5 Things You Need to Know Before the Stock Market Opens

News of the day for August 29, 2024

Nvidia (NVDA) stocks fall after artificial intelligence (AI) darling’s quarterly earnings failed to impress investors; Dell Technologies (DELL) shares fall ahead of second-quarter earnings release after the bell; Salesforce (CRM) shares rise after earnings beat expectations; business review site Yelp (JELP) complains Alphabet’s (GOOGL) Google; and Big Lots (BIG) shares tumble as the home improvement retailer reportedly mulls a bankruptcy filing. U.S. stock futures are little changed, with Friday’s inflation report expected to show cooling price pressures and boost expectations of a Federal Reserve rate cut. Here’s what investors need to know today.

1. Nvidia shares fall as results are unimpressive

Nvidia (NVDA) shares are under pressure in premarket trading after the AI ​​chipmaker’s results topped analyst estimates but failed to wow investors and pointed to slowing growth. Analysts at Jefferies said Nvidia’s third-quarter revenue outlook of $32.5 billion may also have fallen short of investor expectations, despite coming in above analyst consensus. Nvidia attempted to ease concerns about reported delays to its Blackwell chip in its earnings call, saying it expects to “deliver several billion dollars in Blackwell revenue” during the fourth quarter as production ramps up.

2. Dell drops in profit with margins and AI developments in focus

Dell Technologies (DELL) shares fell 5% in premarket trading ahead of second-quarter results expected after the bell, with investors eyeing margin improvements and updates on the PC maker’s position in the artificial intelligence (AI) server market. Analysts forecast revenue to grow to $24.18 billion and net income to $871.01 million, both higher than the same period last year. Analysts said the company could accelerate its cost-cutting efforts to improve margins as chipmaker Intel (INTC) and networking equipment company Cisco (CSCO) have done. Lululemon Athletica (LULU), Marvell Technology (MRVL), Ulta Beauty (ULTA), and more people will report after the bell rings.

3. Salesforce soars as results beat forecasts, margin hits record

Point of sale (CRM) shares rose 5% in premarket trading after the cloud software company delivered second-quarter results that beat expectations and reported a record-high operating margin of 19.1%. The company maintained its fiscal 2025 revenue forecast of $37 billion to $38 billion and raised its earnings per share forecast by 1 cent to between $6.05 and $6.13. Salesforce also said CFO Amy Weaver is stepping down but will remain in the role until a successor is named.

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4. Yelp Sues Google Over Alleged Abuse of Influence in Online Search

Business review site Yelp (JELP) has sued Alphabet (GOOGL) in a federal court in San Francisco, alleging that the search giant is using its dominance to steer users to its own content. “Google, a multi-trillion dollar company and an established monopolist, is abusing its unlawfully enforced dominance in general internet search to steer users to its own inferior content in order to fuel its enormous revenues,” Yelp said in the lawsuit. The move comes weeks after a federal judge ruled that Google violated antitrust laws by maintaining an illegal monopoly in search, a ruling the tech giant is appealing. Shares of Yelp and Alphabet were little changed in premarket trading.

5. Big Lots collapses as home goods retailer reportedly considers bankruptcy

Large lots (BIG) shares plunged 31% in pre-market trading amid reports the furniture and home furnishings chain is considering filing for bankruptcy after years of declining sales. People with knowledge of the plans quoted Bloomberg reported that Big Lots is also seeking investors to help it avoid Chapter 11 bankruptcy. The off-price retailer’s plans come as several retailers report they are grappling with a slowdown in spending on household goods.

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