News of the day for September 4, 2024
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Nvidia (NVDA) shares continue to fall after a report that the chipmaker is being investigated by the U.S. Department of Justice (DOJ) over antitrust concerns; shares of cybersecurity provider Zscaler (ZS) are tumbling after its earnings outlook came up short of analysts’ estimates; investment fund manager Blackstone (BX) agrees to buy an Australian data-center provider for $16 billion; GitLab (GTLB) shares are jumping after the Google-backed software-development platform raised its full-year outlook; and Hewlett Packard Enterprise (HPE) is expected to report year-over-year revenue and profit growth on increased artificial intelligence (AI) demand. Here’s what investors need to know today.
1. Nvidia’s Slide Continues on Report of DOJ Antitrust Probe
Shares of Nvidia (NVDA) are falling 2% in premarket trading after a report that the chipmaker was served a subpoena from the U.S. Department of Justice (DOJ) as part of an antitrust investigation. Government officials had previously sought information from Nvidia and other companies as part of an investigation into market dominance by leading providers of artificial intelligence (AI) technology, but the Bloomberg report said that subpoenas take officials closer to launching a formal complaint against the chipmaker. Nvidia’s premarket dip follows a nearly 10% plummet in its share price yesterday, as investors continued to sell off the stock following a second-quarter earnings report that disappointed, despite beating most analysts’ estimates.
2. Zscaler Stock Dives on Weak Earnings Outlook
Cybersecurity provider Zscaler (ZS) shares are plummeting by 16% in premarket trading after it issued earnings guidance that came in significantly below analysts’ expectations. Zscaler said it is expecting adjusted earnings per share (EPS) of between $2.81 and $2.87 for its fiscal year, below the $3.33 a share that analysts had forecast. The cloud-based service provider’s revenue outlook was closer to the mark, as its full-year guidance range of between $2.6 billion and $2.62 billion was within analysts’ expectations.
3. Blackstone Agrees to Buy Australian Data-Center Provider for $16 Billion
Blackstone (BX) has agreed to buy Australian data-center operator AirTrunk in an A$24 billion ($16.1 billion) deal that would be the investment management company’s biggest ever in the Asia-Pacific region. AirTrunk has a sizeable presence in Australia, Japan, Malaysia, Hong Kong, and Singapore, and owns enough land to add to its capacity, Blackstone said. The Australian Foreign Investment Review Board still must approve the transaction. Shares of Blackstone are little changed in premarket trading.
4. GitLab Shares Jump on Upbeat Guidance
Shares of GitLab (GTLB) are soaring 13% in premarket trading after the software-development platform raised its full-year outlook. GitLab increased its full-year sales outlook to a range of $742 million to $744 million, better than its earlier guidance of $733 million to $737 million, and upped its adjusted EPS outlook to 45 cents to 47 cents from a prior range of 34 cents to 37 cents. GitLab, which is backed by Alphabet’s (GOOGL) Google, also reported second-quarter results that were higher than analysts’ expectations, with year-over-year revenue jumping by 31% to $182.6 million.
5. HP Enterprise Expected to Show Sales, Profit Growth on AI Demand
Market watchers are anticipating third-quarter earnings from Hewlett Packard Enterprise (HPE), which is expected to report a year-over-year jump in both revenue and profit on the back of increased demand for AI products. Analysts expect HP Enterprise’s financial report after the bell to show an 18% profit surge and a 9% revenue increase, with AI systems revenue in focus after more than doubling in Q2 from Q1 as it fulfilled backlogged orders thanks to an improving supply chain. HPE shares are edging lower in premarket trading.
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