U.S. stocks face mixed trading as earnings moves hit storage shares and SpaceX lock-up expires

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U.S. stocks mixed on earnings, SpaceX

Highlights

Sandisk and Western Digital shares fall after issuing outlooks that disappoint investors, despite both emphasizing durable demand and new long-term supply agreements.
Nearly 1 billion newly unlocked SpaceX shares begin trading Thursday, creating a substantial supply event, though premarket the stock remains up more than 3%.
Shopify, Block, Eli Lilly, Expedia, Duolingo, and CVS Health receive multiple analyst price target increases following better-than-expected earnings and improved full-year guidance.

Corporate catalysts shape Thursday trading

As reported by CNBC, Thursday's market watchlist centers on uneven futures, post-earnings pressure in data-storage stocks, and the first wave of SpaceX's IPO lock-up expiration. The S&P 500 and Dow are modestly higher, while the Nasdaq is lower as Sandisk and Western Digital slide after issuing outlooks that fall short of some investor expectations.

Sandisk faces disappointment over its gross margin guidance for the September quarter, while Western Digital's forecast for revenue growth and margin expansion trails peer Seagate. Even so, both companies still point to durable demand and say they are pursuing multiyear supply agreements to reduce cyclicality.

Nearly 1 billion new SpaceX shares are free to begin trading Thursday, adding a significant supply event for the stock. Shares are still up more than 3% premarket, despite the usual concern that a sharp increase in available shares can weigh on prices.

Eli Lilly is drawing multiple price target increases after what is described as another beat-and-raise quarter, with firms including Morgan Stanley, BMO, Wells Fargo and Leerink lifting their targets. Honeywell Aerospace moves in the opposite direction, with shares down more than 15% premarket after its first earnings report since the June spin-off includes a steep cut to full-year guidance tied to supply chain problems.

Analyst calls highlight sector resilience

Shopify is gaining support from analysts after a stronger-than-expected quarter and upbeat guidance, with Mizuho, Citi, UBS, Canaccord and RBC Capital all raising price targets. Company management argues AI tools such as ChatGPT and Gemini are helping discovery for Shopify merchants rather than undermining the business model.

Block also posts a better-than-expected quarter, helped by improved margins, strong Cash App growth and a higher full-year gross profit forecast. The results come five months after the company cut more than 40% of its staff as part of what it called an AI pivot.

Duolingo, Expedia and CVS Health are also in focus after fresh analyst revisions. UBS raises its target on Duolingo as the company points to open-source AI models lowering costs, Expedia wins multiple target hikes after a solid second-quarter beat and a full-year guidance increase, and CVS draws support from UBS and Barclays despite concerns about expected membership declines at Caremark.

Our earlier coverage of the premarket slide in data-storage and chip stocks explained how Sandisk and Western Digital fell sharply after issuing quarterly guidance that topped consensus estimates but still failed to meet elevated investor expectations tied to AI spending. We also noted the weakness spilling into the broader semiconductor complex, underscoring how sensitive the sector has become to any sign that growth and pricing momentum may be normalizing after a strong run.

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