Morgan Stanley's highest conviction picks into earnings
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Yahoo
6 minutes ago
- Yahoo
Super Micro Q4 Earnings Loom--Should You Buy, Hold, or Sell?
Aug 1 - Super Micro Computer (NASDAQ:SMCI) prepares to report fiscal fourth-quarter 2025 results on August 5, with analysts watching for a potential earnings surprise as the company leans on surging AI infrastructure demand. Wall Street expects revenue near $6 billion, slightly below the midpoint of management's prior outlook, and EPS estimates also reflect modest expectations. The San Jose-based server and data center solutions provider navigated a soft fiscal Q3 as revenue came in at $4.6 billion, up 19% year-over-year but just shy of forecasts. Management attributed the shortfall to customers delaying purchases amid the transition from Nvidia's (NVDA) Hopper to Blackwell GPUs, with deferred orders expected to contribute to a stronger Q4 and early fiscal 2026. Warning! GuruFocus has detected 7 Warning Signs with SMCI. Super Micro continues to expand globally, launching over 30 new Blackwell-based AI server solutions and forming a multi?year, $20 billion partnership with Saudi DataVolt to deploy ultra?dense GPU platforms in the U.S., U.K., and Saudi Arabia. With 9% share of the AI platform market and 31% in branded AI servers, the company positions itself for growth as liquid?cooled and high?density solutions drive demand. Investors now look for confirmation that Q3 was a reset, not a slowdown. Based on the one year price targets offered by 16 analysts, the average target price for Super Micro Computer Inc is $41.06 with a high estimate of $70.00 and a low estimate of $15.00. The average target implies a downside of -27.40% from the current price of $56.55. Based on GuruFocus estimates, the estimated GF Value for Super Micro Computer Inc in one year is $71.09, suggesting a upside of +25.71% from the current price of $56.55. Gf value is Gurufocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. For deeper insights, visit the forecast page. This article first appeared on GuruFocus.
USA Today
7 minutes ago
- USA Today
Shock jobs report stirs recession fears: 5 takeaways
The disappointing July jobs report threw a bucket of cold water on an economic outlook that appeared to be holding up surprisingly well despite President Donald Trump's high import tariffs, immigration crackdown and widespread federal layoffs. Not only did employers add a disappointing 73,000 jobs – well below the 105,000 expected – but payroll gains for May and June were revised downward by a whopping 258,000. That left May's additions at 19,000 and June's at 14,000, the weakest performance since the nation was climbing out of the COVID-19 recession in December 2020. In early afternoon trading, the Dow Jones Industrial Average was down about 607 points and the benchmark S&P 500 index was off 1.5% Over the past three months, the economy has averaged just 35,000 employment gains. Here are a few takeaways: This was no blip The poor showing likely wasn't an outlier that will be followed by a resumption of healthy job gains in the months ahead, economists said. Consumers have reined in their spending somewhat, amid worries about Trump's tariffs pushing up prices, and are pulling back on travel and recreational activities. As more of the import charges hit store shelves, Americans will likely restrain their outlays further, Pantheon Macroeconomics wrote in a note to clients. That should translate into weaker job gains, especially in sectors such as manufacturing, retail, trucking and warehousing, the research firm said. And on July 31, Trump escalated his global trade fight with a sweeping new round of import levies. Meanwhile, executives' confidence in the business outlook has been shaken in recent months by the tariffs – which are squeezing profit margins – and that's expected to spell a more pronounced decline in business investment, Pantheon said. 'Sadly, employment appears set for a further summer slowdown as firms, facing renewed cost volatility from escalating trade tensions, remain focused on managing labor costs through reduced hiring, performance-based layoffs, restrained wage growth, and lower entry-level wages,' Gregory Daco, chief economist of EY-Parthenon, wrote to clients. Also, after the Supreme Court recently lifted a stay on mass federal layoffs, 'the decline in federal employment likely will gather more momentum over the coming months,' Pantheon said. The Labor Department has tracked 84,000 federal job losses this year, but the number of buyouts and job cuts announced was much larger. Hiring across the economy hit a 12-month low in June, Labor Department figures show. Will there be a recession in 2025? The dreaded word has slipped back into the conversation after fading the past couple of months as Trump delayed many tariffs and reached deals with several countries. 'To me, today's jobs report is what entering a recession looks like,' Josh Bivens, chief economist of the left-leaning Economic Policy Institute, said in a statement. 'Could we pull up? Sure. But if we look back and end up dating an official recession that starts 3-6 months from now, this is what it would look like today – rapid softening/deterioration in the labor market.' A recession now appears 'very, very likely' unless Trump lowers the tariffs by Labor Day, said Mark Zandi, chief economist of Moody's Analytics. Could a skidding economy and stock market lead Trump to reverse course? A darkening economic outlook and tumbling stock market could well prompt Trump to try to soften the import fees, Zandi said. 'He's going to try to pull it back,' he said. But if he doesn't act before Labor Day, 'It will be too late,' Zandi said, adding the duties will start to ripple too dramatically into retail prices and consumer and business sentiment for the effects to be undone. A September fed rate cut likely At a July 30 news conference following the Fed's decision to hold rates steady for a fifth straight meeting, Fed Chair Jerome Powell described the labor market as solid and balanced. He also said officials would focus primarily on the unemployment rate as they decide whether to lower rates in September. The jobless rate edged up to 4.2% in July. It's still historically low even as Trump's immigration constraints, particularly deportations, shrank the labor force – the pool of people working or looking for jobs. Still, employer demand for employees has waned. But Morgan Stanley suggested the feeble job gains of the past three months would spur the Fed to act in September despite stable unemployment. 'The slower payroll pace keeps downside risks elevated and a September cut on the table,' Morgan Stanley said in a research note. Fed fund futures markets are now putting the chances of a September rate decrease at 85%, up from 45% after Powell's July 30 remarks. AI is starting to crimp job gains Professional and business services shed 14,000 jobs in July and payroll gains in the sprawling white-collar sector have been stagnant for more than two years. July's showing included job losses in computer and technical roles. Staffing executives say companies are replacing many entry-level information technology workers with artificial intelligence. 'It is happening,' Goldman Sachs chief economist Jan Hatzius said on CNBC after the release of the July jobs report. 'This is not the main thing driving the labor market... But we're seeing early signs.'
CNBC
8 minutes ago
- CNBC
Nvidia will be the ‘best beneficiary' of AI spending, says Morgan Stanley's Joseph Moore
Joseph Moore, senior semiconductor analyst at Morgan Stanley, joins CNBC's 'The Exchange' to discuss what companies would benefit from AI spending, his take on Nvidia and Broadcom, and more.
