This Smart Mobility Stock Is Rallying By 60%

Author

Adam Garcia
August 09, 2024

Good morning. It’s August 9th, and we’re going to look at positive earnings reports for Expedia and Paramount, a continued surge in Nvidia, and a smart mobility stock that is rallying by more than 60% in premarket trading.

Previous Close 📈

Stocks bounced back yesterday after experiencing a sharp drop earlier in the week. The latest weekly jobless claims report eased investors' concerns about the stability of the labor market and the overall health of the U.S. economy.

Futures

Futures linked to all three major indices are inching up this morning, supported by a rebound in stocks after a major sell-off over the last few days.

What to Watch

Evergy and Legend Biotech will post their earnings before the beginning of the day’s trade.

We’ll also get the quarterly earnings reports of Envestnet, Cadre Holdings, and Getty Images Holdings after the closing bell today.

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Entertainment

Expedia Rallies Amid Optimism Over Profit Beat Despite Travel Demand Warnings

Expedia shares are rallying by more than 10% in premarket trading after the company reported quarterly profits that exceeded expectations. This surge came even as it joined other players in the travel industry in warning of a potential slowdown in demand.

Expedia reported strong growth in international travel, with many tourists flocking to destinations in the Middle East and Europe. However, the company anticipates a tapering off of demand due to high borrowing costs and persistent inflation, which are expected to dampen consumer spending.

Domestic travel in the United States has already been under pressure since the beginning of the year, as economic uncertainty has led more Americans to hesitate on travel expenditures.

In response to the slowdown, Expedia is reducing its full-year 2024 bookings guidance to 4% year-on-year growth, down from its previous outlook of mid- to high-single-digit growth.

Other travel companies, including rival Booking.com and short-term rental platform Airbnb, have also noted that consumers are becoming more cautious, waiting longer to book vacations, and being more mindful of their spending.

Despite these concerns, the positive market reaction is being partly attributed to investors perceiving Expedia's guidance as conservative.

Technology

Nvidia Leading Tech Rebound With 6% Gain Amid Renewed Optimism

Nvidia is continuing its strong performance in premarket trading today, surging another 6% following a similar gain yesterday. This rise comes as chip stocks are leading a sharp market rebound, particularly within the tech sector, after a recent downturn.

The bounce-back comes after a tough period for Nvidia, which saw its market capitalization drop by over $750 billion since its June peak. The stock fell approximately 25% due to concerns that the AI trade might be losing momentum and growing fears about the U.S. economy.

Nvidia, which generates over 40% of its revenue from Big Tech companies like Microsoft, Meta, Alphabet, and Amazon, continues to benefit from increased spending on data center infrastructure.

Other major chip stocks, including Advanced Micro Devices (AMD), Broadcom (AVGO), and Intel (INTC), also saw significant gains on Thursday, closing more than 5% higher as the tech sector continues to recover from recent losses.

Nvidia’s stock has been particularly volatile, having fallen more than 6% on Monday as part of a broader tech sell-off.

Media & Entertainment

Paramount's Streaming Segment Turns Profitable Amid Major Layoffs and Cable Write-Down

Paramount Global is rallying by 6% in premarket trading today after it reported its first-ever profit in the streaming division during the second quarter.

Despite the positive news in streaming, the company also announced a nearly $6 billion write-down on its cable business, reflecting the ongoing struggles within its linear TV operations.

In a move to streamline operations, Paramount revealed plans to lay off 15% of its U.S. workforce, with the layoffs expected to be largely completed by the end of the year. This decision comes as the company prepares for a major merger with Skydance Media, anticipated to be finalized in the third quarter of 2025.

Paramount's direct-to-consumer (DTC) segment reported an operating income of $26 million for the quarter, marking a $450 million improvement compared to the same period last year. However, the company’s overall revenue for the quarter fell to $6.81 billion, missing analysts’ expectations of $7.24 billion and representing an 11% decline from the previous year.

Despite the first-quarter rebound in linear advertising revenue due to Super Bowl ad sales, the second quarter saw an 11% year-over-year decline, highlighting the challenges faced by legacy media companies amid increasing cord-cutting trends.

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Movers and Shakers

Iteris, Inc. [ITI] - Last Close: $4.28

Smart mobility infrastructure management software and hardware firm Iteris is rallying by more than 60% in premarket trade today after announcing that it is being acquired by Almaviva, an Italian digital innovation group, for $335 million.

This acquisition means Iteris shareholders will receive $7.20 per share in cash, which is a significant 68% premium over the previous day's closing price.

My Take: The stock might rise until it reaches the acquisition target, so this may be a good one to keep a close watch on.

Nauticus Robotics, Inc. [KITT] - Last Close: $1.92

Nauticus Robotics is up by nearly 55% in premarket trade.

The company is announcing that it will be testing its Aquanaut Mark 2 underwater vehicle in partnership with Florida Atlantic University (FAU).

This partnership will allow Nauticus to conduct necessary testing in both shallow and deep waters at a much lower cost—about 90% less than usual, which will accelerate the vehicle's readiness for commercial use.

My Take: The firm has had issues with its financials for the last several years, registering huge losses. It might be best to keep this in the wait-and-watch bucket for now.

Doximity, Inc. [DOCS] - Last Close: $25.66

Doximity's stock is surging by nearly 27% in premarket trade after reporting better-than-expected financial results for its first fiscal quarter.

Its revenue grew by 17% year-over-year to $126.68 million, surpassing analysts’ expectations. Additionally, Doximity's adjusted earnings of 28 cents per share beat the forecasted 22 cents per share.

Even though cash flow was down compared to last year, the company's strong profits and record user engagement, with 590,000 unique healthcare providers using its tools, indicate robust demand for its services.

My Take: Doximity is up by about 2% year-over-year, though it has been falling in the last couple of months. The strong earnings and forecast might be a good sign to keep this one on your radar.

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Everything Else

  • A CVC Group-led consortium is acquiring Hargreaves Lansdown for $6.9 billion.

  • China’s inflation saw a surprise uptick in July, led by a surge in pork prices.

  • Over half of July’s car sales in China were from EVs and hybrids.

  • A weaker dollar is fueling record weekly gains for emerging market currencies.

  • Taiwan Semiconductor posted 45% sales growth in July amid an AI boom.

  • The U.S. labor market shows resilience as Jobless Claims fall sharply.

  • India’s Mahindra and China’s Shaanxi plan to set up a $3 billion car manufacturing JV in India, pending government approval.

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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