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Nasdaq Plummets Amid Chip Maker Sell-Off
Stocks fell sharply on Friday and closed the week with losses amid another round of selling of chip makers along with geopolitical tensions. The Nasdaq was the laggard as semiconductor manufacturers plunged on concerns that hyperscalers will invest less in AI infrastructure and worries about improving Chinese AI models. Meanwhile, pro-inflationary risks gathered momentum as the war in the Middle East continues and fuel costs pick back up. Adding another potential headwind, President Trump claimed in an address last night that China interfered in the 2020 presidential elections, risking the economic truce that has been holding since last year's tariff exchanges.Get caught up quickly on the top news and calls moving stocks with these five Top Five lists.1. STOCK NEWS:Netflixshares slid after the streaming giant forecast a, overshadowing an otherwise in-line quarterSpaceX, citing an issue with some of the enginesCDC issued aas it investigates a multistate outbreak of Cyclospora infections linked to lettuce served at Taco Belllocations in 5 statesTravelersjumped after reporting what its CEO calledAppleovertook Nvidiato once again be the2. WALL STREET CALLS:HSBCAppleto Buy on what the firm sees as an "operational turning point"AST SpaceMobileto Buy at B. Riley after 44% declineEchoStarto Strong Buy from Market Perform at Raymond JamesSonic Automotiveto Neutral at Seaport ResearchChili's parent Brinkerwith an Overweight at Stephens3. AROUND THE WEB:PayPalboard views Stripe-Advent bid as inadequate, Reuters reportsMetain talks with Anthropic on potential $10B computing power deal, NYT saysThe COO for WalmartU.S. to leave this week, WSJ reportsChevronexploring pipeline as Hormuz alternative, WSJ reportsACI Worldwideexploring sale of billing division, Reuters reports4. MOVERS:Nvidia, Intel, AMD, Broadcom, Marvelland Qualcommwere among theamid a broad unwind of the AI tech tradeCoca-Colashares slipped after the beverage company said it hasafter an unauthorized third party gained access to some of its systemsRegenxbiodeclined after an underwrittenof its common stock priced at $9.00 per shareDutch Brostraded higher after the stock was initiated with anat StephensSweetgreenbounced back from a four-day skid after U.S. authorities said a parasite outbreak that's sickened thousands across several states was traced torestaurants5. EARNINGS/GUIDANCE:Autolivfell after the airbag and seatbelt maker reportedthat narrowly missed consensus estimatesIntuitive Surgicaltumbled after the robotic-surgery company said it now expectsto fall near the midpoint of its guidanceStaar Surgicaldropped after the maker of implantable lenses postedAlcoareportedthat missed consensus expectationsRegions Financial, Fifth Thirdand Truist Financialwere among theQ2 resultsINDEXES:The Dow fell 406.55, or 0.77%, to 52,146.42, the Nasdaq lost 361.70, or 1.40%, to 25,520.24, and the S&P 500 declined 76.08, or 1.01%, to 7,457.69.
Nasdaq Falls Over 1% as Chip Makers Plunge
Stocks fell sharply on Friday amid another round of selling of chip makers and new geopolitical tensions. The Nasdaq was the laggard, falling over 1%, as semiconductor manufacturers plunged on concerns that hyperscalers will invest less in AI infrastructure and worries about improving Chinese AI models. Meanwhile, pro-inflationary risks gathered momentum as the war in the Middle East continues and fuel costs pick back up. Adding another potential headwind, President Trump claimed in an address last night that China interfered in the 2020 presidential elections, risking the economic truce that has been holding since last year's tariff exchanges.Get caught up quickly on the top news and calls moving stocks with these five Top Five lists.1. STOCK NEWS:Netflixshares slid after the streaming gianta second consecutive quarter of slowing sales growth, overshadowing an otherwise in-line quarterSpaceXscrubbed a, citing an issue with some of the enginesCDC issued aas it investigates a multistate outbreak of Cyclospora infections linked to lettuce served at Taco Belllocations in 5 statesTravelersjumped after reporting what its CEO called ""Appleovertook Nvidiato once again be the2. WALL STREET CALLS:HSBCAppleto Buy on what the firm sees as an "operational turning point"AST SpaceMobileto Buy at B. Riley after 44% declineEchoStarto Strong Buy from Market Perform at Raymond JamesSonic Automotiveto Neutral at Seaport ResearchChili's parent Brinkerwith an Overweight at Stephens3. AROUND THE WEB:PayPalboard views Stripe-Advent bid as inadequate, Reuters reportsMetato hire senior AWSexecutive amid cloud push, WSJ reportsThe COO for WalmartU.S. to leave this week, WSJ reportsChevronexploring pipeline as Hormuz alternative, WSJ reportsBPand ConocoPhillipsto announce major investments in Iraq, CNBC reports4. MOVERS:Nvidia, Intel, AMD, Broadcom, Marvelland Qualcommwere among the chipmakers extending their selloff amid aof the AI tech tradeCoca-Colashares slipped after theit has temporarily suspended production operations of its Fairlife milk after an unauthorized third party gained access to some of its systemsRegenxbiois trading lower after an underwritten publicof its common stock priced at $9.00 per shareDutch Brostraded higher after the stock wasat StephensTango Therapeuticsadvanced after Mizuhoon the cancer drug developer5. EARNINGS/GUIDANCE:Autolivfell after the airbag and seatbelt makerQ2 adjusted EPS that narrowly missed consensus estimatesIntuitive Surgicaltumbled after the robotic-surgery company said it now expectsto fall near the midpoint of its guidanceStaar Surgicaldropped after the maker of implantable lenses postedAlcoaQ2 adjusted EPS and revenue that missed consensus expectationsRegions Financial, Fifth Thirdand Truist Financialwere among the latest banks to reportINDEXES:Near midday, the Dow was down 0.18%, or 94.32, to 52,458.65, the Nasdaq was down 1.30%, or 337.34, to 25,544.61, and the S&P 500 was down 0.72%, or 54.41, to 7,479.36.
Tech Stocks Continue to Decline, Netflix Shares Drop 11%
Stock futures are lower, extending a selloff in technology shares that has weighed on the broader market despite generally solid corporate earnings and encouraging inflation data earlier in the week. The Philadelphia Semiconductor Index is on track for its worst weekly performance in more than a year as weakness spreads across the industry.Earnings are producing mixed reactions. Netflix shares are sharply lower in premarket trading after the streaming company issued weaker-than-expected third quarter guidance, overshadowing otherwise solid quarterly results. Investors will also continue digesting results from banks and healthcare companies, with earnings remaining a key driver of individual stock performance amid an uncertain macro backdrop.Economic data released this week continues to suggest inflation pressures are easing. However, geopolitical tensions in the Middle East continue to support higher oil prices and have added another layer of uncertainty for investors, particularly as concerns grow over potential impacts on inflation and global supply chains.Despite this week's volatility, market leadership continues to broaden beyond the AI trade, with some investors rotating into financials, healthcare and software companies as they look for sectors with more attractive valuations.In pre-market trading, S&P 500 futures fell 0.94%, Nasdaq futures fell 1.91% and Dow futures fell 0.65%.Check out this morning's top movers from around Wall Street, compiled by The Fly.HIGHER -ConocoPhillipsand BPup 2% and 1%, respectively, as ConocoPhillips has agreed to terms with BP to acquire a 42% interest in BP Energy Company of KirkukVerizonup 1% after yesterday announcing a round of job cuts that will affect roughly 3,000 staff in corporate-owned retail stores.UP AFTER EARNINGS -Doceboup 5%South Plains Financialup 1%Fifth Thirdup 1%Truist Financialup 1%DOWN AFTER EARNINGS -Netflixdown 11%Intuitive Surgicaldown 10%Autolivdown 5%Travelersdown 1%LOWER -SpaceXdown 4% after cancelled Starship Flight 13 launch
Sees 2.5% Positive FX Impact on Net Sales
Sees around 2.5% positive FX impact on net sales; around 10.5-11% adjusted operating margin; around $1.2B operating cash flow.
Company Reports Q2 Revenue of $2.8B, Exceeding Expectations
Reports Q2 revenue $2.8B, consensus $2.77B. Mikael Bratt, CEO, said, "Through focused execution, we maintained the positive momentum from the first quarter. Globally, our sales grew organically more than 1pp faster than global LVP, outgrowing LVP significantly in Asia. Our sales to Chinese OEMs grew by more than 40%, and Chinese OEMs accounted for 55% of our sales in China, compared to 40% a year ago. Our opportunities with Chinese OEMs were further solidified by signing new strategic cooperation agreements with both Great Wall Motor and XPENG. Sales in India continued to grow by more than 35%. Well executed cost reduction activities supported a continued improvement of underlying profitability, with adjusted operating margin increasing to 9.6%. I am pleased that our cash flow improved in line with our expectations, resulting in record operating cash flow for a second quarter, and supporting our ambitious shareholder return strategy. Our leverage ratio improved to 1.2x, despite repurchasing around 1.65M shares, equal to $200M, in the quarter. In line with our ambition to ensure long-term competitiveness and align production capacity with market demand, we continue to optimize our footprint. In the quarter, we announced that we will discontinue manufacturing operations in Turkiye. We continued to manage geopolitical developments successfully in the quarter, limiting the effects of tariffs, supply chain challenges and raw material price increases. The business environment remains uncertain but our current best estimate for the remainder of the year is to reiterate our full year 2026 guidance of about unchanged organic sales growth, adjusted operating margin of around 10.5-11% and operating cash flow of around 1.2B. This is based on the assumption that LVP will decline by around 2.5%. Customer compensations and other mitigation initiatives are expected to have limited impact in Q3, but significantly greater contribution in Q4. Therefore, we expect third quarter adjusted operating margin to be around the first half 2026 level, with a significant improvement in Q4. Based on our full year guidance, we continue to expect strong cash flow for the year, which supports our ambition to provide attractive shareholder returns, including share repurchases of $300-500M in 2026."
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