In today’s briefing:
- Observability Pair Trade: Long Elastic / Short Splunk
- Headwinds Persist, Including Rising DXY, 10-Yr Treasury Yield, & Commodities; Buying Staples, Solar
- Lam Research: New Facility In South Korea & Other Developments
- Palantir Technologies: Partnership With Google Cloud & Other Drivers
- Teladoc Inc: Major Drivers
- Gilead Sciences: The MiroBio Acquisition & Other Drivers
- Sporting Crypto – August 30th 2022: Nike have made $185 million from NFTs
- Boston Scientific: Major Drivers
Observability Pair Trade: Long Elastic / Short Splunk
- Like PANW and SNOW, Elastic continues to power through macro headwinds seen by many other software companies.
- Elastic has a Crowdstrike like dynamic, where it is capturing new workloads from incumbents, in the cloud. In this case, Symantec’s share donator role is being played by Splunk.
- In this tough volatile environment, we like an observability pair trade of Long ESTC / Short SPLK.
Headwinds Persist, Including Rising DXY, 10-Yr Treasury Yield, & Commodities; Buying Staples, Solar
- In last week’s Compass (Aug. 23) we discussed the increasing odds for a deeper pullback in the broad market indexes.
- This was due to 5-week uptrend breaks on the SPX, NDX, and Russell 2000, the Fed tightening, and with Treasury yields, the U.S. dollar (DXY), and commodities (DJP) inflecting higher.
- The market remains in pullback mode; the SPX, NDX, and Russell 2000 are all approaching 50-day MA support, the first big area of interest on this pullback.
Lam Research: New Facility In South Korea & Other Developments
- Lam Research gave a solid performance in this quarter.
- In the quarter, Lam announced the expansion of collaborations within the EUV ecosystem.
- In the quarter, the company continues to see great momentum with its installed and product base initiatives, with CSPG revenues and foundry logic systems reaching new highs.
Palantir Technologies: Partnership With Google Cloud & Other Drivers
- Palantir Technologies is seeing progress in its revenue growth in the commercial market in the United States and has scaled its revenues significantly from $39 million in Q2 2021 to $86 million this quarter.
- The company surpassed the revenue expectations of Wall Street and this was driven by their U.S. commercial business which increased by 120%.
- For the past four quarters, their core U.S. commercial business, excluding strategic investments, has grown by 10% or more quarter-over-quarter, most recently hitting $67.4 million, representing a 14% sequential increase.
Teladoc Inc: Major Drivers
- Teladoc delivered a mixed result and managed to surpass Wall Street expectations on the revenue front but its losses were more than market expectations.
- The management continues its efforts towards creating solutions that change how customers engage with the healthcare system.
- This growth builds on the company’s current relationship in chronic care and will give plan members access to a wide range of integrated primary and chronic care options.
Gilead Sciences: The MiroBio Acquisition & Other Drivers
- Gilead had a very robust second quarter with total product sales of $5.7 billion, up 7% year over year, excluding Veklury.
- The company managed to deliver an all-around beat powered by HIV, cell therapy, and Trodelvy, partially offset by HCV.
- Sequentially, total product sales excluding Veklury increased by 14%, driven by seasonal pricing and inventory dynamics, especially in their HIV business, and increased demand across the whole portfolio.
Sporting Crypto – August 30th 2022: Nike have made $185 million from NFTs
- The NFT bubble has popped. You only have to look at the volumes to know this is true.
- But regardless of the bubble popping — I can tell you for certain — NFTs are still a HUGE talking point at almost every consumer facing company.
- CMOs and strategy directors will be asked in boardrooms; what is our Web3 strategy?
Boston Scientific: Major Drivers
- Boston Scientific’s innovation portfolio, commercial execution, clinical data, and strategic tuck-in M&A supported its solid second-quarter results where the company delivered an all-around beat.
- Furthermore, their Diagnostics business performed well during the quarter because of the Preventice portfolio and implantable cardiac LUX-Dx.
- Despite the macroeconomic difficulties Boston continues to be well-positioned for a decent 2022 ahead given their category leadership strategy, commercial execution, and robust portfolio.
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