Category: US/Midday Session Brief

XRP shoots to the moon, despite Ripple-friendly lawyer losing Senate seat

Posted on by Olumide Adesina

XRP rallied strongly even though a crypto-friendly lawyer lost a seat in the U.S. Senate. The cryptocurrency industry’s appetite for risk spurred XRP’s positive momentum.

XRP rose 5% from its lowest point of the month to an intraday high of $0.55 on November 5, However, it is still in a local bear market, though, having fallen more than 20% from its October peak.

The Massachusetts Senate seat was won by Democrat Senator Elizabeth Warren who defeated Ripple-friendly Republican John Deaton by a significant majority.
Election data from the Associated Press, revealed Warren, the most well-known crypto opponent in US politics, received 74% of the approximately 145,000 votes that have been tabulated thus far.

Deaton was viewed as a longshot against Warren, who has served in the US Senate since 2013 and had a 20–30 percentage point lead in most of the polls.
Renowned cryptocurrency attorney Deaton supported holders of XRP tokens during Ripple’s protracted legal dispute with the Securities and Exchange Commission.

Prominent individuals in the cryptocurrency sector strongly backed Deaton, who raised $2 million from Ripple and Gemini co-founders Tyler and Cameron Winklevoss.

Warren’s third term in the US Senate officially began with her victory. With Kamala Harris securing 11 electoral college votes, the Associated Press has also declared a Democratic victory in Massachusetts.

Super Micro risks being delisted from Nasdaq

Posted on by Olumide Adesina

Super Micro is in danger of being delisted from the Nasdaq due to its sharp decline since March, which has destroyed around $55 billion in market valuation . The chip maker said it will provide a “business update” regarding its latest quarter on Tuesday (Election Day in the US.)

Investors continued to flee Super Micro on Friday after the business lost its second auditor in less than two years, causing the stock to lose another 11%, bringing the sell-off this week to 45%.

The company’s shares ended at $26.05. This erased all of the gains from 2024. The stock’s value more than quadrupled for the year by March, when it peaked at $118.81. Earlier that month, the S&P Dow Jones put the stock in the S&P 500, reflecting Wall Street’s embrace of the company’s growth, driven by sales of servers loaded with Nvidia’s AI technology.

Super Micro’s announcement in August that it would not submit its annual report to the SEC on time was the catalyst for the company’s subsequent difficulties. After revealing a short position in the company, renowned short-seller Hindenburg Research reported “new evidence of accounting manipulation.” Later, according to the Wall Street Journal, the Department of Justice was only beginning its investigation into the business.

Just 17 months after replacing Deloitte & Touche as its accounting firm, Super Micro announced on Wednesday that Ernst & Young had left the company. It was “unwilling to be associated with the financial statements prepared by management,” EY said

Super Micro stated in an August results presentation that revenue more than doubled for a third consecutive quarter, even though the company had not submitted financial statements to the SEC since May. According to LSEG, analysts anticipate that revenue increased by more than 200% to $6.45 billion for the fiscal first quarter that concluded in September. This represents an increase from $1.9 billion in the same fiscal quarter of 2023 and $2.1 billion in the previous year.

Chevron posts $51 billion in revenue in third quarter, stock surges high

Posted on by Olumide Adesina

Chevron returned a record amount of cash to shareholders after exceeding third-quarter revenue and earnings projections. The energy firm’s third-quarter 2023 net income of $6.53 billion, or $3.48 per share, was 31% more than its current net income of $4.49 billion, or $2.48 per share.

The company posted earnings of $2.51 per share, exceeding Wall Street’s quarterly projections.

Chevron reported $50.67 billion in sales, 6% less than the $54.1 billion it recorded in the third quarter of last year but still exceeded street estimates.
The oil company distributed a record $7.7 billion to shareholders during the quarter, which included $2.9 billion in dividends and $4.7 billion in share buybacks. The company’s stock was up over 4% in early trading.

The American oil firm produced 3.36 million oil-equivalent barrels daily during the quarter, a 7% increase over the third quarter of 2023, driven by record output in the Permian Basin.

However, the oil major’s quarterly earnings decreased dramatically from the same quarter in 2023 due to lower prices, reduced refined product sales margins, and the absence of favorable tax periods.

The Oil Major is trying to streamline its holdings as asset deals in Canada, the Congo, and Alaska are expected to finish in the fourth quarter of 2024. The company also intends to reduce expenses by $2–3 billion from 2024 to the end of 2026.

At $6.53 billion, or $3.48 per share, Chevron’s third-quarter 2023 net income was 31% more than its present net income of $4.49 billion, or $2.48 per share. After excluding foreign exchange effects, the company reported earnings of $2.51 per share, much higher than Wall Street’s quarterly forecasts.

Intel shows strong revenue growth in third quarter

Posted on by Olumide Adesina

Intel shares surged strongly on Thursday’s extended trading as the chipmaker’s quarterly outlook and better-than-expected results exceeded expectations.
Intel’s revenue decreased 6% YoY in the fiscal third quarter, which concluded on September 28.

The business reported a net loss of $16.99 billion, or $3.88 per share compared to its net earnings of $310 million, or 7 cents per share, during the same period the previous year,

Intel’s restructuring charges of $2.8 billion for the quarter is part of a cost-cutting strategy. Additionally, there were $15.9 billion in impairment costs,  partially related to goodwill impairment in the Mobileye unit and accelerated depreciation for Intel 7 process node production sites.

The board’s audit and finance committee authorized cost and capital reduction initiatives on October 28, including cutting Intel’s workforce by 16,500 employees and reducing its real estate footprint, the company stated in a filing. The job cuts were initially announced in August.

Intel also stated that the reorganization will be completed by the fourth quarter of 2025.“One of the largest reorganizations the company has undergone since its founding in 1968 is currently underway.” Intel’s chief, Pat Gelsinger, stated.

The chip-maker predicted revenue of $13.3 billion to $14.3 billion and adjusted earnings of 12 cents per share for the fiscal fourth quarter. Analysts had projected $13.66 billion in revenue and 8 cents adjusted earnings per share.

Intel also declared the release of Gaudi AI accelerators and Xeon 6 server processors.  the board’s audit and finance committee approved cost and capital reduction actions, including reducing Intel’s real estate footprint and laying off 16,500 employees.
The job losses were first made public In August. According to Intel, the reorganization will be completed by the fourth quarter of 2025. The Data Center and AI sector generated $3.35 billion in revenue, around 9% higher than the $3.17 billion StreetAccount forecast.

Apple’s net income falls after a one-time charge in European tax

Posted on by Olumide Adesina

Apple’s fiscal fourth-quarter revenue and earnings per share were above Wall Street’s expectations, however, the company’s net income fell after it had to pay a one-time charge related to a European tax ruling.

Apple’s net income for the quarter was $14.73 billion, or 97 cents per share, as opposed to $22.96 billion, or $1.47 per share, during the same period last year. After deducting the one-time tax penalty, Apple’s adjusted earnings per share grew by 12% annually.

During Thursday’s extended trading, Apple’s stock dropped as much as 2%.  The first indication of how well the iPhone 16 is doing in the market is the 6% increase in overall iPhone revenue. Apple had around a week of new product sales throughout the quarter after the release of its product on September 20. With about 49% of all sales, it remains Apple’s most significant product.

Apple CEO Tim Cook stated that the iPhone 15’s sales were “stronger than 14 in the year-ago quarter, and 16 was stronger than 15.”

Cook said the business was looking forward to Apple Intelligence, the AI system for Macs and iPhones that began rolling out this week as part of the iOS 18.1 update.

“We have already received positive feedback from developers and customers, and based on just three days of data, we have an extremely early statistic: Users are adopting iOS 18.1 at twice the rate they did 17.1 in the same quarter last year,” Cook stated.

During a call with analysts, Apple stated that it anticipates “low to mid-single digit” growth in sales for the December quarter. Additionally, it indicated that it anticipates services growth to be almost equal to its 12.87% growth rate from the previous year.

Apple’s iPad division grew the fastest in the hardware division, with sales rising 8% to $6.95 billion. Part of that resulted from pent-up desire. After not releasing any new iPads for 2023, Apple unveiled the iPad Pro and Air models in May. Mac’s revenue increased 2% annually to $7.74 billion during the quarter.

Super Micro melts like ice cream under sun

Posted on by Olumide Adesina

Super Micro’s stock dropped 33% on Wednesday after the company stated its auditor had resigned following months of conflict with the company over board independence and governance.

In their letter of resignation, Ernst & Young expressed their “unwillingness to be associated with the financial statements prepared by management,” The accountant also raised concerns about the board’s independence from “other members of management” 

the firm earlier declared that it had selected EY for its initial audit for the 2024 fiscal year. Super Micro has not yet disclosed its financial figures for this year and is reportedly the focus of a federal investigation.

Super Micro appointed a special board committee to investigate the company’s internal controls after the auditor initially raised concerns about the company’s internal financial controls, governance, and forthcomingness in late July.

In its resignation letter, EY stated, “We are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management’s and the Audit Committee’s representations.” Before a short seller report criticized Super Micro’s accounting and financial procedures.”

Computers manufactured by Super Micro are used by businesses as servers for websites, data storage, and other applications, such as algorithms for artificial intelligence. the business customers include well-known AI companies like Nvidia.

Super Micro has already encountered issues with regulators due to its accounting procedures. In 2020, it settled a $17.5 million penalty with the Securities and Exchange Commission, which accused it of recording revenue incorrectly and prematurely.

Microsoft falls on weak outlook despite beating on earnings

Posted on by Olumide Adesina

Microsoft stock was down by over 4% in extended trading despite the company’s reported profits and revenue beating expectations for the fiscal first quarter. This was because the company’s projection predicted slower growth than anticipated.

 

Data from an LSEG survey showed Earnings per share: $3.30 as opposed to $3.10 as anticipated Revenue: $65.59 billion as opposed to the anticipated $64.51 billion
According to a statement, revenue climbed 16% year over year for the quarter that ended on September 30. During the same period last year, net income increased 11% to $24.67 billion from $22.29 billion.

During a conference call with investors, CEO Satya Nadella stated, “I am fairly hopeful that as we enter the second half of even this fiscal year.”
Microsoft announced in August that it would update business segment reporting to match its management style. The productivity and business processes sector, which comprises Office software, now incorporates mobility and security services and some Windows revenue.

Productivity and business process revenue increased 12% to $28.32 billion during the quarter, exceeding the $27.9 billion consensus among analysts StreetAccount polled.

Microsoft’s use of cloud computing was made more transparent to investors. For the first time, mobility sales, security, and Power BI data analytics were not included in the revenue growth for Azure and other cloud services. Azure’s growth for the quarter was 33%, or 34% at constant currency, with artificial intelligence services accounting for 12 points.

The entire intelligent cloud market, which includes enterprise services, Windows Server, and Azure, brought in $24.09 billion. That is a 20% increase higher than the StreetAccount consensus of $24.04.

YouTube earns $50 billion in revenue

Posted on by Olumide Adesina

YouTube, the largest video-streaming network in the world, made an astounding $8.92 billion in advertising income in the third quarter of 2024, a double-digit rise from previously impressive figures.

According to Alphabet and Google CEO Sundar Pichai, YouTube’s total ad and subscription revenue for the last four quarters has reached $50 billion for the first time. On a quarterly average, those revenues would be almost $12.5 billion. The online business doesn’t reveal all of its quarterly earnings.
YouTube’s ad revenue, which increased 12.2% annually, was included in Alphabet’s Q3 results. According to StreetAccount, Wall Street analysts predicted that YouTube’s ad income for the quarter would come to $8.89 billion.
YouTube TV, YouTube Premium, YouTube Music Premium, and NFL subscription revenue are not included in the ad revenue calculations. Ticket for Sunday
According to Philipp Schindler, Google’s chief commercial officer, YouTube recently concluded its upfront, with ad commitments up 20% year over year, during the Q3 earnings call. Additionally, he informed investors that 850 million unique people saw a video from the 2024 Summer Olympics in Paris, with 12 billion views on YouTube, 35% of that time spent on TV screens.
Alphabet reported $2.12 earnings per share, with total revenue of $88.27 billion (up 15%) and net income of $26.3 billion (up 34%). According to LSEG, that greatly exceeds Wall Street’s estimates of $86.3 billion in revenue and $1.85 EPS.
Pichai’s prepared remarks highlighted, “The company’s momentum is extraordinary.” Our commitment to innovation, long-term focus, and investment in AI is demonstrated by the benefits our customers and partners receive from our AI solutions.

Microsoft opposes plan to invest in Bitcoin

Posted on by Olumide Adesina

Microsoft opposes a plan to invest in Bitcoin despite its resilience to inflation. The tech giant urged its shareholders to reject the proposal at the next shareholder meeting.

According to documents filed with the Securities and Exchange Commission (SEC), the American tech giant wants its shareholders to reject a plan to consider Bitcoin, a treasury investment at its next shareholder meeting.

Microsoft’s board of directors urged shareholders to vote against this resolution at the company’s shareholders’ meeting on December 10. The company has previously “carefully considered this issue,” considering options like Bitcoin and other cryptocurrencies “.
Microsoft feels that such a public evaluation of Bitcoin was not justified,”  the tech firm further disclosed monitoring trends and developments related to cryptocurrencies to inform its future decision-making dot.

Large corporate treasury prefers stable and predictable investments to ensure liquidity and operational funding. Rapid price movements are a factor when evaluating cryptocurrency investments.

The conservative think tank National Center for Public Policy Research’s proposal, emphasized MicroStrategy’s bitcoin investment strategy and the company’s surpassing of Microsoft by over 300 percent this year “despite doing only a fraction of the business”—is noteworthy. He added that spot ETFs are helping institutional and corporate adoption of Bitcoin become more “mainstream.”.

Additionally, the proposal points out that although bitcoin is still erratic, it might be a good inflation hedge. “Businesses should consider the advantages of having even 1% of their assets in Bitcoin, at the very least. “

Elon Musk posts biggest daily gains on Tesla, made $33.5 billion

Posted on by Olumide Adesina

Elon Musk of Tesla, already the richest person in the world, increased his wealth by an additional $33.5 billion on Thursday following the largest rally in his company’s stock since 2013.

According to the Bloomberg Billionaires Index, Musk’s current net worth is approximately $270 billion, which places him more than $84 billion ahead of his close friend and former Tesla board member Larry Ellison, who is still the largest shareholder in Oracle.

Musk owns a significant portion of SpaceX, valued at over $200 billion, he also controls close to 13 percent of Tesla’s outstanding shares.

He also controls the majority stake in the artificial intelligence startup xAI and X, formerly Twitter. Depending on how a shareholder lawsuit involving Musk’s 2018 compensation package turns out, his wealth could increase even further.

The surge came after Musk’s remarks during the call indicating that “vehicle growth” would be between 20 and 30 percent next year amid the company’s better-than-expected earnings report late Wednesday.

At the close, Tesla’s stock had risen 22%, the second-largest increase since the company’s 2010 initial public offering. Tesla shares had been falling and were on track to have their worst month since January before the earnings.

Despite the Nasdaq’s 23 percent gain, the stock erased its year-end loss and is currently up 5% in 2024. In contrast to the average analyst estimate of 58 cents, Tesla reported earnings per share of 72 cents. Profit was increased by $326 million from the company’s Full Self-Driving Supervised system (FSD) and $739 million from environmental regulatory credits.