本周财报前瞻：Palo Alto、博通、Lululemon

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The Stock Movers Report, your roundup of companies making moves in the stock market, harnessing the power of Bloomberg data. Let's take a look now at some stocks making news in the week ahead. I'm Nathan Hager joined by Bloomberg equities reporter Matthew Griffin. So, we're kind of [music] at the uh tail end of the earnings parade, but we've got some uh pretty big names reporting this week, including PaloAlto Networks out with its results on Tuesday.

Where's the bar for PaloAlto after the strong results we got from Crowd Strike when it comes to cyber security, Matthew?

Well, Nathan, the bar is pretty high. I was looking at analysts expectations for PaloAlto. That's ticker P A N W. And they're looking for about 30% year-over-year revenue growth. This comes as all of these cyber names are now considered AI beneficiaries. companies are spending more on cyber security because they're worried about things like this trend of models hacking companies like Anthropic's decision not to even release the Claude Mythos 5 model to the general public because of its cyber capabilities.

And it's really remarkable what's happened in the stock market as a result. You know, the first couple months of this year, these were considered AI disruption candidates. They were SAS apocalypse names and they all traded down as a result. Now they have rallied and so my question would be what is the buy side looking for here? The valuation has spiked above 90 times forward earnings. Those are levels not seen in more than a decade.

So I am wondering what will be enough for investors here. Yeah, I mean that's a really good point given that you know since the start of the year we've already seen just PaloAlto alone nearly double its stock market value. I mean you have to wonder whether there is further upside from here. Yes, I mean with AI, you know, you you look at what's happened to a lot of the AI winners, you can never discount it, but we have seen some of the names, for example, uh some of the chip names moderating uh their own share growth in recent months.

And so the question I guess would be when will that happen for the cyber names?

Absolutely. U we're going to hear from another one of those uh names at least in the tech space on Wednesday when we get results from Broadcom after that day's closing bell. Another AI bell weather after the the blowout outlook we saw from Nvidia this past week. Can we expect something similar from from Broadcom, do you think?

Well, the real question here is what is Broadcom going to say about, you know, whether they see blowout revenue in the future. So the bar for this company that's ticker AVGO for their key revenue stream the AI chip revenue is not necessarily that high in terms of analyst expectations for this quarter. It's about in line with their $16 billion outlook for the quarter. But for next year analysts are expecting revenue from AI chips of about $120 billion. that would imply six-fold growth over 2 years, you know, compared to the last full year we have numbers for.

And so, City says that 2027 outlook or commentary or anything we get from the company is going to be really important. The quarterly outlook for that revenue stream really disappointed investors when they gave it in June. The stock fell 13% in a day. So, we'll see if this report can reignite optimism. We could also learn more about their sales deals with major AI players or these chip financing deals. Our colleagues have reported the company's in talks with lenders to raise more than $60 billion in debt for a deal that would benefit Anthropic and other companies and investors are going to be eager to hear if there are any developments on that front.

Yeah, absolutely. And you know, given what we heard, like I said, from Nvidia just this past week about, you know, how much revenue they expect to get from the uh still continuing AI demand here, uh I guess I wonder whether uh it's one of those uh rising tides that lifts all boats kind of situation that could benefit for Broadcom. Is that kind of what analysts are thinking right now?

It's what Wall Street is hoping. Broadcom has positioned itself as a key competitor to Nvidia, but Nvidia is still the market leader. And so we do go into these reports wondering how much they will benefit from the rising tide. That positioning though as a key competitor, it does mean this report will tell us a lot about the broader AI infrastructure complex. So, anything that confirms that bullish outlook from Nvidia, which was for about 70% revenue growth in the next fiscal year, that would be a positive and it would start offsetting some of the concerns about the AI trade that are growing.

We're seeing falling token prices that complicates the return on investment question. And something I've been reporting a lot on a lot is these regulatory concerns, the public push back to data centers and what that can mean for AI infrastructure spending.

Along with the chip names, we're also going to hear from a retail name uh the athleisure company Lululemon on Thursday. It feels like the turnaround just keeps waiting for Lululemon, Matthew.

Yes, Nathan. And this stock ticker LLU, it really is a case of low expectations. This quarter analysts are expecting revenue to just barely grow to be up about 1%. But even clearing that bar is not guaranteed. I mean, we could list a lot of headwinds facing this company. Increased competition from companies like Vori, product launch issues like the see-through leggings, criticism from their founder, Chip Wilson. And then there's the question of how much credit investors are going to give anything that they say about those issues this quarter because they have a new CEO Heidi O'Neal taking over next month.

That could change the narrative. It could change the strategy. Maybe it will finally put that turnaround into effect. One thing that I am going to be interested to see from this company is what they say about tariff refunds. They have spent a lot on tariffs. It's been a key cost bucket. they've said they're applying for refunds, but that they didn't factor that into guidance. So, that could be a source of upside to consensus here if those refunds come through.

Maybe not high quality, durable upside, but something that would help investors as they wait for a broader rebound in their sales. [music] The Stock Movers Report from Bloomberg Radio. Check back with us throughout the day for the latest roundup of companies making news on Wall Street. [music] And for the latest market moving headlines, listen to Bloomberg Radio Live. Catch us on YouTube, Bloomberg.com, and on Apple CarPlay and Android Auto with the Bloomberg Business App.