Tech stocks are set to rebound early Friday, but even Nvidia
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The impressive profits could not prevent losses in the previous trading day.
Nasdaq 100 futures were flat early Friday, led by technology stocks.
Nasdaq Composite Index
The index was down 0.4% in the previous trading session. The drop came despite Nvidia.
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The stock price rose 9.3% after the earnings announcement, but this did not translate into a rise in the overall market.
Instead, investors focused on better-than-expected economic data and concerns that the Federal Reserve may be further behind on cutting interest rates.
Nvidia shares rose again in premarket trading, up 1.3% and on track to open at a new high. But unlike the previous session, other chip stocks and broader tech stocks are following Nvidia on the upswing.
Advanced Micro Devices rose 1%, Intel rose 0.7% and Micron Technology rose 1.3%. AI-related stocks also got off to a strong start. Supermicro Computer
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C3.ai, which makes AI servers using Nvidia chips, rose 2%, while AI software provider C3.ai rose 1%.
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Workday was the worst performer in premarket trading, falling 12.2% to $228.80 after the company cut its full-year subscription revenue outlook, which Chief Financial Officer Zane Lowe said reflected “increased sales scrutiny and slower customer growth.”
The company reported first-quarter earnings per share of $1.74, beating Wall Street’s expectations of $1.60, according to FactSet data. Revenue of $1.99 billion also beat expectations of $1.97 billion.In more positive news, Workday raised its full-year adjusted operating margin outlook to 25% from 24.5%.
Until there is more confidence that there is upside to the subscription revenue outlook, the stock “is likely headed for the penalty box,” Evercore ISI analyst Kirk Mattern said in a Friday note. He maintained his outperform rating and $350 price target on the stock. “Fundamentally, we see no reason to exit at current levels and believe the risk/reward remains elevated,” he added.
Alibaba shares were in focus after the Chinese e-commerce giant announced plans to raise $4.5 billion through a convertible bond offering to fund share buybacks. The company’s American Depositary Receipts (ADRs) fell 2.3% on Thursday following news of the plans, and were flat early Friday after Alibaba repurchased the shares.
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The stock was up 4.2% through Thursday in 2024.
Alphabet shares may also be worth watching as a federal court begins considering possible reforms to Google’s app store on Thursday following video game developer Epic Games’ antitrust victory against Google last year. A jury ruled in December that Google maintained a monopoly in the app store distribution and payments market.
Google did not immediately respond to a request for comment early Friday.
Email Callum Keown at callum.keown@barrons.com.
