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Nvidia Fever Builds
Markets reversed course, closing in positive territory as investors await Nvidia earnings tomorrow.
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🎯 In this issue:
Banana Bits: Finance headlines that actually matter
Market Summary: Tuesday’s Nvidia-fueled market reversal
Lesson from the Library: How to write a pro-level equity research report
What’s Ripe / Rotten: The tastiest and most disgusting stocks
Technical Trip: Interview Q&A from Lazard
Deal Dispatch: M&A, IPOs, and other transactions
Market Snapshot
📉 Banana Bits
Markets reversed course, closing in positive territory as investors await Nvidia earnings tomorrow.
Nvidia once again faces crazy earnings expectations with investors forecasting a 53% jump in quarterly revenue to $45.9 billion.
Current Fed Governor (or former?) is firing back at Trump with a lawsuit after being dismissed for her mortgage applications.
MongoDB was up as much as 28% after-hours after reporting EPS of $1.00, up 42.5% from last year and crushing expectations of $0.67.
EchoStar was up 70% on a merger announcement by AT&T Spectrum.
Trump cracked the whip and told Cracker Barrel to go back to its old logo, giving the stock a bump on the day.
The Pentagon is reportedly considering taking stakes in some defense contractors like Lockheed Martin.
After a crazy fast surge in August, B*tcoin looks to be taking a breather, hitting its lowest level since early July.
Eli Lilly’s weight loss pill orforglipron cleared its latest trial, paving the way for a smooth approval process.
UnitedHealth stock took a hit after the DOJ expanded its investigation into the company's billing practices.
Consumer companies like RH and Wayfair are getting kicked down again as Trump threatens substantial tariffs.
Ever wondered what the median home price is in your state? Here’s your answer.
Big investors are buying this “unlisted” stock
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Disrupting the real estate industry once again, Pacaso’s streamlined platform offers co-ownership of premier properties, revamping the $1.3T vacation home market.
And it works. By handing keys to 2,000+ happy homeowners, Pacaso has already made $110M+ in gross profits in their operating history.
Now, after 41% YoY gross profit growth last year alone, they recently reserved the Nasdaq ticker PCSO.
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Market Recap
Wall Street Flips Green
Wall Street pulled a classic move today, starting down in the morning and up by the close. After last week’s Powell-fueled rate cut rally party, investors were stuck between taking some chips off the table or letting the market continue to rip.
In the morning, it appeared that some profit-taking was occurring, but by the end of the day, the S&P 500 closed up +0.41% and the NASDAQ was up +0.44%. That brings YTD totals for both indexes to +10.2% and +11.7% respectively.
Things got extra spicy when President Trump fired Fed Governor Lisa Cook over her mortgage applications, which made investors question the Fed’s independence. For a hot minute, it looked like we were in for a selloff. But the Fed fired back, and Cook announced she wasn’t stepping down and was planning to sue.
Also helping to turn things around was Nvidia, Wall Street’s current golden child. The stock led the rally today as traders piled in ahead of its highly anticipated earnings report.
Nvidia has basically become the market’s unofficial mood gauge. The market goes as Nvidia goes, and earnings are expected today after the close. The company has another crazy high bar to meet, and investors will be keenly focused on the impact of China’s chip rules, AI demand, and $8 billion in lost sales.
Revenue consensus estimate is $46.0 billion, and EPS consensus is $1.01. This represents a 50%+ increase.
The company is forecasting an $8 billion revenue hit due to U.S export restrictions, along with a newly imposed 15% fee on all Chinese chip sales.
Despite headwinds, data center revenue is projected to surge to $41.2 billion, with continued strength in AI chip sales.
Outside of Nvidia and on the earnings front more broadly, Eli Lilly flexed with more good news from its obesity drug pipeline after its weight loss pill, orforglipron, cleared its latest trial.
EchoStar absolutely exploded 70% after selling spectrum rights to AT&T for $23 billion, which feels like finding $20 in your laundry but multiplied by a few billion. And if you’re into fancy couches, bad news. RH, Wayfair, and Williams-Sonoma all got dinged thanks to a Trump tariff probe.
What's Ripe
EchoStar (SATS) 70.3%
EchoStar ripped after announcing it’s selling a big chunk of its wireless spectrum to AT&T for $23 billion. For context, spectrum is the invisible real estate that cell carriers need to beam data to your phone.
The deal not only hands EchoStar a massive cash windfall but also clears up questions about how it would monetize those spectrum assets from investors.
Eli Lilly (LLY) 5.9%
Eli Lilly had a big day, climbing after releasing fresh results from its obesity drug pipeline that blew past expectations.
The company’s new treatment showed strong effectiveness in trials, reinforcing the hype that weight-loss drugs could be a multi-hundred-billion-dollar market.
What's Rotten
Keurig Dr Pepper Inc (KDP) 6.9%
Keurig Dr Pepper sank after announcing an $18 billion deal to buy JDE Peet’s and then split into two companies, one focused on coffee, the other on soft drinks.
The move essentially unwinds its 2018 merger, and while management pitched it as streamlining, investors worried about the heavy debt load and complexity.
Six Flags (FUN) 5.8%
Six Flags dropped a $100 million quarterly loss on investors’ heads, which is a wild reversal of expectations and knocked attendance off by about 9%.
To make matters worse, CEO Richard Zimmerman announced he'll step down by the end of the year… even though summer’s supposed to be peak season for thrill rides.
🧠 Technical Trip
Interview Q&A from Lazard
👉 Want 1-on-1 recruiting help from Lazard bankers & 2,000+ top mentors? Apply to WSO Academy
📚 Lesson from the Library
🦈 Deal Dispatch
M&A, IPOs, And Other Notable Transactions
EchoStar is selling its Spectrum Licenses to AT&T for $23 billion, sending the stock soaring.
Canada’s only major IPO of the year, Go REIT, raised $400 million and is struggling out of the gate.
North American Railroad CPKC warns of merger risks in the industry after Union Pacific/Norfolk’s $72 billion deal.
Eversana purchased Waltz Health, creating a $6 billion healthcare company aiming to upend drug middlemen.
Howard Lutnick suggests that the U.S government is interested in buying stakes in defense companies, including Northrop Grumman and Lockheed Martin.
PetroChina proposed buying three natural gas storage companies for $5.6 billion to bolster the nation’s infrastructure for the fuel.
Activist Investor Fivespan built a stake in The New York Times as it pushes the company to adopt AI.
Banana Brain Teaser
Previous
If (4 - x)/(2 + x) = x, what is the value of x^ 2 + 3x - 4?
Answer: 0
Today
If [x] is the greatest integer less than or equal to x, what is the value of [-1.6] + [3.4] + [2.7]?
Being right and making money are two very different things.
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Happy Investing,
Chris, Vyom, Ankit, Colin, & Patrick