Joey Solitro
Stocks kept market participants on their toes Thursday as investors weighed the impact of "meh" revenue guidance from AI bellwether Nvidia (NVDA). The main benchmarks eventually settled higher thanks to impressive earnings from another notable technology company.
At the close, the Dow Jones Industrial Average was up 1.1% at 43,870, the S&P 500 had gained 0.5% to 5,948, and the Nasdaq Composite had ticked 0.03% higher to 18,972.
Nvidia finished the session up 0.5%. The company gave Wall Street plenty to like in its fiscal third-quarter print, including top- and bottom-line beats and an encouraging update on its next-generation Blackwell AI chips.
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But folks seemed to be hyperfocused on NVDA's fiscal fourth-quarter forecast for revenue of $37.5 billion, plus or minus 2%. While this is above Wall Street's average estimate for revenue of $37 billion, it "was below some of the numbers we heard thrown around in recent days," says UBS Global Research analyst Timothy Arcuri (Buy).
Still, Arcuri notes it leaves "considerable room for upside with our supply chain work on Hopper together with company comments on Blackwell implying another $5 billion headroom beyond the guidance."
Snowflake has its best day ever after earnings
Near the top of the Dow was Salesforce (CRM), which jumped 3.1% thanks to a halo lift from fellow software firm Snowflake (SNOW). Indeed, SNOW stock surged 32.7% – its best day ever – after the data cloud company beat top- and bottom-line expectations for its fiscal 2025 third quarter and raised its full-year outlook.
"We rate Snowflake shares a Buy," says Truist Securities analyst Joel Fishbein Jr., adding "that the company possesses a unique technology advantage that will give them a dominant competitive position in the data cloud in both the short and long term."
Fishbein admits SNOW is not a cheap stock at current levels but the "current valuation is fair on a growth-adjusted basis and that the tailwinds for growth are stronger than market expectations which offer further upside going forward."
BJ's jumps on membership fee hikes, stock buybacks
Looking elsewhere on the earnings calendar, BJ's Wholesale Club Holdings (BJ) reported mixed results for its fiscal third quarter, beating on the bottom line but falling just short on the top line.
Nevertheless, BJ rose 8.3% on news the warehouse club is raising its membership fee for the first time in seven years and buying back $1 billion worth of stock, which equates to roughly 8% of its current market cap.
"We rate BJ shares at Buy as we view BJ's as well positioned in both the near term and long term given its strong value proposition (especially in fuel) in a highly inflationary environment, as well as strong and improving membership trends," wrote BofA Securities analyst Robert Ohmes said in a November 11 note.
Alphabet sinks on DOJ news
In non-earnings news, Alphabet (GOOGL) spiraled 4.7% after the Department of Justice (DOJ) on Wednesday said the conglomerate's Google segment should be forced to sell its Chrome search engine browser. News that the DOJ was considering the request began circulating earlier this week, but the agency filed the formal paperwork last night.
The Justice Department is also asking that Google not be allowed to prioritize its search engine on Android devices or pay others to be the preferential search engine on their browsers.
Jobless claims fall, existing home sales rise
On the economic front, data from the Labor Department showed that initial jobless claims fell by 6,000 last week to 213,000.
"Those expecting the labor market to crack are going to have to keep waiting," says Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "Another moderate jobless claims total underscores the U.S. economy's persistent strength. But as the Fed has recently hinted, that strength may slow the pace at which they cut rates."
Existing home sales rose 3.4% in October from the prior month to a seasonally adjusted annual rate of 3.96 million, according to the National Association of Realtors.
"Many prospective buyers spent September waiting for interest rates to moderate following the Fed's jumbo 50-basis point cut to its key benchmark," says José Torres, senior economist at Interactive Brokers.
But instead, longer-term borrowing costs rose, Torres notes. "After seeing rates escalate, these potential home buyers may have entered the market after giving up hope for mortgage costs to ease."
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