WEBVTT - Week Ahead: Target, Crowdstrike, and Broadcom

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 1>Let's take a look now at some stocks making news

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<v Speaker 1>in the week ahead. I'm Nathan Hager, joined by Bloomberg

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<v Speaker 1>Equities reporter Carmen Reinikey. On another pretty busy week for earnings,

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<v Speaker 1>despite the fact almost everybody's reported already, but we hear

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<v Speaker 1>from a big name in retail this week, Target on Tuesday.

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<v Speaker 1>It seems like it's been tough for Target for several

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<v Speaker 1>quarters now, Carmen.

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<v Speaker 2>Yeah, it's true.

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<v Speaker 3>So a key figure for them is comparable sales growth.

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<v Speaker 3>It's been negative in the last three quarters, and it's

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<v Speaker 3>something that analysts are expecting will fall again. So that's

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<v Speaker 3>something I'm definitely going to be watching. Shares have actually

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<v Speaker 3>gotten a little bit of a resurgence so far this year.

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<v Speaker 3>They're up about seventeen percent after four consecutive years of falling,

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<v Speaker 3>so that's going to be really important, you know, earnings

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<v Speaker 3>generally speaking, move stocks. I'm also watching this after Walmart's

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<v Speaker 3>report earlier in the month. It forecasts less earnings growth

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<v Speaker 3>for the year than Wall Street anticipated and had a

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<v Speaker 3>pretty conservative view of the US economy and sort of

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<v Speaker 3>unpredictable times for consumers, which I think raised a little

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<v Speaker 3>bit of a red flag. So Walmart usually does offer

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<v Speaker 3>kind of conservative guidance at the start of the year

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<v Speaker 3>and then raises it in the following quarters. But this

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<v Speaker 3>is still one that people are really watching, as you know,

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<v Speaker 3>a bell weather for the US economy, and Target is

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<v Speaker 3>right in line sort of after that.

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<v Speaker 1>Yeah, absolutely, you know, you mentioned that the stock has

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<v Speaker 1>been on the rise since the start of the year

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<v Speaker 1>despite all the troubles. Does that really kind of raise

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<v Speaker 1>the bar for Target when it comes to meeting those

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<v Speaker 1>earning expectations?

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<v Speaker 3>It certainly could. It's the next catalyst for sure that

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<v Speaker 3>investors will be watching for, you know, deciding if they

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<v Speaker 3>want to continue to buy the stock or sell. I

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<v Speaker 3>think the Target's gotten so beat up in the last

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<v Speaker 3>few years that it's maybe not the biggest indicator that

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<v Speaker 3>the bar is raised, And especially because we know they're

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<v Speaker 3>in the turnaround, I think expectations aren't super high for them,

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<v Speaker 3>so we'll see. I mean, certainly bulls want to see

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<v Speaker 3>this rally continue, and.

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<v Speaker 1>We also hear from another software name CrowdStrike on Tuesday

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<v Speaker 1>as well. You know, every time I think about CrowdStrike,

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<v Speaker 1>I think about the outage from a year or so ago.

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<v Speaker 1>Is that something investors still think about?

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<v Speaker 3>You know, that's such a good question. I think the

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<v Speaker 3>CrowdStrike was able to really move past that quite quickly.

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<v Speaker 3>It's not something that I've necessarily seen is the biggest

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<v Speaker 3>problem for CrowdStrike in the last few months. I mean,

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<v Speaker 3>certainly the bigger thing that I'm kind of looking at

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<v Speaker 3>is that we've seen really broad based weakness in software

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<v Speaker 3>and this was actually one of the stocks that got

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<v Speaker 3>hit recently when Anthropic announced a new security feature and

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<v Speaker 3>it's clawed AI models, so it's a cyber security company,

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<v Speaker 3>and other companies sort of in that space, Cloud Flair,

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<v Speaker 3>z Scaler sale point slumped, so crowdstrikes regained some of

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<v Speaker 3>those losses. It's down still though, nineteen percent almost twenty

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<v Speaker 3>percent on the year. So that's actually something that I'm

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<v Speaker 3>looking for sort of most in these earnings is what

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<v Speaker 3>are they going to say about AI going forward and

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<v Speaker 3>how they're incorporating it. If they're you know, they are

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<v Speaker 3>worried about disruption, or if they sort of have plans

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<v Speaker 3>to maybe integrate it and you know, build their business

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<v Speaker 3>going forward, you.

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<v Speaker 1>Know what that kind of decline and with you know,

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<v Speaker 1>the way that software stocks have been hammered so far

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<v Speaker 1>in this discussion around AI disruption, you have to wonder

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<v Speaker 1>whether after these earnings, maybe some investors might see CrowdStrike

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<v Speaker 1>as a by opportunity. Is that something that you're thinking about?

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<v Speaker 3>Oh totally. I mean we've seen so many valuations kind

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<v Speaker 3>of come in because of these big sell offs. So

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<v Speaker 3>if you are a value investor, if you're even just

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<v Speaker 3>looking for you know, stocks at a discount, there are

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<v Speaker 3>a lot of names in software that maybe makes sense.

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<v Speaker 3>So definitely going to be watching there and see if

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<v Speaker 3>investors you know, hear good things in the report and say, okay,

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<v Speaker 3>this is definitely the time to buy.

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<v Speaker 1>And then on Wednesday, Broadcom reports its results. With all

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<v Speaker 1>this nervousness around the AI spending story, where is the

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<v Speaker 1>bar for the AI infrastructure company Broadcom, you know.

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<v Speaker 3>Especially after Nvidia. I think it's going to be really

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<v Speaker 3>interesting to see how investors react to this report. So

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<v Speaker 3>it's another chip maker, it's also kind of gotten some

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<v Speaker 3>shine as maybe you know, moving in and kind of

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<v Speaker 3>grabbing more market share in the chip making space. But

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<v Speaker 3>that being said, it's also kind of moved sideways. This year.

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<v Speaker 3>We've seen you know, investors really rotating out of these

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<v Speaker 3>sort of big tech companies, these you know, early sort

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<v Speaker 3>of picks and shovels AI companies and into you know,

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<v Speaker 3>just maybe safer parts of the market. So broad comes

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<v Speaker 3>down ten percent so far this year, and I'm I'm

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<v Speaker 3>just really interested to see how investors react to this report.

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<v Speaker 3>Analysts still expect really solid figures out of Broadcom, so

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<v Speaker 3>they're estimating you know, adjusted earnings per share growth and

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<v Speaker 3>revenue growth of more than twenty seven to twenty eight

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<v Speaker 3>percent for this company. So we could see another kind

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<v Speaker 3>of similar reaction where you know, the results are really

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<v Speaker 3>good and investors just still aren't convinced and you know,

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<v Speaker 3>buying shares here.

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<v Speaker 1>Yeah, I mean it used to be you know, it's

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<v Speaker 1>twenty something percent earnings growth was huge, but after in

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<v Speaker 1>Nvidia reporting something like seventy plus percent, the bar is

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<v Speaker 1>kind of in a different place for these companies, isn't

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<v Speaker 1>it totally?

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<v Speaker 3>And it's also just under this umbrella of the like

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<v Speaker 3>wide based anxiety around AI and kind of coming from

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<v Speaker 3>two sides. I mean, we talked about software people worried

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<v Speaker 3>about disruption there. But then on the flip side, you

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<v Speaker 3>know all of the Kapex spending that's you know, boosted

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<v Speaker 3>in VideA and you know Broadcom would also be a

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<v Speaker 3>beneficiary of is worrying to investors. They're worried about cyclicality.

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<v Speaker 3>They're worried that it's going to stop at some point.

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<v Speaker 3>So that's really you know, overshadowed one just stocks in

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<v Speaker 3>the eye trade, but the broader market.

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<v Speaker 2>The stockmovers report from Bloomberg Radio. Check back with us

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