The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
1457 ET - Synopsys is set up for a strong fiscal 2027 after a turnaround year, Baird analysts write in a note, upgrading the stock to outperform and lifting their price target by $2 to $560. Although investors have punished the chip-design software company for showing less upside this year than others in the semiconductor space, "since cutting guidance last September, the evidence always pointed to FY26 being a turnaround year," the analysts write. Now, the last two quarters of fiscal 2026 are tracking ahead, expectations are low, and there's room for upside entering fiscal 2027. After Wednesday's 3Q print showed 40% revenue growth, they write, "we would be surprised if the stock went through further de-rating from current levels if these results are coming through." Synposys shares gain 13%. (elias.schisgall@wsj.com)
1452 ET - Nvidia appears to be prioritizing support for customers in its AI Clouds, Industrial, & Enterprise bucket, in what UBS analysts see as a pointed look to hyperscalers working on developing their own custom chips. Hyperscalers still comprise around 55% of data-center revenue, but Nvidia intends to shift its mix toward ACIE, a bucket essentially comprising non-hyperscale customers. "We think it is prioritizing support for these customers amid expanding demand (hyperscalers are even running excess workload through the neoclouds to expand capacity)," the analysts write. "This also works well for NVDA since many of the hyperscalers are all working on their own silicon roadmaps so there is an increasingly clear 'line in the sand' being drawn." (elias.schisgall@wsj.com)
1442 ET - Nvidia's second-quarter release suggests that SpaceX may have contributed around $13 billion in revenue over the past six months, implying a trajectory of one gigawatt a year, UBS analysts write in a note. "This is a number that should increase dramatically," they add. Nvidia breaks down data center revenue into hyperscalers and a bucket called AI Clouds, Industrial, & Enterprise, and in the second quarter reclassified one customer from ACIE to hyperscaler -- a company UBS suspects to be SpaceX. If true, the numbers before and after the reclassification indicate SpaceX added $6.14 billion in revenue in fiscal 2025, $18.15 billion in fiscal 2026, and $5.18 billion in the first quarter of fiscal 2027. SpaceX has made Nvidia its exclusive chip provider, Elon Musk said earlier this month. Nvidia gains 8.2%. (elias.schisgall@wsj.com)
1303 ET - While Nvidia's decision to reset expectations for its gross margins is a negative, it shouldn't dramatically impact earnings and reflects a conscious trade-off for the company, Benchmark analyst Cody Acree writes in a note. The reset was driven by the rising cost of memory chips, Acree writes, noting that Nvidia is raising prices in the first quarter but also absorbing part of the cost inflation. "We believe the decision reflects a deliberate trade-off: preserve customer economics and deployment velocity while using scale, mix and future manufacturing learning to rebuild part of the margin," Acree writes. "The earnings impact remains manageable because revenue rises much faster than operating expense." (elias.schisgall@wsj.com)
1254 ET - Salesforce investors are breathing a sigh of relief after the company gave further evidence it can actually benefit from AI, Deutsche Bank analysts say in a note. Half of Agentforce bookings in the second quarter came from customers replenishing consumed credits. That suggests that deployments are increasingly generating recurring revenue as customers realize value, the analysts say. Additionally, a deeper relationship with Anthropic helps alleviate concerns that frontier models will diminish the need for Salesforce, instead positioning its data, applications, and governance as the foundation through which customers access those models, they say. "These datapoints do not fully resolve questions around scaled monetization," the analysts say, "but provide credible evidence against investor concerns."Shares climb 21%. (kelly.cloonan@wsj.com)
1250 ET - Salesforce's latest quarterly results provide the clearest sign yet that the software company's organic revenue growth has troughed, Deutsche Bank analysts say in a note. The company now looks like it's working its way up, with a clearer path for reacceleration in the second half of the year, they say. The analysts say they are increasingly confident in Salesforce's ability to accelerate given a combination of particularly strong growth in net new average order value in the first half of the year, as well as Slack's fastest quarterly net new AOV since its acquisition. The analysts keep their buy rating on the stock and raise their price target to $275 from $255. (kelly.cloonan@wsj.com)
1030 ET - Best Buy says it is getting more sales from what it calls emerging categories, which includes AI glasses, health rings and collectibles. Sales from these new products made up about one percentage point of same-store sales during the latest quarter, executives tell analysts on a call. The electronics retailer has made extra space in its stores to support the growth of this category, the executives say. Computing has been Best Buy's biggest sales driver in recent quarters, but is expected to slow down a little in the second half of this year. Executives say they are counting on emerging categories to make up for some of that slowdown. (katherine.hamilton@wsj.com)
1016 ET - Canadian marine technology company Kraken Robotics' C$355 million pipeline is proving its core defense business is accelerating. The company posted a 2Q operational beat with revenue up 4% to C$27.3 million and adjusted Ebitda of C$5 million, which Scotiabank analyst Kevin Krishnaratne says overshadow the legal-dispute driven loss. "Kraken's order book continues to build, with announced 2026 orders now at C$355 million on a combined basis, up from C$292 million at the July 2 update," Krishnaratne says, noting also the new long-term battery master supply agreement with an extra-large unmanned underwater vehicle builder "further validates the SeaPower franchise." (adriano.marchese@wsj.com)
0856 ET - Treasury yields are little changed as the U.S. economy shows strength ahead of Fed Chairman Warsh's first Jackson Hole speech Friday. Nvidia's strong revenue growth lifts Wall Street's mood, while crude futures tick higher. Weekly jobless claims decrease to 203,000 from an upwardly revised 207,000, as layoffs remain contained. Investors expect so far cagey Warsh to clarify his approach to inflation and his view on the Treasury plan to increase long-term bond buyouts. The 10-year trades at 4.666%, slightly higher than yesterday's settle but off overnight highs. The two-year follows a similar pattern and trades at 4.228%. (paulo.trevisani@wsj.com; @ptrevisani)
0648 ET - Delivery Hero's results show improved operational momentum, MWB Research's Alexander Zienkowicz writes in a note. The German food-delivery company lifted its full-year guidance on increased growth and reported a swing to positive free cash flow in the first half. The company's second-quarter performance validates an acceleration in its underlying business, he says. "However, Uber's 41.50 euros per share cash offer remains the valuation anchor, with closing still expected in the second half of 2027 subject to regulatory approvals," he adds. Delivery Hero shares are up 0.3% at 37.07 euros. (najat.kantouar@wsj.com)
0553 ET - Nvidia's results are reigniting the artificial-intelligence chip trade, but as financing gets more and more circular, tech giants could be on borrowed time, says Nic Puckrin, cross-asset analyst and founder of Coin Bureau. Sandisk, Micron and Hynix all look set to open around 5% higher, and Broadcom is also looking stronger premarket. For Puckrin, the biggest question is around Nvidia's $500 billion AI financing deal with asset managers. This might seem like a smart move while demand for AI chips is insatiable, he says, but if that falters, Nvidia and its lending partners will be stuck with collateral in the form of AI chips that no one wants to buy. Nvidia has kicked the can down the road. Next quarter, it will face the same questions. (fabiana.negrinochoa@wsj.com)
0507 ET - Demand for CrowdStrike's cybersecurity products jumped as fears around the threat posed by hostile AI agents rose in the second quarter, JPMorgan analyst Brian Essex writes. The company swung to a profit on a 26% jump in revenue growth in quarterly earnings announced after the bell Wednesday. Concern around Anthropic's Mythos model spiked after the AI lab withheld the model's public release over fears it posed a cybersecurity risk. "Cybersecurity continues to shift from a risk-management role to a foundational AI infrastructure role where we view CrowdStrike as a primary beneficiary," Essex writes. The company is better positioned than its peers to benefit from the "Mythos Moment," the analyst adds. Shares surge 8.4% premarket.
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