Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether it’s a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the latest earnings stats from the S&P 500 👇
*Click the image to enlarge it
After reporting a double, the $4.4T darling of the AI Revolution, Nvidia $NVDA, had a muted -0.51 reaction score.
They posted revenues of $46.74B, versus the expected $46.05B, and earnings per share of $1.05, versus the expected $1.01.
The $23B cybersecurity giant, CrowdStrike $CRWD, had a +1.38 reaction score after reporting a double beat.
Their report showed revenues of $1.17B, versus the expected $1.15B, and earnings per share of $0.93, versus the expected $0.83.
Now let's dive into the fundamentals and technicals 👇
CRWD snapped a 3-quarter beatdown streak 🔥
CrowdStrike rallied 4.6% after this earnings report, and here's what happened:
Total top-line revenue grew by 21% year-over-year, driven by a quarterly record of $221M in net new ARR.
Free cash flow also reached a record high of $284M, driven by margin expansion.
In addition to the record quarter, the management team issued forward guidance that was better than expected.
After a multi-month corrective wave and 3 consecutive negative earnings reactions, we think this earnings report was the catalyst to spark a fresh leg higher and likely a new streak of positive earnings reactions.
Thursday's move formed a textbook bullish engulfing candlestick, which is one of our favorite technical indicators for marking the end of a downtrend (so long as there's follow-through).
Despite some recent headwinds (e.g., the July 19, 2024, incident), the company remains one of the most dominant players in cybersecurity.
So long as CRWD holds above 426, the path of least resistance is higher for the foreseeable future.
NVDA failed to rally on good news 🐻
Nvidia fell 0.8% after this earnings report, and here's what happened:
Revenue grew 56% year-over-year, driven by a 56% increase in Data Center revenue over the same period. Net income is growing even faster at 59% year-over-year.
So far this year, they have returned $24.3B to shareholders via buybacks and dividends. This is expected to increase with the new $60B repurchase authorization.
In addition to the strong quarter, the management team boosted its revenue guidance to $54B. This could surprise to the upside if they're able to recognize Chinese revenue during the quarter.
This was another unbelievably good quarter from the darling of the AI Revolution. They are riding the massive tailwind of cloud and enterprise CapEx for data centers, nearly doubling in two years to what is projected to be $600B this year.
In Sunday's column of The Weekly Beat, we highlighted that the earnings reactions have been anything but consistent. The last 5 reactions have been negative, positive, negative, positive, negative. Completely trendless...
We think there's a significant chance the company will be able to recognize Chinese revenue during the quarter, which could spark the next leg higher in the stock. This could also mark the beginning of a new positive trend in the earnings reactions.
As you can see on the chart, the price is consolidating above a key Fibonacci extension level after more than doubling off the April low. This would be a logical level to see a prolonged digestion of gains.
So long as NVDA holds above 174, the path of least resistance is sideways to higher for the foreseeable future.
Happy Friday!
-The Beat Team
P.S. Nvidia isn't the only stock benefiting from the AI Revolution. Breakout Multiplier has just entered a new options trade in Quantum Computing $QUBT.
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