Biggest S&P 500 Movers on Friday
4 hr 20 min ago
Decliners
- Shares of semiconductor equipment manufacturer Applied Materials (AMAT) tumbled 14%, falling the most of any S&P 500 stock. Although Applied Materials topped sales and profit forecasts for its fiscal fourth quarter, its guidance for the current quarter fell short of forecasts, with macroeconomic uncertainty weighing on its outlook, particularly in China. Shares of fellow chip equipment makers KLA Corp. (KLAC) and Lam Research (LRCX) fell 8.4% and 7.3%, respectively.
- Paramount Skydance (PSKY) shares lost 4.6%, giving back some of the outsized gains posted earlier in the week as the stock drew comparisons to “meme stocks” that have generated trading frenzies lately. The stock has seen major volatility following the completion of the merger between Skydance Media and Paramount Global.
- HSBC downgraded Cisco Systems (CSCO) stock to “hold” from “buy” and lowered its price target. Analysts pointed to Cisco’s modest revenue growth expectations and the possibility of diminishing momentum as the benefits of restocking cycle that has been boosting the computer networking specialist taper off. Cisco stock slipped 4.5% on Friday.
Advancers
- UnitedHealth Group (UNH) shares jumped after a regulatory filing showed that Berkshire Hathaway (BRK.A, BRK.B), the firm run by legendary investor Warren Buffett, has increased its stake in the health insurance giant. UnitedHealth and other insurers have been pressured by rising medical costs and changes in government reimbursement rates, which contributed to UnitedHealth’s decision to withdraw full-year guidance in May. A surge of 12% made UnitedHealth the S&P 500’s top daily performer. Shares of other health insurers also moved higher.
- Sunrun (RUN), the market share leader in the U.S. residential solar business, beat quarterly sales and profit forecasts. The provider of panel installation and battery storage solutions said it would rely on its experience from past regulatory changes to mitigate the impact from pending changes to clean energy tax credits. Sunrun shares rocketed 33%. Shares of S&P 500 constituents First Solar (FSLR) and Enphase Energy (ENPH) shares added 11% and 8.1%, respectively.
- Moderna (MRNA) advanced 5%, adding to gains posted earlier in the week after Jay Bhattacharya, director of the National Institutes of Health, recognized the potential of the mRNA vaccine technology that underlies Moderna’s products. Bhattacharya’s view showed more flexibility on mRNA when compared with tougher rhetoric from other health officials tied to the Trump administration, which has moved to cut funding for mRNA-related research.
Stock Valuations Are Giving Dotcom Bubble Vibes
4 hr 35 min ago
With U.S. stocks sitting near record highs, Wall Street analysts say one key metric is starting to draw dotcom bubble comparisons.
The S&P 500’s price-to-book value ratio has climbed to 5.3, a touch above extreme valuations seen in March 2000, right before the dotcom bubble burst, according to Bank of America market strategist Michael Hartnett.
Except, “it better be different this time,” Hartnett said in a note to clients Thursday.
Factors that would suggest the current market cycle is unlike the one in the 1990s—when tech stock valuations ballooned, and subsequently burst in the early 2000s—include bond allocations, the boom in artificial intelligence, currency debasement as well as global rebalancing away from the U.S. to the rest of the world, he said. However, investors partying on hopes the Federal Reserve cuts rates sooner rather than later could drag on the U.S. dollar, as rate cuts would lower the returns and attractiveness of investments in the currency.
The firm’s Bull & Bear Indicator sits in neutral territory, at a 6.1 on a scale of zero to 10 that measures extreme bearishness to extreme bullishness.
BofA Global Research
“If not different this time, bonds get some love,” Hartnett wrote; international stocks would be favored over the S&P 500 too.
Investors appear “pumped” with expectations the Fed could soon join the “central bank rate cut party,” with valuations being the only hurdle to pushing corporate bonds and stocks higher, he said. Traders are currently pricing in a roughly 87% chance the Fed will cut rates at its next meeting in September, according to the CME Group’s FedWatch tool.
However, a sharp pivot from Fed’s recent policy stance could also give rise to fresh debates on the central bank’s independence, and “disruption [equals] debasement,” Hartnett said, suggesting a policy disruption could drive the U.S. dollar index below 90 and push investors to seek inflation and currency devaluation hedges in gold, crypto, and emerging markets in the second half of the 2020s. The U.S. dollar index, which measures the relative strength of the dollar compared to other currencies, has declined more than 9% this year, at around 98 as of Friday afternoon.
A weaker dollar might prove useful for the Trump administration to see a “’25/’26 boom & bubble,” Hartnett said, which he added could be an easy way “to reverse path of US debt & deficit trends.”
There’s Some Meme-Stock Action Today
7 hr 1 min ago
Why not end the week with some meme-stock action?
That seems to be what’s going on, at least in part, with shares of Opendoor (OPEN), which were recently up some 10%. The company earlier today said its CEO and chair would step down, to be replaced on an interim basis by its chief technology and product officer, while it finishes a search for a replacement a press release said was “well underway.”
The news helped lift shares of the online home-buying company to levels that, at intraday highs, were the highest since July 22, though below their recent high just under $5 apiece. Enthusiasm for the stock driven by meme-stock traders—encouraged by a highly bullish money manager—has helped drive action in the stock, as has a general willingness among traders to dip into riskier corners of the market.
Some other meme stocks were comparably quiet today. Traditional meme names GameStop (GME) and AMC Entertainment (AMC) weren’t doing much in recent trading; a few others, among them GoPro (GPRO) and Kohl’s (KSS), were moving a bit more, though the latter was falling. Some retail-investor money has been shifting toward crypto stocks and related investments, VandaTrack research said earlier this week.
If you’re looking for a reason retail investors keep leaning in with stocks at highs—it might be simply because what they’re doing seems to be working for now. A recent Investopedia survey showed investor sentiment remains high.
The third quarter “to date is a classic ‘global everything rally,'” DataTrek Research wrote earlier today. “It is anchored by the American Tech sector but spreading through every major stock market index around the world.”
One measure of that effect: Retail-investor portfolios recently overtook an ETF that tracks the tech-focused Nasdaq-100 year-to-date for just the second time since 2014, according to VandaTrack; last year was the only time they’ve done so for a full calendar year.
Intel Bucks Chip Stock Sell-Off Amid Tariff Concerns
8 hr 48 min ago
A potential deal with the Trump administration is shaping up to be a saving grace for Intel (INTC), which saw its shares climb Friday while other semiconductor stocks slid.
President Trump told a group of reporters aboard Air Force One Friday morning that he could put tariffs on imported chips as soon as next week.
“I’ll be setting tariffs next week and the week after, on steel and on, I would say chips—chips and semiconductors, we’ll be setting sometime next week, week after,” the president said in-flight, on the way to meet with Russian President Vladimir Putin in Alaska. “I’m going to have a rate that is going to be 200%, 300%,” Trump said. The White House didn’t immediately respond to a request for comment.
The PHLX Semiconductor Index (SOX) was recently down more than 2%. Intel was among a handful of the index’s constituents that was unscathed; shares were up more than 6%.
Reports that the Trump administration is considering taking a stake in Intel are giving the stock a boost. Discussions have included tapping the Chips Act—of which Trump has been a critic—to partially fund a stake in Intel, according to Bloomberg, citing people familiar with the matter. Deal talks follow on the heels of Intel CEO Lip-Bu Tan’s meeting with President Trump on Monday, after Trump publicly called for Tan’s resignation, citing purported China conflicts.
Alex Wroblewski / Bloomberg / Getty Images
A White House spokesperson told Investopedia any discussions “should be regarded as speculation unless officially announced by the Administration.” Intel did not immediately respond to queries about the talks.
Some analysts see the Trump administration as a potential “hero customer,” which Intel could use to fund development for its 14A process, a next-gen chip manufacturing technology that could boost chip speeds.
“Intel could of course use money to help capitalize the fabs given the heavy losses and cash burn, and help to support them during the (likely) years it will take to build up substantial customer base,” Bernstein analysts led by Stacy Rasgon wrote in a report Friday. Intel is already leaning on private equity deals to support building out semiconductor fabrication plants in and outside the U.S.
However, what Trump might want in return is an outstanding question, with investors waiting to see if Trump can “Make Intel Great Again,” the analysts said. The administration recently secured revenue-sharing deals with Nvidia (NVDA) and Advanced Micro Devices (AMD) in exchange for export licenses to resume sales of key AI chips to China.
Other market observers including Jim Cramer, and Morningstar’s Brian Colello also said Intel could likely use the help. “A stake could go a long way toward finishing what Gelsinger couldn’t afford to build but did it anyway,” Cramer tweeted Friday, referencing former Intel CEO Patrick Gelsinger, who stepped down in December.
UnitedHealth Levels to Watch as Stock Surges
10 hr 14 min ago
UnitedHealth Group (UNH) shares surged Friday after Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) revealed a stake in the embattled healthcare giant.
The stock was up over 11% in recent trading at around $303. Still, shares of UnitedHealth have shed over a third of their value since the start of the year, weighed down by worries about investigations into the company’s Medicare billing practices, former CEO Andrew Witty’s sudden departure in May, and a downbeat forecast amid higher care costs.
After bottoming at the start of August, UnitedHealth shares have continued to gain momentum, recently breaking out above a steep downtrend line that extends back to the April peak.
Moreover, the rally in the stock has coincided with the relative strength index moving back above its neutral threshold, indicating accelerating buying interest.
Investors may monitor major overhead areas on UnitedHealth’s chart around $325, $380 and $440, while also watching a key zone of support between $250 and $235.
Read the full technical analysis piece here.
Where Berkshire’s Stock Investments Stood at End of Q2
11 hr 27 min ago
Warren Buffett’s Berkshire Hathaway revealed a position in embattled healthcare giant UnitedHealth Group and reported smaller stakes in longtime holdings Apple and Bank of America, according to a regulatory filing Thursday.
Berkshire (BRK.A, BRK.B) at the end of the second quarter held 5 million shares of UnitedHealth Group (UNH) valued at about $1.6 billion. The company has likely been accumulating shares since the fourth quarter of last year, when it first asked regulators to let it build a position in secret to avoid a price spike. Shares of UnitedHealth Group jumped more than 11% this morning.
Berkshire also opened smaller new positions in security products provider Allegion (ALLE), homebuilder D.R. Horton (DHI), Lamar Advertising (LAMR), and steelmaker Nucor (NUE).
T-Mobile (TMUS) was Berkshire’s sole exit. The conglomerate sold the entirety of its $1 billion stake in the telecommunications giant. It also offloaded nearly half of its Charter Communications (CHTR) holdings.
Berkshire made smaller cuts to two of its largest holdings, selling 20 million of its 300 million Apple (AAPL) shares and 26 million of its 630 million Bank of America (BAC) shares. Buffett began paring Berkshire’s stakes in both last year.
Buffett scooped up 3 million shares of Chevron (CVX), another of his biggest holdings, and left stakes in longtime investments Coca-Cola (KO) and American Express (AXP) untouched.
Berkshire slashed its exposure to banks in the first quarter, exiting its position in Citigroup (C) and trimming its holdings of Bank of America and Capital One (COF). On the flip side, the firm added to some of its food and beverage holdings, including alcohol maker Constellation Brands (STZ) and Domino’s Pizza (DPZ).
In the second quarter, the firm seemed to favor homebuilders. On top of entering D.R. Horton, Berkshire bought about 7 million shares of competitor Lennar (LEN), upping its stake from just 150,000 shares.
Berkshire shares have shed about 11% of their value since Buffett announced in early May that he would step down as CEO at the end of 2025.
Applied Materials Stock Plunges on Weak Outlook
12 hr 58 min ago
Shares of Applied Materials (AMAT) sank in premarket trading Friday, a day after the semiconductor equipment manufacturer gave weaker-than-expected guidance as global economic and tariff worries impact its business, especially in China.
The company sees current-quarter adjusted earnings per share (EPS) between $1.91 and $2.31, and revenue between $6.20 billion and $7.20 billion. Analysts surveyed by Visible Alpha were looking for $2.37 and $7.30 billion, respectively.
CEO Gary Dickerson said Applied Materials was “currently operating in a dynamic macroeconomic and policy environment, which is creating increased uncertainty and lower visibility in the near term, including for our China business.”
CFO Brice Hill added that the company anticipates lower revenue “driven by both digestion of capacity in China and non-linear demand from leading-edge customers given market concentration and fab timing.”
The warning came as the company reported strong third-quarter results. Adjusted EPS came in at $2.48, with revenue rising 8% year-over-year to $7.30 billion. Both were ahead of Visible Alpha consensus estimates.
Applied Materials shares were down 13% in recent trading. Entering Friday’s session, Applied Materials shares were more than 15% higher year-to-date.
Dow, S&P 500 Futures Point to Higher Open
13 hr 47 min ago
Futures tied to the Dow Jones Industrial Average rose 0.6%.
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S&P 500 futures added 0.2%.
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Nasdaq 100 futures were down fractionally.
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