Tech

Nasdaq Rises 0.4%; DXC Tech Surges 11.5% on Bid Talks

By Bill Bullington

6/10, 16:37 EDT
Apple Inc.
Adobe Inc.
Advanced Micro Devices, Inc.
Amazon.com, Inc.
ANSYS, Inc.
Broadcom Inc.
Cognizant Technology Solutions Corporation
DXC Technology Company
Enphase Energy, Inc.
First Solar, Inc.
Alphabet Inc.
iRobot Corporation
Nextdoor Holdings, Inc.
Lam Research Corporation
Meta Platforms, Inc.
Monolithic Power Systems, Inc.
Microsoft Corporation
NVIDIA Corporation
Oracle Corporation
Perion Network Ltd
Synopsys, Inc.
Seagate Technology Holdings PLC
AT&T Inc.
Take-Two Interactive Software, Inc.
Warner Bros. Discovery, Inc. - Series A
Yext, Inc.
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Key Takeaway

  • Major US tech stocks rose, with the Nasdaq 100 Index up 0.4%, despite Apple (AAPL) falling 1.9% post-AI event due to lack of major surprises.
  • DXC Technology (DXC) surged 11.5% on joint bid talks by Apollo Global and Kyndryl Holdings, while Meta Platforms (META) gained 2% despite a Supreme Court review of a lawsuit related to Cambridge Analytica.

TMT Megacap Watch

Major US technology and internet companies mostly rose on Monday, with the Nasdaq 100 Index climbing 0.4% to close at a record. Apple (AAPL -1.9%) fell after its AI event, which was seen as having few surprises. Microsoft (MSFT +1%), Amazon.com (AMZN +1.5%), Alphabet (GOOGL +0.3%), Nvidia (NVDA +0.8%), and Meta Platforms (META +2%) all posted gains.

What's Moving the Market

  • Apple (AAPL): Apple's developer event focused on new AI features, including tools supported by OpenAI’s ChatGPT. However, the lack of major surprises led to a 1.9% drop in its stock. The event emphasized increased consumer privacy and new features for devices using Apple’s A17 Pro and M-series chips, which could drive future upgrades.
  • Meta Platforms (META): The US Supreme Court agreed to review a lawsuit accusing Meta of misleading investors about the Cambridge Analytica data-harvesting scandal. Despite this, Meta's stock rose 2%, as the litigation is seen as less risky compared to other legal challenges related to app addiction and ad-targeting changes.
  • Microsoft (MSFT): Microsoft's June 9 Xbox event highlighted its first-party studios, which is expected to boost its Xbox Game Pass subscription service over the next 12-18 months. This focus on exclusive content is likely to be well-received by its 34 million users.
  • OpenAI: OpenAI hired Sarah Friar, former CEO of Nextdoor Holdings (KIND +9.1%), as its CFO. This move fills a long-vacant role at the AI startup, signaling its intent to strengthen its financial leadership.

Elsewhere in TMT

  • Ansys (ANSS -0.3%): Ansys is poised to benefit from rising demand for simulation software, crucial for product development in sectors like aerospace, autos, and semiconductors. The pending acquisition by Synopsys (SNPS +0.8%) remains a key focus, with regulatory approval expected by mid-2025.
  • iRobot Corp. (IRBT -4.5%): iRobot faces a shareholder derivative action alleging concealment of due diligence issues and regulatory red flags in Amazon.com Inc.’s attempted $1.4 billion buyout.
  • DXC Technology (DXC +11.5%): Apollo Global and Kyndryl Holdings are in talks for a joint bid for DXC Technology, driving the stock up 11.5%.
  • Cognizant (CTSH +2%): Cognizant agreed to acquire engineering research and development firm Belcan for about $1.3 billion in cash and stock, enhancing its capabilities in the engineering sector.

Earnings and Ratings:

  • Perion (PERI): Cut its 2Q revenue forecast, missing estimates, leading to a downgrade by Oppenheimer.
  • Yext Inc. (YEXT): Boosted its FY adjusted EPS forecast.
  • AMD (AMD -4.5%): Downgraded to Equal-Weight at Morgan Stanley due to limited AI boost.
  • Adobe (ADBE): Downgraded to Hold at Melius on risks from AI competition.
  • Broadcom (AVGO): Resumed at Overweight by Morgan Stanley with a price target of $1,658.

Movers:

  • Advancers: Enphase Energy (ENPH +6.5%), First Solar (FSLR +4.7%), Lam Research (LRCX +4.2%), Monolithic Power (MPWR +3.7%), Seagate (STX +3.6%).
  • Decliners: AMD (AMD -4.5%), Take-Two (TTWO -2.6%), Apple (AAPL -1.9%), Warner Bros Discovery (WBD -1.8%), AT&T (T -1.3%).

Tuesday Agenda

  • Earnings Postmarket: Oracle Corp. (ORCL US)