Stockwatch
HedgeWeekly Stockwatch: Nvidia slides on CEO reports as Cisco readies results
Nvidia, Alibaba, Nebius, Cisco and Applied Materials are the shares in focus before Thursday's open.
HedgeWeekly Markets Desk ·
NVDA, Nvidia: The Wall Street Journal reported the board is preparing to oust CEO Jensen Huang, who has disclosed two extramarital affairs; Bernstein cut its rating to Market Perform, Saxo said. Bull case: Results on November 17 will show whether AI chip demand is unaffected by the leadership turmoil. Bear case: Yorkville Ives analysts said Nvidia could lose a quarter of its value if Huang departs.
BABA, Alibaba: Fell more than 6% in Hong Kong after reports it rented Nvidia chips through Megaspeed, a firm whose founder is reportedly tied to the Huang affair. Bull case: Stocktwits said any direct Alibaba involvement is unconfirmed; results are due next week. Bear case: Reports of tighter US controls on remote access to advanced AI chips.
NBIS, Nebius: Reports third-quarter results before the open, with revenue of about $905 million to $907 million expected, after a 15% gain on Wednesday. Bull case: Expected revenue growth of more than 500% from a year earlier. Bear case: An adjusted loss is still expected, and Nvidia's turmoil hangs over AI cloud names.
CSCO, Cisco Systems: Analysts expect revenue of about $18.12 billion, up roughly 22%, and adjusted earnings of about $1.32 a share, TradingKey said. Bull case: Hyperscaler AI infrastructure orders reached about $4 billion last quarter. Bear case: Gross margin fell to 66.3% last quarter; Morgan Stanley cut its rating to Equal-weight on November 5.
AMAT, Applied Materials: Analysts expect revenue of $10.30 billion and adjusted earnings of about $4.05 a share; options imply an 8.8% move either way. Bull case: Consensus revenue growth of more than 51% from a year earlier. Bear case: The implied move tops its 6.51% average post-earnings swing over eight quarters.