My top 10 things to watch Tuesday, Aug. 25
1. We're seeing a comeback this morning in S & P and Nasdaq futures. Both indexes finished yesterday in the red, pulled down by weakness in the AI buildout trade. Many of those names are higher premarket, including chips. I do think the growing political backlash is a serious headwind that requires some adjustments to your portfolio. The hyperscalers may end up benefiting from opposition to data centers.
2. Ahead of Nvidia earnings tomorrow night, Raymond James increased its price target on the Club stock to $352 from $330, implying almost 70% upside. Kept its strong buy rating. Analysts said Nvidia's CPU business is gaining traction, complementing its core GPU sales. Nvidia just started selling standalone CPU racks tailored for agentic AI, so it's still a small part of its revenue. But growing fast. Will we see a bigger buyback announcement? Hope so.
3. Raymond James also upgraded Advanced Micro Devices to strong buy from outperform. The demand inflection for CPUs is a big part of the call. AMD is essentially the reverse of Nvidia: mainly known for data center CPUs, while pushing into GPUs. Analysts said AMD offers the "strongest combination" of direct earnings leverage, data center positioning, and an opportunity to gain market share.
4. Mizuho cut its price targets on memory-chip makers Sandisk and Club name Micron, as well as semiconductor equipment suppliers Applied Materials and Lam Research. Are they no longer believers? Not quite. Analysts said memory remains a key bottleneck and maintained their buy ratings. But given reports that future generations of AI chips may be forced to use less memory, they're worried about potential multiple compression for the group.
5. Stop the presses: a price target increase for enterprise software? Canaccord Genuity took Workday to $225 from $220 ahead of earnings Thursday. Takeover chatter put a floor for Workday shares, but analysts argued improving fundamentals should help the stock too. The take-private report on Aug. 13 truly changed sentiment toward software, and the data center hatred is also helping. Club name Salesforce reports tomorrow night. Big test of the comeback rally.
6. A similar setup awaits Intuit, the owner of QuickBooks, Credit Karma and TurboTax, when it releases earnings after today's close. The stock is up roughly 45% since its late June low. Will it be able to deliver good enough numbers to keep the uptrend intact? Or will the market put it back in purgatory because people believe that Claude can do everybody's taxes?
7. Wolfe Research hiked its price target on Netflix to $95 from $84. Analysts expect stronger results for the second half of 2026 and decent 2027 guidance as new content releases in the third quarter. The stock has a much better pattern now. Shares have rallied 18% since July 20, though they're still down almost 15% for the year. It has paid its dues. Perhaps Netflix will integrate other streaming services like Peacock onto its platform? Yesterday, the New York Times reported it's under consideration.
8. Capital One's price target was raised to $275 from $255 at Wolfe Research. Second-quarter earnings across the sector reflected healthy U.S. consumer spending and credit trends, according to analysts. We thought Capital One's report was good, but it didn't answer an overhanging question on the stock: When will the company start to see tangible earnings benefits from its Discover acquisition? Need to see it in 2027.
9. Rough quarter from Dick's Sporting Goods, sending shares down 18% premarket. Top and bottom line miss, paired with a nasty cut to its full-year EPS outlook. The recently acquired Foot Locker was also a drag, and the company lowered its full-year same-store sales forecast. Worried about legacy shoe brands. This is why you need to be selective in retail.
10. Some love for Elon Musk's SpaceX. JPMorgan said it's "increasingly positive" on Grok, the chatbot and large language model housed under the company's AI business. Analysts said the Cursor acquisition will improve Grok monetization and become a key driver of SpaceX's AI revenue over time. This stock is a good one to own long term, but tough to predict in the near term. Think about SpaceX in decades, not quarters.
