Meta Platforms (NASDAQ: META) surged on strong earnings and AI progress, while Moderna (NASDAQ: MRNA) plummeted after slashing its sales outlook and Applied Materials (NASDAQ: AMAT) saw its stock drop after being denied funding under the CHIPS Act. Find out more about these market movers below.
Meta Platforms (META) Surges on Stellar Earnings
Meta Platforms reported a robust second quarter, with profits reaching $13.5 billion and revenue climbing 22% year-over-year to $39 billion. The tech giant’s performance exceeded market expectations, driving its stock up by 7.75% to $511.62.
CEO Mark Zuckerberg highlighted Meta’s strong AI performance, with Meta AI on track to become the most-used AI assistant worldwide by year-end. The company’s focus on AI development, including the release of an open-source AI model and traction with Ray-Ban Meta AI glasses, has bolstered investor confidence.
Meta provided an optimistic forecast, projecting third-quarter revenue between $38.5 billion and $41 billion. The company’s year-to-date return stands at an impressive 44.52%, with a one-year return of 60.56%, reflecting sustained growth across its apps and AI initiatives.
Moderna (MRNA) Plummets on Slashed Outlook
Despite beating Q2 expectations with revenue of $241 million, Moderna’s stock plunged 15.28% to $101.00 after the company significantly reduced its full-year sales guidance. The biotech firm now expects 2024 product revenue between $3 billion and $3.5 billion, down from the previous $4 billion forecast.
Moderna cited lower expected sales in Europe and a competitive U.S. respiratory vaccine market as key factors behind the guidance cut. The company also faces challenges from tight European budgets and existing contracts with other suppliers, potentially deferring international revenue into 2025.
Despite current setbacks, Moderna remains optimistic about its long-term prospects. The company has begun shipping its new RSV vaccine, mRESVIA, in the U.S. and boasts a pipeline of 45 products in development. Moderna expects to return to sales growth by 2025 and achieve profitability by 2026.
Applied Materials (AMAT) Declines on CHIPS Act Setback
Applied Materials saw its stock drop 4.44% to $202.77 following news that it was denied funding under the CHIPS Act for a $4 billion research and development center in Silicon Valley. The rejection comes as a blow to the company’s plans for expanding its U.S. operations.
The CHIPS and Science Act, signed into law in August 2022, authorized $280 billion in funding for domestic chipmaking research and development. While other chipmakers like TSMC, Samsung Electronics, and SK Hynix have secured grants, Applied Materials faced difficulties in gaining approval for its project.
Despite the setback, Applied Materials maintains a strong market position with a market cap of $167.872 billion and a P/E ratio of 24.41. The company’s year-to-date return stands at 25.54%, with a one-year return of 34.80%, indicating resilience in the face of challenges.
Analysis:
Meta Platforms has impressed investors with its stellar earnings and AI progress, leading to a surge in its stock price. Moderna, on the other hand, faced a significant decline due to slashed sales outlook, but remains optimistic about its long-term prospects. Applied Materials saw a drop in its stock after being denied funding under the CHIPS Act, highlighting the challenges faced by the company in expanding its operations.
For investors, it is crucial to stay informed about such market movements and company updates to make informed decisions about their investments. Understanding the reasons behind stock price movements and company developments can help investors navigate the volatile market and manage their portfolios effectively.