Applied Materials Long Game

And, Autodesk’s controversial strategy.

August 16, 2024

Together With

Today is Friday, August 16, 2024.

The Early Bird Index today is 71.36.

New to this newsletter? Sign up here

Applied Materials Long Game

Despite posting better-than-expected financial earnings results Thursday, Applied Materials (Nasdaq: AMAT) fell 3.08% in after-hours trading.

Financials: Applied Materials reported earnings of $2.12 per share in the past quarter and revenue of $6.78 billion; both were better than expected.

Outlook: The company projects revenue for the current quarter to be about $6.93 billion and earnings per share in the range of $2.00 to $2.36. Sounds good, right? Well, investors expected more.

Quote: “The race for AI leadership is fueling demand for our unique and connected portfolio of products and services, positioning Applied to outperform our markets over the longer term.” -Gary Dickerson, President and CEO. 

Early Bird’s Nest Egg Gains: Reaping the full financial rewards from the current AI demand surge may take some time for the company.

  • The intricate nature of the semiconductor supply chain means that changes in demand don't immediately translate to increased sales for equipment manufacturers like Applied Materials.

  • As other companies aim to capture the AI-driven market, Applied Materials may face increased competition, potentially affecting its market share and profit margins.

Final Thoughts: Applied Materials, up 37% this year, is playing the long game when it comes to AI.

PRESENTED BY THE MOTLEY FOOL

Fortune Favors The Bold

Ever wish you could turn back time and invest in Amazon's early days? Well, buckle up because the AI revolution is offering a second chance.

In The Motley Fool's latest report, dive into the world of AI-powered innovation. Discover why experts are calling it "the rocket fuel of AI" and predicting a market cap 41 times larger than Amazon's.

Don't let past regrets hold you back. Take charge of your future and capitalize on the AI wave with The Motley Fool's exclusive report.

Whether it's AI or Amazon, fortune favors the bold.

Notables

Notable Earnings Today: Flowers Foods (NYSE: FLO), CI&T (NYSE: CINT), OneConnect Financial Technology (NYSE: OCFT).

Notable IPOs Today: Rezolve AI Limited Ordinary Shares (Nasdaq: RZLV), Biomotion Sciences Ordinary Shares (Nasdaq: SLXN), YXT.COM GROUP HOLDING LIMITED American Depository Shares (Nasdaq: YXT), SilverBox Corp IV (NYSE: SBXD), Graf Global Corp. (NYSE American: GRAF).

Notable Equity Crowdfunding Campaigns Ending Today: d’griot (Honeycomb).

Notable Economic Events Today: Building Permits (8:30 a.m. ET), Housing Starts (8:30 a.m. ET), Michigan Consumer Expectations / Sentiment (8:30 a.m. ET), Atlanta Fed GDPNow (10:30 a.m. ET).

Autodesk’s Controversial Strategy

The technology company Autodesk (Nasdaq: ADSK) declined 2.04% in after-hours trading on Thursday after details about a controversial sales policy were reported.

Details: Bloomberg reported Thursday that Autodesk continued a controversial sales strategy after promising investors it would stop. In the reported plan, considered an accounting risk, the company offered discounts to clients paying up front for large multiyear contracts.

  • Autodesk has not commented on the report.

Final Thoughts: The stock is up about 6% this year and is facing pressure from an activist investor to make changes.

H&R Block’s Stock Buyback

H&R Block (NYSE: HRB) jumped 9.98% in after-hours trading on Thursday after posting strong financial results and announcing a $1.5 billion stock buyback.

Final Thoughts: The stock is up 17% this year.

Healthy Consumer Spending: Walmart Earnings and July Retail Sales Show Consumers Aren’t Quitting (Wall Street Journal)

Thank you for reading!

Forward to a friend and tell them to sign up here.

Pick winning stocks: Upgrade to Early Bird Prime

Want more investing tips? Listen to the podcast.

Show Your Support: Buy Me a Coffee.

Questions or comments? Hit reply to reach out.

The contents of Early Bird are intended for informational and entertainment purposes only. They do not constitute trade or investment recommendations and they are not financial or legal advice. Readers are encouraged to consult licensed professionals for personalized guidance regarding their financial or legal situations.