🎮 The Pippen to Nvidia’s Jordan

Plus, SpaceX is planning to sell shares at an eye popping valuation.

Happy Friday 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 Rose on Friday. All three major indexes rose, with the Nasdaq Composite hitting a record high as optimism surrounding Nvidia and AI outweighed concerns over Fed rate cuts.

  • 📈 | One Notable Gainer: Shares of Coinbase jumped 9% after the SEC approved a rule change that opens the door to exchange-traded funds that buy and hold ether, the second-largest cryptocurrency.

  • 📉 | One Notable Decliner: Financial management company Workday saw its shares tumble 15% after the company cut its full-year subscription guidance due to lower customer growth than expected.

  • 🎮 | Tomorrow's Trade: The Pippen to Nvidia’s Jordan. Scroll down for more.

Plus, our partner is a cleantech company combating dangerous PFAS chemicals. Learn more here.

YESTERDAY’S POLL RESULTS

🟩🟩🟩🟩🟩🟩 Bullish

🟨🟨🟨🟨⬜️⬜️ Bearish

S&P 500 Heatmap. Credit: Finviz

All Stock Heatmap. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

ROST (+8%) Shares of Ross Stores rose after the company logged stronger earnings and sales in its spring quarter than analysts had been expecting (MW)

BAH (+4%) Military contractor Booz Allen Hamilton reported its best fiscal year since going public with a net income of $128 million (WTOP News)

INTU (-8%) Shares of TurboTax parent company Intuit fell after TurboTax reported that it lost 1 million free users this tax season (YF)

GH (+13%) US FDA advisers backed approval for Guardant Health’s blood test to detect a form of cancer that begins in the colon or rectum (Reuters)

DECK (+14%) Shares of Deckers Outdoor, the maker of Uggs, hit an all-time high after the company reported a YoY sales jump of 21% (Motley Fool)

TOGETHER WITH BIOLARGO

Dennis Calvert, President & CEO of BioLargo Inc. (OTC: BLGO), was recently a guest on Benzinga’s All-Access.

BioLargo is a cleantech and life sciences innovator and engineering services solution provider. Its core products address Per- and Polyfluorinated Substances (PFAS) contamination, achieve advanced water and wastewater treatment, control odor and Volatile Organic Compounds (VOCs), improve air quality and control infections and infectious diseases.

The company has delivered six straight years of sustained revenue growth through continued innovation. Most recently, it has focused on removing PFAS chemicals, sometimes dubbed “forever chemicals,” from the water supply.

OVERHEARD ON THE STREET

CNBC: Eli Lilly is investing $5.3 billion in a manufacturing plant in Lebanon, Indiana, to expand the supply of its highly popular weight loss drug Zepbound.

Bloomberg: Goldman Sachs has revised its Fed rate cut prediction, now claiming the Fed will begin cutting rates in September rather than July.

USA Today: Burger King is accelerating the release of a $5 value meal to compete with McDonald’s and Wendy’s, which have released similar deals.

YF: Box CEO Aaron Levie praised Nvidia’s first quarter results, claiming such a performance hasn’t been seen in the “history of capitalism.”

Bloomberg: SpaceX has initiated discussions about selling existing shares at a price that could value the closely held company at roughly $200 billion.

TOMORROW’S TRADE IDEA, TODAY

The Simpsons 80S GIF

Second Place Isn’t So Bad

Advanced Micro Devices (AMD) is playing catch-up in the chipmaking game. With Nvidia (NVDA) dominating the market, second place is still a very profitable position. 

AMD is seen as one of Nvidia’s major competitors, and its stock has surged over 500% in the past 5 years. But it’s down around 20% since early March. 

According to analysts, the stock is set for a comeback as the company shores up its gaming and industrial arms and data center chip demand increases.

Rebounding Revenue

Last year AMD’s industrial and gaming divisions accounted for half of its total business. Analysts believe the industrial business, bogged down by oversupply, is at or near its bottom. It brought in $846 million in Q1, but it’s expected to hit $1.1 billion by the end of the year. 

Gaming, on the other hand, isn’t expected to rebound quickly. The division’s revenue is projected to jump a few hundred million dollars in 2025 to $3.37 billion. AMD reported that its gaming division was down 48% year-over-year in its first-quarter earnings report.

Once both arms make their comebacks, it will be up to AMD’s data center business to take it to the next level. The company’s management projected in April that its 2024 sales would hit $4 billion, up from its January projections due to increased demand.

Big-Name Demand

The increased demand is coming from large tech companies like Meta (META), Microsoft (MSFT) and Alphabet (GOOG). These companies need a rapid and steady supply of chips at low costs. To get this trifecta, they buy from multiple vendors, which helps AMD’s cause. 

Analysts believe that rising demand and AMD’s efforts to improve production and product effectiveness could allow it to close the gap with Nvidia. If its sales to data centers can add up to even 15% of Nvidia’s, that would translate to $12.2 billion in annual revenue. 

As the AI train rolls along, AMD could pick up a sizable piece of the pie and continue to compete with Nvidia.

Are you bullish or bearish on Advanced Micro Devices (AMD) over the next 12 months?

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TOGETHER WITH BIOLARGO

Dennis Calvert, President & CEO of BioLargo Inc. (OTC: BLGO), was recently a guest on Benzinga’s All-Access.

BioLargo is a cleantech and life sciences innovator and engineering services solution provider. Its core products address Per- and Polyfluorinated Substances (PFAS) contamination, achieve advanced water and wastewater treatment, control odor and Volatile Organic Compounds (VOCs), improve air quality and control infections and infectious diseases.

The company has delivered six straight years of sustained revenue growth through continued innovation. Most recently, it has focused on removing PFAS chemicals, sometimes dubbed “forever chemicals,” from the water supply.

ON OUR RADAR

YF: Elon Musk expressed disapproval over the Biden Administration’s decision to impose new tariffs on Chinese EVs, citing that it inhibits free exchange.

CNN: At a recent tech conference, Elon Musk said artificial intelligence will likely take all of our jobs, and that’s not necessarily a bad thing.

MW: Precious metals prices settled lower for the week, with gold falling over 4% from a recent record high and silver down from a more than 11-year high.

BI: 51% of respondents in a Northwestern Mutual survey said that inflation is their biggest obstacle to financial security.

Bloomberg: From a survey of 4,171 small-business owners, 34% say they only have one month or less of cash on hand.

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