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đŸ”ș Wall Street Upvotes Reddit

+ Echelon Of Earnings From $MSFT, $META, $LLY, $SBUX, $HOOD, etc.

October 30, 2024

Good afternoon! Adidas and Kanye West, now Ye, have officially buried the hatchet. Adidas CEO Bjorn Gulden confirmed both parties reached a no-cash settlement, ending the dispute that followed Adidas’ 2022 split from Ye over his antisemitic remarks. “There aren’t any more open issues,” Gulden stated, putting the drama firmly in the past.

Meanwhile, Adidas is wrapping up sales of its remaining €1.2 billion Yeezy stock, donating proceeds to anti-discrimination groups. With fresh hits like the Samba and Gazelle driving sales up 7% to €6.4 billion in Q3, Adidas raised its yearly forecast to reflect the brand’s strong momentum.

MARKETS

  • Stocks cooled off Wednesday as investors waded through a wave of earnings reports and prepped for more big tech updates. The S&P 500 slipped 0.33%, while the Dow edged down 0.22%. After setting a record on Tuesday, the Nasdaq also pulled back as chipmaker struggles dragged the sector down.

  • The day started with optimism after Alphabet’s strong results, but the vibe shifted as focus turned to Microsoft and Meta’s anticipated announcements. By late trading, Meta shares dipped, while Microsoft inched upward then ended red after-hours, adding some suspense to this tech-heavy earnings season.

STOCKS
Winners & Losers

What’s up 📈

  • Reddit soared 41.97% after delivering a blockbuster Q3 earnings report, posting 16 cents per share versus the anticipated 7-cent loss, and $348.4 million in revenue, beating the $312.8 million consensus. ($RDDT)

  • Garmin climbed 23.25%, reaching a new 52-week high, on strong Q3 results with earnings of $1.99 per share on $1.59 billion in revenue, surpassing forecasts of $1.45 per share and $1.44 billion in revenue. The company also raised its full-year outlook. ($GRMN)

  • Snap Inc. surged 15.89% after a stronger-than-expected Q3 report, posting 8 cents per share against the 5 cents expected and $1.37 billion in revenue. It also announced a $500 million stock repurchase program. ($SNAP)

  • Shake Shack rose 7.79% as Q3 earnings of 25 cents per share on $316.9 million in revenue topped estimates of 20 cents per share on $316.1 million, hitting a 52-week high. ($SHAK)

  • Dell Technologies increased 6.39% following news that Super Micro Computer's financial auditor resigned, potentially opening up new opportunities for Dell in the AI server market. ($DELL)

  • AbbVie gained 6.36% after exceeding Q3 earnings expectations and announcing a quarterly dividend increase. ($ABBV)

  • United Airlines edged up 4.54% on news that it will raise requirements for frequent flyer status, a move aimed at enhancing profitability and exclusivity in its loyalty program. ($UAL)

What’s down 📉

  • Super Micro Computer dropped 32.68% after disclosing that its auditor, EY, resigned, citing concerns about board independence and accounting practices. ($SMCI)

  • Wingstop fell 21.40% following a Q3 earnings miss, posting 88 cents per share against the expected 95 cents. ($WING)

  • AMD declined 10.62% after issuing Q4 revenue guidance of $7.5 billion, in line with expectations, while meeting Q3 earnings and beating on revenue. ($AMD)

  • Chipotle slipped 7.87% as Q3 results missed revenue estimates, and same-store sales rose only 6%, below the expected 6.3% growth. ($CMG)

  • Eli Lilly dropped 6.28% after reporting weaker-than-expected Q3 earnings of $1.18 per share on $11.44 billion in revenue, missing estimates of $1.47 per share and $12.11 billion. The company also cut its full-year outlook. ($LLY)

  • Kraft Heinz declined 3.07% following a Q3 revenue miss, marking its sixth consecutive quarter below sales estimates, citing weak demand for meal kits and snacks. ($KHC)

  • Qualcomm fell 4.76%. ($QCOM)

  • Cava declined 3.03%. ($CAVA)

SOCIAL MEDIA
Wall Street Upvotes Reddit

Reddit just scored its first profit ever, and Wall Street is buzzing.

The internet’s favorite forum reported Q3 revenue of $348.4 million, a 68% jump year-over-year that smashed expectations. Net income hit $29.9 million, a huge swing from last year’s $7.4 million loss.

The big news sent Reddit shares soaring 42%, tripling its value since going public in March—a huge win for a platform known for everything from meme stocks to life hacks.

The Ad Game and AI Boost

What’s fueling Reddit’s rise? A smarter ad strategy and a healthy dose of AI. New ad formats, video placements, and sports partnerships are finally converting Reddit’s huge traffic into ad dollars.

Meanwhile, Reddit’s data has become gold in the AI world—Google and OpenAI now license Reddit’s data to train their AI models, helping drive “other revenue” up 547% to $33.2 million. CEO Steve Huffman credits these changes for turning Reddit into a profit machine.

User Surge and Global Reach

The numbers show Reddit’s user base is growing, too.

Daily active users jumped 47% year-over-year to 97.2 million, with a 70% spike in logged-out visitors. Reddit’s new AI-driven translation features are drawing international traffic by the millions, and Huffman plans to keep that momentum going by making it easier for visitors to create accounts.

With Reddit posts also ranking higher in Google search results, its influence is clearly on the rise.

More Than Just a Forum

From data licensing to international expansion, Reddit is no longer just the internet’s quirky corner—it’s a serious revenue contender. As its user base and ad revenue grow, Reddit’s steady pivot from niche to mainstream has turned it into a profitable force in social media.

For a platform born from open-forum debates, that’s no small feat.

NEWS
Market Movements

  • 📊 Ad Spending Boosts Tech Stocks Ahead of Elections: Alphabet, Snap, and Reddit saw impressive gains after reporting strong earnings linked to increased ad spending, driven by holiday preparations and election ads. Alphabet rose 6%, Snap jumped 13.4%, and Reddit surged 23% on the news. ($GOOGL), ($SNAP), ($RDDT)

  • 👔 EstĂ©e Lauder Names New CEO to Succeed Fabrizio Freda: EstĂ©e Lauder has appointed StĂ©phane de La Faverie as CEO, effective January 2025, marking a leadership shift as William Lauder steps down as executive chairman, though he will continue as board chair. ($EL)

  • ☕ Starbucks Bids Farewell to Olive Oil Coffee Line: Starbucks is discontinuing its olive oil-infused “Oleato” line in the U.S. and Canada as new CEO Brian Niccol focuses on streamlining the menu and aligning with consumer demand. ($SBUX)

  • 🚗 Geely Unveils New Hybrid Tech to Challenge BYD’s Lead: Geely has introduced a hybrid technology that surpasses BYD’s system in fuel economy and range, aiming to capture a larger share of China’s competitive EV and hybrid market.

  • 📈 Private Sector Job Growth Surges to 233,000 in October: ADP reported a surprising increase in private job creation, with 233,000 new roles added in October—significantly outpacing the forecast of 113,000. This marks the strongest hiring month since July 2023, despite challenges from hurricanes and labor strikes. Key sectors like education, health services, and trade drove much of the growth, while manufacturing saw a dip of 19,000 jobs, largely due to Boeing’s ongoing strike.

  • 🎬 Netflix Eyes Imax Release for Greta Gerwig’s Narnia Film: Netflix is reportedly planning to bring Greta Gerwig’s upcoming Narnia adaptation to Imax theaters, potentially expanding its reach beyond streaming.

  • 💰 TikTok’s Zhang Yiming Becomes China’s Wealthiest Person: TikTok co-founder Zhang Yiming now holds the title of China’s richest individual, with a net worth nearing $50 billion, according to the BBC.

EARNINGS
Echelon Of Earnings

  • đŸ’» Microsoft shares ticked down 3.60% post-earnings after reporting Q3 revenue of $65.6 billion, surpassing Wall Street's $64.5 billion estimate. Profits also beat, coming in at $3.30 per share. AI contributed 12 points to Azure’s 34% growth, though data center limitations held back further gains. Meanwhile, rising AI-driven demand in its Office products and Bing boosted search ad revenue by 19% ($MSFT).

  • đŸ“±Meta shares slipped slightly 3.06% after Q3 results showed $40.6 billion in revenue, a 19% increase year-over-year, beating Wall Street’s $40.3 billion target. Reality Labs, Meta’s AI and augmented reality arm, reported a $4.4 billion loss, as Zuckerberg aims to keep AI investments rolling. The company’s ad-targeting improvements, however, bolstered engagement, even as Wall Street questions the returns on its AI and AR bets ($META).

  • 💊 Eli Lilly dropped 6.28% after its weight-loss drugs Zepbound and Mounjaro came up $900 million short of expectations, attributed to inventory issues. Q3 revenue was $11.4 billion, below analysts’ $12.2 billion projection, and full-year guidance was cut by $600 million. Despite supply-chain fixes, analysts worry about demand as compounded drugs gain ground, posing a potential risk to Lilly’s future sales ($LLY).

  • ☕ Starbucks is undergoing a major strategy shift under new CEO Brian Niccol, who aims to reverse a 7% drop in Q4 same-store sales. Shares are up slightly since his hire, but challenges remain as Niccol plans to simplify Starbucks’ menu and refine mobile ordering. Investors await insights on how Niccol will drive growth in key markets, especially China, where the chain faces a tough competitive landscape ($SBUX).

  • 📉 Robinhood sank 11.38% in after-hours after Q3 net revenue of $637 million fell below the expected $663.5 million. A costly customer promotion, which offset revenue by $27 million, impacted the bottom line despite robust user growth in new products like crypto and futures trading. The company aims to attract more mature investors with recent expansions but faces challenges in turning promotional spending into sustainable revenue ($HOOD).

Calendar
On The Horizon

Tomorrow

PCE is the inflation metric everyone’s watching—especially the Fed. Core PCE, the central bank’s go-to gauge, could tip the scales toward rate cuts if tomorrow’s reading stays low. All eyes will be on the data as it rolls in.

Initial jobless claims offer a weekly pulse on the labor market, though recent hurricanes might muddy the numbers a bit. Thankfully, the latest figures have held steady, keeping any labor market jitters at bay..

Before Market Open:

  • Roblox took a beating in late September after a harsh report from short-seller Hindenburg Research. If the company manages to counter these claims, it could become a prime buying opportunity, given its rapid growth, strong cash reserves, and a young, expanding user base. Analysts expect a -$0.39 EPS on $1.02 billion in revenue. ($RBLX)

After Market Close:

  • Apple has slightly underperformed the market as investors fret over growth, especially in iPhone 16 sales. With demand dipping in China’s sluggish economy, Apple is ramping up its game with new AI software and fresh Mac hardware. CEO Tim Cook will be looking to reassure shareholders with a solid plan for future growth. Consensus: $1.60 EPS, $94.41 billion in revenue. ($AAPL)

  • Amazon still rules online retail, but all eyes are on its cloud segment, AWS, now a major revenue machine. With heavy investments in AI, AWS is primed for growth, though costs are a concern. Investors will be watching for signs that CEO Andy Jassy’s investments are paying off, especially as consumer spending slows. Consensus: $1.14 EPS, $157.14 billion in revenue. ($AMZN)

NEWS
The Daily Rundown

  • 🍔 TGI Fridays Fades from Scene with 50 Store Closures: TGI Fridays has closed around 50 locations, potentially nearing bankruptcy as it faces tough competition, debt, and shifting dining habits that have also impacted chains like Red Lobster.

  • 📰 X Keeps Users in a Political Loop Despite Chosen Interests: X is filling user feeds with political content, even for accounts focused on nonpolitical topics. This unexpected surge in political posts raises questions about platform neutrality and its appeal to advertisers.

  • đŸ„Ź Beef vs. Beans: Industry Faces Off Over Dietary Advice: New dietary guidelines are urging a shift toward plant-based protein, sparking backlash from the beef industry, which warns of nutritional risks. The debate could lead to a shift reminiscent of the 1980s poultry boom.

  • đŸ„Ș NFL’s Love Affair with Uncrustables Is Unmatched: NFL players munch through 80,000 Uncrustables each season, with the Denver Broncos leading at 700 sandwiches per week. Smucker’s, seeing the demand, expects the snack to hit $1 billion in annual revenue.

  • 🚀 Space Factories Take Manufacturing to New Heights: Plans for factories in orbit are taking shape, as companies explore zero-gravity production for high-tech materials, from advanced cancer treatments to premium semiconductors—a potential revolution in industrial processes.

RESOURCES
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