Morning Market Feed, May 31st

The name of the day was software. The drop in Salesforce dragged all software stocks down with it, for me personally, monday.com and Adobe weren’t able to evade that chaos. This was slightly offset however by positive news coming from PayPal, always the spin when you are about to drop a negative piece of something, anyway, let’s just dive straight into the news of yesterday!


- Sales with no force

As I already mentioned yesterday, Salesforce missed their revenue numbers for the first time in 18 years and I would listen to the earnings call to see if there would be any knowledge to gain, and I’d have to say, not really. There were however three things that stood out to me. 1, They called out OpenAI for stealing data and that is how they build their AI algorithms, or as they call them models. This is of course a short snippet as Marc Benioff was praising the newest GPT version for how good it is, but initially built on stolen data. 2, The call got really cheesy when some pushback was given over the numbers. Benioff went into how great the margins and the free cash flow of the business are. 3, But this really is a personal opinion and feeling I got from the call so listen to the earnings call instead of just taking this opinion as a fact, but the praising of Salesforce sounded like somebody who is in a hole and hasn’t figured out what to do against it yet, but does everything to distract from giving that impression. It’s on the bad side of the earnings calls I have listened to this earnings season and the market seems to agree as the stock has sold off even more to be down 20%.


- PayPal with some life in it?

Just when I was about to dive into the negative aspects of the business, the stock got upgraded to “Buy” from “Hold” by Mizuho with a price target of $90, which increased from $68. The report cited developments in the market and a valuation position compared to rivals. You can read more about it in this article


- Costco did what?

Costco is seen as one of the holy stocks in the market. A favorite of Charlie Munger as one of the best businesses out there and always trading enormously rich due to the certainty of the subscription business which allows the company to give really competitive prices amongst other very good policies. But the impossible happened, the company missed revenue expectations, barely. The company came in with $57.4 billion, compared to expectations of $58 billion. As a result, the stock sold down 1% following the release, but before the earnings call.

As we have reached the final trading day of the week already, I hope that the markets hold up better than the previous two days in order to go into the weekend on a good note.

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Morning Market Feed, June 3rd

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Morning Market Feed, May 30th