markets

Luke Kawa5/19/25

China “demands” that the US “correct its mistakes” on semiconductor restrictions

Last week started with a massive rally in US stocks thanks to a trade truce with China.

This week begins on more of a negative note amid news that this aforementioned detente might be taking a bit of a turn for the worse.

While it’s certainly not the cause of the down morning for US stocks, China’s commerce ministry is taking exception with its counterparts in America who last week said that the use of Huawei’s AI chips “anywhere in the world” violates US export restrictions.

“The US’s actions seriously undermined the consensus reached at the China-US Geneva high-level talks and demanded that the US correct its mistakes,” per a translation of remarks from a spokesperson for China’s Ministry of Commerce. “If the US insists on its own way and continues to substantially damage China’s interests, China will take resolute measures to safeguard its legitimate rights and interests.”

The VanEck Semiconductor ETF is off about 0.4% as of 11:40 a.m. ET, well off its lows of the morning and above levels seen prior to these comments hitting the wires premarket.

The AI data center trade has played a critical role in the S&P 500’s comeback from its April 8 trough, thanks in part to the easing of export restrictions that allowed last week’s massive deals between Saudi Arabia and the likes of Nvidia as well as Super Micro to take shape.

But China is a much bigger market than Saudi Arabia for semiconductors, and where the dust settles after any regulatory revamp by the Trump administration is an open question. China’s concern is clearly that the direction of travel isn’t as friendly as it would have suspected given the recent broad thawing of trade tensions between the two nations.

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Matt Phillips7h

Enphase drops as guidance and results fail to impress investors

Enphase Energy fell in after-hours trading Tuesday as uninspiring Q2 guidance overshadowed better-than-expected numbers in its Q1 earnings report. The maker of solar power and battery equipment reported:

Sales of $282.9 million vs. the $282.3 million FactSet expectation.
Non-GAAP diluted earnings per share of $0.47 vs. the $0.43 consensus estimate.
Q2 guidance for revenue between $280 million and $310 million ($295 million at the midpoint) vs. the $294.9 million forecast.

Enphase was a sometimes popular retail trade of the Covid era, when federal tax credits and low interest rates led to a burst of activity for rooftop solar installation. Between the end of 2019 and 2022, the shares rose more than 1,000%.

But as interest rates rose — driven, in part, by both Fed hikes and worries the increases wouldn’t be enough to quell price growth — and Republicans stripped out key tax credits and subsidies for the solar sector from the federal budget, the shares tanked. They’ve lost nearly 90% of their value since peaking in December 2022, and have emerged as a favorite of short sellers. Roughly 20% of the company’s public float is now in the hands of bearish traders.

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Matt Phillips7h

Bloom Energy surges after reporting huge Q1 revenue beat, big guidance hike

Fuel cell maker and momentum trading favorite Bloom Energy surged late Tuesday after reporting Q1 earnings and revenue that trounced Wall Street expectations while ratcheting guidance higher. Here are the numbers:

Q1 adjusted earnings per share of $0.44 vs. the $0.12 expected by analysts, according to FactSet.
Revenue of $751.1 million vs. the $539.9 million consensus forecast.
Full-year EPS guidance of between $1.85 and $2.25 vs. previous guidance of between $1.33 and $1.48 and Wall Street expectations for $1.42.

Bloom Energy shares have been ripping in 2026. They’ve doubled this year, and were up sharply in April after the company announced that it was expanding a deal to supply its fuel cells to Oracle’s data centers. (Oracle also received warrants in April to buy Bloom stock as part of a previous deal.)

The rise of the stock — it’s up more than 1,200% over the last 12 months — has been driven by a simultaneous rise in market sentiment and expectations for business results. Analysts have lifted their full-year 2026 earnings expectations for Bloom by about 30% since the start of the year.

But even accounting for those improving fundamentals, the stock is still quite highly priced by conventional metrics, trading at a multiple of almost 120x earnings over the next 12 months and about 17x expected sales.

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Matt Phillips7h

Seagate soars on strong quarterly numbers, guidance far above expectations

Seagate Technology Holdings ripped late Tuesday after the maker of hard disk drives, relatively cheap data storage devices, reported better-than-expected quarterly numbers and guidance in its earnings report. Seagate reported:

Revenue of $3.11 billion vs. the $2.96 billion expectation from Wall Street analysts, per FactSet.
Adjusted earnings per share of $4.10 vs. the $3.51 anticipated on the Street.
EPS guidance of between $4.80 and $5.20 (midpoint $5.00) for the current quarter — which ends in June — vs. the $3.99 expectation.
Sales guidance of between $3.35 billion and $3.55 billion ($3.45 midpoint) for the current quarter vs. Wall Street’s expectation for $3.16 billion.

The sudden explosion of Seagate shares — and those of its disk-making rival, Western Digital — has been one of the more surprising outgrowths of the AI boom.

A little over a year ago, on April 8, 2025, Seagate shares had been essentially flat for over a decade. (They ended that day up 0.1% since the end of 2014.) Since then, they’re up roughly 800%, as the reality of seemingly endless AI-related demand for data storage has become plain.

Perhaps most impressive is that the pace of the gains is quickening. If the after-hours gains hold, Seagate is on track for April to be its the best month since October 2011.

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