Clean Technology Stock Jumps 29%

Good morning. It's December 13th, and today we’ll look at RH and Broadcom’s surge during premarket trade, T-Mobile’s latest $14B share buyback program, and a tiny clean energy stock that is soaring in premarket trade today.

Previous Close 📈

U.S. stock markets closed lower yesterday. The Dow Jones Industrial Average dropped by 0.53%, while the S&P 500 fell by 0.54%, and the tech-heavy NASDAQ also went down by 0.66%.

Futures

Futures are moving higher this morning, suggesting a more positive tone in early trading. Dow Futures are up 91.00 points, and S&P Futures are gaining +0.33%. NASDAQ Futures are showing the strongest advance, rising +0.69%.

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What to Watch

At 8:30 a.m. ET, the Import Price Index for November will be published, providing insights into price changes for imported goods.

There are no major scheduled earnings reports for the day.

Home Furnishing

RH Shares Surge 17% on Strong Q3 Results and Optimistic Guidance

RH, the luxury home furnishings retailer formerly known as Restoration Hardware, reported robust third-quarter results and an optimistic outlook for the fourth quarter, which is causing its shares to soar 17% in premarket trading today.

The company posted adjusted earnings of $2.48 per share, reversing a loss of $0.42 from the same period last year. Revenue rose 8.1% year-over-year to $811.73 million, slightly below analyst estimates of $812.2 million.

Total demand increased by 13% during the quarter, with brand demand climbing 14%. In November, brand demand accelerated to a 24% increase, and it is up 30% so far in December.

RH expects fourth-quarter revenue growth of 18% to 20%, fueled by a 20% to 22% surge in total demand. For fiscal 2024, the company forecasts revenue growth between 6.8% and 7.2%, supported by demand growth of 9.9% to 10.4%. Adjusted operating margin for the year is expected to range from 11.5% to 11.7%.

The company’s shares have gained nearly 31% in 2024, recovering 79% from lows earlier this year. Competitor Williams-Sonoma rose 2.5% following the announcement, continuing its strong performance with shares up 90% year-to-date. Tempur Sealy also gained 2.2%, nearing a key breakout point.

Semiconductors

Broadcom Nears $1 Trillion Valuation After Strong AI Revenue Outlook

Broadcom (NASDAQ: AVGO) shares are soaring 15% in the premarket today, nearing a $1 trillion market valuation, following a robust revenue forecast driven by booming demand for its custom AI chips.

The company’s first-quarter revenue projection exceeded Wall Street estimates, fueling investor enthusiasm and lifting its stock by approximately $120 billion in premarket trading. Rival Marvell Technology also saw a 5.3% boost.

CEO Hock Tan highlighted Broadcom’s dominance in the AI chip market during Thursday’s earnings call, projecting an AI-related revenue opportunity of $60 billion to $90 billion by fiscal 2027.

The company has already secured contracts with two major hyperscalers, or large cloud service providers, and captured over $12 billion of the addressable AI revenue of $15 billion to $20 billion in fiscal 2024. This includes both custom AI chips and networking equipment essential for data centers.

Broadcom’s stock has climbed more than 62% this year as the company positions itself as a key alternative to Nvidia’s AI processors, which are often costly and supply-constrained. Analysts at TD Cowen estimate Broadcom’s AI revenue could exceed $50 billion by 2027 if its market share holds steady.

Telecommunications

T-Mobile Commits $14 Billion to Share Buybacks by 2025

T-Mobile announced a new $14 billion share buyback program, set to run through the end of 2025, as part of its broader strategy to return $50 billion to shareholders over the next three years.

The wireless carrier is expanding on its September 2023 announcement of a $19 billion buyback initiative that concludes at the end of this year.

In addition to its aggressive buyback strategy, T-Mobile reiterated its commitment to allocating approximately $80 billion towards investments and shareholder returns through 2027.

The company has maintained its position as one of the top three wireless providers in the U.S. by leveraging high-speed 5G networks and offering attractive streaming perks to customers.

The buyback announcement aligns with a competitive trend among telecom giants. Earlier this month, AT&T declared plans to return over $40 billion to shareholders via dividends and stock repurchases over the next three years. T-Mobile projects adjusted free cash flow of $18 billion to $19 billion in 2027, supporting its robust shareholder return program.

Technology

A Tech 7.5x Bigger Than the Internet Economy?

A new technology is about to go mainstream – one Google's CEO has praised as more "profound" than fire or electricity.

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Loop Industries, Inc. [LOOP] - Last Close: $1.23

Loop Industries stock is surging 29% in premarket trade today.

Late yesterday, the clean technology firm announced it had secured $10.5 million through convertible preferred security financing with Reed Societe Generale Group.

The financing terms allow conversion to common stock at $4.75 per share or redemption in cash.

Additionally, Loop finalized the sale of its first Infinite Loop technology license for an upfront payment of $10.5 million, with additional milestone-based payments expected.

EVgo Inc. [EVGO] - Last Close: $6.22

Electric vehicle charging company EVgo is seeing its shares rise by nearly 9% in premarket trade today.

It announced a $1.25 billion loan facility from the U.S. Energy Department last evening.

The loan, provided under the Title 17 Clean Energy Financing Program, will support the deployment of 7,500 high-power fast charging stalls across the U.S., increasing EVgo's total network to at least 10,000 stalls.

The news drove significant trading volume, surpassing 2.2 million shares in the late session, reversing the day's earlier 3.8% loss when shares closed at $6.22.

AYRO, Inc. [AYRO] - Last Close: $0.65

AYRO stock is up 12.5% in premarket trade today.

The zero-emission vehicles manufacturer announced yesterday that it has been named a General Motors (GM) Tier One supplier through a partnership with GLV Ventures.

The collaboration involves supplying GM as part of an expanded low-cost manufacturing and engineering project.

While the financials of the agreement are not available, investors are responding to this news as a positive sign for the company.

Technology

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Everything Else

• Membership fee hikes and robust e-commerce boost Costco’s revenue in an uncertain economy.

• Mitsubishi Chemical explores divestiture of its pharma units as private equity firms Bain, Blackstone, and JIP compete.

• Jeff Bezos will meet Trump as Amazon pledges $1 million for inauguration and streaming support.

• British Hedge fund founder Sanjay Shah found guilty of orchestrating Denmark’s largest-ever tax fraud.

• 26 million travel mugs were recalled by Stanley after reports of lid detachment and burn injuries.

• Trafigura grapples with fraud, impairments, and reduced dividends in a challenging year.

• Labor faces setback as the UK GDP shrinks ahead of the first budget under the new government.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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