U.S. stocks ended lower on Thursday, with the Nasdaq falling more than 1% and technology shares leading declines after a disappointing Salesforce forecast.
Market Snapshot
The S&P 500 lost 31.47 points, or 0.60%, to end at 5,235.48, while the Nasdaq Composite lost 183.50 points, or 1.08%, to 16,737.08. The Dow Jones Industrial Average fell 330.06 points, or 0.86%, to 38,111.48.
Market Movers
Salesforce fell 20% after it reported first-quarter adjusted earnings that topped Wall Street predictions, but shares of the business-software company were down nearly 20% after revenue of $9.13 billion came up short and its outlook for the current fiscal second quarter missed estimates. Salesforce said it expects second-quarter revenue of $9.2 billion to $9.25 billion and adjusted earnings of $2.34 to $2.36 a share. Analysts had been expecting revenue of $9.35 billion and profit of $2.40. The company’s current remaining performance obligations, which combines deferred revenue and order backlog, rose 10% in the first quarter but Salesforce had told analysts to expect growth of 12%.
UiPath was off 34% as the automation-software company said it expects fiscal second-quarter revenue of $300 million to $305 million, well below analysts’ estimates that called for $333 million. UiPath’s revenue outlook for the fiscal year also missed forecasts. “During the first quarter we saw increased deal scrutiny and lengthening sales cycles for large, multi-year deals,” Chief Financial Officer Ashim Gupta said in a press release. “We have considered these factors, the current macroeconomic environment and our leadership transition in our updated guidance for the remainder of the year.” UiPath also said it would reappoint Daniel Dines, a UiPath co-founder, as chief executive.
HP Inc. earned 82 cents a share on an adjusted basis in the second quarter, just beating estimates of 81 cents, as revenue fell 0.8% to $12.8 billion but still managed to top expectations of $12.61 billion. Enrique Lores, CEO of the personal computer and printer company, told Barron’s that enterprises have been “starting a new cycle” and that it sees a “funnel of opportunities for the second half that’s much stronger than we saw before.” The stock was up 17%.
Foot Locker jumped 15% after the athletic-footwear retailer reported first-quarter adjusted earnings of 22 cents a share, topping forecasts of 12 cents.
Kohl’s sank 23% after swinging to a surprise loss in the first quarter and reducing its fiscal-year outlook. The retailer said it expects fiscal-year profit of $1.25 to $1.85 a share, below consensus of $2.40.
Best Buy jumped 13% after the electronics retailer reported fiscal first-quarter earnings that beat estimates but posted softer-than-expected revenue and same-store sales as shoppers remain wary of splurging on pricey items.
Burlington Stores surged 18% after the company barreled past first-quarter earnings estimates and raised its margins and earnings guidance for the fiscal year ending in February.
C3.ai reported better-than-expected fiscal fourth-quarter revenue and the maker of enterprise artificial-intelligence software said it anticipates fiscal 2025 revenue of between $370 million and $395 million, higher than Wall Street estimates that called for $367.7 million. “Demand for enterprise AI is intensifying, and our first-to-market advantage in enterprise AI positions us well to capitalize on it,” said Chief Executive Thomas Siebel. Shares of C3.ai rose 19%.
Agilent Technologies reduced its fiscal-year forecast for adjusted earnings and revenue, saying that while it sees the market for its products getting better it has been “improving at a slower pace than anticipated.” Shares of the laboratory supplies and services company fell 9.7%.
Nutanix fell 23% after the cloud-computing company issued weak revenue guidance for its fiscal fourth quarter and year. The company said it anticipates revenue in the fourth quarter of between $530 million and $540 million, below estimates of $546 million.
American Eagle Outfitters was down 7.6% after the clothing retailer’s fiscal first-quarter sales rose 6% from a year earlier to $1.14 billion but missed analysts’ estimates of $1.15 billion.
PayPal was up 2.4% to $62.51 after analysts at Mizuho Securities upgraded the stock to Buy from Neutral and raised their price target to $90 from $68.
Market News
Dell Earnings Show Fervent AI Demand, but Margin Talk Sends Stock Sliding
Dell Technologies Inc. blazed past expectations for its latest quarter as it continued to benefit from explosive artificial-intelligence demand, but analysts keyed in on the margin impact of that growth.
Management shared an expectation for Dell’s gross-margin rate to decline roughly 150 basis points in fiscal 2025, due to “inflationary input cost, the competitive environment and a higher mix of AI optimized servers.”
Marvell Tech Misses First-Quarter Revenue Estimates on Weak Enterprise Demand
Chipmaker Marvell Technology missed Wall Street expectations for first-quarter revenue on Thursday, hurt by weak client spending in its wireless carrier and enterprise markets, sending its shares down around 5% in extended trading.
Marvell's results signal that the company continues to grapple with weaker demand in its consumer markets as well as a cut back on IT spend by its enterprise clients due to signs of a soft economy.
US Is Slowing AI Chip Exports to Middle East by Nvidia, AMD
US officials have slowed the issuing of licenses to chipmakers such as Nvidia Corp. and Advanced Micro Devices Inc. for large-scale AI accelerator shipments to the Middle East, according to people familiar with the matter, while officials conduct a national security review of AI development in the region.
It’s unclear how long the review will take, nor is there a concrete definition of what constitutes a large shipment, said the people, who asked not to be identified because the discussions are private. Officials are particularly focused on high-volume sales, the people said, as countries including the United Arab Emirates and Saudi Arabia look to import massive quantities of the chips used in AI data centers.
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