NY Dow surpasses $40,000 for the first time! The driving force mentioned data centers 32 times at financial results presentations, and is it an AI-related brand like NVIDIA?
The Dow Jones Industrial Average, which has a history of 128 years (below,NY Dow) will be on 5/17,Reached the $40,000 mark for the first time in historyI did it.
The NY Dow has a high composition ratio of the “old economy” when compared to the S&P 500 index, which more reflects the current state of the US economy. Therefore, part of the market calls the NY Dow an outdated index.
What does it mean that the NY Dow, which is supposed to be out of date, put it on 40,000 dollars? Simply put, it reflects the strength of the American economy and American companies. On the other hand, when I checked the stocks that contributed the most to NY Dow's achievement of 40,000 dollars, they were representative of the old economy, but they were also data center related stocks.
According to Bloomberg data,NY Dow hits $40,000 markIt was 5/17, a major construction machinery company $Caterpillar(CAT.US$ butIt boosted the NY Dow by $36. What is the next largest contributor $UnitedHealth(UNH.US$ with $Goldman Sachs(GS.US$ 、 $JPMorgan(JPM.US$ So, they boosted the NY Dow by 22 dollars, 21 dollars, and 15 dollars, respectively.
The 20 stocks other than the top 10 stocks collectively pushed the NY Dow down 17 dollars. Therefore, it can be said that Caterpillar's contribution to the NY Dow's achievement of 40,000 dollars was enormous. When I checked Caterpillar's stock price gain/fall rate, it has risen 21% since the beginning of the year (until 5/17). In other words, it has been driving the rise of the NY Dow since the beginning of the year.
Note, in addition to Caterpillar, which stocks have driven the rise of the NY Dow since the beginning of the year $JPMorgan(JPM.US$ Ya $Goldman Sachs(GS.US$ 、 $American Express(AXP.US$ financial stocks, etc., and $Walmart(WMT.US$ Ya $Amazon(AMZN.US$Retail stocks such as stand out (Amazon.com became a constituent stock of the NY Dow Index in February this year). For the most part, the above stocks announced strong financial results.
●Is Caterpillar also a data center related brand?
Caterpillar mainly operates in three main segments: construction industry, resource industry, and energy/transportation. From the point of view of the main field, the image of the old economy is very strong. However, Caterpillar was at the financial results presentation (including question and answer) on 4/25”datacenterAbout”Mentioned 32 timesIt also went up to Data centers are one of the words representing the generative AI boom, so to speak, and until now semiconductor companies have benefited from it (for example, $NVIDIA(NVDA.US$It has been frequently taken up in the financial results of).
Caterpillar mainly operates in three main segments: construction industry, resource industry, and energy/transportation. From the point of view of the main field, the image of the old economy is very strong. However, Caterpillar was at the financial results presentation (including question and answer) on 4/25”datacenterAbout”Mentioned 32 timesIt also went up to Data centers are one of the words representing the generative AI boom, so to speak, and until now semiconductor companies have benefited from it (for example, $NVIDIA(NVDA.US$It has been frequently taken up in the financial results of).
Summarizing comments on data centers in Caterpillar's financial results, it can be seen that both the management team and analysts covering the company are highly interested in data center-related operations.
Caterpillar's management's main comments on the data center are as follows.
Sales for users in the power generation business increased due to strong market conditions, including steady growth in data centers.
It is planned to double the capacity of large engines to meet data center demand. We focus on investing in areas that are profitable in the future and are the best opportunities for growth. As for margin (profit margin) opportunities for large engines, I think there is no doubt that this is a field worth investing in in terms of both capital and expenses.
(When answering an analyst's question about order balances) We work really closely with customers looking for large engines for data centers, and we've known what they're looking for for a few years. However, until they give a confirmed order, it will not be recorded as a backorder. Therefore, our order balance may not be as high as you might think.
(In response to an analyst's question about what kind of changes are there due to the rise of AI and the enlargement of data centers) I am very hopeful about sustainable growth opportunities around data centers, not only in terms of an increase in basic power load, but also in terms of specific opportunities to provide services to data centers. I think we're in a unique position because we have both gas turbines and reserves to burn various fuels. There is also a project to ship gas turbines and supply main power for data centers. This is because when trying to expand into an area where data centers are located, electric power companies may not be able to handle that load. As you said, the market is changing, and we're very excited about the opportunity.
●Caterpillar's financial results and stock price trends
Caterpillar announced financial results on April 25th. The stock price fell 7% that day. Adjusted EPS (profit per share) for the January-March fiscal year was 5.60 dollars, which exceeded market expectations (Bloomberg tally, similar below) of 5.13 dollars, but sales were 15.80 billion dollars, down 0.4% from the same period last year, and fell below market expectations (16.12 billion dollars). The decrease in order balance (compared to the previous quarter) and the fact that the sales forecast for 2024 indicated by the company was sluggish also induced sales.
Caterpillar announced financial results on April 25th. The stock price fell 7% that day. Adjusted EPS (profit per share) for the January-March fiscal year was 5.60 dollars, which exceeded market expectations (Bloomberg tally, similar below) of 5.13 dollars, but sales were 15.80 billion dollars, down 0.4% from the same period last year, and fell below market expectations (16.12 billion dollars). The decrease in order balance (compared to the previous quarter) and the fact that the sales forecast for 2024 indicated by the company was sluggish also induced sales.
However, stock prices have rebounded since 4/25. An increase in target stock prices by analysts (3% increase as of 5/20 when compared to before financial results were announced), purchases by investment funds and management teams found at 13F, and expectations for a pick-up in the Chinese economy can be cited as background factors. On 5/17, the famous American financial media Seeking Alpha recommended the purchase. Investors were overreacting to the decline in order balances, and they argued that it was a buying opportunity in the medium to long term.
Note that ETFs linked to the NY Dow include $Guggenheim Dow Jones Industrial Average® Dividend ETF(DJD.US$ Ya $SPDR Dow Jones Industrial Average Trust(DIA.US$ , and high-risk leveraged ETFs, $ProShares UltraShort Dow30(DXD.US$ Ya $Proshares Ultra Dow30(DDM.US$There are things like that. It is necessary to pay attention to the fact that leveraged ETFs have larger stock price fluctuations and higher risk than normal ETFs. On the other hand, it is also true that there are investors who use it as a hedging tool to avoid short-term price ranges or the risk of falling stocks held. Note, if you are a general investor, check your own stock holdings list, and on 5/22 (5/23 morning Japan time) $NVIDIA(NVDA.US$It may also be a good idea to evaluate the financial results of and then act.
Created May 20, 2024 Market Analyst Amelia
Source: Created by Bloomberg by Moomoo Securities
Source: Created by Bloomberg by Moomoo Securities
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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181537335 : caterpillars.
Showa brand
Trump stocks?
There is no going back to the times.
Now, how much do you expect from NVIDIA
they're doing it, right?
I can't look forward to much this time.