Trending tickers: Apple, Reddit, JD Wetherspoon, Toyota and ARM
Apple (AAPL)
Shares in Apple were basically flat in premarket trading as analysts appeared to be unphased by the launch of a line of new iPad tablets revamped with a powerful AI chip that signalled the company is ready to introduce artificial intelligence across its devices.
The iPad Pro now includes the cutting-edge M4 chip. This offers a glimpse into Apple's vision for integrating artificial intelligence capabilities into its devices.
The Cupertino-based company has been criticised for going too slow on the AI revolution as Microsoft (MSFT) pipped its spot as the world's biggest company by market capitalisation.
It is reportedly working on creating its own artificial intelligence chips for the company's data centres in a new project called "ACDC."
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"In my opinion, this is more about improving the costs for AI for Apple than it is necessarily a new product release leveraging artificial intelligence," Maxim Group Managing Director Tom Forte, told Yahoo Finance.
He added that despite the chip's potential to cut artificial intelligence operating costs, "I certainly wouldn't consider changing my hold rating on the news."
Reddit (RDDT)
Reddit released its first quarter earnings report following its March IPO, revealing that revenue increased 48% to $243m (£194.8). Shares soared by 14% in premarket trading.
The company reported $222.7m in ad revenue for the period, up 39% year over year. Average daily active users jumped 37% to a record 82.7 million.
For the second quarter, Reddit expects revenue of $240m to $255m, topping the $224 million expected by analysts, according to LSEG. The midpoint of the guidance range suggests growth of about 32% for the second quarter, up from $183m from a year earlier.
The report comes after its initial public offering in March saw a positive response, with shares up 48% on the first day of trading.
“We are happy with our progress this quarter,” chief executive officer Steve Huffman said in a statement accompanying the report. “Our management target is to grow revenue twice as fast as total adjusted costs, but this quarter we grew revenue five times faster.”
Wetherspoon (JDW.L)
Pub chain JD Wetherspoon has hailed soaring demand for Guinness from younger clients and recovering ale sales as it reported growth over the past three months.
Wetherspoons, which runs 809 pubs across the UK, said like-for-like sales increased by 5.2% over the 13 weeks to April 28 compared with a year earlier, with total sales up 3.3%.
It represented a slight slowdown in growth and means the company has seen a 6.5% sales increase over the financial year-to-date.
As a result, the company said it expects annual profits to be “towards the top of market expectations”.
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Chairman Tim Martin said: “Sales in the period continued the steady recovery from the pandemic,” he said.
“Traditional ales, which were very slow in the aftermath of the lockdowns, are increasing momentum, with Abbot Ale, Ruddles Bitter and Doom Bar showing good growth, as indeed are ales from the many small and micro brewers with which we trade.
“The gods of fashion have smiled upon Guinness, previously consumed by blokes my age, but now widely adopted by younger generations.”
Toyota (TM)
Toyota reported record annual net profit of more than £25.5bn but has warned of an impending drop in income after it was forced to trim production to address a safety scandal.
The world’s largest carmaker by sales enjoyed a record net profit of 4.94 trillion yen (£25.5bn) in the year to March after recording revenues of 45.1 trillion yen (£232.6bn), which was also an all-time high.
The company warned that the current year would be less spectacular as it has been trying to recover from revelations of fraud at suppliers, which prompted it to reduce production targets while it reviewed business practices throughout the group.
The company forecast operating income to decrease around 20% to 4.3 trillion yen in the fiscal year through March 2025, falling short of the market’s consensus forecast of 5.3 trillion yen.
It also expects its net profit for the fiscal year through March 2025 to decline nearly 28% to 3.57 trillion yen.
Toyota last month said it sold 11.1 million vehicles across all brands in the 2023-24 fiscal year, up five percent and the first time they have exceeded 10 million. Sales of purely electric car sales were a much more modest 116,500.
ARM (ARM)
ARM Holdings is slated to announce its fourth-quarter fiscal 2024 results this Wednesday after the Wall Street bell, following its IPO launch in September 2023 where it shunned London for New York.
ARM's stock performance has been volatile, with shares retracing much of their gains from the first quarter due to analyst downgrades. Last month, Morgan Stanley said new deals in China and payments from Apple should bolster Arm’s sales and profits over the medium term.
Its earnings report is a key indicator for semiconductor stocks, given ARM's dominant 99% market share in smartphones and its provision of advanced AI chip designs for me caps such as Nvidia, Microsoft, and Amazon.
Arm generates money through royalties on its designs, rather than hardware sales like Nvidia and other chipmakers such as AMD.
Watch: Apple reveals new iPad models equipped with chips for AI-related tasks
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