Berkshire Hathaway
S&P futures +0.2%, Nasdaq 100 futures  +0.1% and Dow futures  +0.2% were higher.
Cisco Systems reduces forecast, outlines plans to downsize personnel
Cisco Systems dropped its full-year outlook and disclosed plans to trim its global staff as part of a bigger reorganization drive, sending shares lower in premarket U.S. trade on Thursday.
The network equipment maker said it expects to generate full-year adjusted earnings per share (EPS) of $3.68 to $3.74 on revenue between $51.5 billion to $52.5 billion, compared with a prior expectation for adjusted EPS of $3.87 to $3.93 and revenue of $53.8 billion to $55.0 billion. In a call with investors, Chief Executive Charles Robbins noted that the firm expects to face “weak demand with our telco and cable service provider customers.”
Cisco indicated that it will decrease staff by around 5%. It claimed the action will result in a $800 million charge from severance and other one-time termination payments and other expenditures. The bulk of these expenditures are likely realized in the first half of its 2025 fiscal year.
Highlighting the earnings schedule on Thursday will be reports from agricultural equipment business Deere & Company (NYSE:DE), sports betting service DraftKings (NASDAQ:DKNG) and cryptocurrency exchange Coinbase (NASDAQ:COIN).
Buffett’s Berkshire Hathaway reduces Apple investment
Warren Buffett’s Berkshire Hathaway decreased its holding in tech behemoth Apple in the fourth quarter.
According to a securities filing on Wednesday, Berkshire offloaded 10 million shares in the iPhone maker, or about 1.1% of its stake in the firm.
Apple nevertheless remains vital for Berkshire, the large investing firm that has an interest in swaths of significant businesses across numerous industries. Following the deal, Berkshire, which first invested in Apple in 2016, had interests in the group worth $174B at the end of last year — considerably ahead of its second-biggest investment in lender Bank of America.
Speaking at Nebraska-based Berkshire’s annual meeting in 2023, Buffett complimented Apple — whose stock price has risen by more than 330% over the preceding five years — as “a better business than any we own.”
But Apple has recently lagged behind its peers in Big Tech as worries mount around its operations in China and regulatory scrutiny of its App Store. Microsoft (NASDAQ:MSFT) overtook Apple as the world’s most valuable company earlier this year.
TSMC shares surge as Morgan Stanley boosts Nvidia pricing target
Shares of Taiwan Semiconductor Manufacturing Company (TW:2330) set a fresh record high on Thursday as analysts at Morgan Stanley boosted their price target of client Nvidia.
TSMC, the world’s largest contract chipmaker, is a major supplier for industry heavyweights like Nvidia and Apple. The jump in shares in TSMC, which reopened trading following the Lunar New Year vacation, spurred on a larger rally in tech markets in Asia.
Underpinning the increase was a note from analysts at Morgan Stanley in which they bumped up their price target for Nvidia to $750 from $603, citing booming demand for nascent AI technology. Nvidia makes the powerful graphics processing units needed to run huge language models like the famous ChatGPT chatbot, making the California-based group one of the focal points of increasing fervor around AI.
World News
The bull-bear spread in the American Association of Individual Investors (AAII) weekly poll was 15.4 versus 26.4 previous week. Bulls decrease to 42.2% from 49%, Neutrals grow to 31.1% from 28.4%, Bears rise to 26.8% from 22.6%
Warren Buffett’s Berkshire Hathaway reported in an SEC filing its holdings as of December 31, 2023. Berkshire left four investments during the fourth quarter, including by size of prior stake, DR Horton (DHI), Markel Group (MKL), StoneCo (STNE), and Globe Life (GL). Berkshire boosted its interest in three companies, including by size of prior ownership, Chevron (CVX), SiriusXM (SIRI), and Occidental (OXY). Berkshire cut its interest in three holdings, including by size of prior ownership, HP (HPQ), Paramount Global (PARA), and Apple (AAPL).
Japan’s economy unexpectedly declined again in the October-December period; preliminary official data indicated Thursday. Provisional gross domestic product dropped 0.4% in Q4 y/y, after dropping 2.9% in the July-September period. This was significantly below the median projection for 1.4% growth in a Reuters survey.
Economic Calendar
8:30 AM ET Philly Fed Survey Business Index for February…est. (-8.0)
8:30 AM ET Empire Manufacturing for February…est. (-15.0)
8:30 AM ET Weekly Jobless Claims…est. +220K
8:30 AM ET Continuing Claims…est. 1.88M
8:30 AM ET Retail Sales M/M for January…est. (-0.1%)
8:30 AM ET Retail Sales – Less Autos for January…est. +0.2%
8:30 AM ET Import Prices M/M for January…est. 0.0%
8:30 AM ET Export Prices M/M for January…est. (-0.01%)
9:15 AM ET Industrial Production M/M for December…est. +0.3%
9:15 AM ET Capacity Utilization for December…est. 78.8%
10:00 AM ET Business Inventories M/M for December…est. +0.4%
10:00 AM ET NAHB Housing Market Index for February…est. 46
10:30 AM ET Weekly EIA Natural Gas Inventory Data
4:00 PM ET Net Long Term TIC Flows for December
7:00 PM ET Fed’s Bostic Speaks on Outlook, Policy
Other Key Events:
American Academy of Orthopedic Surgeons (AAOS) Annual Meeting, 2/12-2/16, in San Francisco, CA
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