Watch This AI Stock Today

Author

Adam Garcia
December 04, 2024

Good morning. It's December 4th, and today, we’ll look at Dollar Tree and Marvell, which are surging after posting strong earnings. Meanwhile, trouble is brewing in the auto sector as GM posts a $5B write-down and VW workers clash with their CEO.

Previous Close 📈

The major indices did not move much yesterday. While the S&P 500 and Nasdaq showed slight gains, the Dow Jones Industrial Average fell by 0.17%.

Futures

Futures are gaining today, with the Dow Jones Industrial Average futures up 0.50%, S&P 500 futures up 0.29%, and Nasdaq-100 futures up 0.65%.

Investors are closely monitoring upcoming economic indicators, including employment data and inflation reports, which could influence Federal Reserve policy decisions.

Technology

The digital transformation race is heating up, but many companies struggle to keep up with the pace of innovation.

Falling behind in adopting AI and digital solutions can mean lost opportunities and declining competitiveness.

One small cap company is solving this problem with AI-powered tools that drive growth in sales, marketing, customer support, and logistics.

Positioned in a market projected to hit $3.4 trillion by 2026, this company is helping brands not only stay afloat but thrive in a rapidly evolving digital landscape.

The opportunity for growth in this space has never been greater.

What to Watch

Keep a close eye on Dollar Tree (DLTR), Hormel Foods (HRL), The Campbell’s Company (CPB), Chewy (CHWY), and Thor Industries (THO), which report their quarterly numbers this morning.

During the day, the ADP Employment data for November will be released at 8:15 a.m. ET, providing insights into private-sector job growth.

At 9:45 a.m. ET, the S&P Final U.S. Services PMI for November will be published, followed by the ISM Services Index for November at 10:00 a.m. ET, which will give a read on the health of the services sector.

The Factory Orders for October will also be released at 10:00 a.m. ET, providing a look at new orders for manufactured goods.

After the market closes, Synopsys (SNPS), SentinelOne (S), PVH (PVH), AeroVironment (AVAV), and Five Below (FIVE) will announce their results.

Retail

Dollar Tree Shares Surge After Beating Q3 Estimates

Dollar Tree, Inc., shares are surging by nearly 7% this morning upon better than expected third-quarter earnings and revenue. The retailer's performance was bolstered by solid same-store sales growth across its Dollar Tree and Family Dollar brands.

The company’s adjusted earnings per share (EPS) of $1.12, is higher than the $1.07 consensus estimate. Quarterly revenue is at $7.56 billion, ahead of the $7.45 billion projected by analysts. Same-store sales grew 1.8%, with Dollar Tree and Family Dollar stores contributing equally to the increase.

Interim CEO Mike Creedon credited the company’s merchandising strategies for driving results, noting that Q3 sales reached the upper end of their expected range.

Looking ahead, Dollar Tree provided fourth-quarter guidance with adjusted EPS expected between $2.10 and $2.30, and revenue projected to range from $8.1 billion to $8.3 billion. While the revenue outlook is strong, the midpoint of the EPS guidance slightly trails the $2.23 consensus.

For fiscal 2024, the company anticipates adjusted EPS between $5.31 and $5.51, with revenue estimated at $30.7 billion to $30.9 billion, aligning with analyst forecasts.

In other news, CFO Jeff Davis will be stepping down, and an external search for his replacement is underway. Dollar Tree also reaffirmed progress on its strategic review of the Family Dollar business, although no timeline was provided for its conclusion.

Automobiles

General Motors Faces $5 Billion Write Down Amid China Challenges

General Motors (GM) is planning to take over $5 billion in charges during the fourth quarter, citing underperformance in its Chinese joint ventures. The Detroit-based automaker revealed in a regulatory filing today that it will write down its equity stake value by $2.6 billion to $2.9 billion and incur $2.7 billion in restructuring charges, most of which will hit in Q4.

Although the non-cash charges will impact GM's net income, the company stated that they won’t affect its adjusted pretax earnings. This comes as GM’s Chinese joint ventures, including its partnership with SAIC General Motors Corp., reported a $347 million loss in the first nine months of 2024. This is a stark contrast to the $353 million profit the ventures achieved in the same period last year.

China, once a significant growth market for GM, has become increasingly challenging due to stiff competition from domestic automakers like BYD, which have improved quality and lowered costs, often supported by government subsidies. GM’s joint venture with SAIC is completing restructuring efforts to address these challenges, focusing on premium imports and a new pickup truck.

Despite these difficulties, GM expects full-year net profits between $10.4 billion and $11.1 billion. However, shares are down 1.27% in premarket trading, reflecting investor concerns about the company’s prospects in the competitive Chinese market.

Technology

Marvell Stock Surges 13% After AI Demand Boosts Forecast

Marvell Technology Inc. shares are soaring 13% in premarket trading today following the release of better-than-expected third-quarter results and an optimistic outlook fueled by artificial intelligence (AI) computing demand.

The chipmaker reported adjusted earnings of $0.43 per share, exceeding analyst estimates of $0.41. Revenue rose 7% year-over-year to $1.52 billion, surpassing the $1.45 billion consensus. For the fourth quarter, Marvell projects earnings of up to $0.64 per share and revenue of approximately $1.8 billion, both significantly ahead of market expectations.

CEO Matt Murphy attributed the strong performance to custom AI silicon programs now in volume production. “Our exceptional results this quarter and robust outlook are primarily driven by AI computing demand,” Murphy stated.

Marvell has positioned itself as a key player in the AI boom, supplying accelerators and components essential for cloud-computing providers. While it hasn’t reached Nvidia's market dominance, Marvell's focus on AI has paid dividends, with its stock up 59% year-to-date prior to the announcement.

Murphy, who has led the company since 2016, reaffirmed his commitment to Marvell amidst reports of being approached by Intel for its CEO position. During a conference call, he emphasized his dedication, stating, “I’m 100% focused on Marvell.”

As AI spending continues to rise, Marvell's strong Q3 and improved outlook highlight its growing importance in the semiconductor landscape.

AI

The AI revolution continues to accelerate, and while the biggest names dominate the headlines, the real opportunities could lie elsewhere. Seven under-the-radar companies are quietly positioning themselves to capitalize on the next wave of AI growth.

These innovative firms are leveraging AI in groundbreaking ways, opening doors to untapped markets and redefining how industries operate. As others chase the usual suspects, savvy investors know that the greatest potential often comes from companies flying under the radar.

With AI poised to reshape the global economy, now is the time to align with the emerging leaders of this transformative industry.

Movers and Shakers

Heron Therapeutics, Inc. [HRTX] - Last Close: $1.18

Heron Therapeutics' stock is soaring 67% in premarket trading today following a major legal victory.

A U.S. District Court ruled in favor of Heron in a patent dispute against Fresenius Kabi USA over its Cinvanti injectable emulsion, used to prevent chemotherapy-induced nausea and vomiting.

The court confirmed that Heron’s patents, valid until 2035, would be infringed by Fresenius’ proposed generic version.

This ruling strengthens Heron's competitive position, safeguarding its market exclusivity for Cinvanti and potentially maintaining significant revenue streams.

Heron plans to seek a court order preventing Fresenius from launching a generic version until the patents expire, further solidifying its advantage.

My Take: Despite today’s surge, HRTX is down 37.57% YTD and is struggling to be profitable. Keep this stock on your wait and watch list for now.

Pure Storage, Inc. [PSTG] - Last Close: $53.54

Pure Storage's stock is surging 20% in premarket trading after the company reported stellar third-quarter earnings yesterday.

The firm also announced a significant "design win" with a top-four hyperscale cloud provider for its DirectFlash technology.

This technology enables faster, more efficient data storage and has the potential to become the standard for hyperscalers like Amazon, Microsoft, Google, or Meta.

For the quarter ending November 3, Pure Storage posted adjusted earnings of $0.50 per share, beating analysts’ expectations of $0.41 per share.

Revenue reached $831 million, surpassing projections of $815 million and representing year-over-year growth from $763 million. The company also raised its fiscal year revenue guidance to $3.15 billion from $3 billion, reflecting strong demand.

My Take: The hyperscaler win further boosts investor confidence in Pure Storage's growth potential, particularly in the AI-driven data storage market. This could be a strong pick for future growth, so keep this stock on your radar.

CN Energy [CNEY] - Last Close: $0.32

CN Energy Group Inc. shares are surging more than 160% in premarket trading today.

The company has received a 180-day extension from Nasdaq to comply with the minimum bid price requirement.

This extension allows CNEY additional time to meet Nasdaq's listing standards, which has positively influenced investor sentiment, leading to the significant premarket stock price increase.

My Take: This is a tiny stock with low volume and high volatility. It would be best to tread cautiously if you want to invest here.

Digital Disruptor

A rising small-cap company is revolutionizing how brands scale and succeed in the digital age.

By delivering cutting-edge AI solutions for marketing, sales, and customer support, they’re helping businesses increase efficiency, drive growth, and capture more market share.

The future of AI-driven business is here, and this stock could be your opportunity to get in early.

Everything Else

  • Okta posted strong Q3 results driven by subscription growth and innovative updates.

  • VW workers clashed with their CEO as the labor minister urges a compromise on closures.

  • Ubisoft ended XDefiant development, citing competition in the live-service games market.

  • Tech giants drive nuclear innovation as Meta seeks new reactors for energy needs by 2030.

  • Wealth management boosts the National Bank of Canada’s quarterly profit by 17% year over year.

  • October job data fuels expectations of Federal Reserve rate cuts at December meeting.

  • Scotiabank sees growth in North America despite missing revenue estimates.

  • NXP aims to bolster the chip supply chain with a Singapore plant expansion and a China-focused strategy.

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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