Nasdaq Tumbles With Oil at 10-Month High

Roku Rises on Impending Layoffs and Higher Guidance

21 minutes ago

Roku Inc. (ROKU) shares were up more than 2% midday Wednesday after the company said it would lay off 10% of its staff as a part of a broader cost-cutting strategy.

The projected cost of severance and benefits to laid-off workers is $45 million to $65 million. Roku anticipates a cost of $160 million to $200 million related to breaking office leases and another $55 million to $65 million related to content taken off the platform.

Nonetheless, Roku raised its third-quarter revenue guidance to a range of $835 million and $875 million from its earlier estimate of $815 million.

Shares of the company jumped 8% early Wednesday before paring its gains.

-Vivian Medithi

Top Analyst Calls Today

1 hr 16 min ago

AeroVironment Inc. (AVAV): Baird upgraded the drone maker to outperform after the company reported earnings of $1 per share in the most recent quarter, topping analysts’ estimates of 26 cents a share. The company also raised its full-year sales outlook, which is completely covered by its order backlog.

Constellation Brands Inc. (STZ): TD Cowen upgraded the alcoholic beverage maker to outperform and raised its price target to $300 from $240, citing growth in its beer segment.

Toast Inc. (TOST): UBS upgraded the restaurant tech company to buy and raised its price target by 25% to $30. Analysts forecast a 30% increase in gross profit in the next two years as restaurants continue to embrace integrated software solutions. 

First Solar Inc. (FSLR): Morgan Stanley upgraded the solar company to equalweight from underweight and raised its price target to $206 from $180, citing its substantial order backlog.

Block Inc. (SQ): UBS downgraded the fintech company to neutral from buy and lowered its price target to $65 from $102. Analysts see profit and payment volume growth slowing in the second half of this year and 2024 as consumers pull back on discretionary spending. 

GitLab Shares Rise After Surprise Profit on IT Security

1 hr 45 min ago

Shares of GitLab (GTLB) jumped more than 2% Wednesday after the tech firm posted a surprising quarterly profit on soaring sales of its information technology (IT) security platform.

GitLab reported fiscal 2024 second-quarter earnings per share (EPS) of 1 cent. Analysts had been anticipating a loss. Revenue was up 38% to $139.6 million, also more than expected.

The company anticipates current-quarter revenue of between $140 million and $141 million, beating estimates.

GitLab shares have rallied after hitting an all-time low in May. They’re up about 15% for the year.

-Bill McColl

Airline Stocks Sink on Warnings of Higher Fuel Costs

2 hr 28 min ago

Shares of U.S. airlines took a nosedive Wednesday after three major carriers warned an unexpected jump in jet fuel prices this quarter could hit profits. 

United Airlines (UAL), Alaska Air Group (ALK), and Southwest Airlines (LUV) all raised their estimates of average fuel costs in the current quarter. United expects to pay an average of $2.95 to $3.05 a gallon of fuel, up from its earlier estimate of $2.80. Alaska expects fuel costs to average between $3.15 and $3.25, also up from $2.80. Southwest Airlines raised its forecast by 15 cents to between $2.70 and $2.80 per gallon. 

Southwest also lowered its operating revenue outlook, while Alaska Air trimmed its margin forecast. 

Airline stocks sank on the revisions with the U.S. Global Jets ETF (JETS) dropping more than 1% Wednesday morning. Southwest and Hawaiian Holdings Inc. (HA) both lost 3%, and JetBlue Airways Corp. (JBLU) dropped 4%. 

EU Says Apple and Amazon Among Big Tech ‘Gatekeepers’ Subject to New Regulations

3 hr 16 min ago

The European Commission (EC) on Wednesday designated six tech giants as “gatekeepers” under its Digital Markets Act (DMA), one of its most comprehensive efforts yet to rein in big tech.

Five U.S. companies including Apple (AAPL), Amazon (AMZN), Meta Platforms (META), Microsoft (MSFT), and Alphabet (GOOGL), as well as one Chinese company, TikTok owner ByteDance, have been designated as gatekeepers under the DMA, which came into effect this year. They will each have six months to fully comply with the obligations of the new law.

Failure to comply could lead to fines of up to 10% of the company’s total worldwide turnover, or 20% in the event of repeated violations. The EC can also mandate that a gatekeeper sell off a business or parts of it, or prevent them from acquiring another firm.

Shares of all five U.S. companies were down Wednesday. Still, the tech giants have had a red-hot year—all have handily outdone the S&P 500’s 16% year-to-date return.

-Mack Wilowski

Chip Designer Arm Locks Apple As A Customer Until After 2040

3 hr 46 min ago

Arm Holdings has locked in Apple (AAPL) as a customer beyond 2040 via a long-term agreement, the British chip design company revealed Wednesday in a regulatory filing related to its initial public offering (IPO).

The company filed Tuesday for its IPO, which is expected to value the company at up to $52 billion and net it nearly $5 billion in proceeds. If the debut lives up to expectations, it will be the biggest IPO of the year so far and the Nasdaq’s third-largest ever.

Arm designs chips that power about 99% of the world’s smartphones and last year the company shipped about 30 billion chips to 260 companies across the globe.

-Fatima Attarwala

Stocks Making the Biggest Moves Premarket

5 hr 13 min ago

Gainers:

• Roku Inc. (ROKU): Shares of the streaming company gained more than 9% after it raised its sales and earnings outlook for the current quarter while also announcing it would cut 10% of staff in an effort to control costs.
• Gitlab Inc. (GTLB): Shares of the software development platform rose more than 5% after it topped analysts’ revenue estimates for the most recent quarter and offered higher-than-expected current-quarter guidance.
• Toast Inc. (TOST): The restaurant payment tech firm’s stock gained more than 4% after it announced co-founder and chief operating officer Aman Narang will take over from current chief executive officer Chris Comparato on Jan. 1, 2024.

Losers:

• Enbridge Inc. (ENB): Shares of the oil and gas distributor lost 7% after it offered to buy several natural gas distribution assets from Dominion Energy (D) for $9.4 billion. Shares of Dominion slipped more than 2% premarket.
• Asana Inc. (ASAN): Shares fell 4% even though the project management software provider beat Wall Street’s top and bottom line estimates for last quarter and modestly raised the low end of its current quarter guidance. 
• Southwest Airlines Co. (LUV): The airline’s shares lost almost 4% after it narrowed its revenue outlook for the current quarter and warned of higher-than-expected fuel costs. Most major U.S. airlines were also lower in premarket trading.

5 Things to Know Before Markets Open

5 hr 35 min ago

Here’s what investors need to know to start their day:

1. The FTC is reportedly set to file an antitrust lawsuit against Amazon (AMZN) later this month after Amazon officials failed to offer concessions to the regulatory agency at a key meeting in August.
2. The European Union has listed several tech giants, including Apple, Microsoft, and Google-parent Alphabet, as “gatekeepers” under its Digital Markets Act, subjecting the companies to a new set of rules designed to open up more competition.
3. With the backing of SoftBank Group, C&S Wholesale Grocers is reportedly near a deal to acquire stores that Kroger (KR) and Albertsons Companies (ACI) are attempting to sell in order to meet the regulatory requirements for their proposed $25 billion merger.
4. GitLab (GTLB) shares jumped more than 5% in pre-market trading after the software development platform outperformed analyst estimates in its quarterly earnings report on the strength of its artificial intelligence (AI) powered DevSecOps platform.
5. Investors will get a look at the Federal Reserve’s latest data on economic conditions when it releases the quarterly Beige Book today at 2 p.m. ET, ahead of its next meeting in two weeks.

-Terry Lane

Stock Futures Fall for a Second Day

6 hr 5 min ago

Futures contracts connected to the Dow Jones Industrial Average were down 0.2% in premarket trading Wednesday.

S&P 500 futures were also 0.2% lower.

Nasdaq 100 E-mini contracts slumped 0.3%.