WORLD STREET | NVIDIA'S STELLAR EARNINGS, PFIZER'S COST-CUT PLANS, TARGET'S WEAK GUIDANCE AND MORE
The biggest beneficiary of the AI wave, Nvidia delivered better-than-expected quarterly numbers, despite the huge expectations. US retailer Target not just reported lower-than-expected quarterly earnings but also rolled out a weak guidance for the current quarter. Pfizer launches a new cost-cutting plan, aimed at saving $1.5 billion by 2027. China's Tencent and iFlytek have dropped the prices of their large-language models (LLMs), like the ones ChatGPT uses for chatbots. Hard Rock International refutes any participation to takeover troubled Australian casino operator, Star Entertainment.
Nvidia promise
Nvidia's revenue in the first quarter skyrocketed by 262 percent compared to the previous year, reaching $26.04 billion, surpassing the expected $24.65 billion. Sales in its data center segment, the largest revenue contributor, surged by 427 percent to $22.6 billion, beating estimates of $21.32 billion.
Additionally, Nvidia's forecast for the fiscal second quarter predicts revenue of $28 billion, exceeding analysts' expectations of $26.66 billion. The company also expects its adjusted gross margin for the second quarter to be 75.5 percent, with analysts projecting 75.8 percent. In the first quarter, Nvidia reported an adjusted gross margin of 78.9 percent, higher than the estimated 77 percent.
Meanwhile, the chipmaker also announced a 10-for-one stock split, which along with its stellar earnings and strong guidance lifted its shares above the $1,000-mark in extended trading.
Tough times ahead
US retailer Target's quarterly earnings fell short of Wall Street's expectations, causing a selloff in the counter. Its forecast for the upcoming quarter also failed to impress investors. The retailer's comparable sales fell 3.7 percent in the latest quarter, marking the fourth straight quarterly decline.
Looking forward, the company expects sales growth of flat to 2 percent for the next quarter, which is below analysts' predictions. In contrast, Walmart, Target's biggest competitor, reported stronger results last week due to increased demand for essential items like groceries and household products.
Cash crunch
US drugmaker Pfizer announced a new multi-year program to reduce its expenses by about $1.5 billion by the end of 2027, adding to a $4 billion cost-cutting plan it had announced the previous year.
The company stated that it would record one-time charges, mainly related to severance and implementation costs, of $1.7 billion as part of the new program. It expects to record a majority of the charges that year, with the actual cash outlays expected in 2025 and 2026. However, no plans of layoffs have been announced yet.
Price wars
Chinese internet company, Tencent and artificial intelligence (AI) firm iFlytek, reduced prices of large-language models (LLMs) used in ChatGPT-like chatbots. This move marks the beginning of a price war among some of China's largest tech firms.
Tencent's cloud division announced that its "lite" version of the LLM, called Hunyuan, would now be available for free. Additionally, prices for more advanced versions were slashed by 50 percent to 88 percent. Shortly before Tencent's announcement, iFlytek stated that its "Spark" LLM would either be free or five times cheaper than similar offerings from competitors.
Earlier in the week, the cloud divisions of Alibaba and Baidu, along with Bytedance, had also reduced prices for their LLMs, indicating a broader trend within the Chinese tech industry.
Who's lying?
Hard Rock International, the company behind the iconic Hard Rock Cafe hotels and restaurants, has refuted any participation in a takeover attempt for troubled Star Entertainment. This denial caused shares of the Australian casino operator to drop by 10 percent on Tuesday.
On Monday, Star Entertainment had announced receiving "interest" from a consortium of investors, which included Hard Rock Hotels & Resorts (Pacific), leading to a 20 percent increase in its shares.
2024-05-23T02:40:04Z dg43tfdfdgfd