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CEO hits out against a short thesis and says 10-K delay won't affect customers. (0:16) Tesla's robotaxi goes to Hollywood. (3:39) Goldman loves gold. (4:29)
This is an abridged transcript of the podcast.
Our top story so far. Super Micro Computer (NASDAQ:SMCI) Chief Executive Charles Liang said that neither the recent delay to its annual report nor the recent disclosure by Hindenburg Research that it is short the company's stock will impact the company’s customers or partners.
"Neither of these events affects our products or our ability and capacity to deliver the innovative IT solutions that you rely on every day," Liang wrote in a letter also filed with the SEC.
"Our production capabilities are unaffected and continue operating at pace to meet customer demand. Our world-class engineering and support teams are also unaffected and continue to build and deploy large-scale AI Total Solutions."
Liang added that the company is "well-positioned" to deliver its product portfolio to its customers and help them meet their IT issues.
In addition, Liang also said that Super Micro will have more to say about Hindenburg Research's short thesis that he characterized as "false or inaccurate."
You “may have also heard about a recent report from a short-seller hedge fund that contains false or inaccurate statements about our company, including misleading presentations of information that we have previously shared publicly," he said. "We will address these statements in due course."
Looking to the economy, the ISM Manufacturing index came in at 47.2 for August, contracting for the fifth straight month. It missed the 47.5 consensus but rose from 46.8 in July.
Wells Fargo economists said“most of the strength came from inventories.”
“While inventories can be volatile, it's the first time this component crested above 50 since early 2024 and the release notes manufacturers adjusting to lower output levels and timing issues,” they added. “In other words, this inventory was unintended and a consequence of slowing demand. Without the inventory build, the overall ISM composite index would have seen a decline twice as large in August.”
Among active stocks, Deutsche Bank downgraded JPMorgan Chase (JPM) to Hold from Buy and upgraded Bank of America (BAC) and Wells Fargo (NYSE:WFC) to Buy from Hold.
Analyst Matt O'Connor highlighted "shifting opportunities" in a banking sector that he views as "somewhat in no man's land."
The JPM downgrade reflects the stock's outperformance year-to-date, which provides less upside potential for the near to medium term. On BofA, O'Connor points to the stocks recent underperformance and says net interest margin should normalize higher as low-yielding assets get repriced or roll off.
For Wells Fargo, he said: "In the near term, one could argue there's been a fair amount of de-risking given the lowered outlooks on both net II and capital (on the July call) and as regulatory risks seem more priced in than they did a few months ago."
Novo Nordisk (NVO) says the supply shortages of its diabetes drug Ozempic (semaglutide) will continue into the fourth quarter of 2024, according to a note published by the European Medicines Agency.
The drugmaker said increased demand for the injectable GLP-1 drug, coupled with capacity constraints at some of its manufacturing sites, have led to the supply shortage for lower strengths of Ozempic. Intermittent shortages for all strengths are expected into the final three months of the year.
And Wells Fargo cut Boeing (BA) to Underweight from Equal Weight on longer-term pressure on cash flow amid efforts to develop new aircraft.
Analyst Matthew Akers says: “Boeing had a generational free cash flow opportunity this decade, driven by ramping production on mature aircraft and low investment need. But after extensive delays and added cost, we now see growing production cash flow running into a new aircraft investment cycle, capping FCF a few years out.”
In other news of note, Tesla (TSLA) announced that it will unveil its new Robotaxi on October 10 at an event at Warner Bros. Studio in Burbank, California. The electric vehicle maker typically holds events at its factories, such as the Gigafactory in Austin. But Hollywood studio space was also used when Tesla showed off its solar roof product on the set of Desperate Housewives in 2016.
The 110-acre Warner lot holds 29 sound stages and has been used as the site to produce major movies and TV shows.
The Austin-based company delayed the timing of the original robotaxi event from August 8 to October 10 due to changes in design to the autonomous mass-market prototype.
Ark Invest said that despite Waymo and Baidu (BIDU) being the first-to-market in robotaxi operations, its research suggests that Tesla is training its autonomous system with ~70X more data.
And in the Wall Street Corner, Goldman Sachs is in on gold.
The commodities team says the yellow metal is their preferred near-term long and favorite hedge against geopolitical and financial risks, with added support from imminent rate cuts and ongoing emerging market central bank buying.
Goldman maintained its 2025 target of $2,700/oz and opened a long gold trading recommendation, adding that the tripling in central bank purchases since mid-2022 on fears about U.S. financial sanctions and U.S. sovereign debt is structural and will continue -- reported or unreported.
"Our analysis suggests an upside of 15% in gold prices under a hypothetical rise in financial sanctions equal to the rise seen since 2021 and a similar upside if U.S. CDS spreads widen by standard deviation (13 bps) amid rising debt concerns," they said.
