WEBVTT - Broadcom and HPE Fall; Snowflake Surge

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<v Speaker 1>Bloomberg Audio Studios.

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<v Speaker 2>Podcasts. Radio. News. The Stock Movers Report, your roundup of

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<v Speaker 2>companies making moves in the stock market, harnessing the power

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<v Speaker 2>of Bloomberg data.

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<v Speaker 3>Let's take a look at some stocks on the move today.

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<v Speaker 3>I'm Nathan Hager, joined by Bloomberg's Dan Curtis. Before we

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<v Speaker 3>get to the biggest winners and losers in the pre-market,

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<v Speaker 3>we've got to talk about the biggest earnings story of

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<v Speaker 3>the day.

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<v Speaker 1>Dan, that would be Broadcom.

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<v Speaker 3>Kind of a complicated picture here.

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<v Speaker 1>Why is the stock lower this morning?

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<v Speaker 4>Yeah, very complicated. And the stock, which trades under ticker AVGO,

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<v Speaker 4>is down about 3% in the pre-market. And we've seen

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<v Speaker 4>a lot of fluctuations after the results came out after

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<v Speaker 4>the bell. Stock went down pretty heavily, then reversed.

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<v Speaker 1>It was back up. Now we're down 3%.

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<v Speaker 4>So as you said, very complicated. So the fourth quarter

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<v Speaker 4>outlook coming in below estimate. So there's a little bit

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<v Speaker 4>of a speed bump in the road ahead of this company.

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<v Speaker 4>It sees $ 35 billion in sales in the current quarter.

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<v Speaker 4>That was short of the average estimate. However, after that,

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<v Speaker 4>the next two years, the company then sees rapid expansion

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<v Speaker 4>with results doubling each fiscal year, so quadrupling over two years,

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<v Speaker 4>which is very robust. And the company is also projecting

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<v Speaker 4>earnings of $ 30 a share in fiscal 2028. So again,

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<v Speaker 4>a few years out, stronger than estimates. So short-term bump,

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<v Speaker 4>but long-term, there looks to be an acceleration. One thing

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<v Speaker 4>to note, though, is Broadcom said it sees Anthropic and

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<v Speaker 4>OpenAI surpassing Google as its biggest customer. Now, both of

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<v Speaker 4>these companies are in the process of going public, which

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<v Speaker 4>would provide a capital infusion, and they may need this

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<v Speaker 4>cash to pay all of their bills. So you also

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<v Speaker 4>then have the complication of two IPOs potentially necessary for

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<v Speaker 4>this company to fulfill all of its current estimates. for

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<v Speaker 4>what will happen in the next few years. So when

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<v Speaker 4>you go out that far, there's a lot of different

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<v Speaker 4>ways this could go. If it goes smoothly, it looks

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<v Speaker 4>very strong. However, you could get a few bumps in

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<v Speaker 4>the road.

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<v Speaker 3>Okay, so let's put a little bit of a drag

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<v Speaker 3>on NASDAQ futures this morning, an even bigger drag from HPE.

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<v Speaker 3>This earnings story seems a little more straightforward, Dan.

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<v Speaker 1>Yeah, it is.

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<v Speaker 4>So HPE shares are down 4% in the pre-market, and

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<v Speaker 4>the company is failing to live up to the hype

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<v Speaker 4>that existed into the earnings report yesterday morning.

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<v Speaker 1>We were talking about Dell.

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<v Speaker 4>That had HPE investors enthusiastic into their earnings, however, not

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<v Speaker 4>quite making it. So the company beat top and bottom

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<v Speaker 4>line estimates for the fiscal third quarter. It raised its

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<v Speaker 4>revenue projections. Gross margins are expected to moderate towards historical levels,

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<v Speaker 4>so we're starting to see signs of margin contraction. And also,

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<v Speaker 4>data center networking revenue fell 6%, and that was driven

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<v Speaker 4>by supply constraints. That particular area of the overall networking

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<v Speaker 4>segment led the networking revenue to miss for the period.

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<v Speaker 1>That is weighing on shares this morning.

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<v Speaker 3>Okay, so that's one of the biggest losers pre-market. The

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<v Speaker 3>biggest winner and then some... Snowflake, wow.

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<v Speaker 1>What a pop.

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<v Speaker 4>24% pop, ticker S-N-O-W.

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<v Speaker 1>It's a cloud-based data platform.

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<v Speaker 4>It's projecting fiscal year revenue will be around $ 6 billion.

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<v Speaker 1>That is higher than the average street estimate.

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<v Speaker 4>The company's been weaving artificial intelligence into its platform, and

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<v Speaker 4>that's starting to pay off.

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<v Speaker 1>It has a coding assistant that they call Coco.

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<v Speaker 4>It had 2,000 new customer accounts that increased total by

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<v Speaker 4>over 25%. JP Morgan analysts note that the third consecutive

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<v Speaker 4>quarter of product revenue acceleration showcases both AI and core upsides.

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<v Speaker 4>The shares have already more than doubled off the year's lows.

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<v Speaker 4>It is continuing up significantly higher as both the AI

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<v Speaker 4>and the non-AI parts of this business show some strong acceleration.

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<v Speaker 3>And we got a pretty positive earnings story as well

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<v Speaker 3>outside the tech space from Five Below.

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<v Speaker 4>Right.

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<v Speaker 1>So ticker is 5FIVE.

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<v Speaker 4>It's a discount retailer and it's lifting its full year outlook,

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<v Speaker 4>seeing net sales coming in about 4% higher than its

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<v Speaker 4>previous guidance. Now, this comes in with a little bit

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<v Speaker 4>of a cautious outlook that the company issued in June.

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<v Speaker 4>It was concerned about the impact of persistent inflation, but

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<v Speaker 4>is now raising guidance higher. CEO said that the raised

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<v Speaker 4>forecast is a result of the company being able to

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<v Speaker 4>quickly capitalize on online trends.

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