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Market Update: Nasdaq Rises | CDNS, FFIV, GLW Up Big Today
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Technology Stocks Keep Rallying
Technology stocks are leading the market today, with AI stocks seeing big gains.
- Broadcom (Nasdaq: AVGO): Is up 3.8% on reports that OpenAI is working with the company and Taiwan Semiconductor (NYSE: TSM) to build custom chips. The chips are expected to go into production in 2026.
- Lam Research (Nasdaq: LCRX): Is rallying alongside other semiconductor equipment stocks like Tokyo Electron.
- Advanced Micro Devices (Nasdaq: AMD): Is also seeing strong gains, up 3.7% on the day. The company is rising into earnings, where its expected to significantly expand operating margins.
Consumer Confidence Sees Massive Acceleration
Economic measures have been growing across the board in recent months. Today’s Consumer Confidence reading might be one of the more ‘eye-popping’ macroeconomic numbers to be released in recent months.
The Conference Board’s ‘Present Situation Index’ rose to 138 in October. The last time the reading jumped this much in a single month was March 2001.
Consumer confidence is rebounding sharply, but it’s still far below readings in 2019 when the ‘Present Situation Index’ reached more than 170.
Ford Down 9% Today
Ford (NYSE: F) reported earnings after the bell last night, and the stock is suffering today. The number in focus is profitability. Ford had previously given a range of operating earnings (EBIT) of $10 to $12 billion, but now expects to come in at the low end of that range.
Overall, earnings for last quarter were good. The company delivered adjusted earnings of $.49 per share (ahead of expectations of $.47) and beat on revenue. However, the forecast of higher expense pressure in the future is what’s on investor’s minds today as the stock is down 9%.
Ford lost $1.22 billion on its “Model E” electric vehicle in the third quarter. This investment continues to weigh on the bottom line as Ford has been unable to drive more market share in the EV space.
As of 12:45 p.m. ET on October 29th, the Nasdaq Composite is up 88.64 points on the today (.48%). The biggest gainers in the market are clustered in the technology sector. Communications Services (which includes companies like Meta Platforms) is up 1.03% while Information Technology is up .85%.
Lagging are industries like utilities (-1.66%), Energy (-1.32%), and Real Estate (.73%). While the Nasdaq and S&P 500 are currently up, 8 out of 11 sectors are down. So today is hardly a broad-based rally but is instead concentrated in growth stocks and technology.
Let’s look at some of today’s biggest storylines.
Market Indexes
- S&P 500: Up 8.22 (+.14%)
- Dow Jones Industrial Average: Down 94.46 (-.23%)
- Russell 2000: Down 14.63 (+.66%)
Technology Stocks Crush Earnings
Some of the biggest earnings winners from last night include F5 Networks (Nasdaq: FFIV), Cadence Design Systems (Nasdaq: CDNS), and Corning (NYSE: GLW). Let’s examine why each stock is jumping today.
- F5 Networks: Reported EPS of $3.67 versus expectations of $3.45, which is up from $3.50 last year. Guidance for next year has revenue up 4-5% while EPS is expected to grow at a 5-7% clip. Importantly, the company said that during the third quarter it was seeing “areas of improving demand after a prolonged period of budget scrutiny, evidenced by improving pipeline and close rates.” F5’s strong results – combined with other earnings like ServiceNow‘s – point to a strong rebound in IT budgets. F5 Networks is up 10.3% today and now trades at all-time highs.
- Cadence Design Systems: Saw EPS at $1.64, which was significantly above estimates of $1.44. Earnigns grew at a 30% year-over-year pace. Guidance for next year merely met analyst expectations, but the company’s performance in the third quarter was strong enough that shares are still surging today. One particular bright spot is the company’s Servies decision, where revenue doubled year-over-year to $115.1 million. Cadence is up 13% today while its key rival Synopsys (Nasdaq: SNPS) is up 6.2%.
- Corning: Earnings were largely inline with analyst expectations. EPS was $.54 versus expectations of $.53, a jump of 20% from last year. The highlight of the earnings report was optical sales, which grew 36% from last year. That segment also saw net income surge by 92%. Corning has become a major winner in the arms race to build out new datacenters and investors continue to pile into the stock, which is up 7.7% today.
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