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River1 Asset Management
October 31, 2024

NYSE Ticker: RVER

Calendar

Friday – Non-Farm Payrolls

Trading Observations

APeak earnings hitting and loads to dig thru
META MSFT UBER headlining and dragging things lower
Bonds stable
5760 support looks like it will be tested early and see if it holds. 5875 resistance....

Futures

DOW -233

S&P -39

Nasdaq -157

CNN Fear/Greed Index

10-Year Yield

Oil

Consumer/Financial Healthcare

WING - Raymond James cut the target on Wingstop Inc. to $345 from $435. Maintains outperform rating.

CVNA: +21% Another great Q … Q3 Revs $3.66B vs street $3.46B and EBITDA crushes at $429M vs street at $329M

COIN: -3% shortfall in Q3 rev; mgmt talking in their shareholder letter about soft market conditions during period. Guide for subscription/service rev in Q4 is light

HOOD: -11% shortfall on sales at $637M (vs St $663.5M), w/ miss driven by Equities, Crypto, and NII. The weaker sales drove a modest miss on EBITDA ($268M vs est $277M)

BKNG: +4% 3Q RNs accelerated to +8% y/y (vs guide +3-5% vs +7% y/y last qtr) "driven primarily by stronger performance in Europe"

AMGN inch up as much as 0.3% in premarket trading after the drugmaker reported adjusted earnings per share for the third quarter that beat the average estimate.

BIIB slips 1.2% in premarket trading after Morgan Stanley downgraded the drugmaker to equalweight from overweight saying the launch of its Alzheimer’s drug, Leqembi “has tracked below our expectations.”.

Technology

QQQ -1% to start post flurry of disappointing EPS reactions – META (-3.7%), MSFT (-3.8%) with each facing differing issues on why trading heavy .. note QQQ still well above all major moving avgs

META: -3.5% positioning #1 headwind for story coming into print + lofty expectations .. remains one of cleanest stories and reaction more function of crowded positioning .... Mmgt talking up capex or 2025 but at this point in story - Zuck has earned the right to spend (vs 2 yrs ago; hyperscalers making it clear there is more risk to underspend vs over) …. Real $$ wont be selling this print. Oper margins 43%!

MSFT: -4% reaction lot more concerning given cleaner positioning + how much length has come out of name in recent months. Poor guide led to downside reversal after hours … Azure outlook +31-32% vs expects +33% (due to supply pushouts in AI / GPU) .. Guiding capex to increase q/q on Cloud + AI demand signals. MSFT: huge laggard since June 1 - MSFT+4%, CRM+26%, SAP+30%, NOW+45%, ORCL+49%

MBLY: +9% At last, a positive - beaten on revenue and EPS for Q3, narrowed their FY reve range without lowering it and see FY operating income in a range with consensus as the midpoint ... Big Short base in MBLY, 22% of float (although float is low due to big INTC holding)

ROKU: -14% no acceleration seen in 2025; revs beat and guides above but Q4 EBITDA guide misses at 30M vs 36.2M ... tough comps from political and slower 3P demand-side platform contributions put the expectation of 2025 acceleration at risk

UBER: 1st prints -5%, Q3 bookings miss (40.97B vs est 41.24B); sees Q4 GB ~$43.5B at mid (below expectations) ...story has beecome lot less clean given recent M&A headlines + Tesla update

DASH shares rise as much as 3% in US premarket trading after the food delivery company reported earnings that surpassed analyst expectations and issued strong guidance for the fourth quarter as its market share grows. JV with LYFT.

ETSY: fade / think not giving QTD - talking about late / compressed holiday season and 'distracting' election ... qtr mixed with better revs and take rate/ebitda but lower sellers and buyers and weaker GMS

TWLO: +8% solid qrtr beat; Guides 4Q above street across all metrics. Raises FY24 Organic Rev guide to +7.5-8% y/y (vs prior +6-7% y/y)

ARM: -4% Bernstein downgrading to Underperform - believes Arm's long term equity story "remains very appealing," but questions at what price? Despite using a "generous and merited" valuation, it struggle to find upside from current share levels (+40% since upgraded qrtr ago)

SMCI - shares are down 5% in premarket trading, after Argus Research downgraded the maker of servers to hold from buy.

AMZN: Thur night / 6.8% implied move .... debate most around Q4 OI guide; retail biz. aws checks have been solid .... Conf call 5pm ET AMZN: wants Alexa'snew AI brain to rival ChatGPT, but a person familiar said technical challenges may keep it stuck in the lab until next year. Chatbots aside, the company is poised to report 10% sales growth for last quarter

Apple - Thurs night; it seems on any given day there is a “iPhone 16 sales are tracking poorly” followed by an “iPhone 16 sales are tracking well” headline, leaving investors a bit nervous into the report; it’s likely iPhone sales are fine with a favorable mix while mgmt. reiterates its optimism around Apple Intelligence

INTC - Thurs night; the bar is so low after the disastrous Q2 update that Intel won’t have to do much to come off seeming “better-than-feared”, although sentiment remains quite gloomy on the medium and long-term prospects