👉 The Investing Week Ahead: Nvidia, CrowdStrike, & Salesforce

With Labor Day Weekend coming up, we’ll be sending you our next update on the morning of Tuesday, September 3rd.

Let’s dive right in for everything you should be watching until then!

What We’re Watching:

Back at the beginning of the summer — Salesforce shares plunged -16% after the company reported its first revenue miss since 2006. While earnings per share of $2.44 beat expectations of $2.38, revenue came in at $9.13 billion, below the $9.17 billion anticipated by Wall Street. Despite +11% year-over-year revenue growth, budget scrutiny and longer deal cycles led to a -9% decline in Professional Services revenue.

Salesforce maintained its full-year revenue guidance of $37.7-$38 billion but raised its earnings forecast to $9.86-$9.94 per share. Investors were unimpressed, leading to the steepest drop in Salesforce’s stock since the 2008 financial crisis. Since then, shares have risen +12% as investors eagerly await updates on shortening deal cycles and hope for confirmed / improved guidance.

CrowdStrike has had one heck of a quarter. It began with an incredible Q1 financial report. Ending ARR grew +33% YoY to reach $3.65 billion, and net new ARR grew +22% YoY to $212 million. CrowdStrike delivered record operating cash flow of $383 million and record free cash flow of $322 million, 35% of revenue.

Just a few days after this report, it was announced that CrowdStrike would be added to the S&P 500. In less than two weeks, the stock rose nearly +28%.

Flash forward to today, and CRWD stock is well below where it was before the last earnings report. As all of you know, CrowdStrike had a horrendous outage in July — causing 8.5 million systems to crash across the country. It’s believed that Fortune 100 companies lost $5.4B of revenue as a result. It was so bad that the disaster even has its own Wikipedia page. Here’s a video I made about the impact on Delta.

On Friday, it was announced that Microsoft (MSFT) is planning a cybersecurity event in September specifically to discuss changes since the CrowdStrike outage.

I still hold CrowdStrike and the earnings report this week + that Microsoft event will be critical for investors to watch closely.

Despite concerns, Nvidia has reassured that production is on track, with analysts downplaying the potential impact of any delays. Nvidia shares have more than doubled this year.

Here we go once again… Nvidia is reporting, and the entire market is eagerly awaiting the results.

“While market expectations are centered on Iran’s attack hurting Israel without triggering a wider regional conflict, Israel’s response will be equally important. And Israel’s response may include an attack on Iran’s oil supply and related infrastructure, which would put at risk 3-4% of global oil supply.”

— Vivek Dhar, Mining & Energy Commodities Strategist at the Commonwealth Bank of Australia

What We’re Watching:

In July — we learned about the PCE inflation data for June. It showed that inflation rose at a tame pace to start the summer, while consumer spending remained relatively healthy.

This time around — the PCE Index will likely be one of the final determinants if the Fed will be dropping interest rates by 25 bps or 50 bps in September. According to the CME FedWatch Tool, there’s a 63% chance of a 25 bps cut and a 37% chance of a 50 bps cut.

Home prices continued to trend upwards in May as the benchmark 20-city index rose for a fifteenth consecutive month to a new all-time high. We find out this week if the trend will continue.

“While annual gains have decelerated recently, this may have more to do with 2023 than 2024, as recent performance remains encouraging… Our home price index has appreciated +4.1% year-to-date, the fastest start in two years.

Covering the six-month period dating to when mortgage rates peaked, our national index has risen the past four months, erasing the stall experienced late last year. Collectively, all 20 markets covered continue to trade in a homogeneous pattern. Coming into the 2024 presidential election, traditional red states are in a dead heat with blue states, both averaging +5.9% gains annually.”

— Brian D. Luke, Head of Commodities at Real & Digital Assets.