Friday is a technical break-out zone for the S&P 500 (SPY) after it failed to close at 5,000. Still, the index traded above the milestone level in the futures market. The index benefited from ARM Holdings (ARM) rising an astounding 47.9% yesterday, after gaining as much as 57% in intraday trade.
Investors need to watch ARM’s 23 times price-to-book ratio and price-to-sales multiples. The firm reported revenue growing by a modest 13.8% Y/Y to $824 million. At a $79 billion market capitalization on $700 million in cash flow on a GAAP basis, the stock trades at a 100 times P/FCF multiple.
ARM stock must not fall today. Otherwise, the short sellers with an 11.46% short interest may regain control of their bearish bet.
Cloudflare (NET) posted revenue of $362.5 million, up by 32% Y/Y. It earned 15 cents on a non-GAAP measure. For FY 2024, the firm expects revenue of up to $1.652 billion. NET stock rose by 21% last night in after-hours trade. Cloudflare created its market and will expand from it. Short interest is 5.39%, so expect bears to cover their bet against the stock today.
In the entertainment sector, Disney (DIS) shares will look to add to yesterday’s 11.5% gain. Analysts reversed the bearish view. The firm is offering ESPN to non-cable customers. EPSN also has a deal with Fox and Warner Bros. Discovery (WBD) to offer sports content through streaming.
Expect DIS stock to follow through from Thursday’s rally.
