In today’s briefing:
- Will Intel Ride The AI Wave?
- Downgrading Discretionary & Health Care to Market Weight, Staples & Utilities to Underweight
- Qatar Sovereign Fund Joins the US$250M Series D Round of Builder.ai
- Salesforce: The Market Is Once Again Missing The Forest For The Trees
- Datadog Inc.: Can The Codiga Acquisition Bring It To A Whole New Level In Observability? – Key Drivers
- ConocoPhillips: Breaking Production Milestones Good Enough In The Current Environment? – Key Drivers
- Martin Marietta Materials Inc.: Major Drivers
- Mettler-Toledo International Inc.: Launch Of Automated Label Inspection Solution & Other Developments
- Quanta Services Inc.: Is The RP Construction Services Acquisition A Big Boost To Its Infra Solutions Platform? – Key Drivers
- Paramount Global: Are The Tough Times Here To Stay? – Key Drivers
Will Intel Ride The AI Wave?
- Intel’s CFO boosted the current quarter outlook to the higher end of the guided range of $12 billion +/- $500 million
- Intel’s share price was up 4.8% in overnight trading, presumably a result of the forecast boost
- While Intel’s CFO thinks Intel is set to ride an AI wave, we think it will be more like riding a ripple across a rising tide that lifts all boats.
Downgrading Discretionary & Health Care to Market Weight, Staples & Utilities to Underweight
- Since January 2023 we’ve anticipated for 4165-4200 to cap upside on the S&P 500 for 2023, but that a rally to 4300-4325 is also possible; this remains our view.
- In our 5/2/23 Compass we discussed how the Nasdaq Composite was testing 12,300 resistance, and that a breakout and reach to 13,180 is possible.
- The Nasdaq Composite hit 13,154 Tuesday as Technology (XLK), and to a lesser extent Communications (XLC), are seemingly in a blowoff stage, while all other Sectors are neutral to bearish.
Qatar Sovereign Fund Joins the US$250M Series D Round of Builder.ai
- Builder.ai, an AI-powered composable software platform, has raised US$250 million in a Series D funding round led by Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar.
- Existing and new investors, including Iconiq Capital, Jungle Ventures, and Insight Partners, joined.
- This round takes Builder.AI’s total fund raised so far to US$450 million.
Salesforce: The Market Is Once Again Missing The Forest For The Trees
- Most of the red flags that I have outlined before are now being taken care of, but I remain cautious for the time being.
- The market continues to react negatively to what was in my view a very good quarter, says Salesforce’s chief executive.
- A lot has changed since I first covered Salesforce (NYSE:CRM), back in December of 2020.
Datadog Inc.: Can The Codiga Acquisition Bring It To A Whole New Level In Observability? – Key Drivers
- Datadog had a good Q1 as they exceeded analyst expectations on all fronts, with revenue of $482 million, a 33% YoY increase, and added approximately 1,400 net new customers.
- The company observed growth from existing customers and continued to see customers optimizing their cloud spend.
- In addition, Datadog made significant advancements in its product offerings, introducing new security capabilities such as Application Vulnerability Management and enhancing its Cloud Security Management product.
ConocoPhillips: Breaking Production Milestones Good Enough In The Current Environment? – Key Drivers
- ConocoPhillips produced a good first quarter performance, managing an all-around beat, breaking both company and Lower 48 production milestones.
- Production was outstanding, averaging 1,792,000 barrels of oil equivalent per day due to strong performance across the board.
- With new wells coming online and good strong performance, Lower 48 underlying production increased by 8% year over year, reaching 1,036,000 barrels of oil equivalent per day on average.
Martin Marietta Materials Inc.: Major Drivers
- Martin Marietta had a solid start to the year and managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
- Financially, Martin Marietta reported increased revenues, gross profit, earnings per share, and adjusted EBITDA.
- Solid aggregate demand was observed across their footprint, with attractive pricing fundamentals.
Mettler-Toledo International Inc.: Launch Of Automated Label Inspection Solution & Other Developments
- It was a successful first quarter for Mettler-Toledo International, with solid sales and profit growth and an all-around beat.
- Sales growth was broad-based across various markets, driven by effective market identification and attractive growth opportunities.
- Strong execution on margin initiatives and cost control resulted in solid earnings growth despite significant currency headwinds.
Quanta Services Inc.: Is The RP Construction Services Acquisition A Big Boost To Its Infra Solutions Platform? – Key Drivers
- Quanta Services had a successful first quarter with double-digit revenue growth and strong performance across segments.
- Their management team sees opportunities for further backlog growth driven by base business and energy transition projects.
- In the quarter, Quanta Services also completed the acquisition of RP Construction Services.
Paramount Global: Are The Tough Times Here To Stay? – Key Drivers
- It was a challenging Q1 for Paramount Global, with total revenue of $7.3 billion and the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
- Free cash flow in Q1 was a use of $554 million, aligned with expectations for negative free cash flow in 2023, but positive free cash flow is anticipated in the back half of the year.
- The company aims to improve earnings and free cash flow through franchise content, commercial execution, and operating efficiencies, targeting positive growth in 2024.
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