Chip stocks rise despite looming tariff threats
19 minutes ago
Chip shares saw an uptick on Thursday, following President Donald Trump’s announcement that certain semiconductor manufacturers would be exempt from the proposed 100% tariffs.
During a White House briefing, Trump stated, “We’re looking at imposing about 100% tariffs on chips and semiconductors, but there will be no fee for those made in the United States.” This announcement came with the participation of Apple CEO Tim Cook, who discussed plans to boost US manufacturing, alongside an earlier commitment of $500 billion this year.
However, details regarding the announcement were somewhat vague. It’s unclear whether companies’ current manufacturing commitments sufficed or if new investments would be necessary for the exemption. Moreover, analysts at Jeffries have pointed out uncertainty regarding how the tariffs and exemptions would extend to electronic devices and semiconductors.
Angelo Zino, a Senior Vice President at CFRA Research, commented, “It’s probably unwise to overinterpret Trump’s statements and social media posts—I think waiting for further details next week is sensible.”
Still, investor sentiment seems to reflect optimism that the president’s announcement alleviated some pressure on semiconductor stocks. The PHLX Semiconductor Index saw a 1.2% increase in recent trades, with major players like Nvidia and Broadcom climbing about 0.5% from previous highs, while AMD surged 5%. Taiwan Semiconductor Manufacturing also gained 5%, as did Applied Materials, which rose more than 2%.
An analyst from Bank of America Securities noted, “From a high-level view, while 100% tariffs sound concerning, we’re actually expecting a much lower impact.”
According to Citigroup analysts, US firms with domestic manufacturing—think Intel, Micron, Texas Instruments—should be insulated from tariffs. Companies like Nvidia, AMD, Broadcom, and Qualcomm can likely mitigate tariff impacts by partnering with major foundries like TSMC and Samsung.
“If complete exemptions are granted to Taiwanese chipmakers… that would bode well for a positive outlook toward the broader technology semiconductor ecosystem,” Zino remarked.
Even European semiconductor firms with no US operations should avoid 100% tariffs. A recent EU-US Trade Agreement limited semiconductor tariffs to 15% and guaranteed no tariffs for semiconductor equipment manufacturers like ASML.
A spokesperson for the European Commission reportedly stated that the Trump administration confirmed the 15% cap established by the agreement wouldn’t be overridden by additional tariffs.
Peloton experiences stock volatility amid layoffs and surprising profits
1 hour 23 minutes ago
Peloton Interactive saw its stock fluctuate wildly on Thursday as the company announced a restructuring plan that includes layoffs, despite unexpectedly strong fourth-quarter earnings.
Known for its exercise equipment, Peloton achieved GAAP earnings of 5 cents per share, while analysts had predicted a loss of 5 cents. Revenue, however, dropped 6% year-on-year to $606.9 million, even as projections rose.
In a letter to shareholders, CEO Peter Stern acknowledged, “Our operating expenses are excessively high, hindering future investments.” He mentioned a cost restructuring plan aimed at achieving savings of at least $100 million by the end of fiscal year 2026, through workforce reductions and spending cuts.
Looking ahead, Peloton anticipates revenues between $2.4 billion and $2.5 billion for fiscal year 2026, with the midpoint surpassing market estimates.
Peloton’s stock jumped 14% earlier in the day but recently declined by around 2%.
Is Apple dodging tariffs?
2 minutes ago
If Apple has figured out a way to avoid extra customs duties, it might just be onto something.
President Donald Trump said recently that companies, including iPhone manufacturers, could be exempt from upcoming semiconductor tariffs if they invest in US manufacturing.
“What’s promising for companies like Apple is that whether their products are built in the US or there’s a commitment to build them, they might avoid fees.” Tim Cook, the Apple CEO, was present at the White House to pledge $100 billion towards US manufacturing on top of an earlier $500 billion investment.
This move suggests Apple may not need to fully shift production to the US to qualify for exemptions, although it indicates increased domestic component creation.
Apple isn’t alone in gaining concessions from the Trump administration; Nvidia CEO Jensen Huang has also met with Trump, aiming to regain approval for AI chip sales to China, which faced restrictions earlier this year.
Following these discussions, Apple’s shares climbed about 3% to around $189, building on a 5% increase from the previous day.
Wall Street analysts reacted positively, with Bank of America raising their target from $240 to $250 and JP Morgan praising Cook’s strategy as “masterful in navigating global political uncertainty,” maintaining a price target of $255.
Dan Ives from Wedbush, a well-known Apple bull, labeled it a “strategic move by Cook,” sticking with a bullish forecast of $270.
Eli Lilly shares tumble after drug trial disappointment
3 hours 26 minutes ago
Eli Lilly saw its stock plummet on Thursday after the pharmaceutical giant reported underwhelming results from a late-stage trial of its obesity drug.
Shares slid 14%, marking the lowest trading levels for the stock since early last year.
In a phase 3 trial, patients experienced average weight loss of 12.4% (around 27.3 pounds) over 72 weeks, falling short of the 15% expected from competing treatments like Novo Nordisk’s Wegovy.
CEO David Rix, in a CNBC interview, seemed nonchalant about the results, suggesting they were not far off what analysts anticipated. Rix mentioned the aim is to develop a convenient pill that competes well with other GLP-1 drugs.
The company plans to seek regulatory approval for this new drug by year’s end.
In conjunction with the drug announcement, Eli Lilly also reported strong second-quarter earnings, boasting an adjusted EPS of $6.31, a 38% year-on-year increase, on revenues of $15.56 billion, exceeding expectations.
This surge in profit can be attributed to heightened demand for Zepbound, their existing weight loss drug, contributing to sales of $3.38 billion. Sales for Murjaro, another GLP-1 drug for treating obesity and type 2 diabetes, surged by 68% to $52 billion.
Eli Lilly has revised its annual adjusted EPS forecast upward to a range of $21.75 to $23.00, with revenues projected between $60 billion and $62.1 billion, exceeding prior estimates.
Intel stocks dip after Trump calls for CEO’s resignation
4 hours 22 minutes ago
Intel shares dropped on Thursday after President Trump suggested that new CEO Rip Butane should resign.
In a post on Truth Social, Trump declared, “Intel CEOs are very conflicted and must resign immediately. There’s no other solution to this problem.”
Earlier, Senator Tom Cotton raised concerns about CEO Butane’s ties to Chinese companies in a letter to Intel’s chairman.
Butane has faced scrutiny for ties to Cadence Design Systems prior to his days at Intel, where he pleaded guilty over issues related to sales to China.
Intel shares fell about 2% in recent trading. Following a significant drop last year, the stock’s value has remained relatively stable this year.
Major index futures poised to open higher
5 hours 18 minutes ago
Futures for the Dow Jones industrial average indicated a rise of 0.4%.
S&P 500 futures increased by 0.6%.
Meanwhile, Nasdaq 100 futures expanded by 0.8%.
