VIDEO: Here's What We're Focused on With Alphabet's Results
Chris recaps today's price target moves in the portfolio, thesis-confirming comments on several positions, and previews Alphabet's earnings report.
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In today’s Daily Rundown, Chris Versace recaps the TheStreet Pro Portfolio’s price target adjustments for ServiceNow NOW and United Rentals URI as well as thesis-confirming comments for several holdings from SK Hynix HXSCL, LG Display LPL, Amazon AMZN, and Nvidia NVDA.
We also preview what we’ll be focusing on when Alphabet GOOGL reports after today’s market close as well as what we’re aiming to learn from Intel INTC and Digital Realty DLR results.
Transcript
CHRIS VERSACE: Hey, everyone, Chris Versace, and it is Thursday, April 24th. It's been a busy day for the portfolio. We've had multiple Alerts out to you already. In some cases, we've adjusted our price target for ServiceNow from 1,250 down to 1,100, even though the company's quarterly results last night, forward guidance, and the comments about AI adoption were all very much thesis confirming for us.
Why did we trim our price target back? Well, we are taking a more conservative approach with the market and potentially the market valuation that investors will be looking to give to the S&P 500. So that's part of our thinking on that. But all-in-all, we continue to see ServiceNow extremely well-positioned as spending on productivity and cost reduction efforts continues.
We would also say that those folks who are really concerned about the impact of DOGE cuts on ServiceNow's business, I hate to say it, they kind of jumped the gun on that. Please take a look at the Alert. You'll be very interested in the comments that we shared in there from Bill McDermott, CEO of ServiceNow, on that very topic.
In another Alert, we also discussed the very nice March quarter results and reaffirmed guidance from United Rentals here too. However, we did take a more conservative approach with our price target, reducing it to 800 from 900. But given where the current share price is, we still see enough to continue and maintain our one rating on the shares of URI. We also laid out some of the upcoming catalysts that we'll be looking for as it relates to that particular stock.
We also had an Alert out this morning, walking through some positive comments from memory company SK Hynix about smartphone and PC prospects, as well as AI adoption. Very good for our positions in Qualcomm and Universal Display, but we also use that as a point to reiterate our longer term thesis regarding AI adoption and the impact that it will have on network capacity for Marvell.
In the same Alert, we also talked about the very confirming comments out of LG Display as they reported their quarterly results and really highlighted the accelerating adoption of organic light-emitting diode displays, which is, of course, only reiterating and reaffirming our positive stance on the shares of Universal Display. Now, that's what we had in our Alerts to you this morning.
But there are some other things that are helping prop the market up today, even though we are seeing a growing number of companies kind of confirm our thinking that tariffs would be a headwind for earnings guidance during the current earnings season. But what were those positive comments? Well, they relate back to the tech sector. And I'm referring to comments from Amazon and NVIDIA that data center and AI demand is simply not slowing down, nor is data center construction.
And of course, that last part keeps us bullish on yeah, not only United Rentals, but let's also remember Eaton Corp as well. What were those comments? Speaking at a conference, Kevin Miller, Amazon's vice president of data centers, said there's, "been no real significant change". We continue to see very strong demand, and we're looking both in the next couple of years, as well as long term in seeing the numbers only go up.
At the same conference, an NVIDIA spokesperson shared that the company is not seeing any signs of a slowdown. So we take those two comments, one from Amazon, one from NVIDIA. It helps explain the additional lift that we're seeing today in our shares of NVIDIA and Marvell. But remember, let's connect the dots and that comment from Amazon about data center construction. Also good, United Rentals, as well as Vulcan Materials, and, of course, Eaton.
Now, after today's market close, we do have quarterly results from Alphabet. The consensus forecast is for EPS of $2 on revenue of $89.15 billion. That revenue number is up just over 10% year-over-year. Now, as you know, we will be breaking down the results not just for the quarter, but for the guidance. As we do that, we will be focusing in on the factors that are influencing them. And of course, here I'm referring to the search and advertising business, as well as YouTube and cloud.
As it relates to cloud, what we'll be looking for are the company's comments about whether or not it is still capacity constrained, and what that means for capital spending levels ahead. Remember, management recently reiterated its spending plans, but given developments, especially those over the last few weeks, we would not mind management reiterating those plans once again. And of course, we will expect the company to discuss the recent monopoly ruling against it in digital advertising.
Now, as we put all those pieces together and learnings from Alphabet's earnings report, we will revisit our Google price target. But also, we'll be talking about implications for other positions in the portfolio. And with that in mind, we will also be following comments from intel after today's market close. Remember, we suspect that we are going to get a kitchen sink quarter from the new CEO. But we will be interested on what it has to say about the PC and data center end markets. And with regard to data center, we will also be sifting through comments, as well as expansion plans from Digital Realty Trust.
So we had a busy day today. We expect another busy day tomorrow, as well as on top of it all, the latest weekly roundup. So please be sure to check your emails, your Alerts, and if we make any moves with the portfolio, we, of course, want you right there with us. Thanks for watching.
At the time of publication, TheStreet Pro Portfolio was long NOW, URI, AMZN, NVDA and GOOGL.
