From Nvidia to nuclear power to extra spicy hot sauce
10/27/2024 19:31
Lots of stories get overlooked during earnings seasons.
This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:
-
The chart of the day
-
What we're watching
-
What we're reading
-
Economic data releases and earnings
The earnings avalanche has commenced.
And what does that mean?
You've probably missed a lot of other stories that could impact your portfolio. After all, there's more to one's investing life than modeling out 2050 profits for Nvidia (NVDA) and wondering whether Tesla (TSLA) will haul in $10 billion in sales from humanoid robots.
In the spirit of this, here are a couple of convos I had this week that may leave you thinking (hopefully).
AI meets extra spicy hot sauce: I was at a CEO dinner this week where an analyst specializing in AI proceeded to share the deep impact to businesses as AI proliferates. I tend to agree the way business is done will change profoundly, and it'll include a good bit of job loss.
An example of AI's impact is in Cholula hot sauce. Its parent, spice maker McCormick (MKC), held an investor day this week.
"We have used generative AI to really understand where all the commentary was going [for hot sauce], we learned there were some Cholula lovers out there that wanted a hotter version. So in January, we are launching an extra-hot version of Cholula," McCormick CEO Brendan Foley told me on Yahoo Finance's Market Domination Overtime.
McCormick reiterated its long-term sales growth guidance of 4% to 6% and earnings growth of 9% to 11%. Shares are up 16% year to date compared to the 22% gain for the S&P 500.
You can catch that full spicy segment here.
Building a 21st-century media company: The traditional media industry continues to be disrupted by everything from new streaming networks to creators posting on YouTube. Why else do you think Disney (DIS) said this week its CEO Bob Iger was sticking around until 2026 (he was rumored to be leaving in 2025)? He has to leave the business in a much better place than his last exit.
One of these disrupters in the past 15 years has been Dude Perfect. The company was started by five friends who went to Texas A&M and rose to fame for viral trick-shot videos posted on YouTube. The company now boasts 60.5 million subscribers and churns out a steady, broader array of content.
Armed with a new $100 million capital infusion from Highmount Capital, Dude Perfect is gearing up for more unique programming and the build-out of a headquarters in Frisco, Texas. In charge of bringing that vision to life? Dude Perfect's first-ever CEO Andrew Yaffe, who took the job several weeks ago.
"I think people underestimate how big YouTube is," Yaffe told me of the Google-owned (GOOG) platform on Yahoo Finance's Opening Bid podcast (video above; listen in here). "YouTube is the biggest media platform in the US in terms of consumption. Bigger than Netflix (NFLX). And that's growing quickly. It's also the biggest outside the US. It's massive — it is how people under the age of 34 consume content."
Not massive: Google's stock price year to date. Shares have lagged the S&P 500's 23% gain, rising only 16%.
Big Blue is a big AI player: So much gets lost on a company's earnings day as traders zoom in on the numbers and a couple of trends on the earnings call. Ultimately this is why I think companies should be reporting twice a year, but that's a discussion for a different day.
One number that got lost in IBM's earnings release Wednesday (which led to a shellacking in the stock price as consulting sales missed estimates): $3 billion of AI-related project backing. IBM's veteran CFO Jim Kavanaugh tells me the company is tracking toward adding $1 billion in AI project backlog a quarter.
That's huge and aligns with what Kavanaugh thinks is a long runway for AI infrastructure buildout.
"In my personal opinion, I think it's going to be the longest [adoption] curve that we'll see also because it'll play in many different industries and many different clients," Kavanaugh said.
That bullish sentiment was echoed in a convo I had on Opening Bid with BofA analyst Vivek Arya this week, where he went into how AI's buildout will require the use of nuclear power. More insight on that and how it will benefit market darling Nvidia here.
Our Morning Brief anchor Seana Smith will be diving into IBM's AI future with chairman and CEO Arvind Krishna at our annual Invest conference on Nov. 12. Want to stop by and say hi and be in the room for some wealth-building chats? Register here!
There is still a Marriott running Marriott: Meet David S. Marriott, 50, who assumed the chairman role at Marriott (MAR) from his legendary father J.W. "Bill" Marriott, Jr., 92, in 2022. David's father — who is chairman emeritus — served as chairman for 60 years and CEO for 40 years. Mind-blowing! Bill's parents, Alice Marriott and J. Willard Marriott, founded the company as an A&W root beer stand in 1927.
Suffice it to say, the younger Marriott hardly does interviews (he travels a lot and has four children) — so it was a treat to spend time with him on Opening Bid.
"I spent several summers doing internships in the kitchen, learning how to prep food, hot food, cold food, and learning how to cook on the line. And, I spent a summer as a bellman and spent some time making beds and working behind the front desk," Marriott told me of his on-the-job training.
The full pod drop of our chat is at 8:30 a.m. ET on Monday. Be sure to tune in on Yahoo Finance or listen in on your podcast platform of choice.
And since you were wondering: Shares of Marriott are up 111% in the last five years. Hilton (HLT) is up 155%.
Three times each week, I field insight-filled conversations with the biggest names in business and markets on Opening Bid. Find more episodes on our video hub. Watch on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance