U.S. Stocks to Watch: Nvidia, Broadcom, Wells Fargo, CrowdStrike, HPE, Guidewire Software, and More

Dow Jones
04 Jun

Stock futures rose modestly Wednesday after the S&P 500 posted a second day of gains led by tech shares and favorable employment data.

These stocks were poised to make moves Wednesday:

NVIDIA rose 0.7% to $142.18 in premarket trading. The stock rose 2.9% on Tuesday and the leading maker of artificial-intelligence chips topped Microsoft as the largest U.S. company by market capitalization as of the close of trading. Nvidia's closing market cap was $3.45 trillion, edging out Microsoft's $3.44 trillion, according to Dow Jones Market Data.

Broadcom was up 0.5% at $258.15 ahead of the start of trading Wednesday. Shares of the semiconductor and software company rose 3.3% on Tuesday to close at a record high of $256.85. Broadcom is scheduled to report fiscal second-quarter earnings on Thursday. Citi Research's Christopher Danely raised his price target on Broadcom to $275 from $210 and reiterated a Buy rating, citing strong demand for AI processors.

Shares of Wells Fargo were rising 3.9% after the Federal Reserve lifted the growth restriction it imposed on the country's third-largest bank following a fake-accounts scandal that surfaced in 2016. The Federal Reserve Board of Governors voted to remove the restriction that had capped the bank's assets at just under $2 trillion.

CrowdStrike Holdings, Inc. reported first-quarter adjusted earnings that topped Wall Street consensus but revenue in the period of $1.1 billion, up 20% from a year earlier, missed expectations of $1.11 billion. The quarter included general and administrative costs of $38.7 million related to a widespread software outage last July. CrowdStrike said it expects second-quarter adjusted profit of 82 cents to 84 cents a share, better than estimates of 81 cents, on revenue of $1.14 billion to $1.15 billion, below forecasts of $1.16 billion. Shares of the cybersecurity company were down 6.4%.

Hewlett Packard Enterprise gained 5.1% after the company reported better-than-expected second-quarter earnings and revenue, though profit margins remained under pressure in its server segment, its most important business. Server revenue in the second quarter was $4.06 billion, topping analysts' expectations of $3.98 billion. However, operating profit margins of 5.9% were down from 11% a year earlier.

Insurance-software provider Guidewire Software raised its fiscal-year revenue outlook to about $1.18 billion to $1.19 billion, up from its prior forecast of about $1.16 billion and $1.17 billion. Guidewire posted fiscal third-quarter adjusted earnings that beat analysts' expectations as revenue rose 22% to $293.5 million on higher subscription and support sales. Shares jumped 11%.

Lumentum Holdings was rising 6.2%. The optical-components maker raised its fiscal fourth-quarter adjusted earnings guidance to between 78 cents and 85 cents a share, up from a prior forecast of 70 cents to 80 cents. It also boosted its revenue outlook to $465 million to $475 million.

Earnings reports are expected Wednesday from Dollar Tree, MongoDB, Five Below, PVH, and Thor Industries.

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