Nvidia Probe Escalates 🚨

And, Zscaler's conservative outlook.

September 04, 2024

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Today is Wednesday, September 4, 2024.

The Early Bird Index today is 69.33.

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Nvidia Probe Escalates 🚨

Could it get any worse for Nvidia (Nasdaq: NVDA) on Tuesday? The stock dropped 9.53% during the day followed by another 2.42% decrease in after-hours trading.

Details: Tuesday marked the biggest one-day drop ever as the stock lost $279 billion in market value. Other chipmakers also fell during the day.

Powering the Story: Nvidia’s stock declined in after-hours trading due to a Bloomberg report that said the U.S. Justice Department sent subpoenas to Nvidia, claiming the chipmaker violated antitrust regulations. It is part of an escalating probe against the company.

Early Bird’s Nest Egg Gains: The semiconductor decline was part of a larger market selloff, with major U.S. stock indexes experiencing their largest declines since early August. 

  • This selloff was partly driven by renewed worries about a slowing U.S. economy, as recent manufacturing data showed continued contraction.

  • Investors are cautious about the sustainability of growth in the semiconductor sector.

Final Thoughts: Nvidia has been in a downward trend since its earnings report last week.

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Notables

Notable Earnings Today: Dick's Sporting Goods (NYSE: DKS), Dollar Tree (Nasdaq: DLTR), C3.ai (NYSE: AI), Hewlett Packard Enterprise (NYSE: HPE), ChargePoint (NYSE: CHPT), Yext (NYSE: YEXT), Hormel Foods (NYSE: HRL), Casey's General (Nasdaq: CASY), Ciena (NYSE: CIEN), Core & Main (NYSE: CNM), Credo Technology Group (Nasdaq: CRDO), America's Car-Mart (Nasdaq: CRMT), Sprinklr (NYSE: CXM), Torrid (NYSE: CURV), Copart (Nasdaq: CPRT), AeroVironment (Nasdaq: AVAV), Verint Systems (Nasdaq: VRNT), Concrete Pumping Holdings (Nasdaq: BBCP), Couchbase (Nasdaq: BASE), Daktronics (Nasdaq: DAKT) Descartes (Nasdaq: DSGX), J.Jill (NYSE: JILL), KNOT Offshore Partners (NYSE: KNOP), Phreesia (NYSE: PHR), REV Group (NYSE: REVG).

Notable IPOs Today: Pheton Holdings Ltd Class A Ordinary Shares (Nasdaq: PTHL).

Notable Equity Crowdfunding Campaigns Ending Today: NineOneSix Systems (Wefunder), Epi One (StartEngine), Patsy's Rum Cake (Honeycomb), YouSolar (StartEngine).

Notable Economic Events Today: Trade Balance / Exports / Imports (8:30 a.m. ET), JOLTs Job Openings (10:00 a.m. ET), Factory Orders (10:00 a.m. ET), Beige Book (2:00 p.m. ET), API Weekly Crude Oil Stock (4:30 p.m. ET).

Zscaler's Conservative Outlook

The cloud security company Zscaler (Nasdaq: ZS) fell 15.06% in after-hours on Tuesday even though it posted better-than-expected financial earnings results.

Financials: Zscaler reported earnings of 88 cents per share in the past quarter and revenue of $592.9 million; both were better than expected.

Outlook: The company’s (let’s call it cautious) forecast for the full year worried investors. Zscaler only expects earnings per share to reach $2.81 to $2.87 during the next year.

Final Thoughts: Zscaler was already down 9% this year. With a conservative profit outlook, the stock could conceivably keep declining. 

Gitlab Posts Earnings Beat

Shares of the software development company Gitlab (Nasdaq: GTLB) surged 16.16% in after-hours trading on Tuesday after posting strong financial results.

Financials: Gitlab reported earnings of 15 cents per share in the past quarter and revenue of $182.6 million; both were better than expected.

Final Thoughts: Gitlab, previously down 25% in 2024, is trying to turn things around.

Not Wine O’Clock: Constellation Brands Cuts Outlook on U.S. Wine Market Woes (Wall Street Journal)

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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.