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.
1706 GMT - Nvidia should move quickly to name a permanent successor to Jensen Huang, Morgan Stanley analysts say in a note. Interim CEO Colette Kress should be able to effectively manage the company's period of transition, while Huang leaves the company with a strong foundation, they say. "But 'interim' status can create challenges around commitments to customers, larger investment syndications, and getting buy-in on strategic planning, which could all be potentially more difficult," they say. "Given the pace of AI, and the complexity of NVIDIAs planning, we believe establishment of the permanent CEO role should be a priority." Nvidia shares are off 3.2%.(elias.schisgall@wsj.com)
1654 GMT - Cerebras is set up for strength heading into next year, according to Wedbush in a note following strong 3Q results and raised guidance. Analysts Matt Bryson and Tuo Ma say that rising GPU rental prices, increased costs and pricing from competitors, and contracted cloud capacity beyond the OpenAI partnership all bode well for 2027. The company's announcement of Microsoft joining as a cloud customer is "the proverbial cherry on top of the outstanding outlook," the analysts say. "While the Q4 outlook is impressive, we would note that Cerebras appears to have even greater room to produce upside in 2027." Cerebras jumps 11%. (elias.schisgall@wsj.com)
1647 GMT - Truist analysts downgrade Nvidia to hold from buy, writing that the risks to the stock extend beyond Jensen Huang's affairs to the company culture and its revenue from GPUs that may have become accessible to Chinese entities. The scandal both threatens to unwind Nvidia's "ride or die with Jensen culture" and highlights the lack of "know your customer" rules in the semiconductor industry, the analysts write. And while the stock looks attractive on the fundamentals after this week's selloff, they write that "NVDA's investment risks [are] too great to forecast revenue or earnings with enough confidence to continue our Buy rating." Nvidia falls 3.3%.(elias.schisgall@wsj.com)
1640 GMT - There's some reason for caution following Cerebras's 3Q report, Morgan Stanley analysts say in a note, even as financial results showed strengths. The company has fallen behind on delivering cloud capacity for a major customer, potentially driving small penalties and raising the possibility of a cancellation if the delay is prolonged. "This highlights that the take or pay nature of the contract still depends on delivery execution milestones: continued misses could affect both the timing and amount of contracted revenue," the analysts say. "We remain OW given the upside to our price target, but are more cautious than last quarter and would want to see capacity deliveries catch up and the contracted cloud ramp materialize before becoming more constructive." Cerebras surges 10%. (elias.schisgall@wsj.com)
1425 GMT - The combined earnings of the energy companies that are part of the S&P 500 stock index more than doubled during 3Q compared with the same period of last year, according to financial-data provider London Stock Exchange Group. As a result, energy accounted for the highest earnings growth in 3Q among all sectors represented in the benchmark, followed by technology, with about 71% combined earnings growth, and materials, with 32%, LSEG's data shows. By comparison, the combined earnings of all companies in the index rose 34% in 3Q from a year earlier. Technology, however, was the S&P 500's sector that recorded the highest revenue growth-about 42%-during 3Q, followed by energy and communications services, with 36% and 14% respectively. (luis.garcia@wsj.com; @lhvgarcia)
1338 GMT - The Australian dollar could be the most vulnerable currency in the case of a the AI-related rout, MUFG Bank's Derek Halpenny says in a note. The nation has seen a sharp increase in data center rollouts and other AI investments in recent years, making its currency exposed to developments in the AI sector, Halpenny says. "It also has energy and commodity exposures that would result in a negative terms of trade hit." The Australian dollar falls 0.2% versus the U.S. dollar to 68 U.S. cents. (miriam.mukuru@wsj.com)
1135 GMT - Microsoft says it's seeing encouraging recovery progress, with service availability and email delivery performance improving across a growing portion of affected Microsoft 365 infrastructure. "Some users may still experience intermittent issues as recovery actions continue," the company says in a post on X. "We're focused on recovery for the remaining affected environments while prioritizing email queue and backlog reduction." The comments come as Microsoft continues working to resolve an outage that has disrupted services including Outlook and Teams for hundreds of thousands of users since Thursday. Microsoft off 1.5% premarket. (connor.hart@wsj.com)
1102 GMT - Microsoft says it has made additional progress toward recovery in the wake of a widespread outage that has affected hundreds of thousands of users. The company says recovery actions have been completed across portions of affected infrastructure, with traffic being gradually restored. "We're seeing improvements in key scenarios, including mailbox access and delayed email processing, though some intermittent issues may continue," the company says in a post on X. "Our focus is extending these recovery actions across remaining affected infrastructure while continuing stabilization and adding capacity to improve consistency." Microsoft slips 1.4% premarket. (connor.hart@wsj.com)
1202 GMT - The cost of insuring euro credit against default edges higher as sentiment deteriorates due to AI-related fears. This week's resignation of Nvidia's Chief Executive Jensen Huang raised concerns as markets are uncertain whether the next leader will deliver good performance as Huang did. Increased expectations of more interest-rate rises by major central banks are also lowering appetite for risk assets. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 3 basis points to 293bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
1201 GMT - Nvidia's third-quarter results next week will be closely watched for any near-term direction on the chip company's share price after Jensen Huang's resignation, XTB's Kathleen Brooks writes. "While we expect another monster report and we fully expect earnings to come in above estimates of $108 billion, it's the future outlook that is more important than ever for Nvidia's share price," Brooks says. Shares are up 2.5% at $170.35 in premarket trading, having fallen 4.34% in the earlier session. They are currently down 19% over the month-to-date.
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