Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The Stock Movers report, your roundup of companies making moves
Speaker 2: in the stock market, harnessing the power of Bloomberg Data.
Speaker 1: Let's take a look now, add some stocks making news
Speaker 1: in the week ahead. I'm Nathan Hager, joined by Bailey Lipschultz,
Speaker 1: senior equities reporter for Bloomberg News. And Bailey, it looks
Speaker 1: like Wednesday is going to be a particularly busy day
Speaker 1: on the earnings. We got several big names reporting in
Speaker 1: the middle of the week. So let's start with Cisco.
Speaker 1: The tech earnings aren't quite done with us yet.
Speaker 3: Huh Now, not done with us yet, and we're pivoting
Speaker 3: to some of those I don't know, actual companies that
Speaker 3: make real tangible goods that you can hold, and Cisco's
Speaker 3: going to be a big one given the stocks up
Speaker 3: more than thirty percent over the last year and a
Speaker 3: lot of expectations are a big focus on can they
Speaker 3: maintain the momentum that we've been seeing given the jitters,
Speaker 3: probably speaking around software AI and kind of the broader
Speaker 3: sell off.
Speaker 1: Yeah, we've seen this sub mat of sell off, particularly
Speaker 1: and software stocks after the anthropic AI agent was announced
Speaker 1: so how could that potentially affect the results we see
Speaker 1: from Cisco particularly well.
Speaker 3: I think the big question comes back to what is
Speaker 3: management guide towards for the remainder of twenty twenty six
Speaker 3: And everyone seemingly is marking down their software expectations. But
Speaker 3: is a company like Cisco that makes the hardware and
Speaker 3: is able to at least benefit from a huge push
Speaker 3: of AI investments. The question will be is there actually capacity?
Speaker 3: Is their capacity constraight and are we going to hit
Speaker 3: a point where maybe some of these companies, the likes
Speaker 3: of Meta and Google, who seemingly are not slowing down
Speaker 3: on their investment, are we going to see that potentially
Speaker 3: hidden inflection point or a peak and that'll be critical
Speaker 3: for investors. But again, this is a stock that has
Speaker 3: continued to rally over the last few days and weeks,
Speaker 3: as opposed to, as we mentioned, the big sell off
Speaker 3: that we've seen for anything that could lose out to
Speaker 3: AI making their kind of software relevant.
Speaker 1: Along with big Tech, we're waiting for earnings from Big Max.
Speaker 1: What do we expect from McDonald's this week, Bailey, There's
Speaker 1: a lot.
Speaker 3: Of optimism about how how McDonald's is positioning benefiting from
Speaker 3: tax rebates for the lower end consumer, benefiting potentially from
Speaker 3: your upper and middle class down shifting some of their spending.
Speaker 3: This is a company that, if you look at the
Speaker 3: chart on a twelve month basis, looks a bit like
Speaker 3: an EKG. But right now it's going to close at
Speaker 3: another record high. So this is a lot of excitement
Speaker 3: around their new offerings. It does seem like when you
Speaker 3: talk to analysts or look through some of the notes,
Speaker 3: this is one of the companies that could benefit as
Speaker 3: a fast food operator, not only here in the US,
Speaker 3: but globally speaking. So again, does it turn into to
Speaker 3: your point of price perfection example remains to be seen,
Speaker 3: but a lot of excitement.
Speaker 1: So there are a lot of questions that aren't there
Speaker 1: about whether the pivot, the return of the extra value
Speaker 1: meal is going to eat into McDonald's margins potentially.
Speaker 3: Well that's the question when you look at a company
Speaker 3: like McDonald's, or you kind of look broadly speaking at
Speaker 3: some of these companies who are needing to rethink their playbook,
Speaker 3: does that impact margins and are investors willing to underwrite
Speaker 3: maybe more narrow margins for actually a return to growth.
Speaker 3: They're seemingly a bigger kind of beat on the top line.
Speaker 3: But the questions do come back to your point. If
Speaker 3: you're using better deals or trying to get people in
Speaker 3: the door, and you're competing with other peers who are
Speaker 3: catering towards people who don't want to spend up to
Speaker 3: eat out or eat fast food, how does that ultimately
Speaker 3: impact the bottom line. But it does seem like again,
Speaker 3: at least the cell side is very optimistic, and I
Speaker 3: do want to call out the fact that if investors
Speaker 3: are rotating away from fast growing tech stocks, McDonald's is
Speaker 3: not a bad place to park your money. And we've
Speaker 3: been seeing that play out over the last few weeks.
Speaker 1: And along with McDonald's and Cisco Systems, we're going to
Speaker 1: get earnings as well from Tea Mobile on Wednesday. I
Speaker 1: think we had some recent beats, didn't we from Verizon
Speaker 1: and AT and T. Where does that leave the country's
Speaker 1: most valuable cell phone provider.
Speaker 3: It's kind of stuck in a rut. If you look
Speaker 3: at the stock price right now on Team Mobile, really
Speaker 3: move in sideways. Yes, it did rally from a low
Speaker 3: at the end towards the end of January of one
Speaker 3: hundred and eighty three dollars. But when you compare or
Speaker 3: overlay their charts against AT and T to your point
Speaker 3: or Verizon, those stocks look like rocket ships. Verizon over
Speaker 3: the last week went from thirty about forty dollars a
Speaker 3: share to forty seven dollars a share. On the flip side,
Speaker 3: AT and T is up pretty sharply after rallying after
Speaker 3: its results, So it does seem like investors maybe are
Speaker 3: baking in some optimism. There was a bit of a lift,
Speaker 3: which we typically do see with mobile or spectrum providers.
Speaker 3: We do see with airlines when one company beats, people
Speaker 3: get a bit more optimistic. But if we're looking at
Speaker 3: a T Mobile stock that on the last twelve months
Speaker 3: is down, it doesn't seem like investors are maybe giving
Speaker 3: them the credit to benefit again from the optimism and
Speaker 3: from what all intents and purposes, kind of looks like
Speaker 3: a little bit like a rocket ship as much as
Speaker 3: it could for a communication company. What we saw for
Speaker 3: Verizon again rallying twelve percent last week after their results.
Speaker 1: So what are the potential big growth drivers for T
Speaker 1: Mobile in this quarter?
Speaker 3: Well, the big focus is going to be on how
Speaker 3: are they competing with AT and T With Verizon, can
Speaker 3: they continue to compete on price. We all see the
Speaker 3: Verizon ads about how if you can swap and they
Speaker 3: can beat your price for a mobile provider. The big
Speaker 3: other question is are they going to benefit potentially from
Speaker 3: what we've seen play out with SpaceX's starlink direct to
Speaker 3: consumer potentially from Starlink. The big question also is when
Speaker 3: you look at these companies in their propensity to return capital,
Speaker 3: whether that's buybax, whether that's through dividends, managements. Commentary around
Speaker 3: that I think also will be closely watched.
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