My top 10 things to watch Wednesday, Feb. 8
1. President Joe Biden’s State of the Union address takeaways: CHIPs and Science Act matters. Oil around for at least a decade. That’s about it. Biden renews call for taxes on billionaires and corporate buybacks. Won’t go anywhere in a GOP-controlled House.
2. Citi raises price target on Club holding Linde (LIN) to $418 per share from $402 and keeps buy rating after a solid quarter. This industrial gas and engineering firm is integral to carbon sequestration and CHIPs Act. Several other analysts also increased their PTs. Linde is a great way to play the Biden administration.
3. U.K.’s Competition and Markets Authority (CMA) says Microsoft‘s (MSFT) $69-billion purchase of “Call of Duty” maker Activision Blizzard (ATVI) will hurt gamers. The CMA will consider companies’ responses before issuing its final report by April 26. ATVI shares down about 3.5% early Wednesday. Whether buyout happens or is not central to our Microsoft investment thesis.
4. Club holding Microsoft: So it’s now forget anything you cared about with the Azure cloud. Now it’s all about ChatGPT and artificial intelligence. AI everything. It will be integrated across all product lines, talking about margin expansion. Most hated stock in the world just two weeks ago. Alphabet (GOOGL), also a Club stock, unveiled AI chatbot, rival Bard.
6. The Dow, the S&P 500 and the Nasdaq are lower, one day after Fed Chairman Jerome Powell’s comments about inflation easing but likely higher interest rates sent markets on a wild ride. The bulls won by the close, with all three stock benchmarks breaking multiday losing streaks.
7. Chipotle Mexican Grill (CMG): Was the fourth quarter really that bad? I would say, no. Despite earnings-per-share (EPS) and revenue misses, the company sees Q1 high-single-digits comps versus 6.7% increase expected. Big reset with costs under control means this should be a good year. That’s what matters. At least 11 Wall Street analysts raise price targets on the stock, which fell roughly 4% early Wednesday.
8. Uber (UBER) shares rise roughly 8% early Wednesday after the ride and food delivery company reported an adjusted profit when analysts were expecting a loss. Q4 revenue also beat. Guidance for Q1: Bookings $31 billion to $32 billion versus $31.25 billion estimate.
9. Under Armour (UAA) holiday quarter (fiscal Q3) beats on adjusted EPS and revenue. Earnings guidance 52 cents per share to 56 cents versus prior guidance 44 cents per share to 48 cents.
10. Bed Bath & Beyond (BBBY) staves off bankruptcy on the backs of the moron memesters. Crazy ups and downs this week: nearly doubling Monday and then cut in half Tuesday.
(Jim Cramer’s Charitable Trust is long LIN, MSFT, AAPL. See here for a full list of the stocks.)
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