Boeing
Boeing (BA) stock dropped more than 7% today as a flurry of headlines caused investors to rethink the industrial giant’s outlook.
What started late yesterday as a delay of deliveries to China based on a state regulator’s review of batteries used in cockpit voice recorders grew to the company’s announcement that current quarter deliveries will fall short of last quarter.
Boeing management also suggested that the company’s cash flow could be impacted by lighter-than-planned deliveries.
A if that wasn’t enough, the FAA proposed to adopt a new airworthiness directive for certain Boeing Company Model 777 airplanes. On any other day, this news may have slipped through, but the current state of Boeing’s media mentions clearly has investors on edge.
Boeing stock had rallied back above its 20- and 50-day moving averages in the last week – both of which are in a bearish trend – but today’s selling erased that strength, putting the stock back below both critical trendlines.
Additionally, the stock closed below $175, which has been acting as support for Boeing stock since mid-April.
Long-term bulls need to keep an eye on Boeing’s $160 price level, as a break below that price will draw new 52-week lows and continue the trend of lower lows and lower highs for the stock. That simple pattern is almost always a sign that a stock is set to begin a period of aggressive selling.
My current price target for Boeing remains at $120.
Nvidia
Nvidia (NVDA) shares closed 9% higher today following the company’s better-than-expected earnings report after last night’s close. It was Nvidia’s first close above $1,000.
Investor’s first reaction to the report last night was a bit cool as shares traded just 4% higher on the initial news. Comments from the company during the earnings conference call including the planned 10:1 stock split and an increase in the stock’s dividend increased Wall Street’s interest in advancing shares higher.
While Nvidia’s price moved higher, the market had a more muted result. Stocks started showing signs of stress today as can often happen after a large marquis company report. This included the “AI Adjacent” companies like Super Micro Computer (SMCI), AMD (AMD), and Intel (INTC). The last of those companies, Intel, left a heavy mark on the Down Jones Industrial Average, which closed the day lower by 1.52%.
Back to Nvidia shares, I labeled this as “The Most Dangerous Stock in the World” on Wednesday. That’s still the case as the next few days will be key for the stock.
A move back below $1,000 will trigger profit-taking on Nvidia as well as the rest of the market. Watch for critical support at this price.
Snowflake
Snowflake (SNOW) shares finished the day 5% lower after the company missed their Q1 earnings targets.
The cloud computing company – often seen as a key AI player – reported an earnings per share (EPS) miss of $0.04 despite beating analyst’s expectations for revenue. Revenue for the year grew 32.9%, just a hair better than this time last year.
Part of the reason for the EPS miss was due to an increase in the company’s investment in AI, more specifically their purchase of GPUs. That move cut more heavily into their margins, causing the miss.
Management’s guidance, though slightly better than Wall Street’s targets, still shows a year over year growth rate of 24%, but that is compared to last year’s growth of 33%. The drop in the company’s growth rate is causing investors to question the valuation of the stock.
From a chart perspective, SNOW shares have been trading in a relatively tight range after last quarter’s earnings report triggered a one-month, 34% decline.
Today’s move puts SNOW stock’s $150 price level within close reach. That round-numbered price level has served as strong support for the bottom of the stock’s recent range.
That said, investors should expect to see negative momentum increase on the stock, driving it towards a new trading range low at $135.
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.