Eli Lilly, Caterpillar Plunge After Disappointing Q3 Results

Good morning. It's October 30th, and today we'll look at why Eli Lilly, Caterpillar, and AMD are all plummeting in premarket trade while Alphabet is surging nearly 7% after posting strong Q3 results.

Previous Close 📈

Stocks rose on Tuesday, with the Nasdaq Composite reaching a new record as growth-oriented stocks led the way. The Nasdaq advanced 0.78%, driven by Big Tech anticipation, while the S&P 500 added 0.16%. The Dow lagged, slipping 0.36%.

Futures

S&P 500 futures are up 0.2% Wednesday morning, with Nasdaq 100 futures climbing 0.8% following Alphabet’s earnings beat, which saw shares surge 5% amid strong cloud revenue growth. Dow futures are up 32 points (0.08%).

Traders are focusing their attention on earnings from Meta and Microsoft and on the preliminary Q3 GDP report.

Mobile Industry

32,481%: First Major Disruption in Smartphones in Over a Decade

Imagine a phone that doesn’t just serve as a gadget but becomes an income-generating asset. This smartphone is pioneering a new model where users can earn money from everyday activities—like listening to music, playing games, or even simply charging.

With an impressive 32,481% growth in revenue from 2019 to 2022, this company ranked #1 among software companies on the Deloitte 500 list of the fastest-growing firms.

With shares available at just $0.25, this could be the most disruptive move in the smartphone industry since its inception.

 Take a look and secure your position today!

*This is a paid advertisement for Mode Mobile Reg A offering. Please read the offering statement at https://invest.modemobile.com/.

What to Watch

Several major firms will announce their quarterly earnings before the market opens today, including Eli Lilly and Company (NYSE: LLY), Caterpillar (NYSE: CAT), and Automatic Data Processing (NASDAQ: ADP).

Tech biggies Microsoft (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META) will report their results after the market closes, along with Amgen (NASDAQ: AMGN), Booking Holdings Inc. (NASDAQ: BKNG), and KLA Corporation (NASDAQ: KLAC) .

On the economic data front, key data will be released this morning, including the ADP Employment Report for October at 8:15 a.m. ET, followed by GDP for Q3, the Advanced U.S. Trade Balance in Goods for October, and Advanced Retail and Wholesale Inventories for October, all at 8:30 a.m. ET.

Pharmaceuticals

Eli Lilly Falls Short of Q3 Revenue Expectations Despite Strong Demand for GLP-1 Drugs

Eli Lilly’s stock is plummeting by 10% in premarket trading today, after it reported third-quarter revenue below Wall Street expectations and revised its full-year guidance.

Revenue came in at $11.4 billion, short of the anticipated $12.17 billion, although it still marked a 20% increase year-over-year. Net income also fell short of forecasts, causing Eli Lilly to cut the high end of its full-year revenue outlook and profit guidance.

The company’s flagship weight-loss drug, Zepbound, and its diabetes medication, Mounjaro, contributed significantly to sales, with a combined $4.4 billion this quarter, up from $4.3 billion in the prior quarter.

However, Zepbound sales reached nearly $1.3 billion, missing the $1.7 billion estimate due to reduced U.S. inventory in the wholesaler channel. Mounjaro generated $3.1 billion, but analysts noted that an increasing number of patients are opting for Zepbound due to its higher-dosage benefits for weight loss.

Eli Lilly’s growth potential extends beyond GLP-1 drugs, as the company is also developing an Alzheimer’s treatment, Kisunla, which could compete with Biogen and Eisai’s Leqembi. Recent studies suggest lower starting doses may reduce the risk of brain swelling—a key concern in Alzheimer’s drugs, including Kisunla, currently in late-stage trials.

The skyrocketing demand in the obesity market has been a major factor behind Lilly’s 50% stock surge in 2024, placing it on track for potential trillion-dollar valuation status.

Construction

Caterpillar Misses Earnings Expectations as Construction and Resource Sales Decline

Caterpillar Inc. shares are falling by 5.8% in premarket trading today due to a disappointing third-quarter earnings report. The construction and mining equipment giant reported net income of $2.46 billion, or $5.06 per share, down from $2.79 billion, or $5.45 per share, a year ago.

Excluding one-time items, Caterpillar’s adjusted earnings per share are $5.17, lower than Wall Street expectations of $5.35.

Total revenue declined 4.2% year-over-year to $16.11 billion, below the expected $16.37 billion, driven by reduced sales volumes as demand from end users waned.

Caterpillar’s largest segment, construction industries, saw revenue drop 9% to $6.35 billion, while resource industries experienced a 10% decline to $3.03 billion. Energy and transportation was a bright spot, with revenue increasing by 5% to $7.19 billion.

Despite a 31.1% stock gain year-to-date, Caterpillar’s weaker sales in key business units, particularly in construction and resources, have raised concerns about ongoing demand.

Semiconductor

AMD’s Q4 Outlook Disappoints Wall Street, Stock Plummets 8%

AMD's stock is falling by nearly 8% in premarket trading after the chipmaker released its third-quarter earnings report yesterday, which matched earnings per share expectations and slightly exceeded revenue forecasts.

While AMD reported adjusted earnings per share of $0.92 and revenue of $6.8 billion—beating the expected $6.7 billion—the company’s Q4 revenue projection of $7.2 billion to $7.8 billion fell short of investor expectations, with Wall Street aiming for $7.55 billion.

Concerns over slowing AI growth for AMD weighed on investor sentiment. However, CEO Lisa Su emphasized strong demand in AMD’s core data center, client, and embedded sectors, citing “significant growth opportunities” due to rising computing demands.

AMD’s data center division delivered $3.5 billion in revenue, surpassing forecasts and marking substantial growth from $1.59 billion in Q3 2023. The client segment also outperformed with $1.9 billion in sales, up from $1.45 billion last year.

However, AMD’s gaming segment experienced a sharp 69% decline, bringing in $462 million compared to $1.5 billion a year ago, as demand for gaming consoles and PC graphics cards continues to drop post-pandemic.

AMD’s stock has risen 72% over the past year, outpacing the S&P 500’s 41% gain but lagging behind competitor Nvidia’s 246% surge in the AI chip market. Despite the Q4 outlook, AMD remains a key player in the AI sector, though it faces stiff competition from Nvidia, which holds a dominant market share.

Technology

Alphabet Reports Strong Q3 Results, Driven by Cloud and AI Expansion

Alphabet, Google’s parent company, delivered robust third-quarter results, surpassing analysts’ estimates on both earnings and revenue.

Earnings per share reached $2.12, beating the projected $1.85, while revenue totaled $88.27 billion, exceeding the expected $86.30 billion, driven by strong performance in the cloud and AI sectors.

Alphabet’s shares are rising by 6.8% in premarket trading.

Google Cloud, a significant growth driver, posted $11.35 billion in revenue, marking a 35% year-over-year increase, fueled by expanding AI services. CEO Sundar Pichai highlighted the company’s AI "full stack," emphasizing its large-scale integration into products used by billions globally.

The core search segment, Google’s primary revenue source, generated $49.4 billion, a 12.3% year-over-year increase. Meanwhile, YouTube ad revenue reached $8.92 billion, slightly above estimates, with improvements attributed to AI-enhanced content recommendations.

CFO Anat Ashkenazi, recently appointed from Eli Lilly, reiterated Alphabet’s focus on cost-cutting through AI, optimizing workforce and physical assets to reallocate resources strategically.

Alphabet’s Other Bets segment, which includes ventures like Waymo and Verily, saw revenue grow to $388 million, up from $297 million last year. Recent internal changes include the restructuring of the AI-focused Gemini team under Google DeepMind, indicating Alphabet’s continued prioritization of AI innovation.

Precision Trading

See What One Ticker... One Trade... EVERY WEEK... Can Do for YOU

Imagine the power of trading just one ticker, once a week. New research reveals that this focused strategy has led to truly extraordinary gains—up to a remarkable 2,614% in under 11 days.

This approach doesn't just simplify trading; it offers the chance to target gains that most strategies miss.

By zeroing in on just one trade each week, traders can cut through the noise and focus on what really works.

This groundbreaking approach could transform the way you view weekly trading, offering consistency without the clutter of endless ticker choices.

If you’re looking for a strategy that’s streamlined and proven, this could be your answer.

See how one ticker, one trade can work for you. Click here for the full details.

NerdWallet Inc. [NRDS] - Last Close: $11.32

NerdWallet is surging 28% in premarket trading.

The firm posted strong Q3 revenue growth, driven primarily by a 916% year-over-year increase in its insurance segment.

The company reported Q3 revenue of $191.3 million, exceeding expectations of $168.5 million and a 25% growth rate from last year.

Small- and medium-sized business (SMB) products also grew, with revenue rising to $27.8 million, boosted by business credit card and loan renewals.

For Q4, NerdWallet forecasts revenue between $164 million and $172 million, surpassing analyst estimates, and projects solid operating income.

Reddit Inc. [RDDT] - Last Close: $81.74

Reddit’s stock is soaring 22% in premarket trading.

The firm reported better-than-expected Q3 earnings and an optimistic Q4 forecast yesterday.

It achieved a significant turnaround, with earnings per share at 16 cents compared to an expected loss of 7 cents and revenue of $348.4 million, surpassing estimates of $312.8 million.

Reddit also saw a 68% year-over-year revenue increase and a rise in daily active users by 47% to 97.2 million.

For Q4, Reddit projected revenue between $385 million and $400 million, exceeding analyst predictions and signaling sustained growth.

Snap Inc. [SNAP] - Last Close: $10.89

Snap shares are up 13% in premarket trading today.

The company surpassed revenue and user growth expectations and announced a $500 million share buyback yesterday.

In Q3, Snap’s revenue rose 15% year-over-year to $1.37 billion, slightly above expectations, and daily active users grew by 9% to $443 million, beating estimates.

The company has attracted advertisers back by improving ad targeting through machine learning and introducing new ad formats, including one that promotes businesses on Snap Map.

Technology

Earn Money With Your Smartphone? This Innovative Device is Reshaping the Market

For the first time in over a decade, a unique smartphone concept is reshaping the industry landscape, turning what was once a monthly expense into a source of revenue.

This innovative device has achieved 32,481% growth from 2019 to 2022, with software revenue now driving its rapid rise to the top.

Unlike any smartphone before, it allows users to earn money through everyday activities—streaming, gaming, even just charging their phones.

Don’t miss out on this exciting pre-IPO opportunity—claim your share today.

*This is a paid advertisement for Mode Mobile Reg A offering. Please read the offering statement at https://invest.modemobile.com/.

Everything Else

• Chipotle maintained steady growth in Q3 but revenue missed Wall Street projections, and shares are dropping 6% in premarket trade as a result.

• China filed a WTO lawsuit against the EU over new EV tariffs.

• Vietnam's Vingroup teamed up with Benya Technologies for a $3.5 billion data center.

• China Life reported record profit boosted by a stock market surge.

• Humana raised its full-year guidance after stronger-than-expected Medicare Advantage growth.

• Bunge Global SA reported a decline in third-quarter profit but surpassed expectations.

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

Click here to get our daily newsletter straight to your cell for free.

P.S. Just like this newsletter, it's 100% free*, and you can stop at any time by replying STOP.