The stock market saw the major indexes reverse higher this week and all hit record levels on Google, Apple, Broadcom and the latest jobs report. A federal judge imposed relatively light antitrust penalties vs. Google, letting a search deal with Apple remain. Google-parent Alphabet jumped to a record high while Apple stock cleared a buy point.
Broadcom and Credo Technology were big earnings winners while Salesforce.com stumbled. Several biotechs gapped up on news. The Tesla board proposed an Elon Musk pay package worth up to $1 trillion.
Stock Market Hits New Highs
The stock market opened the shortened week with sharp losses, but quickly came off lows with the S&P 500, Nasdaq composite and Dow Jones all hitting record highs Friday. Google-parent Alphabet, Apple, Broadcom were big winners on news, while the weak jobs report bolstered Fed rate cut hopes and sent the 10-year Treasury yield tumbling to five-month lows. Gold prices surged to fresh all-time highs.
Jobs Report Bolsters Back-To-Back Rate Cuts
The U.S. added just 22,000 jobs in August, below views, with June-July payrolls revised down by 21,000. The unemployment rate ticked up to 4.3%, as expected, while wage growth cooled. That followed several other weak labor market reports, including job openings, jobless claims and the ADP Employment report. A September rate cut was already a lock, but now markets are betting heavily on a second quarter-point move in late October and expect 75 basis points for the full year.
Google Antirust Penalties Light
Google parent Alphabet surged to a record high after a federal judge issued a more favorable ruling than expected on remedies in the U.S. government's antitrust lawsuit involving the tech giant's internet search business. Federal judge Amit Mehta ruled that Google can keep its Chrome browser. While the internet giant will be barred from exclusive search contracts and must share search index data with competitors, Mehta didn't bar Google from making payments to third parties, such as Apple for default browser placement. New agreements will be limited to one year. In a 2024 ruling, Mehta declared Google a monopolist in internet search. Google could appeal the 2024 ruling as well as Mehta's remedies decision. Apple stock rose above a buy point.
AI Fuels Broadcom Stock
Broadcom stock surged after the fabless chipmaker and infrastructure software provider delivered a beat-and-raise earnings report. Earnings rose 36% year over year while sales increased 22% to $15.95 billion. AI chip revenue growth accelerated to 63% in Q3, to $5.2 billion. It forecast Q4 AI chip sales of $6.2 billion, up 66%. Broadcom also announced big orders from a fourth customer for its custom AI data center processors, likely OpenAI. It already makes such chips for Alphabet unit Google, Facebook parent Meta Platforms and TikTok parent ByteDance. Analysts say the AI accelerator sales also are boosting the company's networking chip sales. Notably, Nvidia and AMD, which make high-powered GPUs, fell modestly below key levels.
Credo Stock Surges On Strong Results
Credo Technology surged after crushing Wall Street's targets for its fiscal first quarter and with its guidance for the current period. The maker of high-speed connectivity systems for AI data centers reported a 1,200% EPS gain while sales skyrocketed 274%. For the current Q2, Credo expects revenue of $230 million to $240 million, up 226% at the midpoint.
Figma Plunges After Earnings Report
Figma plummeted 20% in the stock market after the design software firm posted in-line results in its first quarterly report since its late July IPO. In Q2, Figma earned an adjusted 9 cents a share as sales jumped 41% to $249.6 million. However, it predicted revenue growth of 33% in the current Q3 and 37% for the full year. Several Wall Street analysts cut their price targets on Figma after the report.
Salesforce Falls On Guidance
Salesforce reported fiscal Q2 earnings climbed 13%, topping estimates, while revenue edged past views with a 10% gain to $10.2 billion. Current remaining performance obligations, known as CRPO bookings, rose 11% to $29.4 billion, also slightly above forecasts. CRPO bookings are an aggregate of deferred revenue and order backlog. But the Dow software giant guided slightly lower on October-ending quarter revenue amid its artificial intelligence product push. Shares tumbled.
Zscaler Beats, Guides Higher
The cybersecurity firm reported fiscal Q4 earnings, revenue and billings that topped estimates, while fiscal 2026 sales guidance came in above estimates and EPS in line. Zscaler earnings per share rose 23% while revenue climbed 21% to $719 million. Billings jumped 32% to $1.202 billion. But shares fell.
Tesla CEO Elon Musk Pay Deal: $1 Trillion
Tesla's board proposed a pay package to Elon Musk that could be worth $1 trillion as well as an investment in his xAI startup. Meanwhile, the Tesla Robotaxi app opened to the general public after initially limiting its ride-hailing service to influencers and other invitees. CEO Elon Musk predicted safety drivers will be pulled from "robotaxis" in California by year-end. It's unclear how Tesla could do that legally given the extensive testing and reporting required in the state. Meanwhile, safety monitors in Austin, Texas, moved behind the wheel on at least some rides. Tesla said it's a temporary move for highway rides, though a new state law stiffens regulatory rules. Shares rose solidly in the stock market, above key levels and around aggressive buy points.
Biotechs Jump On Drug News
A handful of biotech stocks gapped higher with United Therapeutics leading the way. On Tuesday, shares skyrocketed nearly 33% after United Thera's drug, Tyvaso, improved lung function in patients with idiopathic pulmonary fibrosis, a chronic lung condition. The move pulled shares of rivals Insmed and Liquidia higher. Also Tuesday, shares of Ionis Pharmaceuticals launched to a four-year high while Arrowhead Pharmaceuticals jumped. Ionis scored a "home run" after its drug, olezarsen, outperformed a placebo in a study of patients with severely high triglycerides. Arrowhead struck a deal worth up to $2.2 billion to license its potential Parkinson's drug to Novartis. Novartis will pay $200 million up front and up to $2 billion in milestones, plus royalties on any future sales.
Stock Market News In Brief
Hewlett Packard Enterprise reported fiscal third-quarter earnings and revenue that slightly beat. EPS fell 12% while sales rose 19% to $9.1 billion. Its fiscal Q3 included about a month of results from its acquisition of Juniper Networks, which closed July 2. For the current October-ending quarter, HP Enterprise guided up on profit but down on sales. Shares rose.
Macy's shares spiked after the company reported fiscal Q2 earnings that fell 23% but were more than twice as high as expected. Net revenue dipped 2% but also beat. Macy's noted its best comparable sales growth in 12 quarters and lifted its outlook.
American Eagle reported a strong earnings beat, bolstered by success from its ad campaigns with actress Sydney Sweeney and NFL player Travis Kelce. The Sweeney and Kelce campaigns saw "record-breaking" customer acquisitions and brand awareness, generating 700,000 new customers and 40 billion impressions, the company said. CEO Jay Schottenstein noted that the fall season is off to a "positive" start. American Eagle expects comparable sales growth in the low single digits for Q3 and Q4. AEO stock spiked 32% Thursday.
Dollar Tree easily beat EPS views while a 12% revenue gain also beat, amid a flood of affluent shoppers trading down. But the discount retailer, which completed selling its Family Dollar business in July, sees tariff impacts in the second half. Dollar Tree raised full-year EPS guidance, but only in line with consensus despite the big Q2 beat. Shares tumbled.
Guidewire Software easily beat fiscal Q4 earnings views, while it posted a 22% revenue gain to $356.6 million. The underwriting software maker gave bullish guidance. Shares gapped higher Friday.
BYD slashed its 2025 vehicle delivery target to 4.6 million from 5.5 million, reflecting fierce competition in China's EV market, especially from Geely and Leapmotor. Shares tumbled to a seven-month low.
Samsara reported fiscal Q2 EPS jumped 140% while revenue rose 30% to $391.5 million, both comfortably beating. Annual recurring revenue (ARR) from subscriptions rose 30% to $1.64 billion, edging past views. For the current quarter, Samsara guided slightly higher. Samsara provides sensors and cloud-based software to manage vehicle fleets and industrial operations.
