Trending tickers: latest investor updates on TSMC, Netflix, Rigetti, Novartis and EasyJet
Shares in TSMC (TSM) were 4% higher in pre-market trading as the world's main producer of advanced AI chips, posted record quarterly profits, driven by surging demand for artificial intelligence processors.
The company reported a 60.7% year-on-year increase in net profit for the second quarter, beating analysts' expectations, as it continues to benefit from strong demand for high-performance chips used in AI applications.
TSMC, which manufactures advanced semiconductors for clients including Nvidia (NVDA) and Apple (AAPL), said it expects third-quarter revenue to reach between $31.8bn (£23.7bn) and $33bn, a 38% increase from a year earlier, and up 8% on the previous quarter at the midpoint of its guidance.
"The primary driver of growth for TSMC has been the robust demand for AI related chips, particularly for the leading edge nodes below 7nm," said Brady Wang, associate director at Counterpoint Research.
Read more: UK jobs market continues to cool, pay growth slows
"Surging demand from the AI boom is highly sustainable in the near term, with AI still in its very beginning stages and continues to expand across industries," Wang added.
Taiwan-listed shares in TSMC (2330.TW) surged nearly 80% last year, but have gained only 5% so far this year amid concerns over tariffs and unfavourable currency exchange rates.
Ben Barringer, global technology analyst at Quilter Cheviot, said: "Geographic expansion continues at pace, with six fabrication plants in Arizona, two in Japan, one in Germany, and 11 in Taiwan meaning nine out of 20 new fabs are now located outside Taiwan. Capital expenditure remains unchanged, signaling stability and some conservatism given macro and tariffs.
"While shipments of Nvidia's H20 inference chips to China were temporarily halted, they have now resumed and a full recovery here would provide a meaningful boost. TSMC is increasingly dominant in production and advanced packaging, with demand exceeding their output."
Netflix (NFLX)
Shares in Netflix (NFLX) were just above the flatline ahead of the US opening bell on Thursday as the streaming company kicks off this season's Big Tech earnings reports.
The company posted revenues of $10.5bn in the first quarter, marking a 13% year-on-year increase. Its earnings per share (EPS) reached $6.61, a 25% rise from the previous year. These results followed strong revenue and EPS growth in the fourth quarter, which had surpassed investor expectations.
Netflix forecasts this positive momentum will continue into the second quarter, with revenues expected to hit $11.04bn, a 15.4% increase compared to the same period last year. Its projected EPS is $7.03, up 44.1% from a year ago. Additionally, the company expects operating margins to rise from 27.2% in Q2 2024 to 33.3%.
Read more: Stocks that are trending today
However, Netflix's price-to-earnings (P/E) ratio stands at 49.62 times forward earnings, significantly higher than the Broadcast Radio and Television industry's forward multiple of 35.79.
"This high valuation suggests Netflix's potential for post-earnings growth is limited, as Wall Street already expects the company to beat second-quarter estimates. If the company fails to meet or exceed projections, investors should prepare for a potential sell-off," Zachs Investment Research said in a note.
Netflix is set to report second-quarter earnings this Thursday, after market close.
Rigetti (RGTI)
Shares in Rigetti Computing (RGTI) were trending in pre-market trading after surging over 30% in the previous session following the company's announcement of a major breakthrough in quantum computing.
Rigetti said it had achieved 99.5% median two-qubit gate fidelity on its 36-qubit system, which means it has cut its error rate in half compared to its previous record. Gate error is a major barrier to quantum computing achieving viability outside the lab.
While 99.5% accuracy seems high, a classical computer has a much lower error rate but it puts the company one step closer to making quantum computing commercially viable.
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The announcement led to an upgrade from a top analyst, who sees more potential upside for the stock. Brian Kinstlinger, an analyst at Alliance Global Partners, raised his price target on Rigetti from $16 to $18, while maintaining his Buy rating.
Rigetti has argued that its chiplet-based architecture is more scalable than traditional monolithic quantum processors, which could give it a competitive advantage as demand for practical quantum applications rises.
"We benefit from the many advantages of superconducting qubits, including gate speeds more than 1,000x faster than other modalities like ion trap and pure atoms, and scalability," Subodh Kulkarni, Rigetti CEO, said.
Novartis (NVS)
Shares in Novartis (NVS) were lower in pre-market trading in the US, as investors appeared unconvinced by the company's announcement of a share buyback of up to $10bn and a raised full-year profit guidance, despite continued demand for key drugs driving growth in second-quarter sales and earnings.
In April, Novartis had narrowed its earnings target range to rule out growth below 10%.
Second-quarter operating income, adjusted for special items, rose 20% to $5.9bn, slightly exceeding analyst forecasts, while sales climbed 12% to $14bn.
The Swiss pharmaceutical company is preparing for the patent expiration of its heart drug Entresto, the company's best-seller, and the arrival of generic competitors. However, it pointed to strong performances from recently launched treatments such as Pluvicto for prostate cancer, Scemblix for leukaemia, and a new indication for breast cancer treatment Kisqali as evidence of the replacement power within its portfolio.
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The new buyback, which runs through 2027, reflects the company's confidence in its medium- to long-term growth prospects and its solid balance sheet, said Novartis chief executive Vas Narasimhan.
"Our robust balance sheet and confidence in our mid- and long-term growth enable us to initiate an up-to $10bn share buyback as part of our commitment to balanced capital allocation," Vas Narasimhan explained.
Earlier this year, Novartis pledged to spend $23bn over the next five years to expand its footprint in the US and recently completed a $15bn repurchase program launched in 2023.
Shares also declined on the Swiss stock exchange, where the company trades under NOVN.SW.
EasyJet (EZJ.L)
Shares in EasyJet (EZJ.L) plunged more than 7% in London after the low-cost carrier warned that 'worsening' air traffic control delays and rising fuel prices would impact its full-year profits, even as it reported strong demand for travel this summer.
The airline forecast a £25m hit to profits for the year ending September, following a third-quarter pre-tax profit increase of £50m to £286m, in line with analyst expectations.
"We are extremely unhappy with the strike action by the French ATC in early July, which as well as presenting unacceptable challenges for customers and crew also created unexpected and significant costs for all airlines," EasyJet CEO Kenton Jarvis said in a statement.
Read more: UK's 'shoddiest' companies revealed after consumer letdowns
While demand for EasyJet's budget-friendly flights and holiday packages has remained strong, the airline noted that travellers are taking longer to book tickets amid deteriorating global macroeconomic sentiment, a trend that it said is ongoing.
EasyJet reported pre-tax profits of £286m for the three months to the end of June, a 21% year-on-year rise, in line with analyst estimates.
Passenger numbers grew 2%, with the carrier benefiting from the timing of Easter, which fell in the third quarter this year. The airline expressed optimism about the peak summer months and said its outlook for the rest of the financial year 'remains positive,' forecasting 'good profit growth' year on year.Sign in to access your portfolio
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