• Investinq
  • Posts
  • 🏷️ Salesforce Goes All In on AI

🏷️ Salesforce Goes All In on AI

+ China Hits Back At U.S. With Export Ban On Rare Minerals

December 04, 2024

Good afternoon! Enron is “back,” but only as a joke. A parody website launched on the 23rd anniversary of its bankruptcy, complete with buzzwords, stock images, and a cheesy promo video. The brains behind it? The same satirists who created the “Birds Aren’t Real” conspiracy. The site openly admits it’s “performance art,” but that hasn’t stopped it from selling merch.

The rebranded Enron mocks corporate culture with slogans like “Success starts with being nice” and a video of people proudly declaring, “I am Enron.” It’s satire at its finest, but whether this stunt has more legs or is just a one-off trick remains to be seen.

MARKETS

*Stock data as of market close*

  • Tech stocks lifted markets on Wednesday, pushing all three major indexes to fresh records. The Nasdaq surged 1.3%, while the S&P 500 added 0.6% and the Dow climbed 0.7% to break above 45,000 for the first time ever. Salesforce was a standout, helping fuel the day’s gains as investors cheered its latest earnings.

  • The rally was further boosted by Fed Chair Jerome Powell’s comments, calling the U.S. economy "remarkably good." With the S&P 500 now hitting its 55th record close of the year and the Nasdaq extending its streak, 2024 continues to shine as one of the strongest years for stocks in decades.

STOCKS
Winners & Losers

What’s up 📈

  • Pure Storage skyrocketed 22.06% on strong earnings and a new contract with a major tech company. ($PSTG)

  • Marvell Technology surged 23.19% after an impressive quarter and subsequent analyst upgrades. ($MRVL)

  • Roku rose 9.58% after Needham analysts identified it as a potential acquisition target. ($ROKU)

  • Salesforce climbed 10.99% on a third-quarter revenue beat and optimistic subscription revenue forecasts. ($CRM)

  • JetBlue Airways jumped 8.25% after revising its full-year revenue guidance upward due to stronger-than-expected holiday bookings. ($JBLU)

  • Okta advanced 5.38% on a strong beat-and-raise quarter. ($OKTA)

  • Eli Lilly gained 2.03% as its obesity drug Zepbound outperformed Wegovy in a clinical trial. ($LLY)

What’s down 📉

  • PSQ Holdings plummeted 37.75% as investors took profits following yesterday’s rally on news of Donald Trump Jr. joining its board. ($PSQH)

  • Couchbase dropped 21.92% after issuing a weaker-than-expected forecast for the next quarter. ($BASE)

  • Foot Locker sank 8.90% after missing earnings expectations and issuing a disappointing fiscal forecast. ($FL)

  • Campbell’s declined 6.24% as the company announced a change in leadership and reported lower-than-expected sales. ($CPB)

EARNINGS
Salesforce Goes All In on AI, Investors Cheer

Salesforce shares shot up nearly 11% on Wednesday, hitting an all-time high, as the CRM titan unveiled quarterly results that surpassed expectations and flaunted its shiny new AI darling, Agentforce.

Revenue for Q3 grew 8.3% year-over-year to $9.44 billion, just ahead of Wall Street’s projections. Meanwhile, profitability flexed its muscles, with an adjusted operating margin of 33.1%, beating forecasts.

Agentforce: Your New AI Wingman

Meet Agentforce: Salesforce’s AI-powered assistant designed to handle customer support and sales grunt work without breaking a sweat. Rolled out in October, it’s already clocking over 200 deals, scoring big names like FedEx and IBM. At $2 a pop per agent conversation, this chatbot’s looking like a moneymaker.

CEO Marc Benioff called Agentforce’s Salesforce-powered data integration its “unfair advantage”—think Iron Man’s suit but for sales reps.

And Salesforce isn’t shy about doubling down: 2,000 new hires are on deck to push the product. But some analysts are cautious about whether Agentforce can sustain its buzz or if it’s just another chatbot in a crowded AI market.

AI = Salesforce’s Shot in the Arm

After a rough spring—hello, layoffs and slowing growth—Salesforce is back in the game. The stock has rebounded more than 50% since May, riding the AI hype train. But it’s not all smooth sailing. Analysts like Guggenheim’s John DiFucci wonder if Salesforce can keep charging premium prices for a tool that could soon be everywhere.

For now, Salesforce is leaning into its AI-fueled momentum, betting on Agentforce to keep it ahead of the pack. If nothing else, the buzz is doing wonders for the stock—and that’s a win any way you spin it.

NEWS
Market Movements

  • 🕊️ UnitedHealthcare CEO Fatally Shot in Targeted Attack: Brian Thompson, CEO of UnitedHealthcare, was killed in a targeted shooting outside the Hilton Hotel in Manhattan ahead of the company’s investor event. The suspect, using a silenced firearm, fled the scene on an e-bike. Thompson, a prominent figure in the healthcare industry, had reportedly received threats prior to the attack.

  • 🏦 Powell Stands Firm on Fed Independence Under Trump: Federal Reserve Chair Jerome Powell expressed confidence that the central bank's independence will remain intact during President-elect Donald Trump's second term. Powell highlighted legislative safeguards that protect the Fed from political influence, emphasizing its mission to maintain maximum employment and price stability.

  • 🛡️ Trump Moves to Block Nippon Steel's U.S. Steel Bid: President-elect Trump reiterated plans to block Nippon Steel’s $15 billion acquisition of U.S. Steel, citing national security and economic concerns. ($X)

  • ✈️ Frontier Airlines Adds First-Class Seating for Revenue Boost: Frontier Airlines announced plans to introduce first-class seating and enhanced loyalty perks, aiming to generate $250 million by 2026 and $500 million by 2028. ($ULCC)

  • 🍸 Constellation Brands Sells Svedka to Focus on Turnaround: Constellation Brands is selling its Svedka vodka brand to Sazerac as it works to revamp its struggling wine and spirits division, which reported a 12% sales drop in Q2. ($STZ)

  • 🚀 SpaceX Valuation Soars to $350B in Share Sale Talks: SpaceX is reportedly exploring a tender offer to sell insider shares, which could raise its valuation to $350 billion — a sharp rise from $210 billion earlier this year. ($TSLA indirectly)

  • 💊 Zepbound Outshines Wegovy in Weight Loss Trial: Eli Lilly's Zepbound demonstrated a 20.2% weight loss in users over 72 weeks, surpassing Novo Nordisk's Wegovy, which showed a 13.7% reduction. The results solidify Lilly's competitive edge in the weight-loss drug market. ($LLY)

  • 💳 Banks Preemptively Raise Fees Amid CFPB Delays: Synchrony and Bread Financial raised credit card APRs by 3-5 points and introduced new monthly fees, anticipating a delayed CFPB rule capping late fees at $8. ($SYF, $BFH)

  • ⚖️ Amazon Faces Lawsuit Over Delivery Exclusions: The D.C. Attorney General filed a lawsuit against Amazon for excluding two predominantly Black ZIP codes from Prime's expedited delivery service while still charging full membership fees. ($AMZN)

TRADE
China Hits Back At U.S. With Export Ban On Rare Minerals

Trade tensions between the U.S. and China are taking a metallic turn. Beijing has banned the export of gallium, germanium, and other rare minerals to the U.S., countering fresh Biden administration restrictions on advanced chip-making tech. These minerals aren’t just shiny rocks—they’re critical for everything from chips to electric vehicles (EVs) to military hardware.

Why This Matters:

  1. Global Reliance: China is the top dog in rare mineral production, dominating gallium and germanium supplies. The U.S., meanwhile, depends on these imports to fuel industries like semiconductors and renewable energy.

  2. Economic Impact: A total ban on these minerals could shave $3.4 billion off the U.S. GDP, according to the U.S. Geological Survey.

  3. EVs in the Crosshairs: Tighter controls on graphite exports—a key EV battery material—could hit automakers scrambling to scale up production.

High-Stakes Moves

This isn’t the first time China has played the mineral card. A similar squeeze on Japan in 2010 prompted Tokyo to slash reliance on Chinese supply chains. The U.S. may attempt a similar pivot, but diversifying mineral imports could take years.

Meanwhile, Beijing’s move signals it’s willing to use its mineral dominance as a counter to U.S. tech sanctions. With President-elect Trump threatening to escalate trade measures further, this tit-for-tat battle is far from over.

The Takeaway: China’s restrictions highlight the urgency for the U.S. to secure alternative supplies of critical minerals. But in the short term, these dueling measures are creating ripples across industries—from chipmakers to car manufacturers—leaving both economies vulnerable in the process. As the world’s two largest economies dig in, the tech and trade landscape is increasingly becoming a high-stakes chessboard.

Calendar
On The Horizon

Tomorrow

The labor market watch rolls on with tomorrow’s initial jobless claims report. Last week showed a continued gradual drop in unemployment filings, and analysts are keeping their fingers crossed for another steady showing this time around.

Before Market Open:

  • Dollar General has taken a beating this year as inflation-strapped low-income shoppers pulled back on spending. A disappointing earnings miss earlier in 2024 triggered a steep selloff that the stock has yet to bounce back from. On the bright side, the stock’s current valuation might just make it a bargain worthy of its own shelves. Consensus estimates sit at $0.95 EPS on $10.14 billion in revenue. ($DG)

NEWS
The Daily Rundown

  • 🇰🇷 South Korea’s Temporary Martial Law Stuns Markets: South Korean President Yoon Suk Yeol briefly declared martial law, accusing the opposition of ties to North Korea. While the declaration was overturned within hours by a unanimous National Assembly vote, the move led to temporary dips in South Korean stocks and global concerns over political stability in the region.

  • 🇻🇳 Vietnamese Tycoon Faces Execution Over $9 Billion Fraud: Truong My Lan, convicted of orchestrating a $27 billion fraud involving the Saigon Commercial Bank, must repay $9 billion to avoid execution. The case, a cornerstone of Vietnam’s anti-corruption crackdown, has shaken investor confidence and led to significant economic repercussions.

  • 🤖 ChatGPT's ‘David Mayer’ Mystery Resolved: OpenAI attributed its chatbot’s inability to process the name “David Mayer” to a glitch. Speculation ranged from sanctions lists to right-to-be-forgotten requests, but OpenAI confirmed the issue was purely technical and not linked to external interference.

  • 📊 AI’s Role in Election Misinformation Minimal, Meta Says: Despite concerns, AI-generated misinformation accounted for less than 1% of flagged election-related content on Meta platforms this season. Meta’s proactive measures, including blocking 590,000 AI-generated images of prominent politicians, appear to have mitigated widespread AI-related misinformation risks.

  • 📺 Walmart Finalizes Vizio Acquisition: Walmart completed its $2.3 billion acquisition of Vizio to bolster its advertising business. The TV maker's SmartCast platform is expected to enhance Walmart Connect, expanding ad revenue and engagement opportunities.

  • 🍕 Pizza Hut Tests Futuristic Design in Texas: Pizza Hut revealed a futuristic restaurant design concept to be piloted in Texas before expanding nationwide. The overhaul aims to modernize the brand while retaining nostalgic favorites like the Book It! program.

  • ⚒️ Volkswagen Faces Strikes Amid Cost-Cutting Push: Nearly 100,000 Volkswagen workers staged walkouts across nine German plants to protest factory closures and pay cuts. The automaker argues the measures are essential to counter weak EV demand, rising energy costs, and competition from China. The strikes may escalate if negotiations fail in the next round of talks.

RESOURCES
The Federal Reserve Resource

Join our small yet growing subreddit 🚀: https://www.reddit.com/r/investinq/

Wall Street Reads 💎 (Best Books):

Check out our latest issues 🎯: https://investinq.beehiiv.com