Amazon, Shopify, Salesforce, Ambarella, and the Cannabis Industry: Stock Market Weekly Digest (28 August - 1 September)
01.09.2023
4 minutes for reading
Amazon.com Inc., Shopify Inc., Salesforce.com Inc., Ambarella Inc., and representatives of the cannabis industry were in the spotlight this week. Let's explore how their stocks reacted to the recent events.
Ambarella shares fell 20% after Q2 reporting
US technology company Ambarella Inc., which manufactures semiconductor products for video and image compression and processing, as well as computer vision and AI technologies, reported its results for Q2 of fiscal 2024 on Tuesday 29 August.
Ambarella Inc.'s May-July revenue slipped 23.20 % to 62.12 million USD, amid weak consumer demand compared to the same period last year. Additionally, net loss added 31.92% to 31.20 million USD or 0.79 USD per share.
The company predicts its revenue for Q3 of fiscal 2024 to be 50 million USD. The day after the quarterly report was released, Ambarella Inc. (NASDAQ: AMBA) stock plunged 20.37% to 60.34 USD per unit.
Cannabis stocks surging
According to Bloomberg, on Tuesday, a high-ranking official from the Department of Health and Human Services (HHS) called on the Drug Enforcement Agency (DEA) to change the classification of marijuana. The proposal is to move it from Schedule I, which includes highly controlled substances, to Schedule III in accordance with the Controlled Substances Act.
DEA representatives confirmed receiving the recommendation from HHS and announced plans to conduct their own review for this adjustment. The reclassification of marijuana may contribute to the further easing of restrictions on the use of cannabis and its full legalisation in the US.
The news triggered a sharp increase in the shares of companies related to cannabis. On 30-31 August, the stocks demonstrated a marked surge:
- Canopy Growth Corp. (NASDAQ: CGC): +42.5%
- AdvisorShares Pure US Cannabis ETF (NYSE: MSOS): +39.18%
- Tilray Inc. (NASDAQ: TLRY): +23.33%
- Cronos Group Inc. (NASDAQ: CRON): +17.82%
- SNDL Inc. (NASDAQ: SNDL): +16.23%
- Aurora Cannabis Inc. (NASDAQ: ACB): +7.87%.
Salesforce stock added 6% over a week
US cloud software developer Salesforce.com Inc. published its Q2 fiscal 2023 report on Wednesday 30 September. Revenue for May to July saw an increase of 11.44% to 8.6 billion USD, and net profit demonstrated a remarkable surge of 1763.24%, skyrocketing to 1.27 billion USD or 1.28 USD per share.
Analysts surveyed by FactSet had forecasted that Salesforce.com Inc.'s revenue would reach 8.53 billion USD, while the net profit would amount to 1.90 USD per share.
Salesforce.com Inc. management expects revenue in Q3 of fiscal 2023 to be in the range of 8.70-8.72 billion USD, while net profit could be between 1.02-1.03 USD per share. According to the full-year forecast, revenue could reach 34.7-34.8 billion USD, while the net profit could approach the range of 3.50-3.52 USD per share.
In addition, the company announced its first stock buyback for 10 billion USD. On 31 August, following the robust report and forecast, Salesforce Inc. (NYSE: CRM) shares increased by 2.9%, up to 221.46 USD per unit. The quotes have risen by 5.72% since the beginning of that week, and by 67.03% since the start of 2023.
Shopify stock jumped on news of partnership with Amazon
Shopify Inc., the e-commerce software developer, that owns the e-commerce platform of the same name, announced its partnership with the world's largest online retailer, Amazon.com Inc, on Wednesday.
Shopify Inc. clients will be able to use Amazon's Buy with Prime programme, including the options for express and free delivery, as well as exclusive discounts. The company will only be responsible for providing the retail platform and processing payments, which will allow it to reduce logistics costs.
At the same time, Amazon.com Inc. with 9.7 million suppliers on its marketplace will have the opportunity to expand its client base. Over 4 million online stores are registered on Shopify. In addition, the e-commerce giant will be able to collect data on new buyers to streamline its workflow.
Amazon.com Inc. (NASDAQ: AMZN) stock added 2.18% on Thursday 31 August, rising to 138.01 USD per share, while Shopify Inc. (NYSE: SHOP) stock climbed 10.80%, up to 66.49 USD.
Summing up
Ambarella Inc. and Salesforce.com Inc. released their quarterly earnings reports this week. The stock of the first company responded with a downward movement, while the latter went up.
Cannabis stocks demonstrate a marked surge amid the possibility of marijuana reclassification in the US.
Shopify Inc. and Amazon.com Inc. announced their partnership, leading to an increase in their stock prices.
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