged since the introduction of ChatGPT, prompting tech giants to invest heavily in AI infrastructure. Analysts from Omdia estimate that ByteDance and Tencent each ordered about 230,000 Nvidia chips, including the H20 model, tailored for Chinese markets.

Microsoft's aggressive expansion in AI infrastructure is partly driven by its $13 billion investment in OpenAI. The company aims to leverage its AI capabilities for both internal services and customer offerings through Azure. Despite competition, Microsoft continues to rely on Nvidia's chips while developing its own AI accelerators.

Why It Matters: The acquisition of Nvidia chips by Microsoft underscores the tech giant's strategic focus on enhancing its AI infrastructure. Nvidia's dominance in the AI semiconductor market is well-documented, with CNBC's Jim Cramer emphasizing that no company can rival Nvidia's technological superiority.

Nvidia posted $35.1 billion in revenue in the third quarter, with data center revenue alone reaching $30.8 billion, underscoring its pivotal role in AI infrastructure.

However, Nvidia's chips have faced challenges, such as overheating issues in its Blackwell AI chips, impacting companies like Meta and Microsoft.

Despite these challenges, Nvidia's chips remain integral to AI advancements, and Microsoft's substantial investment reflects its commitment to staying at the forefront of AI technology.

Robinhood Outpaces Tech Giants Meta, Amazon With $2 Million Donation To Trump's Inaugural Fund: CEO Criticizes Biden's Crypto, AI Policies

Benzinga News — Wed, 18 Dec 2024 15:48:22 -0500

Robinhood Markets Inc. (HOOD ) announced a $2 million donation to President-elect Donald Trump's inaugural fund on Tuesday, marking the largest publicly announced contribution among major tech firms.

What Happened: The donation, double the amount pledged by Meta Platforms Inc. (META ), Amazon.com Inc. (AMZN ), and OpenAI, comes amid broader tech sector alignment with Trump's proposed regulatory approach.

Robinhood CEO Vlad Tenev criticized President Joe Biden's administration's "heavy-handed" regulatory stance, particularly regarding cryptocurrency and artificial intelligence. "There's been open warfare against the cryptocurrency industry in America and a very anti-A.I. posture," Tenev told FOX Business.

The announcement follows significant developments in tech-political relations, including SoftBank Group Corp.'s (SFTBY ) commitment to invest $100 billion in U.S. technology over the next four years. SoftBank CEO Masayoshi Son called Trump "a double down president" while announcing the investment at Mar-a-Lago.

Robinhood reported a 500% month-over-month increase in crypto trading from October to November, highlighting the platform's growth amid regulatory uncertainty. Tenev emphasized the need for "sensible regulation" to maintain U.S. leadership in financial innovation.

Why It Matters: The financial platform's stance aligns with recent moves by other tech leaders. Apple Inc. (AAPL ) CEO Tim Cook met with Trump at Mar-a-Lago, while Meta's Mark Zuckerberg and Alphabet Inc.'s (GOOG ) (GOOGL ) Sundar Pichai have also engaged with the president-elect.

Tesla Inc. (TSLA ) CEO Elon Musk, set to co-lead the Department of Government Efficiency in Trump's administration, has been a vocal supporter of regulatory reform that could benefit technology companies.

"The U.S. should embrace cryptocurrency and lead in this space, much like it does in artificial intelligence," Tenev added, emphasizing the platform's commitment to democratizing finance while maintaining regulatory compliance.

Price Action: Robinhood's stock closed at $41.63 on Tuesday, down 3.63% for the day. In after-hours trading, the stock dipped slightly. Year-to-date, the stock has surged by 236.54%.

The stock is trading near its 52-week high of $43.83, well above its 52-week low of $10.38. The company's price-to-earnings ratio currently stands at 71.36, according to data from Benzinga Pro.

Boeing Restarts 767, 777 Aircraft Production As Machinists Strike Ends After 7 Weeks

Benzinga News — Wed, 18 Dec 2024 15:48:07 -0500

Boeing Co. (BA ) has restarted production of all airplane programs previously halted by a machinists' strike in the Pacific Northwest.

What Happened: The company confirmed that it resumed production of its popular 737 MAX jetliner earlier in December, following the conclusion of a seven-week strike involving 33,000 factory workers, Reuters reported on Wednesday.

Production of wide-body aircraft, including the 767 and 777/777X models, has resumed in Everett, Washington. Boeing Commercial Airplanes CEO Stephanie Pope announced the resumption on social media, emphasizing the importance of ensuring that manufacturing employees are up-to-date with training and certifications. She also mentioned optimizing inventory levels for smooth production.

Last week, Boeing reported delivering only 13 commercial jets in November, a significant drop from the 56 delivered in the same month the previous year. This decrease followed the production shutdown during the strike.

The Federal Aviation Administration (FAA) plans to increase oversight as production resumes, with FAA head Mike Whitaker expressing satisfaction with Boeing's cautious restart. Whitaker had previously limited 737 MAX production due to safety concerns.

Why It Matters: The resumption of Boeing's production comes amid a challenging period for the aerospace giant. In November, Boeing announced layoffs affecting 17,000 employees, a move aimed at stabilizing its financial position.

These layoffs, representing 10% of the company's global workforce, were part of a broader strategy to address financial difficulties, including inconsistent stock performance and production delays.

Mortgage Applications Dip As Rates Climb: 'It Is Still Cheaper To Rent Than Purchase For 82 Out Of 97 Major Cities'

Benzinga News — Wed, 18 Dec 2024 15:47:50 -0500

The U.S. mortgage market hit a speed bump last week as rising interest rates pushed application activity lower, breaking a five-week streak of growth.

According to the Mortgage Bankers Association (MBA), total mortgage applications decreased 0.7% for the week ending Dec. 13, 2024, signaling persistent challenges for buyers and homeowners navigating high-rate environments.

The average interest rate for 30-year fixed-rate mortgages on conforming loan balances - up to $766,550 - rose from 6.67% to 6.75%, snapping three consecutive weeks of marginal declines.

"Mortgage rates increased last week, leading to overall mortgage application activity decreasing for the first time in five weeks," said Joel Kan, MBA's vice president and deputy chief economist.

"Buyers remained active in the purchase market, helped by gradually improving inventory conditions and a more positive outlook on the economy and job market," he added.

The Mortgage Refinance Index fell 3% from the previous week, but still remained 41% higher than the same period in 2023. VA refinance applications plunged 17%, offsetting gains seen in prior weeks.

Housing Affordability: Renting vs. Owning

Mortgage rates remain near 7%, while home prices have risen in all 97 major U.S. cities.

Bank of America examined the rent-versus-buy dilemma in 97 U.S. cities in a note to clients on Wednesday.

The result? In places like San Francisco, Los Angeles, and San Jose, mortgage payments now account for a staggering 60-70% of median family income, making renting the clear budget-friendly option, according to the investment bank.

"Regionally, it is still cheaper to rent than purchase for 82 out of 97 major cities in the US," analyst Jeseo Park wrote.

New Orleans, Pittsburgh, and El Paso are among the cities where it's cheaper to own than rent.

"The housing market is still stuck between high mortgage rates and low inventories," said Park.

"We've seen some relief with the Federal Reserve starting to ease monetary policy, but rates are unlikely to fall dramatically in the near term. Buyers should expect only mild improvements next year," she added.

With the mortgage spread hovering around 2-2.5 percentage points and Bank of America analysts forecasting a 10-year yield of 4.25% in 2025, mortgage rates are expected to stay around 6-6.5% next year.

"Given that many homeowners locked in low rates during Covid, a mortgage rate above 6% would still be too high to promote significant activity," Park stated.

Market Reactions

The iShares Residential and Multisector Real Estate ETF (REZ ) edged up 0.1% on Wednesday, following twelve losses in the past thirteen sessions.

The VanEck Mortgage REIT Income ETF (MORT ) climbed 0.5%, recovering from a 1.3% decline on Tuesday.

Stocks within the industry saw minimal movement as markets adopted a cautious, wait-and-see stance ahead of the upcoming Federal Reserve meeting.

Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI ) and New York Mortgage Trust, Inc. (NYMT ) were among the top gainers in the MORT ETF, rising 1.8% and 1.2%, respectively. Meanwhile, Ares Commercial Real Estate Corp. (ACRE ) was among the laggards, slipping 0.9%.

US Stocks Led By Apple, Nvidia, And Other Tech Giants Dominate Nearly Two-Thirds Of MSCI World Index, Drawing Parallels To 1980s Peak

Benzinga News — Wed, 18 Dec 2024 15:47:34 -0500

The U.S. has the world's largest companies by market capitalization and about two-thirds of the MSCI World Index is dominated by companies based out of America.

What Happened: U.S.-based companies ranking among the world's top ten firms by market capitalization include Apple Inc. (AAPL ), Microsoft Corp. (MSFT ), Nvidia Corp. (NVDA ), Amazon.com Inc. (AMZN ), Alphabet Inc. (GOOG ) (GOOGL ), Meta Platforms Inc. (META ), Tesla Inc. (TSLA ), and Broadcom Inc. (AVGO ).

These magnificent seven firms along with Broadcom are the beneficiaries of the U.S. tech and AI boom. The remaining two non-U.S. firms that make up the top ten include Saudi Arabian Oil Co and Taiwan Semiconductor Mfg Co Ltd (TSM ).

According to an X post by Kevin Gordon, director and senior investment strategist at Charles Schwab, "Such an imbalance has not been seen since the late 1980s." The data shared by him shows nine out of the top ten companies by market capitalization were based out of the U.S. in the 1980s.

"...the US, with 4% of the world's population, roughly a quarter of global GDP and a third of global profits, now accounts for more than two-thirds of the MSCI World index's capitalization. Such an imbalance has not been seen since the late 1980s...," he said.

Why It Matters: Additionally, the top ten constituents in the MSCI World index are U.S.-based firms. This index captures 1,397 large and mid-cap companies across 23 developed markets.

According to MSCI's latest release, dated Nov. 29, the U.S. has a weightage of 73.92% in the index, followed by Japan with 5.23%, the United Kingdom with 3.44%, Canada with 3.1% and France with 2.5%.

The index has the highest exposure of 25.29% to information technology companies, followed by 16.3% to financial firms.

Congressional Leaders Reach Bipartisan Deal To Avert Government Shutdown

Benzinga News — Wed, 18 Dec 2024 15:47:14 -0500

In a significant development, U.S. Congressional leaders have reached a consensus on a bipartisan deal to extend government funding, thereby averting the looming December 20 shutdown deadline.

The legislation, revealed on Tuesday, extends the funding deadline to March 14, 2025. This move allows the incoming Congress and president to decide on the government's funding for the majority of the year. The package includes a one-year farm bill extension, approximately $100 billion in disaster relief, and around $30 billion in disaster and economic assistance for farmers among other authorizations, reported The Hill.

The agreement marks the end of weeks of negotiations over disaster aid and overall funding. This is the final funding agreement of a divided Congress before the new class takes over in January. The bill provides nearly $30 billion in funding for the Federal Emergency Management Agency, following recent concerns about the agency's Disaster Relief Fund.

More than $2 billion in funding for the Small Business Administration was agreed upon after officials reported that its disaster loan program had exhausted its funds during the hurricane season. The bill also allocates $20 billion for disaster relief for farmers and $10 billion in economic support for farmers.

The legislation also extends the National Flood Insurance Program's authorization and includes measures aimed at pandemic mitigation. The total emergency and disaster funding attached to the continuing resolution amounts to approximately $110 billion, with no offsets included.

Although some Republicans have voiced frustration over the bill's additional provisions and delayed implementation, the House is anticipated to swiftly pass the legislation to prevent a government shutdown ahead of the holidays.

SpaceX Completes 3 Launches In 24 Hours As It Chases Annual Launch Target

Benzinga News — Wed, 18 Dec 2024 15:46:15 -0500

Elon Musk's rocket manufacturing company SpaceX completed three Falcon 9 missions in under 24 hours on Tuesday as it gears up to meet its own launch targets for the year.

What Happened: On Monday, at 7:52 p.m. ET, SpaceX's Falcon 9 launched the RRT-1 mission from Florida.

On Tuesday, at 5:19 a.m. PT, the company's rocket launched the NROL-149 mission from California.

At 5:26 p.m. ET on the same day, the company also launched the SES O3b mPOWER mission from Florida, successfully launching three missions in 24 hours.

Teams complete three successful Falcon 9 missions in under 24 hours

SpaceX launched its 125th mission for the year on Dec. 13. With the three recent launches, the total number of launches undertaken by SpaceX this year has risen to 128.

Why It Matters: SpaceX was initially looking to complete 144 launches this year or an average of 12 times per month.

However, SpaceX VP of Launch Kiko Dontchev said in November that the company will not make its goal of 144 launches this year but is still targeting 30 more launches, or one launch every two days, for the rest of the year.

With less than fifteen days now remaining for the year, one can assume SpaceX to complete 6 more launches as per Dontchev's estimate, successfully crossing the 130 launches benchmark.

For the entirety of 2023, SpaceX only completed 96 launches, not including two test flights of the company's Starship launch vehicle.

Oreo Maker Uses AI To Come Up With Flavor Perfection: Mondelez Says, 'Not Stopping Iterating Until It Tastes Like X'

Benzinga News — Wed, 18 Dec 2024 15:45:59 -0500

Mondelez International (MDLZ ) has been leveraging AI to speed up recipe development and improve flavor profiles.

What Happened: The AI tool, created in collaboration with software consulting firm Fourkind, now part of Thoughtworks, has been operational since 2019, reported the Wall Street Journal.

It aids Mondelez's R&D team by generating recipes based on desired traits like flavor, aroma, and appearance. The tool also evaluates ingredient costs, environmental impact, and nutritional value.

The AI leverages this data to propose new formulations-a process that once relied on trial and error. Mondelez reports that AI-driven development although subjected to human taste-testing, has accelerated product testing and production trials by four to five times.

"The point is we get there faster," stated Kevin Wallenstein, section manager at Mondelez. "The consumer wants the product to taste like X. We're not stopping iterating until it tastes like X ... we're doing things more efficiently."

The tool has been used in over 70 projects, resulting in new products such as the Gluten-Free Golden Oreo and revamped classic recipes.

In addition to Oreos and Chips Ahoy, Mondelez produces popular snacks like Ritz crackers, Cadbury chocolates, Clif bars, Triscuits, Tate's cookies, and Toblerone.

According to the report, Mondelez carefully limits how far its AI can push innovation. Earlier, less-refined versions of the tool, lacking sufficient data, made odd suggestions.

"Because [baking soda is] a very low-cost ingredient, it would try to just make cookies that were very high in baking soda, which doesn't taste good at all," said Wallenstein. This is why a brand steward plays an important role is to uphold each snack's core identity.

Mondelez did not immediately respond to Benzinga's request for comments.

Why It Matters: The integration of AI in food production is not without its challenges. For instance, Instacart's AI recipes in January this year went viral for their unusual and often unappetizing results.

Moreover, Mondelez is not just using AI for product development. The company is also leveraging AI for marketing via Google's (GOOG ) (GOOGL ) Veo video generator.

Earlier this month, the Oreo-maker also explored a merger with The Hershey Co. (HSY ), but the latter remains a tough acquisition target.

Mondelez's organic sales increased by 5.4% in the latest quarter, accompanied by an 11.2% rise in adjusted gross profit dollars.

Price Action: According to Benzinga Pro, Mondelez shares declined by 0.24% to $61.34 on Tuesday, with an additional 0.42% drop in after-hours trading. Year-to-date, Mondelez has fallen by 16.93%.

Salesforce Doubles AI Hiring Goal, To Add 2K Sales Roles

Benzinga News — Wed, 18 Dec 2024 15:45:38 -0500

Salesforce Inc (CRM ) targets employing 2,000 people in the form of sales reps, marketers, and customer service agents to sell artificial intelligence software to clients, CNBC cited CEO Marc Benioff at a company event in San Francisco on Tuesday.

In November, Benioff shared plans to employ 1,000 salespeople focusing on AI. Benioff told CNBC Salesforce already had 9,000 referrals for the 2,000 positions.

On Tuesday, Salesforce announced that a second generation of its Agentforce technology, capable of tackling questions in Salesforce's Slack communications app, will be available in February 2025.

Salesforce has embedded experimental AI agents on its homepage to enhance user interaction. It manages 32,000 weekly queries through its chat-based help page, with only 5,000 requiring human escalation, down from 10,000.

Benioff highlighted these advancements as evidence of AI's growing role in improving customer support efficiency.

Benioff contrasted Salesforce's offerings with Microsoft Corp (MSFT ), noting the limited visibility of its Copilot-branded AI tools. Microsoft countered, stating that its AI solutions are driving measurable improvements, including a 9.4% boost in revenue per seller and an 11.5% reduction in case resolution time.

Salesforce's hiring spree comes nearly two years after the company laid off over 7,000 employees to adjust to economic conditions.

On Tuesday, Salesforce and Adecco Group boosted recruiting with Agentforce and Data Cloud for faster candidate matching. Vivint, a provider of smart home and security solutions, tapped Agentforce to enhance its customer service teams with 24/7 autonomous agent support.

On TechCrunch's Equity podcast, Benioff predicted that Salesforce will surpass a billion agents within the next 12 months. In October, Northland Capital Partners stated that the AgentForce platform now matches Microsoft's capabilities.

Salesforce stock surged over 37% year-to-date.

Salesforce reported a third-quarter revenue of $9.44 billion, up 8%, above the analyst consensus of $9.35 billion. The adjusted EPS of $2.41 missed the analyst consensus of $2.44.

Salesforce expects fourth-quarter revenue of $9.9 billion-$10.1 billion versus $10.04 billion analyst consensus. It anticipates fourth-quarter adjusted EPS of $2.57-$2.62 compared to consensus estimate of $2.61.

Investors can gain exposure to Salesforce through JPMorgan Equity Premium Income ETF (JEPI ) and SPDR Series Trust SPDR Portfolio S&P 500 Growth ETF (SPYG ).

Price Action: CRM stock traded higher by 0.71% to $353.47 premarket at the last check on Wednesday.

SolarEdge Poised For Growth Amid Cost Cuts, While Canadian Solar Faces US Policy Headwinds: Goldman Sachs

Benzinga News — Tue, 17 Dec 2024 16:04:15 -0500

Goldman Sachs analyst Brian Lee revised ratings for key residential solar stocks. The analyst notes there is a disconnect between the mid-to-long-term fundamentals and valuations for solar/storage equities heading into 2025.

Solar equities appear to be overpricing risks tied to policy uncertainty, even though secular growth drivers, such as U.S. power demand and pricing, remain strong.

SEDG: The analyst upgraded SolarEdge Technologies, Inc. (SEDG ) rating to Buy from Sell and raised the price target to $19 (from $10 prior).

After a challenging period, including a tough U.S. residential solar market and weaker European demand, the analyst notes estimates have bottomed, and concerns about SEDG's $350 million debt in 2025 are overstated.

SEDG's recent cost-cutting measures, including headcount and facility reductions, strengthen the outlook, adds the analyst.

Lee says that while the call may be early, he sees a turnaround as the company benefits from improved cost control and a better product mix.

The analyst sees FY25 as a key inflection point, with growth likely accelerating in FY26.

The analyst estimates negative EPS for FY25 but expects a positive fourth-quarter FY25 and strong growth in FY26. The EPS estimate of $1.64 for FY26 is well above the consensus of $0.55, adds the analyst.

CSIQ: Meanwhile, Lee downgraded Canadian Solar Inc. (CSIQ ) to Sell from Neutral and cut the price target to $11 (from $14 prior).

The analyst's negative outlook stems from policy risks under the Trump administration and tariffs on solar imports from Southeast Asia.

As a major foreign supplier of solar panels to the U.S., CSIQ is highly exposed to these risks, which will impact its margins, especially given the U.S. has been one of the more profitable markets recently, says the analyst.

The analyst also sees consensus estimates as overly optimistic, with the 2025-2026 EBITDA projections 35% - 40% below the Street's, as recent policy changes and the uncertain outlook are not fully reflected in market expectations.

The analyst says 2024-2025 EBITDA estimates remain largely unchanged, while the 2026 estimate is revised down by 6% to $688 million due to a bleak outlook.

Price Action: SEDG shares are up 23.3% at $15.19, while CSIQ shares are up 0.86% at $11.76 at the last check Tuesday.

Nvidia Unveils Latest Jetson Supercomputer Aimed At Unlocking AI For Small Companies: What You Need To Know

Benzinga News — Tue, 17 Dec 2024 16:04:07 -0500

NVIDIA Corporation (NVDA ) shares are in the spotlight Tuesday as the stock continues to pull back from recent highs. Despite the weakness, the company continues to charge ahead in the AI revolution with the introduction of a new, lower cost version of its Jetson computer.

The Details: Nvidia unveiled its most affordable generative AI supercomputer on Tuesday. The new version of Nvidia's Jetson computer, priced at $249, is directed at hobbyists and small businesses looking to leverage AI applications, according to the Wall Street Journal.

The company stated that the $249 Jetson Orin Nano Super offers nearly twice the speed and efficiency of its predecessor and can handle around 70% more computational tasks, at close to half the cost.

"Whether creating LLM chatbots based on retrieval-augmented generation, building a visual AI agent, or deploying AI-based robots, the Jetson Orin Nano Super is an ideal solution to fetch," the company said in a news release.

While the company faces restrictions in the U.S. related to selling some of its hardware in China, Nvidia has confirmed that the new Jetson product will be available in the country through local distributors.

The move from Nvidia represents a shift from the company's usual focus on large corporations and AI startups with substantial budgets for AI infrastructure. These clients typically spend significant amounts on hardware to develop and operate their AI models.

Why It Matters: Nvidia is the latest company to introduce a product for the "edge," aimed at casual AI consumers and smaller businesses interested in exploring AI applications.

The report indicates that Alphabet (GOOG ) (GOOGL ), Intel (INTC ) and Qualcomm (QCOM ) have already ventured into the space. The move from Nvidia could potentially bolster competition between tech giants, driving innovation and potentially lowering costs across the industry.

This shift to the "edge" could ultimately accelerate the adoption of AI across various sectors by offering businesses of all sizes the ability to experiment with and implement AI solutions.

"Jetson Orin Nano Super is suited for those interested in developing skills in generative AI, robotics or computer vision. As the AI world is moving from task-specific models into foundation models, it also provides an accessible platform to transform ideas into reality," the company said.

NVDA Price Action: At the time of writing, Nvidia stock is trading 1.47% lower at $130.05, according to data from Benzinga Pro.

Meta Fined $264 Million By EU Watchdog Over 2018 Facebook Data Breach

Benzinga News — Tue, 17 Dec 2024 16:04:00 -0500

On Tuesday, The Irish Data Protection Commission (DPC) announced its final decisions following two inquiries into Facebook parent Meta Platforms, Inc (META ) Meta Platforms Ireland Limited (MPIL).

The decisions made by the Commissioners for Data Protection, Dr. Des Hogan and Dale Sunderland, included several reprimands and a penalty of approximately $264 million (251 million euros).

The DPC launched these own-volition inquiries following a personal data breach reported by MPIL in September 2018.

This data breach impacted roughly 29 million Facebook accounts globally, of which about 3 million were from the EU and EEA.

The categories of personal data affected included the user's full name, email address, and phone number. The exploitation by unauthorized third parties of user tokens on the Facebook platform led to the breach.

MPIL and its U.S. parent company remedied the breach shortly after its discovery.

Meta and other Big Tech giants have faced regulatory scrutiny and penalties for violation of user data privacy.

In September 2024, the DPC penalized Meta with 91 million euros ($101.5 million) for 2019 violations of the General Data Protection Regulation's (GDPR) security standards.

The DPC launched a probe in April 2019 under the GDPR after Meta disclosed that it stored "hundreds of millions" of user passwords in plaintext on its servers. Additionally, the company engineers reportedly accessed the 600 million passwords stored in plaintext.

In May 2023, the DPC fined Meta 1.2 billion euros ($1.3 billion) for allegedly transferring personal EU data to the U.S.

Meta held $70.9 billion in cash and equivalents as of September 30, 2024. Meta Platforms stock surged 80% year-to-date.

BofA Securities analyst Justin Post hailed Meta as an "AI Story" backed by Llama and Meta AI gaining traction. Post expects Meta's Al-driven ad advances to play out in 2025.

Rosenblatt analyst Barton Crockett said Meta's AI investments drove the 20% revenue growth after the third-quarter print and, if sustained, could continue to support growth despite increasing capital expenditure.

Price Action: META stock is down 0.30% at $632.35 at the last check on Tuesday.

Biden Backs Congressional Stock Trading Ban: 'Inside Track' To Wealth

Benzinga News — Tue, 17 Dec 2024 16:03:54 -0500

President Joe Biden has endorsed a ban on Congress Trading, suggesting that members of Congress should not be able to buy and sell stocks in options while they are in office.

What Happened: Congress Trading has been a popular topic among retail investors for years with the trading activity of former Speaker of the House Nancy Pelosi closely followed thanks to the often winning trades made by her husband Paul Pelosi.

Investors also monitor potential conflicts of interest trades, such as Congress members buying war stocks during increased Middle East tensions and which members of Congress are buying Trump-linked stocks and meme coins.

President Biden is calling for an end to the current legal practice.

"Nobody in the Congress should be able to make money in the stock market while they're in the Congress," Biden said in an interview with political advisor Faiz Shakir.

The video, which is set to be released later this week, will be published by A More Perfect Union, as reported by the Associated Press, which was able to view the video ahead of its release.

Biden's comment comes as members of Congress are currently able to buy and sell stocks, options, and cryptocurrency as long as they properly disclose the trades within the appropriate time limit of 45 days.

In the interview, Shakir said he admired the fact that Biden didn't get into stocks early like Google, Boeing, Microsoft, Nvidia and Amazon while he was a senator.

"I don't know how you look your constituents in the eye and know, because the job they gave you, gave you an inside track to make more money. I think we should be changing the law," Biden added.

Biden said he was able to live on a Congressional salary and not worry about becoming rich through playing the stock market previously.

The comments made in the interview mark a change in Biden's opinion on the issue. Biden previously refused to weigh in on the issue of congressional trading, saying he would "let members of leadership in Congress and members of Congress determine what the rules should be," as his previous press secretary Jen Psaki reported.

Why It's Important: There have been numerous calls to vote for Congress members to vote for a ban on Congressional trading, but a vote has not happened.

Representative Ro Khanna (D-Calif.) previously told Benzinga that he will continue to advocate for a vote to ban the practice.

"We should have a vote on it," Khanna told Benzinga.

Khanna said that despite his continued speeches in the House advocating for a ban on stock trading, there is a "collective shrug" in Congress regarding the issue.

"It is shameful that over three years after the pandemic with the shenanigans from those senators who sold their stock after learning of the pandemic" there still hasn't been a vote, Khanna said.

Khanna said that people were outraged at the time when several senators sold their stocks in tourism and other sectors that would be hurt, knowing that the economy could crash from the COVID-19 pandemic.

"Senators making money when the rest of the country was suffering during the pandemic."

With Biden now advocating for the ban before the end of his presidential term, the situation will be closely monitored to see if Congress votes on the matter.

Unusual Whales helped launch two Congress Trading themed ETFs in 2023 through a collaboration with Subversive. The Unusual Whales Subversive Democratic Trading ETF (NANC ) and Unusual Whales Subversive Republican Trading ETF (KRUZ ) provide investors with opportunities to invest in the same stocks as members of Congress.

Americans Bought Less But Paid More,' Says Peter Schiff: Experts Digest November Retail Sales Data

Benzinga News — Tue, 17 Dec 2024 16:03:47 -0500

November's retail sales outpaced expectations, rising a 0.7% from October and outpacing market expectations of a 0.5% increase. Some experts are pointing out that inflation may be partially responsible for the increase in retail sales data.

Experts React: Retail sales grew by 3.8% year-over-year, the highest since December 2023, up from the upwardly revised 2.9% in October. Excluding motor vehicles and parts, retail sales advanced by 0.2% month-over-month, missing expectations of 0.4%.

Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, pointed to inflation and auto sales as the drivers of November's retail sales in a post on X.

"Nov. retail sales rose 0.7%, above the 0.5% that was expected. The rise resulted mainly from higher car prices, not higher car sales. If you strip out autos, retail sales rose just 0.2%, half of what was expected. If you adjust for inflation, Americans bought less but paid more," Schiff wrote.

Gregory Daco, chief economist at EY-Parthenon, Ernst & Young, also highlighted consumers' prudence in November's retail sales when adjusted for inflation.

November's retail sales could have been bolstered by consumers who have reported buying big-ticket items in order to save money ahead of expected tariff increases under President-elect Donald Trump, according to Bloomberg.

"It's important to note that sentiment differs by political affiliation, with Democrats more concerned that proposed tariffs will drive a resurgence in inflation. As such, Democrats and independents have cited tariffs as a key driver of 'buy-in-advance' behavior, while Republicans broadly expect inflation to slow dramatically ahead," said Eliza Winger, Bloomberg economist.

On the other hand, Logan Mohtashami, lead analyst at HousingWire, pointed out that retail sales figures rarely go down and perhaps November's data should be expected.

It's uncommon to see negative nominal year-over-year retail sales data. Since 1993, the only instances were during Covid, the Great Financial Recession, and in October 2002.

Markets React: All major U.S. indices are trading lower Tuesday with the SPDR S&P 500 ETF Trust (SPY ), tracking the S&P 500, 0.56% lower at $603.42 and the Invesco QQQ Trust (QQQ ), tracking the Nasdaq 100 index, 0.75% lower at $534.15 at the time of publication.

Costco Warns That Tariffs Raise Prices, Trump Team Says Trade Policies Will 'Make Life Affordable'

Benzinga News — Tue, 17 Dec 2024 16:03:41 -0500

Retailer Costco Wholesale Corporation (COST ) is the latest company to warn about the impact tariffs imposed by President-elect Donald Trump could have on higher prices for consumers.

What Happened: Costco beat analyst estimates for revenue and earnings per share in the first-quarter financial results last week.

While many investors and analysts were focused on higher membership fee revenue thanks to a price increase earlier this year and new milestones across items like deliveries, pharmacy, pizzas and Thanksgiving pies, company executives provided an early look at the tariff concern.

"There's a lot of uncertainty around the timing and scope of changes, so it makes it difficult for anyone to predict what the impact will be with confidence," Costco Chief Financial Officer Gary Millerchip said on the earnings call.

"In general, of course, tariffs raise costs. That's not something that we see as a positive in general."

The Costco CFO said the company faced tariffs in the past and its buyers and merchants are equipped to work through and "navigate and manage that situation." The tariffs could impact the company, suppliers and ultimately consumers.

"When it rains, it rains on everybody."

Millerchip said the company is already considering plans ahead of the January inauguration.

"We have a plan over time where we have done this in the past and typically we'll look where we can to pull forward inventory buying."

Costco will also consider additional sourcing locations and work with vendors to lower costs, Millerchip said. Another option would be to eliminate some items where "the value just wasn't there."

"We're about a quarter of our business is non-foods and then a subset of that is imported. So remember, it's a minority of our overall business and then it's a smaller part of that as well."

Trump's presidential transition team took exception to the comments from Costco.

"President Trump has promised tariff policies that protect the American manufacturers and working men and women from the unfair practices of foreign companies and foreign markets," Trump transition spokesperson Brian Hughes told the New York Post Monday.

Tariffs could be conducted via executive orders from Trump and not need Congressional approval. The tariffs could hit China, Canada and Mexico initially.

"As he did in his first term, he will implement economic and trade policies to make life affordable and more prosperous for our nation," Hughes added.

Why It's Important: The comments from Costco come after discount retailer Dollar Tree Inc shared a similar sentiment of being proactive in taking steps to offset tariffs, while expressing concern that prices could go higher for consumers.

"While the situation remains fluid and the exact nature, scope, and eventual timing of any new tariffs is not yet clear, we are prepared to act on multiple fronts," Dollar Tree (DLTR ) Chief Operating Officer and Interim CEO Mike Creedon said on Dollar Tree's recent conference call.

Creedon said Dollar Tree was able to negotiate lower costs with suppliers back in 2018 and 2019 when last dealing with tariff concerns. The company also changed product specs and pack sizes along with stopping the sale of several items altogether.

"All three of those options are still at our disposal."

Creedon said the company's multi-price strategy, which includes items past the $1 and $1.25 price points, could also be a solution for the tariff plans when asked to share what the downside case to the company's earnings is due to tariffs.

"Multi-price gives us the ability to flex where we need to if a certain product becomes something that we've got to move in the market to be competitive."

While it remains to be seen if Trump follows through with his tariff threats, retailers are already embracing the potential for higher costs and warning consumers that changes to item selection and higher prices could be coming.

COST Price Action: Costco stock trades at $985.87 Tuesday versus a 52-week trading range of $640.56 to $1,008.25. Costco stock is up 52% year-to-date in 2024.

Amazon's Project Kuiper In Talks With Taiwan For Satellite Partnership

Benzinga News — Tue, 17 Dec 2024 16:03:27 -0500

Taiwan is advancing its efforts to secure reliable satellite-based communications by entering discussions with Amazon.com Inc's (AMZN ) Project Kuiper.

The move marks the Taiwanese government's attempts to strengthen its internet and mobile infrastructure amid concerns over potential Chinese interference, the Financial Times reports.

Wu Cheng-wen, Taiwan's technology minister, told the FT about the shortcomings of Eutelsat subsidiary OneWeb's existing network.

Wu cited delays in OneWeb's second-generation satellite development as a factor driving the search for additional partners, notably Amazon's Kuiper.

OneWeb denied claims of financial instability, stating that its constellation development was on track and fully backed by its shareholders as per FT. The company asserted that it remains the only low-Earth-orbit (LEO) provider ready to deliver services in Taiwan.

Taiwan's interest in LEO satellite networks stems from SpaceX's Starlink's role in maintaining Ukraine's communications during the ongoing conflict with Russia.

The island sees such technology as a backup if undersea cables supporting its internet and telecom systems are severed in a conflict scenario.

However, Starlink's involvement remains unlikely, as Elon Musk has declined to meet Taiwan's joint-venture requirements and faces scrutiny for his business ties to China, FT reports.

Meanwhile, Taiwan's government is also working to build its satellite constellation through its national space agency.

Wu announced plans to develop a rocket launch site in southeastern Taiwan, with operations expected to begin within five years.

Project Kuiper from Amazon is gearing up to take on SpaceX's Starlink satellite service. The satellite rivalry between Amazon and SpaceX is heating up as Project Kuiper expands its global footprint.

Project Kuiper secured eight licenses and purchased land in New Zealand to install ground stations, supporting its satellite broadband initiative. Meanwhile, SpaceX's Starlink increased its New Zealand user base from 12,000 to 37,000 in 2023.

India's Department of Telecommunications (DoT) has instructed Starlink and Amazon to submit security compliance details as part of their applications to offer satellite communication services in the country.

Starlink and Project Kuiper are pushing for a 1% spectrum charge and a 20-year license to launch satellite communication services in India.

Amazon plans to deploy over 3,000 satellites, with production launches set for late 2024 and commercial broadband services expected in 2025. Starlink, with over 6,000 satellites already in operation since 2019, maintains a significant early advantage.

Price Action: AMZN stock is down 0.78% at $231.12 at last check Tuesday.

Joby Aviation Completes Key Aerostructure Tests For FAA Certification

Benzinga News — Tue, 17 Dec 2024 16:03:07 -0500

Joby Aviation, Inc. (JOBY ) is making significant strides in its journey toward FAA certification, as its shares rise in premarket trading following the announcement of a major achievement.

The company has successfully completed a critical series of aerostructure tests for certification credit with the Federal Aviation Administration.

The successful static load testing of Joby's tail structure is a landmark event, marking the first time the company has conducted such a test with FAA representatives present.

This testing, conducted in Santa Cruz, California, is part of a comprehensive testing campaign covering all aspects of the aircraft, including structures, components, and systems.

The data gathered from these tests is crucial for the FAA's type certification process, which is a key step in bringing Joby's electric air taxi to market.

Didier Papadopoulos, President of Aircraft OEM at Joby, said it represents years of dedication from the company's engineering, testing, certification, and manufacturing teams.

"Our vertically-integrated approach to aircraft development gives us the capability to design, build, and test entire aerostructures in-house, providing Joby with a strong foundation to rapidly and efficiently continue to bring innovative technologies to market," Papadopoulos said.

Joby's electric air taxi, designed to carry a pilot and up to four passengers at speeds of up to 200 mph, aims to revolutionize urban mobility with zero emissions and a significantly quieter operation compared to traditional helicopters.

The completion of these tests marks a critical milestone toward the aircraft's full certification and eventual commercialization.

Price Action: JOBY shares are trading higher by 1.13% to $7.990 premarket at last check Tuesday.

Market Update: Dow Falls 260 Points Ahead of FOMC Decision

Rachel Hemple — Tue, 17 Dec 2024 12:37:29 -0500

Stocks were lower Tuesday as market participants looked for direction ahead of the Federal Reserve's final monetary policy decision of the year. The Dow Jones Industrial Average fell over 260 points, marking its longest losing streak since 1978 at nine sessions, while the S&P 500 Index and Nasdaq Composite lost nearly 0.4% and 0.3%, respectively.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY ): -0.39% or -23.47 points to 6,050.61

Dow Jones Industrial Average (DIA ): -0.61% or -267.58 points to 43,449.90

Nasdaq Composite Index (QQQ ): -0.32% or -64.83 points to 20,109.06

Moving Markets:

U.S. Retail Sales rose at a faster-than-expected rate in November as the U.S. holiday shopping season gets off to a strong start. Sales increased by 0.7% last month, the Commerce Department said Tuesday, higher than October's 0.5% gain. Notably, motor vehicle and auto part sales rose 1.8% annually, while e-commerce sales increased 1.4% year-over-year.

Sales excluding auto and gas rose by a less-than-expected 0.2%.

Wells Fargo senior economist Tim Quinlan wrote in a note to clients on Tuesday that while the report is a positive sign for retailers, there are some consumer spending headwinds expected into the new year.

"The potential for new tariffs at some point next year suggests some new price pressure," Quinlan wrote, quoted by Yahoo!finance. "We expect households to keep spending into the new year, but for the pace of consumption to slow as the year progresses and tariff-related price pressure bites. While the broad household sector is still in a decent financial position today, data suggest consumers are growing more vulnerable amid slowing real income growth and still-high financing costs."

In the News:

Pfizer (PFE ) shares rose Tuesday after the pharmaceutical giant forecasted for 2025 adjusted profit to come between $2.80 to $3 per share on revenue in the range of $61 billion to $64 billion, coming in-line with market expectations and boosting outlooks as the company comes under fire from activist hedge fund Starboard Value.

The company also estimated a roughly $1 billion revenue impact from changes to Medicare's Part D prescription program under the Biden administration's Inflation Reduction Act. Pfizer noted that the addition of new manufacturer discounts and other changes would more than offset expected benefits from the $2,000 out-of-pocket spending cap for seniors under the prescription drug plan in 2025.

Salesforce (CRM ) plans to hire 2,000 employees to sell artificial intelligence software to clients, CEO Marc Benioff said at a company event in San Francisco on Tuesday. Moreover, Benioff said the second generation of its Agentforce technology will become available to customers in February 2025.

"We're adding another couple thousand salespeople to help sell these products," Benioff said. "We already hed 9,000 referrals for the 2,000 positions that we've opened up. It's amazing."

For Wednesday:

All attention will be on the Federal Open Market Committee's monetary policy decision due out Wednesday afternoon, with policymakers broadly expected to issue another quarter-point interest rate cut.

Threads Reaches 100 Million Daily Active Users As Meta Capitalizes On Exodus From Elon Musk's X To Alternative Platforms

Benzinga News — Tue, 17 Dec 2024 11:44:42 -0500

On Monday, Meta Platforms, Inc.'s (META ) CEO Mark Zuckerberg said that Instagram's Threads has reached a milestone of 100 million daily active users.

What Happened: Taking to Threads, Zuckerberg said that Meta's Twitter rival now boasts 300 million monthly active users, an increase from 275 million in November.

This marks the first time the company has disclosed its daily active user count.

Meta has been actively sharing statistics and introducing new features to attract more users. This includes custom feeds, starter packs for new users, and options to change default feeds.

Last month, Instagram boss Adam Mosseri highlighted that Threads has consistently seen a million sign-ups daily for three months.

Why It Matters: The surge in Threads' user base is part of a broader trend of users leaving Elon Musk's X (formerly Twitter) for alternative platforms.

Rival social media network to both X and Threads, Bluesky is also gaining from the user shift away from X. It now has over 25 million users as of Dec. 10 with popular names like Alexandria Ocasio-Cortez, Mark Cuban, and Mark Hamill ranked as one of the most popular Bluesky accounts.

This shift has been particularly pronounced following Donald Trump's victory, which led to a significant increase in activity on platforms like Bluesky and Threads. Users have expressed dissatisfaction with the atmosphere on X, prompting them to explore other options.

Pfizer Does Not Anticipate Material Changes To US Vaccine Policy From The Incoming Administration In 2025

Benzinga News — Tue, 17 Dec 2024 11:44:36 -0500

On Tuesday, Pfizer Inc. (PFE ) released its full-year 2025 financial guidance, projecting revenues between $61.0 billion and $64.0 billion compared to a consensus of $63.28 billion.

For 2025, Pfizer expects revenue from COVID-19 products to remain consistent with 2024, excluding approximately $1.2 billion in one-time Paxlovid revenue recognized in 2024.

The guidance accounts for an estimated $1 billion net unfavorable revenue impact due to changes under the Inflation Reduction Act (IRA), particularly Medicare Part D redesign.

While IRA provisions like the $2,000 annual out-of-pocket cap are expected to benefit revenues, these are offset by eliminating the Coverage Gap Discount Program and adding manufacturer discounts in certain coverage phases.

The company projects operational revenue growth of flat to 5% year-over-year from the midpoint of 2024 baseline guidance, excluding non-recurring items.

On expenses, Pfizer anticipates full-year 2025 adjusted Selling, Informational, and Administrative expenses of $13.3 billion and $14.3 billion, while adjusted R&D expenses are expected between $10.7 billion and $11.7 billion.

Pfizer estimates total adjusted SI&A and R&D expenses to fall between $24.0 billion and $26.0 billion, reflecting $4.0 billion in savings from its cost realignment program by the end of 2024 and an additional $500 million in savings expected in 2025.

For adjusted EPS, Pfizer projects $2.80 to $3.00 in 2025, reflecting anticipated operational growth of 10% to 18% year-over-year from the midpoint of 2024 baseline guidance.

The expected improvement is attributed to higher revenues, improved operating margins driven by ongoing cost management, and the non-recurrence of one-time items that boosted 2024 adjusted EPS by approximately $0.30.

These items included $1.2 billion in Paxlovid revenue and the removal of Haleon equity method income following the reduction of Pfizer's ownership stake in the fourth quarter of 2024.

The company also reaffirmed its 2024 full-year 2024 guidance.

Dr. Albert Bourla, Pfizer Chairman and Chief Executive Officer, stated: "Pfizer is in a strong position to continue making a positive impact for patients and delivering on our financial commitments in 2025."

He added, "We also expect to continue improving our operating margins with focused financial discipline. We've been successful in delivering on our goal of $4 billion in net operating expense savings through 2024 from our cost realignment program, with an additional $500 million still expected to come in 2025. Additionally, in support of our ongoing efforts to improve gross margin performance, we will work to make additional progress with our Manufacturing Optimization Program in the coming year."

On the conference call, the company said it does not expect material U.S. policy changes regarding vaccines from the incoming administration in 2025.

Price Action: At last check on Tuesday, PFE stock was up 2.46% to $25.87 during the premarket session.

Walmart Teams Up With China's Meituan to Boost E-Commerce

Benzinga News — Tue, 17 Dec 2024 11:44:29 -0500

On Tuesday, Walmart Inc (WMT ) said it has tapped Meituan for its e-commerce delivery services in China.

The retailer's goods will be available on the Chinese delivery company's app, the Wall Street Journal cites Walmart's China unit in a WeChat post. Walmart's e-commerce business in China accounts for nearly 50% of its sales in the country.

In October, Walmart had 332 retail units in the country, including 49 members-only Sam's Club stores, a hit with middle-class Chinese families, the report said.

The collaboration with Meituan came months after Walmart sold its ownership of Chinese e-commerce company JD.com Inc (JD ) for $3.6 billion to focus on other priorities away from China's challenging and competitive market.

In November, Walmart reported that its third-quarter net sales in China rose 17% to $4.9 billion, backed by growth during Chinese holidays. Total sales grew by 5.5% to $169.59 billion, above the consensus of $167.72 billion. The adjusted EPS of 58 cents beat the consensus of 53 cents.

Now, let us look at what is brewing with Walmart in the U.S. In November, Walmart CFO John David Rainey warned that President-elect Donald Trump's proposed tariffs could force Walmart to raise prices on some products.

In an interview with CNBC, Rainey acknowledged certain items may see increases if tariffs, ranging from 10%-20% on imports and up to 60%-100% on Chinese goods, take effect.

While two-thirds of Walmart's products are U.S.-made, tariffs could significantly impact the remaining imports.

Walmart stock surged 79% year-to-date. Investors can gain exposure to the stock through iShares Russell 3000 ETF (IWV ) and iShares MSCI ACWI ETF (ACWI ).

Price Action: WMT stock closed higher by 0.66% at $94.87 on Monday.