The major indexes were narrowly mixed, holding at or near record highs, while the small-cap Russell 2000 rebounded to test 52-week bests. The core PCE price index, the Fed's favorite inflation gauge, showed some reviving price pressures but no worse than feared. Dell Technologies, Pure Storage, Cava, Celsius and Okta were among the big earnings winners, while Zscaler plunged. Viking Therapeutics skyrocketed on strong trial data for its weight-loss drug. Bitcoin soared well above $60,000 while crude oil topped $80 a barrel.
Nasdaq Eyes Record High
The Nasdaq rose solidly, just short of topping its November 2021 peak. The S&P 500 climbed modestly to a fresh all-time high while the Dow Jones fell slightly, just below recent record highs. The small-cap Russell 2000 rebounded right to 52-week highs. Treasury yields retreated as PCE inflation wasn't worse than feared. Crude oil prices rose while Bitcoin soared.
Economic Data Mixed
A big week of inflation, consumption and manufacturing data left the outlook unclear. The Fed's primary inflation gauge, the core PCE price index, came in hot, but basically no worse than expected. Core prices rose 0.4% in January, as the 12-month inflation rate slipped to 2.8% from 2.9%. On a six-month annualized basis, core inflation rose to 2.5% from just 1.9% in December. The PCE report showed consumer outlays rose a mild 0.2% in January, as a 1.2% dive in goods spending largely offset a 1% rise in spending on services. Meanwhile, the Institute for Supply Management factory index unexpectedly slid further below the neutral 50 level, falling 1.3 points to 47.8. But S&P Global's manufacturing gauge showed faster growth.
Bitcoin Skyrockets Above $60,000
Bitcoin spiked about 20% this week and vaulted more than 40% in February, driven by an influx of institutional participation and the upcoming halving event in April. Bitcoin soared as high as $64,037 on Wednesday to its highest level since November 2021 before easing back below $62,000 on Friday. Other cryptocurrency prices and related stocks rallied on the move. BlackRock's iShares Bitcoin ETF has been the clear leader in inflows since its launch at $7.76 billion as of Feb. 29, according to BitMEX Research. High-fee GBTC has seen $8.4 billion in outflows, but still leads spot ETFs in terms of total assets at $26.6 billion. Marathon Digital surged more than 9% on the week despite Thursday's 16.5% tumble following earnings.
Business Software Stocks Mixed
Salesforce said adjusted Q4 EPS rose 36% while revenue climbed 11% to $9.29 billion, slightly beating. But fiscal 2025 revenue guidance was below consensus, Salesforce announced a first-ever 40-cent quarterly dividend and increased its stock buyback by $10 billion. CRM stock rose modestly, nearing its late 2021 record highs. Snowflake reported a 150% EPS surge, far above views, with revenue up 32% to $774.7 million, also beating. But the data analytics firm guided lower on fiscal 2025 product revenue and said Frank Slootman will step down as CEO, but remain chairman. SNOW stock plunged. Workday said adjusted Q4 EPS rose 58%, beating views while revenue climbed 17% to $1.92 billion, in line. Workday forecast 18% (current remaining performance obligations) growth in Q1, slowing from 20% in Q4. Workday reiterated fiscal 2025 guidance for subscription revenue growth of 17% to 18%, mostly just below views. WDAY fell solidly.
Cybersecurity Earnings Strong
Okta said Q4 adjusted profit jumped 110% with revenue up 19% to $605 million, both beating. It also gave solid fiscal 2025 revenue guidance. Shares surged. Zscaler reported fiscal Q2 earnings leapt 105% while revenue climbed 35% to $525 million and billings grew 27% to $627.6 million. All topped estimates. For the current quarter Zscaler guided higher. But shares fell solidly.
Storage Plays Surge
Data storage rivals Pure Storage and NetApp both surged on earnings beats. Pure Storage jumped 24% after it said it earned an adjusted 50 cents per share on sales of $790 million. Both numbers were down slightly year over year but beat expectations. A strong outlook helped, with Pure Storage projecting sales will grow 15% for the current quarter. Meanwhile, NetApp's adjusted EPS grew 42% with sales up 5% to $1.6 billion. NTAP stock gained more than 15% in after-hours trading. Elsewhere, server and storage cloud software firm Nutanix gained 7% after reporting a 76% adjusted EPS gain with sales up 16% to $565 million.
Rival Weight-Loss Drug Stocks Soar
Altimmune and Viking Therapeutics rocketed on weight-loss drug news, with the former tacking on 28% in a day and Viking adding 121%. On Monday, Zealand Pharma and its partner Boehringer Ingelheim said 83% of patients with a liver disease showed improvement after receiving their drug. Just 18.2% of placebo recipients hit the same bar. The Zealand and BI drug uses the same mechanism as Altimmune's experimental weight-loss drug. Altimmune is also testing its drug in the same liver disease. On Tuesday, Viking said patients given its weekly shot for 13 weeks lost up to 14.7% of their body weight. The results were 13.1% better than the placebo group and topped Eli Lilly drug Zepbound. Patients who received weekly Zepbound injections lost 7% to 8% of their weight over 13 weeks in Lilly's Phase 3 study, Surmount-1. Analysts, though, cautioned against making comparisons across two different studies.
Celsius Heats Up On Earnings
Energy drink makers Celsius Holdings and Monster Beverage beat views, with international sales growth helping. Celsius earned 17 cents vs. a 12-cent loss a year earlier. Revenue soared 95% to $347.4 million, though growth slowed for a second straight quarter. Heavily shorted Celsius stock skyrocketed above a base. Monster Beverage reported a 31% EPS gain, meeting views while growth slowed for a second quarter. Revenue increased 14.4% to $1.73 billion, just missing. MNST stock jumped, flirting with buy points.
Cava Feasts On Strong Earnings
The Mediterranean-themed quick-service chain reported a profit of two cents a share vs. views for a break-even Q4. Revenue soared 52.5% to $175.5 million, slightly topping. Same-restaurant sales grew 11.4%. Cava gapped up above a buy point, with the 2023 IPO briefly hitting a new high. Domino's Pizza reported 1% gains for EPS and sales, with profits topping views and revenue slightly missing. The pizza giant hiked its dividend by 25% and announced a $1 billion buyback. Shares soared to a two-year high, but slashed weekly gains.
Dell Sees Booming AI Server Demand
Dell Technologies reported a 22% non-GAAP EPS gain, easily beating Q4 views amid strong demand for its AI servers. Revenue fell 11% to $22.32 billion, also topping. Dell is upbeat on the current year and hiked its dividend by 20%. Shares skyrocketed. Earlier in the week, HP Inc. reported an 11% EPS gain, in line with fiscal Q1 views. Revenue fell 4.6%, falling short. The PC and printer giant sees a tough first half in 2024. Shares slumped.
Energy Plays
Frontline reported better-than-expected fourth-quarter earnings and revenue Thursday, even as the international oil and gas shipper saw profit slide 52% compared to last year. Sales slid 22% to $415 million. FRO stock was little changed. Meanwhile, offshore oil services firm Tidewater reported worse-than-expected earnings and revenue, though they leapt 97% and 62%, respectively. It also OK'd a $48.6 million share repurchase program. Shares jumped on earnings, rising slightly for the week.
In Brief
Shift4, which operates as Shift4 Payments, said fourth quarter EPS rose 49% to 76 cents while revenue climbed 31% to $705.4 million, both missing. Net revenue rose 35% to $269 million, also falling short. For fiscal 2024, the company forecast EBITDA of $655 million, in line with estimates. Shift4 stock initially tumbled Tuesday on earnings, but reversed higher. On Wednesday, shares soared on a takeover report, but reversed lower Thursday as one possible bidder denied interest.
TJX Cos. reported a 26% EPS gain, in line with Q4 views. Revenue climbed 13% to $16.41 billion, the third straight quarter of slowly accelerating growth. The off-price apparel and home goods retailer guided slightly lower on Q1 and for the current year, but hiked its dividend 13% and increased its buyback to $2 billion-$2.5 billion.
C3.ai lost 13 cents per share on an adjusted basis, much smaller than expected. Fiscal Q3 revenue rose 18% to $78.4 million, slightly beating. For the current quarter, the company guided revenue in line. C3.ai has told analysts it expects revenue growth to reaccelerate as more AI pilot projects ramp up into commercial production. Shares gapped higher.
Best Buy reported better-than-expected fourth-quarter earnings and revenue Thursday. EPS grew 4%, breaking a string of eight consecutive year-over-year declines. Sales dipped less than 1% to $14.65 billion. The consumer electronics giant guided generally lower for the current year. Best Buy jumped, briefly hitting a 52-week high.
Alpha Metallurgical Resources reported better-than-expected fourth-quarter earnings and revenue. The coal supplier saw EPS decline 1% to $13.23 with sales increasing 17% to $960 million. Full-year earnings dropped 35%. Shares jumped to a record high Monday, but reversed lower for the week.
Veeva Systems reported adjusted EPS grew 20% while revenue rose 12% to $631 million, both topping fourth-quarter estimates. Shares fell modestly Friday on earnings, erasing weekly gains.
Hewlett Packard Enterprise reported a 24% EPS decline in Q1 that topped lowered expectations. Revenue fell 14% to $6.8 billion, below estimates. The maker of computer servers, networking equipment and data storage systems guided low for the current quarter.
Elastic reported a 112% EPS gain with revenue up 19% to $328 million, both beating fiscal Q3 views. The cloud-based enterprise search firm guided slightly higher on current-quarter revenue. But ESTC stock tumbled Friday.
Autodesk jumped on its fiscal fourth-quarter results, with EPS up 12% and sales climbing 11.5% to $1.47 billion. The design software maker guided in line for Q1 revenue. Shares spiked Friday morning but then faded.
