Momentum investors continued to unwind their aggressive bets against downstream AI suppliers. Networking firms like Nokia (NOK), Ciena (CIEN), Corning (GLW), and Coherent (COHR) are all down in the 40% - 50% range from their 52-week high.
Ciena’s 10.3% daily decline on Thursday caught bulls off-guard. The firm posted $2.11 in adjusted earnings per share after revenue rose by 37% Y/Y to $1.67 billion. Two customers accounted for 10% or more of its revenue in the quarter (41.7% of revenue). Shareholders are potentially nervous about Ciena’s reliance on too few customers. Any downturn in AI would hurt its results quickly.
Sentiment reversed unexpectedly for optical networking and semiconductor stocks. Wait for sentiment to improve before considering CIEN stock.
Tyson Foods (TSN) dropped by 7.26%, breaking down from a downtrend that started in May. The food provider cut its sales growth forecast for this fiscal year. A severe cattle shortage, the longest in U.S. history, plus food inflation hurt consumer demand.
Tyson is guiding revenue growth of 1.5% to 2%, down from a previous projection of 2.5% to 3.5%. It expects its beef segment to lose $625 million to $775 million.
Campbell Soup (CPB) posted a -8.0% change in revenue Y/Y, to $2.1 billion. It slashed its quarterly dividend by 36%. It will use the cash flow savings to pay down its debt.
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