Morning Brew: Altria's Revenue Declines, Boeing's New CEO, and AMD's Strong Q2 Results

S&P futures vs fair value: +53.00. Nasdaq futures vs fair value: +300.00. The S&P 500 futures are up 53 points (1.0% above fair value), Nasdaq 100 futures are up 300 points (1.7% above fair value), and Dow Jones Industrial Average futures are up 40 points (0.1% above fair value). Early trading shows a positive trend, driven by gains in semiconductor stocks. Advanced Micro Devices (AMD, Financial) is up 8% after reporting earnings, and NVIDIA (NVDA) is up 7%. Semiconductor shares also got a boost from a Reuters report about export rule exemptions for allies. Investors are waiting for the Fed's policy decision at 2:00 ET today, expecting rates to stay the same. There is hope that the Fed will hint at a rate cut in September. The Bank of Japan raised its policy rate by 15 basis points to 0.25%. Governor Ueda hinted at another hike this year. The central bank will also reduce asset purchases by JPY400 billion each quarter. Today's US economic data includes: 8:15 ET: July ADP Employment Change (consensus 160,000; prior 152,000) 8:30 ET: Q2 Employment Cost Index (consensus 1.0%; prior 1.2%) 10:00 ET: June Pending Home Sales (consensus 1.5%; prior -2.1%) 10:30 ET: Weekly crude oil inventories (prior -3.74 million) 14:00 ET: July FOMC Rate Decision (consensus 5.25-5.50%; prior 5.25-5.50%) In corporate news: Today's News Altria Group (MO, Financial) reported a 4.6% year-over-year decline in revenue to $6.21 billion, mainly due to lower net revenue in the smokeable products segment. However, this was partially offset by higher net revenues in the oral tobacco products segment. Net of excise taxes, revenues decreased by 3.0% to $5.3 billion. Total cigarette revenue in Q2 fell 13% to $17.9 billion. Earnings per share (EPS) for the quarter stood at $1.31, matching last year's figure but falling short of the $1.34 consensus. CEO Billy Gifford highlighted the company's progress in transitioning adult smokers to smoke-free products. Advanced Micro Devices (AMD) saw its shares rise over 9% following better-than-expected Q2 results. The company reported a 9% year-over-year increase in top-line growth, driven by a 115% rise in Data Center revenue. AMD projects Q3 revenue to be around $6.7 billion, surpassing the consensus estimate of $6.61 billion. Non-GAAP gross margin is expected to be approximately 53.5%. Boeing (BA) announced the hiring of Robert “Kelly” Ortberg as its next chief executive. Ortberg, known for his tenure at Rockwell Collins and subsequent merger activities, brings a wealth of experience in business integration and mechanical engineering. This leadership change comes as Boeing aims to tackle its ongoing manufacturing and quality issues, as well as the integration of Spirit AeroSystems (SPR, Financial). Microsoft (MSFT, Financial) experienced a 2.6% drop in premarket trading despite its fiscal fourth-quarter results and guidance for the next quarter sparking debate on Wall Street. Wedbush Securities analyst Dan Ives described the company's conference call as "validation" for investors focused on AI monetization trends. CEO Satya Nadella and CFO Amy Hood emphasized stronger commercial bookings and anticipated Azure growth acceleration in the second half of the year. Wingstop (WING) saw a significant rally in early trading after surpassing consensus estimates with its Q2 earnings report. System-wide sales surged 45.2% year-over-year to $1.2 billion, bolstered by 73 net new openings. Domestic same-store sales increased by 28.7% year-over-year. The company reported a GAAP EPS of $0.93, beating the consensus of $0.83 and last year's $0.54. Humana (HUM) shares fell around 10% despite exceeding profit estimates for Q2. The company reaffirmed its adjusted EPS target of ~$16.00 for the year, missing the consensus estimate of $16.34. Full-year GAAP EPS guidance was cut to approximately $12.81 from $13.93. However, Humana raised its Medicare Advantage annual membership growth target, now expecting a 4.2% increase supported by better-than-expected retention and non-DSNP sales. Teva Pharmaceutical (TEVA) reported better-than-expected Q2 financials and raised its full-year outlook. The company achieved $4.2 billion in revenue, marking a 7% year-over-year growth. Teva's generics business expanded across all regions, generating $2.5 billion globally. The company raised its full-year revenue outlook, citing strong performance in the first half of 2024 and upcoming milestones. Mobileye (MBLY) faced a downgrade from J.P. Morgan due to concerns about its SuperVision product and inventory issues. Analyst Samik Chatterjee highlighted the deteriorating volume outlook for electric vehicles and lackluster sales trends for internal combustion engine and hybrid vehicles. The downgrade reflects potential risks in the near-term demand outlook for Mobileye's advanced driver assistance systems business. ASML Holding (ASML) stock surged 7% following a report indicating a potential exemption from expanded export restrictions on chip-making equipment to China. BofA Securities reiterated its Buy rating on ASML with an unchanged price target of €1,302, noting the news as a significant positive surprise. GuruFocus Stock Analysis The Future Is Optimistic for Duolingo by Renato Neves Supported by Cloud, AI Units, Microsoft Is on a Path of High Growth by Akim Guerreiro A Scorecard on Women as Chief Executive Officers by John Dorfman Costco Is Beyond Overvalued by Parker Schwartz, CFA Adobe: Leading the Charge in AI-Powered Creative Software by Lucas Wong