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Luke Kawa

The “most bullish thing” UBS heard Nvidia say

Nvidia’s robust rally following its earnings report and management’s conference call is proof enough that investors are picking up what Jensen Huang and co. are putting down.

But what exactly is engendering enhanced optimism about the state of an AI boom that is already well in bloom?

Well, here’s UBS Securities analyst Timothy Arcuri, who has a “buy” rating and $175 price target on the shares, on what stuck out the most to him:

“The most bullish thing we heard on this call was that, ‘on average, hyperscalers are each deploying nearly 1000 NVL72 racks, or 72,000 Blackwell GPUs per week’ and are ‘on track to further ramp output this quarter.’ When queried, management again affirmed that this is 1k racks PER week PER hyperscaler. This is much higher than almost all estimates regarding rack shipments and implies a run rate of at least 10k/month — a number that seems too high to use, but makes the point that racks are really taking off.”

In other words, the newest racks (which required some tweaks earlier in the year to solve overheating issues) are now flying off the shelves and into data centers at a rapid pace.

Arcuri’s observation related to these remarks from CFO Colette Kress on the conference call:

“The introduction of GB200 NVL was a fundamental architectural change to enable data-center-scale workloads and to achieve the lowest cost per inference token. While these systems are complex to build, we have seen a significant improvement in manufacturing yields, and rack shipments are moving to strong rates to end customers. GB200 NVL racks are now generally available for model builders, enterprises, and sovereign customers to develop and deploy AI.

On average, major hyperscalers are each deploying nearly 1,000 NVL72 racks or 72,000 Blackwell GPUs per week and are on track to further ramp output this quarter. Microsoft, for example, has already deployed tens of thousands of Blackwell GPUs and is expected to ramp to hundreds of thousands of GB200s with OpenAI as one of its key customers.”

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IBM Analysts React Man Reading Report

Analysts parse IBM earnings, see weakness, stock slides

IBM is on track for its worst trading day in months.

Matt Phillips2h
markets
Max Knoblauch

Southwest sinks on bearish options activity following its third-quarter earnings beat

Southwest’s first full quarter of baggage fees drove it to a revenue record and a profit beat, sending shares higher in after-hours trading on Wednesday. But on Thursday morning, its shares are down more than 5%.

As of 10:50 a.m. ET, more than 31,000 put options in Southwest Airlines have changed hands. That’s already about 50% above its 20-day average for a full session. Thursday’s trading was particularly skewed toward puts, with a put/call ratio of about 3.3 versus Southwest’s 20-day average ratio of less than 1.4.

The bearish options activity coincides with Southwest’s earnings call on Thursday, which apparently isn’t doing much to inspire optimism.

markets
Nia Warfield

Las Vegas Sands soars as Q3 earnings beat and Macau momentum fuel analyst optimism

Shares of Las Vegas Sands leapt over 12% Thursday morning after the casino operator reported a strong third quarter fueled by booming business at its properties in Macau and Singapore.

Adjusted earnings per share came in at $0.78, beating analyst expectations of $0.62. Revenue hit $3.3 billion, also above the Street’s forecast of $3.05 billion. The company plans to raise its annual dividend by $0.20 for 2026, bringing the total payout to $1.20 per share.

“We remain enthusiastic about our growth opportunities in both Macao and Singapore as we realize the benefits of our recently completed capital investment programs,” Chairman and CEO Robert G. Goldstein said in a statement.

Analysts were optimistic on the results:

  • Stifel kept its “buy” rating and raised its price target to $68 from $60.

  • Barclays maintained a “buy” rating and lifted its target to $62 from $59.

  • Goldman Sachs held a “neutral” rating but boosted its target to $64 from $57.

  • Mizuho kept its “buy” rating and raised its target to $63 from $56.

  • Macquarie maintained a “neutral” rating but increased its target to $64 from $62.

markets
Luke Kawa

Super Micro slumps after announcing preliminary Q1 net sales far below Wall Street’s expectations

Super Micro Computer is slumping after management delivered a preliminary revenue update that came in far short of what the Street was expecting.

Net sales for the quarter ended September 30 (the company’s fiscal Q1 2026) will be about $5 billion, according to a press release, which is below its guidance for $6 billion to $7 billion and below the average analyst estimate of just short of $6.5 billion.

Management attributed this to “recent design wins in excess of $12 billion, requesting delivery in the second quarter of fiscal year 2026 (Q2’26).”

Charles Liang, President and CEO reitereated the company’s expectation of $33 billion in revenues for the fiscal year that started in July, saying “We see customer demand accelerating, and we are gaining AI share.”

If net sales do come in around $5 billion, that would be a roughly 20% decline versus the same period in 2024.

This is not the first time this year that Super Micro has preannounced a revenue miss and effectively blamed it on timing issues.

On April 29, the company preannounced disappointing results and said, “During Q3 some delayed customer platform decisions moved sales into Q4.” Pushing back the timing of a big revenue ramp has been a common theme for Super Micro throughout the year.

As we wrote in August:

“If I could boil down the cause of the substantial volatility in shares of Super Micro Computer this year to one sentence, it would be this: it’s in the AI business — which is clearly booming — and management makes big promises on sales that it fails to deliver on.

Sales are the football, management is Lucy, and investors are Charlie Brown, falling for each renewed promise and then having it yanked away and landing flat on their backs.”

Super Micro scheduled an earnings call for Nov. 4 to discuss the outlook for second-quarter revenues and deliveries.

markets
J. Edward Moreno

West Pharmaceutical jumps on continued GLP-1 demand

West Pharmaceutical, which manufactures injectable pharmaceutical packaging, rose more than 14% in early trading after it reported earnings results that beat Wall Street estimates, bolstered by sales of components that go into GLP-1 pens.

The company reported adjusted earnings per share of $1.96 for the quarter, more than the $1.68 analysts polled by FactSet were penciling in. West also reported sales of $805 million, crushing the $785.7 million the Street was expecting.

The company attributed the strong report to growth in its GLP-1 elastomers, which are small rubber components that go into the pens that deliver the blockbuster weight-loss drugs made by Novo Nordisk and Eli Lilly. Those parts accounted for 9% of sales for the quarter, the company said.

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