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00:00And right now we are two minutes away from the end of the trading day.
00:03Romain Bastet taking you through to that closing bell.
00:06It's a global simulcast.
00:07Carol Masser and Tim Stenevich may join us now.
00:10Welcome to our audiences across all of our Bloomberg platforms, television, radio,
00:13our partnership with YouTube.
00:16A little bit of a sentiment shift here on the day, Carol Masser.
00:19Coming off the record highs yesterday, we are modestly lower for most of the major indices
00:23that we should just flag for our viewers and our listeners.
00:26We are going to get some major earnings coming down the pike in just a matter of minutes,
00:30including from the best performing stock of the year, SanDisk.
00:33Yeah, I'm looking forward to that.
00:35Western Digital also coming out with earnings.
00:37You've got Expedia, eBay, Duolingo, Elf Beauty, Honeywell Aerospace, DoorDash.
00:44I mean, there's a lot coming.
00:45You didn't say AppLovin, did you?
00:46AppLovin?
00:47You didn't say AppLovin.
00:48I didn't.
00:48I left that for you.
00:49AppLovin.
00:50That's because I'm loving you and I'm giving you AppLovin.
00:53Oh, see Romain.
00:55Wow.
00:55Get a room with you.
00:56The love over here.
00:58No, we're like, you know.
01:00Well, you're actually in a room, but all right, I got you.
01:02But we get to this idea of the earnings season.
01:04I know, look, so much hay has been made of the AI trade.
01:06Yeah.
01:07You were sitting here yesterday when AMD and SpaceX crossed the wire.
01:10And, you know, we're going to hear from SanDisk, a stock that's just took a beating last month,
01:14down 50% in the month of July, still up like, you know, 400 plus percent on a year-to
01:19-date basis.
01:19But it gets to this idea of just how much risk appetite is still there for some of these high
01:24multiple names.
01:25Agreed.
01:26So we will watch, and we will be breaking them down in just a moment.
01:28But we've just got 20 seconds.
01:31And will it be a record on the S&P?
01:33Doesn't look like it's going to be that way, Romain.
01:35Yeah, it looks like the S&P fading into the close here.
01:38It's been holding right around the waterline for most of the session here.
01:41But now down almost 14 points.
01:44It looks like that's where it's going to settle.
01:45It's going to basically be down about two-tenths of a percent on the day.
01:48The Dow Jones Industrial Average was closed at a record high today, adding about 260-plus points, or a half
01:54a percent today.
01:55So, yes, that is another record high.
01:56The NASDAQ Composite and NASDAQ 100 each down about eight-tenths of one percent.
02:01And the Russell 2000, Carol, losing about 18 points, or six-tenths of one percent.
02:05Almost an even split in the S&P 500.
02:08In the S&P, we had 245 names move higher.
02:11256 names move lower today.
02:14Yeah, and we talk about sort of what's been leading the market yesterday.
02:17On the sector basis, it was all tech.
02:19Today, it was materials up one-and-a-half percent.
02:22Health care up a percent on the day.
02:24Financials up two-tenths of a percent.
02:26And then everything else just faded.
02:28Technology stocks as a group basically unchanged.
02:31Communication Services down two percent.
02:33And a big part of that was the big downdraft that we saw in Alphabet.
02:37All right, guys, let's get to some of the individual gainers as we await some earnings.
02:41NVIDIA, that stock up 3.4 percent off its highs, but nonetheless a gainer on this Wednesday.
02:47That company, as I mentioned, up more than three percent.
02:50Stock gaining after SpaceX said it would exclusively use NVIDIA AI chips.
02:55SpaceX expects to have approximately two gigawatts of computing capacity by the end of this year.
03:00It could rise to as much as 10 gigawatts next year.
03:02That's its projections.
03:04Nonetheless, it gave Romain a boost to NVIDIA.
03:06The stock up roughly 17 percent year-to-date.
03:08Yeah, a little bit earlier, we got earnings out of booking.
03:11Those shares rallied 12 percent on the day.
03:13We're now hearing from one of its competitors, Expedia.
03:15Those shares slightly higher in the after-hours trade after the company said gross bookings in the quarter
03:20did come in slightly above estimates at $33.93 billion.
03:24Revenue, $4.32 billion.
03:27That's also a beat.
03:28Adjusted EPS, $5.76, and that is a beat.
03:32Here's your guidance.
03:33For the full year, the company says expect revenue of $16.05 to $16.22 billion.
03:38That is a raising of their guidance.
03:41Their previous guidance was $15.6 to $16 billion.
03:44So basically a beat and raise quarter for the company as you see the shares just slightly higher, up about
03:501.5 percent.
03:51Yeah, the stock's actually up about 12 percent year-to-date.
03:53It looks like it might be actually, in the regular session, maybe closing at a record high.
03:58But nonetheless, we did see it hit a 52-week high in today's session.
04:01Again, investors liking what they heard from the company, up about 5 percent here now in the aftermarket.
04:08Second quarter adjusted EBITDA, $1.12 billion versus $1.04.
04:12And then in terms of the outlook, just to go back there, sees third quarter revenue $4.65 to $4
04:17.75.
04:18And, Tim, that is a boost.
04:20Estimate on the street was $4.66 billion.
04:22Yeah, for Expedia, GroupShare is up 4.8 percent right now.
04:25Arian Gorin, the CEO of the company, she said, quote,
04:28we continue to strengthen our marketplace through more personalized consumer product experiences
04:32and expanded supply across our business while leveraging AI as a force multiplier
04:37to innovate faster and operate more efficiently.
04:39Secondly, I guess I want to know more details about how they're using AI and how it made them more
04:44efficient.
04:45I think people could say, okay, well, the conversation is starting to shift from these companies now
04:49adopting this technology and making them more efficient.
04:51So where does that show up on the bottom line?
04:53All right, we're going to wait for some more earnings.
04:55I'm going to go back to some gainers.
04:56Shopify have to mention, at its highs, up almost 25 percent today, finishing the day with a gain of about
05:0117 percent.
05:03Number one gainer in the NASDAQ 100 today, the highest level since January.
05:08The e-commerce giant reported third-quarter revenue outlook beating expectations,
05:12strengthening the view that it faces limited disruption from artificial intelligence.
05:17Revenue is seen growing at a low 30s percentage rate ahead of Wall Street's expectation of a 27 percent jump.
05:23It would mark the sixth consecutive quarter revenue growth exceeding 30 percent.
05:27Keep in mind, the stock has definitely been under pressure.
05:30It had fallen 23 percent this year through Tuesday's close.
05:34Stock now still down about 10 percent amid concerns about AI disruption,
05:38but maybe easing some of those investor concerns remain.
05:41Block XYZ.
05:43Jack Dorsey's company out with its earnings.
05:45Second quarter revenue does appear to be a beat, particularly with its square segment revenue.
05:49But the redhead has to do with their third quarter forecast.
05:52The company says operating income for the current quarter will be $875 million.
05:57That's above street estimates of roughly about $866 million.
06:02The company also says that for the quarter it expects gross profit of about $3.13 billion.
06:07That's just a nudge higher than what the street was looking for for this particular quarter.
06:13The company also providing some full-year guidance.
06:15It's also just a smidge above analyst estimates.
06:18Yeah, absolutely.
06:19Just going through the snapshot here, you mentioned some of the highlights.
06:23Just looking for some commentary here.
06:26So, again, sees adjusted operating income for the third quarter, $875 million.
06:30The estimate was $865.7 million.
06:33Sees gross profit of $3.13 billion.
06:35The estimate is for $3.12 billion, so a little bit better.
06:38And, again, seeing adjusted operating margin of about 28 percent.
06:41Tim, that stock bouncing around in the aftermarket now unchanged, but we did see it a little bit higher earlier
06:45on.
06:45Remember, this is the company that a few quarters ago shocked the markets by massive layoffs.
06:50A lot of people in the wake of that said, okay, well, it was because of overhiring that happened during
06:54the pandemic.
06:55But, again, going back to what everybody's looking for, okay, did AI replace these employees?
07:02Is AI making the company more efficient?
07:04Shares a block.
07:05Initial reaction now up more than 4 percent in the after hours.
07:08All right.
07:09Well, we're starting to get some numbers trickling out here right now for Western Digital.
07:13The company that now wants to be referred to as WD, one of the big memory storage device makers.
07:20The company says that net revenue for the quarter did come in at about $3.75 billion.
07:26The street, on average, was looking for $3.68.
07:28So that is a beat.
07:29Adjusted EPS coming in at $3.56 a share.
07:33The street was looking for $3.31.
07:37This release is a bit of a beast to parse through.
07:39But you see the reaction in the shares there.
07:41They're down about 12 percent.
07:43So the numbers for the most recent quarter did beat.
07:45But, clearly, something else in here that investors are focusing on.
07:48And it might have to do with the forecast.
07:50The company says that for the current quarter, which is its fiscal first quarter,
07:53it expects revenue of $4 billion to $4.2 billion.
07:57The street was looking for $4 billion on average.
07:59So the low end of that range, pretty much on the nose of what the street was looking for.
08:03The company says gross margin in the quarter will be 56 percent.
08:06The street was looking for 53.8.
08:08The company says operating expenses in the quarter will be lower than what the street was looking for.
08:13What's the problem?
08:14At $3.98 to $400 million.
08:15And adjusted EPS in the quarter will be $3.85 to $4.15, the low end of that range above
08:22the average of street estimates.
08:23What's the problem?
08:24High expectations?
08:25Yeah.
08:25Well, the stock's up more than 200 percent year-to-date.
08:28So I would definitely go into that.
08:30I mean, again, going to some of the outlook here.
08:33The company sees first quarter adjusted gross margin 55 percent to 56.
08:36The estimate was 53.8.
08:38So that's, I would say, upbeat there.
08:41The company sees first quarter operating expenses.
08:44Looks like they're reining them in a little bit.
08:46$390 million to $400 million.
08:48The estimate was $475.3 million.
08:52And then Western Digital sees first quarter adjusted EPS, $385 to $4.15 a share.
08:58The estimate on the street was $383.
09:00So this is a little, I got a little head scratching here.
09:04But the company, commentary from the company's CEO, now, as Romain mentioned, WD, is how the company wants to be
09:11referred to.
09:12Irving Tan, it says that demand is, that they have confidence in demand.
09:16He says, quote, as global data creation continues to accelerate, we enter fiscal year 2027 with continued confidence in the
09:22durability of demand and with increasing visibility into our business.
09:27With our scale technology leadership and operational discipline, WD is well positioned to capitalize on the secular data growth opportunity
09:34and deliver long-term shareholder value.
09:36I just want to point out real, sorry, just real quickly.
09:38We are still waiting, Sanders.
09:39And I should point, there is a ton of trading activity going on in it right now.
09:42Those shares are also down about 8 percent.
09:44The release has been posted on the company's website.
09:47We have not gotten it on the Bloomberg terminal.
09:49And we should also point out that the files on the company's website right now are not actually coming up
09:54here.
09:55So it's not clear whether people have actually seen the numbers just yet and are reacting to that or whether
09:59they're reacting to what they heard from Western Digital.
10:01Of course, Western Digital, the company that spun off SanDisk last year.
10:05We've got it on the terminal now.
10:08SanDisk, fiscal fourth quarter revenue was $8.97 billion, up 51 percent sequentially.
10:14Gap net income reported at $6.9 billion.
10:17Sequential revenue growth came approximately one-third from higher volumes and two-thirds from higher pricing, which is always great
10:27for margins.
10:27But it's something to keep in mind in terms of when we look through these numbers.
10:31Fourth quarter non-gap diluted net income per share was $39.25 a share.
10:35So we're just starting to get some stuff here, Romain.
10:37Yeah, I'm going to hold off just a little bit here.
10:39I'm not quite getting all of those on my terminal as well.
10:42But you see the reaction.
10:43And it gets back to this idea that you were getting at, Tim, this idea of high expectations.
10:48Of course, Western Digital had been on a tear, but SanDisk had been on even a greater tear here.
10:52And it raises a lot of questions as to exactly what actually constitutes a real beat in this day and
10:57age.
10:58Yeah, we got Jake Silverman coming up.
11:00He covers semiconductors for Bloomberg Intelligence.
11:02He's going to be joining us.
11:03But look, the backdrop is that their demand is high for this stuff.
11:07Look at what the stocks have done so far this year.
11:09Look at what Apple has had to do as a result of higher input costs, raising prices for certain items.
11:14The question is, how long does that demand go on?
11:16And, you know, is there actual competition from China that U.S. companies can have access to?
11:21Just going through SanDisk a little bit more, expanding their share, repurchase authorization, approving an additional $14 billion buyback, bringing
11:28total remaining authorization to $15.5 billion.
11:30But you're right.
11:31We're looking for some comparisons here.
11:33But I'm always a little suspect, too, going back to who we're talking about.
11:37Was it Western Digital cutting their CapEx?
11:40And, like, why?
11:41When it has rained in a little bit, why is that happening?
11:44All right, guys, that is a wrap.
11:46SanDisk down, just shy of 5%.
11:48Now 5% in the aftermarket.
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