Breakfast Bites - US Macro data getting weaker
Earnings beings punished; More tariff announcements later today
Rise and shine everyone
US Markets seem to be a little shaky. As we discussed yesterday, liquidity is low, and it doesn’t take much to see sharp market fluctuations. Yesterday’s ISM Services PMI came as quite a surprise, particularly where employment was concerned. The drop is noticeable, and taking into consideration the recent NFP downward revisions, it doesn’t paint a great picture for the labor market.
After the close, we got AMD earnings, and the market wasn’t happy. Stock was down -4%. While revenue topped estimates, adjusted EPS came in barely in line, a tough result for a stock that’s rallied 45% year-to-date on hopes of accelerating growth. Gross margins declined, earnings remain lower year-over-year, and the company also took a write-down on chip inventory. Although data center revenue met expectations, Wall Street had been hoping for stronger growth. Export restrictions on the MI308 chip also weighed on overseas sales, contributing to an operating loss of around $150 million and raising fresh concerns about the long-term outlook for AMD’s data center business.
Adding to the chip worries was Super Micro, down -16% after the company cut its full-year revenue outlook and issued a quarterly profit forecast that missed expectations, fueling concerns over demand and pricing pressure for its high-performance AI servers.