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Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of more than 15,000 subscribers striving to be better investors with an edge in the market.

Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

This article is designed to truly give you that EDGE in the day ahead!

Grab your afternoon pick me up and let’s dive in.

Market Talk

The major indexes were mixed to start the week as investors await the much anticipated quarterly results from Nvidia later today.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

Nvidia reports earnings after the bell, here’s what to expect

Nvidia is set to release its quarterly earnings report today after the market close, with high expectations due to its prominent position in the technology and semiconductor sectors.

Analysts predict a 243% increase in fiscal first-quarter revenue to $24.6 billion, marking over 200% year-over-year growth for the third consecutive quarter. The majority of this revenue, over $21 billion, is expected to come from Nvidia's data center business, which supplies advanced processors to major tech companies like Google, Microsoft, Meta, Amazon, and OpenAI.

Nvidia's profitability from its AI products is anticipated to push net income up by more than five times from the previous year, reaching $13.9 billion or $5.58 per share.

The company's market cap has surpassed $2 trillion this year as the stock has surged 91%, following a more than threefold increase in 2023.

Target and Lowe’s can be added to the list of companies seeing a weak consumer

Recent quarterly earnings reports indicate a trend of weak consumer spending across various companies. Key findings include:

• McDonald’s: U.S. same-store sales grew by 4.8%, below the expected 5.2%, and the company missed earnings estimates for the first time in two years.

• Starbucks: Reported declining same-store sales and slashed its forward guidance.

• Home Depot: Revenue was lower than expected as customers delayed renovations due to high interest rates.

• Walmart: Shoppers focused on essentials like food and health items over general merchandise.

• PepsiCo: Noted weaker spending among low-income consumers, with a 5% decline in beverage volume in North America.

• Target: Experienced a year-over-year sales decline and missed earnings estimates as consumers bought fewer discretionary items and groceries.

• Lowe’s: Saw declines in sales and income as homeowners postponed larger projects and bought fewer expensive items, influenced by inflation and reduced consumer confidence.

Overall, high prices and economic pressures are causing consumers to cut back on spending, affecting a wide range of consumer-centric companies.

📚 EDGE-UCATION: What are earnings reports and why do they matter?

Quarterly earnings reports are financial updates that publicly traded companies release every three months. These reports include important details such as revenue, profit, expenses, and earnings per share.

Earnings reports are important for the following reasons:

1. Performance Insight: They show how well a company is doing financially.

2. Investor Decisions: Investors use this information to decide whether to buy, hold, or sell their shares.

3. Market Impact: Strong or weak earnings can affect the company's stock price and the overall market.

4. Guidance: Companies often provide future outlooks, helping investors understand potential growth or challenges ahead.

Ultimately, quarterly earnings reports are crucial for keeping investors informed and maintaining market transparency.

Amazon plans to give Alexa an AI overhaul — and a monthly subscription price

Amazon is planning to upgrade its Alexa voice assistant with generative artificial intelligence and will charge a monthly subscription fee for the enhanced service.

This new, more conversational version of Alexa aims to better compete with AI-powered chatbots from companies like Google and OpenAI and is expected to launch later this year. The subscription will be separate from Amazon's $139-per-year Prime service, and the price has not been finalized.

Alexa, initially launched in 2014, now appears outdated compared to recent AI advancements like OpenAI’s GPT-4, which supports deep, real-time conversational translations, and Google’s AI-powered Gemini.

This upgrade is crucial as internal pressure mounts on Amazon’s Alexa division, which has faced profit-driven restructuring since founder Jeff Bezos stepped down. To adapt, much of the Alexa team has shifted to Amazon’s artificial general intelligence (AGI) team. 

Alexa has a significant market presence, with over 500 million Alexa-enabled devices sold as of 2023.

The Second Half

The second half of the week is very quiet with only a handful of key earnings, the initial jobless claims and a few housing reports on deck.

Earnings Reports

There is only one earnings report left this week that we here at The Investor’s Edge we will be watching, but it’s the all important results from Nvidia:

Here is the calendar of earnings releases scheduled for the rest of the week:

Economic Reports

Here is the calendar of events scheduled for the remainder of the week:

The quiet week continues as PMI data, new home sales, consumer sentiment and initial jobless claims are the only reports scheduled.

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.