Markets will open Thursday with the semiconductor sector on watch. Arm Holdings (ARM) lost over 10% after posting quarterly results that did not meet expectations.
Arm reported $0.40 in EPS as revenue increased by 39% Y/Y to $939 million in the first quarter. Arm achieved strong license revenue growth, up by 72% Y/Y to $472 million. In Q2, Arm expects an EPS of $1.45 - $1.65. For the full year of 2024, Arm will earn an adjusted $1.57 a share.
ARM stock is too expensive relative to its tepid growth rate.
Among the Magnificent 7, Meta Platforms (META) stock will return to the $500 level today. The company reported a strong increase in revenue, up by 22.1% Y/Y to $39.07 billion. Non-GAAP EPS was $5.16.
Meta is an AI king. Even without realizing growth from AI initiatives, the firm is a cash flow machine. META stock is an attractive buy.
As for the stocks to avoid today, Teladoc Health (TDOC) tops the list. Shares will open down by over 10% after posting a $0.28 loss in the quarter. Revenue is stagnant, falling by 1.5% Y/Y to $642.4 million. Moreover, BetterHelp is not a profit driver for the firm.
In the ad platform space, watch Axcelis Technologies (ACLS). The firm reported revenue falling by 6.4% Y/Y. This will hurt the share price, creating a better buy zone.
