Daily stocks in the news

Shift4 Payments is preparing for a potential rally as it breaks above its 50-day moving average following an upgrade by MoffettNathanson. The company, which serves over 200,000 businesses in the hospitality and restaurant industries, has been struggling to stay above this average since a short seller report caused a drop in late April. However, the recent upgrade could provide the catalyst needed to reignite a rally. Around 90% of Shift4 Payments' revenue comes from transaction fees, relying on consumer spending, which has been impacted by inflation. Despite the challenging demand environment, the company delivered strong Q1 results and increased its revenue forecast for FY23. The upcoming months of May and June will be crucial for restaurant performance, as this sector contributes 40% of Shift4 Payments' annual revenue. Additionally, the company is expanding internationally and partnering with gateways and payment models like PayPal to drive long-term financial growth. While there have been some setbacks, waiting for Q2 earnings results in August will provide a clearer picture of the company's performance.

Logitech, a manufacturer of computer peripherals, is facing a period of uncertainty following the sudden resignation of its CEO, Bracken Darrell. The company has been struggling with declining sales in challenging market conditions, and this unexpected departure has added to the company's turnaround efforts. Guy Gecht, a non-executive member of Logitech's board of directors, will serve as the interim CEO until a permanent replacement is found. Mr. Gecht brings experience as the former CEO of Electronics for Imaging, but the departure of Logitech's longtime CEO presents challenges in executing the company's turnaround plan. Logitech experienced significant growth during the pandemic but has since struggled to maintain momentum. The stock has declined by 9% year-to-date and is far from its all-time highs. The company has faced six consecutive quarters of revenue decline, with the last two quarters seeing a 22% drop. One of the major issues for Logitech is the delayed refresh cycle for products that were in high demand during the work-from-home period. However, the company has overcome supply chain disruptions and normalized promotional activity in the market. The departure of the CEO adds another layer of uncertainty as Logitech seeks to diversify its product offerings and execute its turnaround plan.

Shares of Advanced Micro Devices (AMD) initially dropped after doubts arose regarding its ability to compete with NVIDIA in developing powerful AI chips. However, those doubts have diminished following reports that Amazon Web Services (AWS) is considering using AMD's new AI chip for its data centers. While a final decision has not been made, AMD's piecemeal approach and the incompatibility of NVIDIA's DGX Cloud platform with AWS's data centers give AMD an advantage. If AWS proceeds with AMD, orders for the MI300X chip could increase in Q4 when production ramps up. Additionally, AMD's CEO, Lisa Su, highlighted the growth potential of AI chips in the data center market, estimating it to be around $30 billion this year and projected to grow over 50% annually for the next three to four years. Despite a weak Q1 in the data center segment, AMD's stock has seen a surge since then, positioning the company for potential success with its new AI chip.

UnitedHealth, the largest health insurance firm in the US, saw its shares plummet to 52-week lows following bearish comments made during a Goldman Sachs conference. The company stated that its medical care ratio, which represents the percentage of premiums used to cover claims, may exceed its FY23 outlook. This news has had a ripple effect across the health insurance industry, with other insurers such as ELV, CNC, MOH, HUM, and CI also experiencing declines in their stock prices. UnitedHealth had previously discussed the trend of deferred care, but until now, had not observed a significant increase in medical care ratios. However, pent-up demand for outpatient care, particularly among seniors, is now being fulfilled, leading to higher healthcare service utilization. Behavioral health is also receiving more attention, contributing to increased care activity. These outpatient care trends, while on the lower-cost side of care, are impacting UnitedHealth's medical care ratio and may affect the company's ability to meet its long-term EPS growth target. Additionally, the summer months may see further delays in care as doctors take vacation days and patients engage in outdoor activities.

Intel (INTC) is exploring the possibility of making a significant investment in Arm Ltd.'s upcoming IPO, aiming to bolster its position in the AI market. As Intel faces challenges in its own transformation and competitors like NVIDIA and AMD gain momentum in the AI chip sector, the company is considering a strategic move to align itself with Arm. Bloomberg reports that Intel is in discussions with Arm to become a key investor in the IPO, although specific investment details and the IPO's timeline remain uncertain. Arm, owned by Softbank, holds a dominant position in the semiconductor industry with its chip designs powering major technology products from companies like Apple, Samsung, Qualcomm, and Intel itself. Arm's portfolio of AI-optimized chips played a significant role in NVIDIA's attempt to acquire the company for $40 billion in 2020. However, regulatory challenges led to the deal's collapse. By participating in Arm's IPO, Intel aims to tap into the growing demand for AI chips and benefit from Arm's established position in the market. Although Intel has fallen behind its competitors, the company appears to be heading in the right direction. Despite a 36% year-over-year decline in revenue and a 15 percentage point drop in gross margin in Q1, Intel issued inline revenue guidance for Q2, suggesting signs of stability in the PC market. Intel's CEO, Pat Gelsinger, highlighted the progress made in inventory corrections during the earnings call. The potential success of Arm's IPO could have far-reaching implications for the overall IPO market, as a strong debut from Arm may encourage other companies to go public. Overall, an investment in Arm's IPO would benefit Intel, Arm, and the IPO market as a whole. While many details are still unknown, and the Arm IPO may be several months away, this development instills confidence in Intel's AI-focused ambitions and presents a promising opportunity for all parties involved.