11/27/24

Tech sell-off drags S&P 500 lower

The S&P 500 slumped 0.3%, the Nasdaq 100 fell 0.9%, and the Russell 2000 eked out a 0.1% gain ahead of the Thanksgiving holiday. Activity was light, with total US volumes traded about 20% below their one-month average.

Despite the retreat in the benchmark US stock gauge, more S&P 500 constituents rose than fell.

Technology was the worst-performing S&P 500 sector ETF, down 1.4%. It was an off day for the Magnificent 7, with all except Alphabet falling, though the performance for the cohort was in line with the sector as a whole.

Dell and HP were the worst two performers on the S&P 500, down double digits after posting underwhelming sales.

The defensively-geared real-estate and healthcare sectors gained, and were tops on the S&P 500 sector leaderboard.

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Claire Yubin Oh

ANOTHER ONE BITES THE DUST

37m

Electronic Arts set to go private in $55 billion deal — the latest in a long line of disappearing stocks

The “Madden” maker is set to join a growing group of listed companies that are deciding to drop out of exchanges.

Luke Kawa40m

Nvidia jumps as Jefferies hikes price target to $220 from $205

Nvidia is off to a great start this week, buoyed by Jefferies analyst Blayne Curtis hiking his price target on the $4 trillion chip designer to $220 from $205 thanks to the recent announcement of its $100 million investment in OpenAI to enhance and accelerate the build-out of data centers.

Curtis wrote:

“Management made clear the strategic partnership represents incremental demand for NVDA and does not overlap with existing OAI plans with ORCL or MSFT. Raising estimates based on the new partnership. Raising revenue for C26/C27 to $282B/$334B (vs St. $279B/$328B) from $269B/$300B, respectively. Raising EPS for C26/C27 to $6.55/$7.72 (vs St. $6.49/$7.57) from $6.09/$6.71.”

Matt Phillips49m

Disk drive makers rip, analyst cites conviction on cycle upswing

Western Digital and Seagate Technology Holdings — makers of the affordable data storage devices known as hard disk drives — surged Monday amid a general upswing in the AI data center trade and after a specific shout-out to the sector by Morgan Stanley IT analysts.

The analysts ratcheted up their price targets — to $171 from $99 for WDC, and to $265 from $168 for Seagate — and earnings estimates for both stocks, both of which they rate “overweight” (essentially a “buy”).

They wrote:

“While we’ve been hard disk drive (HDD) bulls for the better part of two years, HDD demand has recently inflected — the result of strengthening cloud infrastructure spending ($3T through 2028), accelerating investments in data-enabling technologies, and AI inferencing — both agentic and multi-modal — emerging as an incremental tailwind to data-rich media generation and data retention needs.

At the same time, the market remains up to 10% undersupplied per our recent checks, and as a result, nearline HDD prices are firming and visibility has recently extended into [the first half of calender 2027], an unprecedented 18+ months from now.”

The two disk drive makers are the second- and third-best performers in the S&P 500 this year, with Seagate up roughly 170% and Western Digital up about 160%.

Nia Warfield2h

Carnival beats on earnings and revenue, boosts full-year outlook again

Carnival beat earnings expectations and raised its outlook for the third time this year, as the cruise operator also posted record revenue.

Shares were slightly lower in early trading Monday. The stock has been hot recently, having climbed about 57% over the past six months, though it has cooled off in September.

Earnings per share came in at $1.43, just ahead of estimates of $1.32 from analysts polled by FactSet. Revenue hit $8.2 billion, also topping expectations, fueled by resilient travel demand and higher onboard spending.

Looking ahead: Carnival now expects adjusted net income to climb nearly 55% from 2024, better than its June guidance of 44% better. Adjusted EBITDA is projected at $7.05 billion, up 15% year over year and also topping prior guidance of $6.9 billion.

J. Edward Moreno2h

Merus surges after Genmab says it will acquire it for $8 billion

Danish biotech Genmab announced on Monday that it will acquire cancer startup Merus in an all-cash deal worth about $8 billion.

Genmab is buying Merus for $97 per share, a roughly 40% premium over its closing price as of Friday. The deal was approved unanimously by both companies’ boards, Genmab said.

Merus’ experimental drug, petosemtamab, has shown encouraging results in mid-stage trials for metastatic head and neck cancer. The stock jumped more than 30% in premarket trading once the acquisition was announced.

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