My top 10 things to watch Wednesday, Nov. 11
1. A rebound day incoming? Nasdaq futures are up almost 2% this morning, as upbeat earnings from influential neocloud CoreWeave ripple across the broader AI trade. The S & P 500 is also heading toward a solidly higher open. WTI crude is up over 1%. The bond market is closed today in observance of Veterans Day.
2. Good data center versus bad data center: CoreWeave is a good one. Shares are up 14% premarket. Better-than-expected revenue and adjusted operating margins of 10.4%, reaching double digits ahead of schedule. Also better-than-feared comments on 2027 financing needs. Plus, its older Nvidia chips are holding their value for longer than people think. Will be talking to CEO Mike Intrator on "Squawk on the Street" later this morning.
3. Here are four things that I think Nvidia must to do as next week's earnings report approaches: (1) introduce the world to Ian Buck, the inventor of its linchpin CUDA software who currently serves as its VP of hyperscale and high-performance computing business, (2) lean into the Wachtell investigation and find out if CEO Jensen Huang needs his own counsel, (3) pause all investments into the AI ecosystem and harvest some cash now that the Anthropic IPO is imminent, (4) announce a historic buyback that supersedes its $235 billion plan.
4. Here comes the Nvidia downgrades. Baird kicks us off, cutting the stock to hold from buy and slashing its price target to $200 from $500. Worried about the Huang overhang, but also reduced visibility into 2027 data center forecasts. Morgan Stanley chip analysts also removed their "top pick" designation. This Club stock can only bottom when the majority of analysts cut and run. We're getting the early birds out of the cage.
5. The closely watched VanEck Semiconductor ETF, or SMH, is trading at 15 times forward earnings, its lowest valuation multiple since the fall of 2022, before ChatGPT kicked off the fourth industrial revolution. Melius Research's Ben Reitzes highlighted that incredible fact in a note this morning. A successful Anthropic IPO next week would be bullish for many chip names and the AI trade overall.
6. T-Mobile CEO Srini Gopalan didn't sound concerned about the looming threat from SpaceX last night on "Mad Money." Gopalan said, "I don't spend my time speculating on what, exactly, they'll do because really the person who's going to decide who wins and who is successful in this industry is going to be the customer and the consumer." He said T-Mobile's new "T-Mix" plans are key to its strategy of offering value to customers while building an even better network.
7. Buy Costco. The company announced last night a special dividend of $30 a share, double the last one paid in 2024. Costco has done these every few years or so. Payable on Dec. 4. Must be a shareholder of record by the end of the day Nov. 24. So, still time to get it on it. Also announced a $4 billion buyback authorization. Shame on those of us who, for a moment, thought maybe Costco was overvalued. The Club stock is up nearly 2% this morning.
8. Jefferies started coverage of Corning with a buy and a price target of $134, saying the company is in a sweet spot for AI-driven demand for fiber optics, which is replacing slower copper connections. The analysts noted the growing use of fiber "inside the box," connecting the hardware in servers and equipment racks. Referred to as "scale-up."
9. "DoorDash has tested the limits of even its most masochistic investors." That's how MoffettNathanson described a tough 12 months for the stock. The analysts cut their price target to $239 from $277. They did, however, keep their buy rating, saying the stock is now in a "sweet spot." The analysts like DoorDash's planned $17 billion acquisition of Instacart to move deeper into grocery delivery.
10. GE Vernova is roaring back, up 6% this morning after a tough day on speculation about changes SoftBank made to the way it buys power generation equipment for its data centers. I said yesterday the decline in the Club stock was wrong. JPMorgan trimmed its GEV price target to $1,000 from $1,035 but maintained its buy rating. As we noted in yesterday's Homestretch, the analysts at JPMorgan said the SoftBank moves won't impact GEV. The same thing I said earlier in the day.
