Here is the CMG earnings. Chipotle tops earnings and revenue estimates as restaurant traffic rises again https://www.cnbc.com/2024/07/24/chipotle-mexican-grill-cmg-q2-2024-earnings.html (BOLD is my opinion OR what I consider important content) "Key Points Chipotle Mexican Grill said its restaurant traffic increased 8.7% in the second quarter. The restaurant company beat Wall Street’s estimates for its quarterly earnings and revenue. Chipotle reiterated its full-year outlook for same-store sales growth. Chipotle Mexican Grill on Wednesday reported quarterly earnings and revenue that topped analysts’ expectations as it saw higher traffic at its restaurants, bucking an industry slowdown. Shares of the company rose more than 7% in extended trading. Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG: Earnings per share: 34 cents adjusted vs. 32 cents expected Revenue: $2.97 billion vs. $2.94 billion expected The burrito chain reported second-quarter net income of $455.7 million, or 33 cents per share, up from $341.8 million, or 25 cents per share, a year earlier. Chipotle’s profits rose from the year-ago period due to price hikes that helped offset higher avocado prices and greater usage of oil to fry tortilla chips this quarter. Excluding items, Chipotle earned 34 cents per share. Net sales climbed 18.2% to $2.97 billion. The company’s same-store sales rose 11.1% in the quarter, topping StreetAccount estimates of 9.2%. Traffic to its restaurants increased 8.7%, despite backlash on social media fueled by customers who said their burrito bowls are smaller. CEO Brian Niccol has denied that the company has reduced its portion sizes. The chain brought back its chicken al pastor in March as a limited-time menu item. More customers have also been ordering its barbacoa, which underwent a name change earlier this year that added “braised beef” to improve customer awareness of the option. Chipotle opened 52 new company-owned locations and one new international licensed restaurant during the quarter. The company reiterated its full-year outlook that same-store sales will grow by a mid- to high-single digit percentage. Chipotle also anticipates that it will open between 285 to 315 new restaurants this year." MY COMMENT UP 7% after hours. Not to worry......it will plummet like a rock tomorrow when the headlines will say........"BURRITO Seller Screws Customers on Portion Size....As CEO Tries To Hide Behind Earnings Numbers". I notice....above.... that they had to get the little dig in about portion size in relationship to the 8.7% traffic increase. YES.....a CLEAR BEAT.....but does it even matter anymore over the short term. I doubt it.
Here is more if you are interested in CMG or own it. Chipotle: Q2 Earnings Snapshot https://finance.yahoo.com/news/chipotle-q2-earnings-snapshot-202133175.html
NVDA.....well down by -6.8% in a single day today. This just shows the INSANITY of the short term markets. Lets hope this does not spread to the longer term markets. It is bad enough that stocks are punished as we saw today....when companies like NVDA dont show even the slightest hint of anything remotely negative in the upcoming earnings. This is kind of a FLUFF article....but probably speaks the TRUTH. Prediction: Nvidia's Stock Correction Will Lead to Outsized Gains in the Second Half of 2024 https://finance.yahoo.com/news/prediction-nvidias-stock-correction-lead-113000939.html (BOLD is my opinion OR what I consider important content) Beginning in January 2023, it seemed like Nvidia (NASDAQ: NVDA) stock went straight up for almost 18 months. There was good reason for that as investors piled in to the company that has become the face of a dramatically increasing artificial intelligence (AI) sector. But no stock goes straight up forever, and valuation still matters. A correction in the stock was inevitable and finally occurred over the last month. Nvidia shares recently traded as much as 13% below the closing record high set on June 18. And buying quality stocks in periods of corrections or bear markets is one of the best ways to generate market-beating returns. Invest when others are fearful The recent pullback isn't the first time Nvidia investors dragged the stock lower by taking profits. In the second half of 2022, Nvidia's sales plunged nearly 20% compared to the prior-year period as chip demand from gaming and cryptocurrency-mining users crashed. That helped lead to a sell-off that knocked Nvidia shares down by more than half in 2022. Those sellers missed out on what would become an epic stock price run with gains of nearly 750% since the start of 2023. That's because Nvidia kept innovating. Sales to its data-center customers exploded as generative AI gained prominence, and the company's gaming sales rebounded. A more recent hiccup for Nvidia's sales has been government restrictions applied to advanced chips being sold to China. But recent reports say that Nvidia is getting ready to offer a new chip for sale to China that conforms to current trading rules. A new AI chip for the Chinese market that adheres to U.S. export controls would be just one more catalyst for Nvidia's sales, and potentially share price, to rise. That's why it's a good idea to take advantage of the recent price drop. As Warren Buffett famously said of his investing philosophy, "we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." The recent correction shows that some Nvidia investors are fearful right now. Reasons to be greedy with Nvidia In addition to the anticipated rebound in Nvidia's China sales, its domestic data center sales should also provide future catalysts. The main driver to boost sales will be its next-generation Blackwell platform for the growing data center market. Nvidia has said it will introduce new chips on an annual cadence. But the newest technology chips should actually be incremental income, rather than a replacement of existing income. One bit of evidence was the recent second-quarter report from Taiwan Semiconductor. The manufacturer of high-end AI chips for Nvidia said that demand remains strong and supply continues to be tight. That bodes well for continued growth in Nvidia's sales. Nvidia's business plan is also helping to increase demand. The company has already built a dominant position supplying chips to train AI models. It has also begun an annual cadence of new, higher-perfomance offerings beginning with next year's Blackwell graphics processing units (GPUs) and AI server-infrastructure systems. Its biggest customers will likely continue to upgrade with Nvidia's newest products. But don't forget that smaller companies still struggling to obtain Nvidia's existing H100 GPUs remain in the queue. KeyBanc Capital Markets analyst John Vinh summed it up well in a recent research note, stating: "Despite the impending launch of Blackwell in 2H24 [second half of 2024], we are not seeing any signs of a demand pause as demand for H100 remains robust, as we continue to see rush orders." What to watch for next Nvidia is expected to update investors with its next quarterly financial report on Aug. 28. If it confirms the continued strong-demand picture by outpacing expectations yet again, it would likely boost the share price. But Nvidia's stellar results have continued to build investor expectations, some of which are already priced into the stock. Nvidia's forward price-to-earnings (P/E) ratio is hovering above an already high five-year average. That high valuation will likely continue if the company's sales continue to soar. But investors should be prepared for another correction if the company reports any stumbles to that growth." MY COMMENT Way to go......Tiresmoke. Money in the long term bank for you.
Today I had HUGE dollar losses in my two accounts and those that I manage. WAY...... over many multiples of six figures in a single day. I am not going to say what....."WAY over"....means in dollar terms....but....a lot. But.....in the scheme of things and considering the gains racked up to date......NOT a big deal. The dollars are big but the percentage loss is reasonable for a day like today. I take heart in the fact that today was NOT a rational market day. None of the stocks that I own have taken any sort of "fundamental" hit. It is all a symptom of the nature of the current....modern....market and the reality of news headline and content......AI SPEED TRADING......which creates its own firestorm, self fulfilling, event over the short term. I really dont get caught up in the dollar amounts. My focus with about FIVE MONTHS to go in the year is to beat my 10% goal. I assume that at the end of this week I will still be over +30% YTD. I am not in the business of trying to protect gains....I am in the business of making and growing money. To do so....I need to be totally and constantly in the markets for the long term.
Is this realistic number? That's an incredible growth of business that CMG is anticipating. I just realized Chipotle has 20 stores in London. Never heard of them before, never even seen it was advertised on TV or Internet. In Europe we don't have food chain restaurants like Chipotle, I think there is a huge potential for branching out in EU.
Well that is in line with their long term goals: "Management thinks it can double its store count from the 3,500 it has today to reach 7,000 in North America alone. It plans to open about 300 stores this year, and at that rate, it should have around 5,000 in five years." https://finance.yahoo.com/news/where-chipotle-mexican-grill-5-141500384.html This is part of the reason that I am long term this stock. The other BIG REASON....they strongly appeal to the under age 45 crowd......and.....are very well managed. With their BIG CAP GROWTH POTENTIAL......they are just what I look for in a company. I also need NON-TECH companies to help balance out my small number of....nine....stocks which skew strongly to TECH. I hope this small holding becomes a primary component of my stock portfolio over the next two years. I figure it will take about 1-2 years for me to evaluate owning this company.
I'm also considering adding CMG stock to my portfolio. Massive potential. How many times my wife and I wanted to go out and have a lunch/brunch/dinner but not fancied fine dinning since we have small kids, but also wanted to avoid fast food chains since it's poor quality. We would be more than happy to eat at Chipotle.
That is why a lot of younger people like CMG Strathmore. Because it is healthy eating at a reasonable price........and.....there are some tasty menu options for just about everyone. I am not trying to say you should buy this stock.....but...if you choose to do so it is down by about 24% since the correction in the stock started on June 18, 2024. That is a significant discount. BUT....that does not mean the fall is over......neither do these earnings. I dont see it making an immediate come-back. BUT....I am long term the company.
Brutal couple of weeks for my account. I've seen just over a 20% loss in under 2 weeks. That has to be the worst dip I've experienced since I started investing. Oh well, nothing to do. I just wish I had some spare cash hanging around to take advantage.
At this point I think we were more than due for a correction in tech/chip stocks. I am more than happy to ride this one out. AMD has been in correction territory for a while and NVDA is only a couple bucks aways from a 20% pullback. When in doubt, zoom out. What's that mean??!!! Sometimes we get caught up in the daily and weekly drops. In situations like this I look at the YTD, 1 year and 5 year and ask myself if this looks normal or do I need to reevaluate. As someone who doesn't own CMG stock, I may in the future, I do eat there usually a couple times a month. As W said this is a go to place for people under 40. I believe they are going to try to do what they say they are going to. In my area they are replacing all the 'old' stores with brand new ones. The new stores are more modern and so is the menu. I really think they tried to limit the portion sizes, realized the big portion sizes where part of their draw and then veered away from it. Last few times I went they were loaded up like the good old days.
I ALSO believe we may be seeing an old-fashioned summer correction. The way the markets are reacting in general even when there is good news shows lack of enthusiasm and skittishness. We will not get a rate cut till at least September or if not than after the election. AND....rate cuts some time over the rest of the year are pretty well baked in. I dont really spend any time analyzing the potential for correction....since it is meaningless to me. As a fully invested person all the time.....I do not take any action when corrections happen anyway.
AND.....this is good news for the general economy. BUT.....I dont really trust this number. I dont know why......but I have a BIG feeling that this number is significantly overstated and will be revised down at some point in the future. GDP: US economy grows at faster than expected pace in second quarter as inflation eases https://finance.yahoo.com/news/gdp-...ond-quarter-as-inflation-eases-123158542.html (BOLD is my opinion OR what I consider important content) "The US economy grew at a faster than expected pace in the second quarter. The Bureau of Economic Analysis's advance estimate of second quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 2.8% during the period, well above the 2% growth expected by economists surveyed by Bloomberg. The reading came in higher than first quarter GDP, which was revised down to 1.4%. Meanwhile, the "core" Personal Consumption Expenditures index, which excludes the volatile food and energy categories, grew by 2.9% in the second quarter, above estimates of 2.7% but significantly lower than 3.7% gain in the prior quarter. The data's release comes as investors try to gauge when the Federal Reserve will start cutting interest rates and if the central bank can achieve a soft landing, where inflation comes down to its 2% target without a significant economic downturn. Entering Thursday, markets had priced in a 100% chance the Fed would cut rates by the end of its September meeting. "The data today will reinforce the notion that the Fed has the benefit of time," Renaissance Macro head of economic research Neil Dutta wrote in a note following Thursday's release. "In the Fed’s mind, there is no need to rush with private domestic demand growing at a solid pace over the second quarter. July remains a set up meeting for September."" MY COMMENT The key to the above is that this data is ONLY an........yeah right......"estimate". Also we have the FACT that the GDP data for the first quarter was revised DOWN to 1.4%. My view.......there is a significant "chance" that this data is corrupted by politics, incompetence, and flaws in how the "estimate" is arrived at. We have seen RAMPANT examples of this sort of economic data being constantly revised DOWN over the past year or more. I have ZERO reason to trust this data is accurate. BUT......I dont invest based on government economic data anyway.
Since we like to keep everyone in the know with our latest trades, Yesterday and this morning I transitioned pretty much the remainder of my AMD shares into NVDA. I think we will see some more drop but since I'm trading chip stock for chip stock it should be a wash. I have a little 75 share position left in AMD, mainly to keep it on my radar but also also because I really do like Lisa Su and the company. But in investing their is no room for emotion, friends, love... It's amazing how months of slow increases can get deleted in 2 days but that's the game. Hopefully we take hit sharp and fast and can move on. The lingering decrease like the one through 2018 Q4 is what I can't stand.
As to the markets today.........the short term is simply a joke. A knee-jerk reaction market driven by traders that simply hammers companies regardless of prospects or success. There is ZERO differentiation in various stocks right now. It is basic, massive, herd behavior on the part of the traders and as a result on the part of the big averages.
AND....just for fun....we will be having to sit through yet another FED MEETING next week. Perfect timing to have the FED meeting during the same week when many of the big cap tech companies report earnings. No doubt it will be a very MUDDLED week.
I like this little article. Tech’s splurge on AI chips has companies in ‘arms race’ that’s forcing more spending https://www.cnbc.com/2024/07/25/techs-splurge-on-ai-chips-has-meta-alphabet-tesla-in-arms-race.html (BOLD is my opinion OR what I consider important content) "Key Points Executives at Meta and Google admitted this week that their companies may be spending too much on artificial intelligence infrastructure. However, they said the risks of spending too little are far greater. “Because the downside of being behind is that you’re out of position for like the most important technology for the next 10 to 15 years,” Meta CEO Mark Zuckerberg said on a podcast. Meta CEO Mark Zuckerberg has been assembling a large stockpile of Nvidia chips, spending billions of dollars so his company can develop and train advanced artificial intelligence models. But even he says the AI hype may be driving too much investment. “I think that there’s a meaningful chance that a lot of the companies are overbuilding now and that you look back and you’re like, oh, we maybe all spent some number of billions of dollars more than we had to,” Zuckerberg said on a podcast this week with Bloomberg’s Emily Chang. He’s not the only one expressing that sentiment. On Alphabet’s earnings call on Wednesday, CEO Sundar Pichai said his company may well be spending too much money on AI infrastructure, which largely consists of Nvidia’s graphics processing units (GPUs). But he sees little choice. “When we go through a curve like this, the risk of underinvesting is dramatically greater than the risk of overinvesting for us here,” Pichai said. In addition to Meta and Alphabet, Nvidia is racking up business from Microsoft, Amazon, Oracle and Tesla, which have all publicly pronounced that AI investment is a central priority for this year and the foreseeable future. Nvdia’s revenue has more than tripled for three straight quarters and is expected to more than double in the current period. Alphabet and Tesla highlighted their AI buildout costs on earnings calls this week, and investors can expect to hear more next week, when Microsoft, Amazon and Meta report results. Meta debuted its latest Llama AI model on Tuesday. The model, dubbed Llama 3.1, comes in three different versions, with one variant being the biggest and most capable AI model from Meta to date. Meta is sticking with open source, which means the technology can be accessed for free by outside developers, even as the company pours money into the underlying infrastrucure. Zuckerberg said on the podcast with Chang that companies are “making a rational decision” in their AI investments despite the exorbitant costs. “Because the downside of being behind is that you’re out of position for like the most important technology for the next 10 to 15 years,” Zuckerberg said. The way Pichai sees it, even if Alphabet is investing too much, the infrastructure is “widely useful for us.” ‘A threat and an opportunity’ Nvidia shares are up 131% this year after soaring 239% in 2023. The company is now valued at close to $3 trillion, behind only Apple and Microsoft, though it briefly surpassed the two of them in market cap in June. Nvidia gets more than 40% of its revenue from Microsoft, Amazon, Google, and Oracle, which all need a hefty dose of GPUs for their public cloud offerings. While those are some of the most well-capitalized companies on the planet, there’s some concern brewing among investors about the massive stockpiling. David Cahn, a partner at venture firm Sequoia, wrote in a blog post last week that the dynamic driving the spending is competitive and follows game theory dynamics, creating a “cycle of competitive escalation.” “The cloud giants see AI as both a threat and an opportunity and do not have the luxury to wait and see how the technology evolves,” Cahn wrote. “They must act now.” Cahn calculated that in the technology industry, there needs to be $600 billion in annual AI revenue to justify all the money that’s been spent on data centers and chips. On Wednesday, Cahn followed up by saying that Zuckerberg’s and Pichai’s comments about limiting downside bolstered his theory. “Google and Meta CEOs both out in last 24 hours now agreeing with my AI Arms Race narrative: That AI CapEx is driven by game theory and FOMO vs. actual revenue / usage,” Cahn posted on LinkedIn. Nvidia says demand will remain strong through its newest generation of AI chips, called Blackwell, which will start to ship later this year. But it’s starting to address investor questions about return on investment as growth inevitably slows due to historically difficult comparisons. Colette Kress, Nvidia’s finance chief, told investors in May that the company had calculated that when a cloud provider spends $1 on an Nvidia-based server, it can rent it out for $5. Goldman Sachs analysts said in a recent note that Nvidia is looking to share these types of data points to instill confidence in investors. Tesla CEO Elon Musk said on his company’s earnings call on Tuesday that “demand for Nvidia hardware is so high that it’s often difficult to get the GPUs.” Tesla said capital expenditures on AI in the quarter amounted to $600 million, as the company invests in autonomous driving and humanoid robots. Musk said Tesla is focusing on developing its own Dojo supercomputer because Nvidia chips are so pricey and so hard to get. ″I think we kind of have no choice because the demand for Nvidia is so high,” Musk said. “And it’s obviously their obligation essentially to raise the price of GPUs to whatever the market will bear, which is very high.”" MY COMMENT Some realistic content above regarding the rush to buy and install NVDA and other chips. Much of this "race" is being done blind. No one knows how this change over to AI will work out......but everyone has no choice but to participate. The winner......NVDA. BUT.......NVDA today.....down by 4.8%. YES......the short term is EXTREMELY OPAQUE.
These are days I love to buy, if I scrape up anything besides goldfish crackers and cheerios out of the couch cushions. EVERYTHING is down. These broadbase selloffs are often very extreme but also spring back quickly. sometimes you just have to be rational in irrational situations. Did NVDA do anything to warrant a 10% drop in two days?!? I don't believe so. This is just fuel for the next leg up.
That is for sure Tiresmoke. The question becomes......can little investors avoid the growing feelings of fear and stress that cause people to bail. People start to doubt themselves when markets are showing irrational behavior. They will never do it........but it would be nice if someone did some study of the impact on this AI SPEED TRADING on the market system and whether it is destabilizing the markets. BUT.......HEY.....I actually have a stock that is GREEN.......HD. It is UP by over 1% today.
As I have said many times........if the markets become separated from reality and are basically random........if earnings and individual company performance does not matter......there will be NO markets. People will abandon them. That would be a huge shame since the stock markets are one of the very few vehicles available to everyone....even the little people....to achieve some small level of wealth.
YES.....another day with little actual news....but the feel of the markets is underlying fear and distrust. A general feeling of discomfort....everyone waiting for the other shoe to drop. That means it is time for me to go do something else and ignore it all today. It is simply a waste of time to watch irrational behavior.
