📟 Battle of the Chipmakers

Plus, Amazon's big investment in Singapore.

Happy Tuesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

  • 🟨 | US Stocks Hovered Around Flat on Tuesday as investors look for more information and insight on when the Fed could start cutting rates.

  • 📈 | One Notable Gainer: Telehealth consultation platform Hims & Hers Health gained 6% after announcing it expects second-quarter revenue to range between $292 million and $297 million, higher than the analysts’ $288 million projection.

  • 📉 | One Notable Decliner: Shares of Walt Disney Co. took a 10% dive after the company reported mixed fiscal second-quarter earnings, which included a decline in its theme park revenue.

  • 📟 | Tomorrow's Trade: Battle of the Chipmakers. Scroll down for more.

Plus, our partner is revolutionizing how individuals invest, find out how.

S&P 500 Heatmap. Credit: Finviz

All Stock Heatmap. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

Nvidia, Ferrari, & Palantir

NVDA (-2%) Shares of Nvidia fell after billionaire investor Stanley Druckenmiller said he cut his stake and that AI is a “little overhyped” (CNBC)

RACE (-6%) Ferrari’s Q1 results beat analyst estimates on top and bottom lines, but the company had a disappointing full-year guidance (Benzinga)

PLTR (-15%) Palantir reported stronger-than-expected revenue, but analysts are worried about slowing momentum (WSJ)

PTON (+16%) Shares of Peloton jumped on reports of a potential buyout with private equity firms considering taking the fitness company private (Barron’s)

SPG (+2%) Mall operator Simon Property Group posted a first-quarter revenue beat and lifted its 2024 guidance (SA)

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OVERHEARD ON THE STREET

AP: Disney’s streaming business turned a profit in its first financial report since the challenge to CEO Bob Iger’s leadership.

The Guardian: Boeing is facing a new US investigation into “missed” 787 Dreamliner plane inspections and whether aircraft records were falsified.

Reuters: Amazon plans to spend nearly $9 billion over the next four years to expand its cloud computing infrastructure in Singapore.

WSJ: Instacart and Uber have joined forced to add Uber Eats to the Instacart App as both companies face competitive pressure from rival DoorDash.

CNBC: Another partnership- Life Time fitness is teaming up with Lululemon, naming it the official apparel partner of Life Time pickleball and tennis.

TOMORROW’S TRADE IDEA, TODAY

Photo Galaxy GIF by Samsung France

Samsung Versus SK Hynix

Nvidia (NVDA) might dominate the AI scene, but other companies in the industry are also making their mark. 

Two memory chipmakers have been on the rise: SK Hynix (KRX: 000660) and Samsung (KRX: 005930).

Samsung is currently the world’s largest supplier of dynamic random-access memory chips, crucial to data processing. 

But SK Hynix is hot on Samsung’s tail, recently announcing that it’s the first company in the industry to mass-produce the next generation of high-bandwidth memory chips (HBM3E). It’s currently Nvidia’s number-one supplier of HBM3E chips.

SK Hynix

SK Hynix reported earnings in April and saw its 5-quarter losing streak end. Its net profit for the first quarter came in at $1.39 billion. 

Analyst Trent Masters of Alphinity Investment Management says SK Hynix is the stronger play. He’s bullish because of the company’s reliability and partnership with TSMC (TSM), further solidifying its position as an industry leader. 

Masters likes that SK Hynix has homed in on its core competency: memory chipmaking. Meanwhile, Samsung makes everything from chips to refrigerators.

Nam Hyung Kim of Arete Research agrees that SK Hynix is the stronger pick. He noted that its profit margins look better than Samsung’s and its stock has outperformed over the past 12 months.

Samsung

Samsung’s April earnings report was also strong, beating expectations with first-quarter operating profit up over 900%. 

Sung Kyu Kim of Daiwa Capital Markets has given the stock a buy rating. The analyst predicts Samsung will begin to close the gap between the two companies in the HBM3E space. If the company does catch up, he believes Samsung has more upside potential. 

Nvidia isn’t the only company benefiting from the AI boom, and investors could look to these well-positioned stocks to take advantage of the trend.

Which stock do you think will outperform over the next 12 months?

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“I believe that Simply Wall St is the best program out there. Not only do they provide all the analytic data you need but they display it in a user-friendly format that is actionable. They also provide weekly emails on what is going on with your portfolio, insider buying and selling, dividends analyst recommendations etc…” 
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ON OUR RADAR

AP: The go-broke dates for Medicare and Social Security have been pushed back due to an upbeat economy that’s resulted in improved projections.

NYP: Convicted Theranos CEO Elizabeth Holmes just had her sentence slashed for a second time in less than a year.

BI: Google is co-funding a guaranteed basic income trial that will give 225 families $12,000 a year to help them secure long-term housing.

Axios: According to Friday’s jobs report, more working-age women are employed now than ever before in US history.

CNN: Americans saved up $2.1 trillion during the pandemic. However, the extra spending money is now gone and economists are concerned about what’s next.

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