Zoom’s Microsoft Problem

Plus, Snowflake's good earnings.

Steven Lerner
Steven Lerner

Today is Thursday, December 2, 2021.

Zoom’s Microsoft Problem Comes to Light

Microsoft (Nasdaq: MSFT) released a standalone version of video collaboration platform Teams on Wednesday, pitting the company against Zoom (Nasdaq: ZM).

Details: Called Teams Essentials, the package is designed to get small businesses to sign up without having to get the more expensive Office package. Teams Essentials costs $4 per user, each month; By contrast, Zoom costs $14.99 per user each month.

Background: The price point for Teams Essentials could spell trouble for Zoom, which reported disappointing earnings in November. Zoom has been struggling all year, especially as more businesses return to the office.

Numbers: Shares of Zoom plunged 6.48% on Wednesday. The stock is down 45% this year.

Final Thoughts: If the new Omicron variant of the coronavirus causes more people to work from home, then Zoom could enjoy a nice rebound.


Notable Earnings Today: Dollar General (NYSE: DG), Signet Jewelers (NYSE: SIG), Express (NYSE: EXPR), Kroger (NYSE: KR), Toronto-Dominion Bank (NYSE: TD), Duluth Trading (Nasdaq: DLTH), DocuSign (Nasdaq: DOCU), Marvell Technology (Nasdaq: MRVL), Asana (NYSE: ASAN), Smith & Wesson (Nasdaq: SWBI), Tilly’s (NYSE: TLYS), Zumiez (Nasdaq: ZUMZ), Kirkland's (Nasdaq: KIRK), Ollie's Bargain Outlet Holdings (Nasdaq: OLLI), Ulta Beauty (Nasdaq: ULTA).

Notable IPOs Today: Grab Holdings Limited Class A Ordinary Shares (Nasdaq: GRAB), Mountain Crest Acquisition Corp. V Common Stock (Nasdaq: MCAG), Deep Medicine Acquisition Corp. Class A Common Stock (Nasdaq: DMAQ), ROC Energy Acquisition Corp. Unit (Nasdaq: ROCAU), Games & Esports Experience Acquisition Corp. Unit (Nasdaq: GEEXU), UTA Acquisition Corporation Units (Nasdaq: UTAAU).

Notable Equity Crowdfunding Campaigns Ending Today: Secretos de mis Abuelos (Honeycomb), MAGFAST (NetCapital).

Notable Economic Events Today: Jobless Claims (8:30 a.m. ET).

Health Stocks in Focus As Omicron Emerges

Photo by Jeremy Bezanger / Unsplash

The Omicron variant of the coronavirus could be detrimental for most stocks, but the healthcare field might benefit from a continued pandemic.

Testing: When the Omicron variant was first identified last week, Qiagen NV (NYSE: QGEN) reaffirmed that its PCR tests are effective in identifying Covid-19. The stock went up 3.5% Friday when most of the market was down.

Vaccines: Some of the vaccines stocks, including Pfizer (NYSE: PFE), also performed well when the Omicron variant emerged last week. This is especially true as more Americans get booster shots.

Pills: Pfizer and Merck (NYSE: MRK) could also benefit as both companies have produced pills for Covid-19.

Final Thoughts: Is it too late to buy into these health stocks? It really depends on the severity of the Omicron variant.

Snowflake Leaps Due to Strong Earnings

Shares of Snowflake (NYSE: SNOW) jumped 16.24% in after-hours trading on Wednesday after the data warehousing company posted great earnings.

Financials: Snowflake reported $334 million in revenue during the third quarter and future guidance of $345 million to $350 million in product revenue for the fourth quarter. Both numbers were better than expected.

Quote: “Snowflake saw momentum accelerate in Q3, with product revenue growing 110% year-on-year to $312.5 million. Continued international expansion during the quarter resulted in product revenue from the EMEA and APJ regions up 174% and 219% year-on-year, respectively.” - Frank Slootman, Chairman and CEO, Snowflake.

Strong Numbers: There’s a lot to like about this earnings report from Snowflake. One strong area was the total gross margin, which reached 64% in the quarter.

Final Thoughts: Despite the strong numbers, Snowflake's stock is still overvalued for most investors.

Chip Off the Old Block: Square Changes Name to Block, Days After CEO Jack Dorsey Leaves Twitter (The Wall Street Journal)

Slow It Down: Apple Tells Suppliers iPhone Demand Has Slowed as Holidays Near (Bloomberg)

Reversal: Facebook retreats from crypto ad ban (CNBC)

Testify: Cryptocurrency executives to be questioned in Congress (BBC)

Equity Crowdfunding Acquisition: Republic acquires the UK’s Seedrs in $100M deal to push into Europe (TechCrunch)

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