Dow leads broader rally after soft jobs report, Apple earnings triumph

Live5 updates

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  Fri, May 3, 2024 at 8:44 AM PDT

  Apple investors delight in largest ever stock buyback

  Lagging most of its big tech peers this year, Apple (AAPL) came into earnings down 10%. But its fortunes quickly turned after announcing the largest ever stock repurchase program.

  Shares of the iPhone maker climbed more than 6% Friday morning after revealing the board approved a new $110 billion share repurchase plan.

  Of the 10 largest share buyback announcements made in the US, Apple is responsible for the top six of them, according to Bloomberg, which includes share repurchases from Chevron (CVX) and Alphabet (GOOG, GOOGL).

  The latest buyback came in well above the $90 billion amount that some analysts had expected, following the prior repurchase programs of the last two years. Apple also boosted its shareholder dividend to 4%, in another sweetener.

  Angelo Zino, senior equity analyst at CFRA Research, kept a Buy rating on Apple shares with a 12-month price target of $210, which represents a 14% premium above its current $184 share price.

  Zino said the buyback program and increased dividend “demonstrates AAPL’s high conviction level for business prospects ahead,” he said in a note. “We believe these results appear to change the narrative on the AAPL story, as China is holding up better than expected and there are a host of upcoming events/catalysts on the horizon that could improve investor sentiment and drive consensus estimates higher.”

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  Fri, May 3, 2024 at 8:19 AM PDT

  Amazon’s AWS on course to bring in $100 in revenue this year

  The division that represents more than 60% of Amazon’s quarterly operating profits has achieved a significant milestone: it’s on course to haul in $100 billion in revenue this year.

  Powered by heightened demand for generative AI services and the ongoing trend of companies moving their workloads to the cloud, Amazon’s enterprise cloud operation rose for the second straight quarter, rising 17% year over year to $25 billion, Yahoo Finance’s Brian Sozzi reports.

  AWS CEO Adam Selipsky, who was hired to run the division in 2021, said on the Opening Bid podcast that even wit that growth, the business still has room to grow. Selipsky contends that with 85% of companies still storing their data on-premise, AWS still has massive opportunity to increase its business. are just beginning to gust.

  “We’re optimistic about the business outlook for AWS and I think it can continue to grow really rapidly. I don’t really see an upper limit on it,” Selipsky said. “Of course it’s not our birthright, it’s not guaranteed. We’ll only be as successful as what we do tomorrow for customers.”

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  Fri, May 3, 2024 at 7:25 AM PDT

  Stocks trending in morning trading

  Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday:

  Apple (AAPL): The tech giant is basking in the sun Friday morning as shares rose as much as 6% after the iPhone maker reported earnings that beat forecasts, sales that fell less than feared, and a new $110 billion share repurchase plan.

  Amgen (AMGN): Shares of the pharmaceutical company surged 13% Friday morning after its CEO said he was “very encouraged” by interim results of a Phase II study of injectable obesity drug MariTide.

  Coinbase (COIN): The crypto exchange reported better-than-expected revenue in its first quarter earnings report, but analysts were mixed on the company’s outlook. Some noted that Coinbase’s share price isis still heavily influenced by the fluctuations in digital currencies.

  Cloudflare (NET): Shares of the cloud cybersecurity company plummeted over 16% Friday morning following the release of second quarter revenue projections, which fell short of expectations, fueling concerns about sustaining its growth rate.

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  Fri, May 3, 2024 at 6:34 AM PDT

  The Dow jumps 500 points in morning trading

  A weaker than expected jobs report rekindled hopes on Wall Street that the Fed will eventually cut rates this year, as the unemployment rate ticked up to 3.9%, offering central bank officials a signal that their current restrictive policy is still impacting the economy.

  The Dow Jones Industrial Average (^DJI) jumped 1.5%, or more than 500 points, while the S&P 500 (^GSPC) rose 1.2%. The tech-heavy Nasdaq Composite (^IXIC) increased roughly 1.9%. All three gauges are poised to build on sharp closing gains from Thursday.

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  Fri, May 3, 2024 at 4:46 AM PDT

  The valuation debate on Apple

  Let the valuation debate on Apple’s (AAPL) stock begin after a soft quarter and ahead of some artificial intelligence catalysts soon. I am calling the quarter soft even as the sell-side is overlooking all sales declines and focusing only on amazing Apple things.

  Loop Capital’s Ananda Baruah had a good point on this one:

  “The stock isn’t ‘expensive’ per se … but not screaming cheap either. It’s tough to discern if valuation is friend or foe currently, given Apple is trading more in the middle of its recent trading range but with fundamentals softer. Our hunch is that near-term stock dynamics could be variable, with the second half of the year stock dynamics being more ‘contextual’ given that there doesn’t currently seem to be as much estimate variability vs. Wall Street, and that [Apple has the potential to generate news on Gen AI and on AR/VR (i.e. VisionPro), two areas that could prove to be catalysts.”