Mid-Morning Look

Tuesday, August 19, 2025

U.S. stocks looking mixed early as the S&P rises slightly after briefly taking out prior day lows, the Dow gets a boost behind Home Depot (HD) results lifting shares, but mega cap tech seeing modest weakness after a tremendous run in recent weeks has the Nasdaq Comp slightly lower (AMZN, GOOGL, META, MSFT, NFLX early weakness). Outside of the FOMC Jackson Hole conference this week (8/21-8/24), highlighted by Fed Chair Powell speech on Friday, attention mid-week is on retail with HS earnings today but Wal-Mart, target and Lowe’s the next two days. After yesterday’s summit with President Zelenskiy and European leaders, President Trump called Russian President Putin, and the hope is to hold a Putin-Zelenskiy meeting by the end of August. President Trump said that the two leaders must meet one-on-one before a trilateral summit can happen. Housing data was surprisingly strong for Housing Starts and Building Permits; while rates are also slightly lower to begin the day as S&P affirmed the US AA+ rating and specifically mentioned tariff revenue as a positive offset to tax cuts and higher spending. Expects continued light volumes and tight trading ranges ahead of this week’s Powell comments at Jackson Hole.

• US July Building Permits fell -2.8% vs June -0.1% at 1.354M unit rate (below consensus 1.386M) and vs June 1.393M unit rate. July single-family permits +0.5% to 870,000-unit rate; multifamily -8.2% to 484,000-rate.

• In Electric Vehicle (EV): LI was downgraded to Market Perform from Outperform at Bernstein saying despite Li Auto’s pioneering EREV technology and strong ADAS progress, rising competition in premium PHEV SUVs and challenges in the crowded BEV market pressure the outlook, while BEV efforts are also margin dilutive. XPEV posted a Q2 loss that narrowed from a year earlier as revenue rose 125% from a year earlier. In Auto EV Charging: BLNK reported Q2 revenue of $28.7M (+38% QoQ & –14% YoY) exceeding consensus (~$22M) and reflecting a rebound in product sales (+73% QoQ to $14.5M), and another record quarter of service revenues (+46% YoY to $11.8M).
• In the Drone Sector: Needham initiated three names at Buy with UMAC Initiated Buy and $15tgt, ONDS Buy and $5 tgt and AVAV Buy and $300 tgt saying they believe the domestic unmanned aerial systems (UAS) market is entering a multi-year supercycle, driven by a generational shift in defense priorities toward autonomous unmanned platforms. They said their bullish outlook is underpinned by favorable U.S. legislation aimed at accelerating industry momentum.

• INTC +8%; as SoftBank Group has held talks with Intel (INTC) on buying the American semiconductor firm’s struggling contract chipmaking business, the Financial Times reported https://tinyurl.com/5bzx6n45
• IOVA +11%; after the biotech said Health Canada approved Amtagvi to treat certain patients with unresectable or metastatic melanoma.
• MOH +3%; along with gains in CNC as managed care/Medicaid names see extended bounce after massive underperformance in 2025.
• NWE +4%; BKH said it would buy NWE for $3.6B in an all-stock deal, which has an enterprise value of $15.4B and the per-share value of about $59 implies a premium of 7.66% to NorthWestern’s last close.
• NXST +5%; enters into definitive agreement to acquire TGNA for $6.2B in accretive transaction with Tegna holders to receive $22 per share. However, note that the WSJ reported overnight that SBGI offers to merge broadcast TV business with rival TGNA saying that the deal would value Tegna’s shares at around $25 to $30 apiece https://tinyurl.com/d6dyubkt
• PANW +5%; following very strong FQ4 results and even better FY26 guidance; RPO of $15.8B grew +24% y/y (19% LQ), resulting in bookings growth accelerating to 35% vs +9% LQ, Revenue of $2.54B was ~$36M ahead of the midpoint of guidance and product revenue of 574M grew +19.4% y/y (+15.8% LQ)

• MDT -4%; posted better-than-expected quarterly earnings but was overshadowed by appointment of two new board directors following talks with activist investor Elliott Investment Management.
• PLTR -5%; falls for a 5^th straight day, under pressure since Citron Research valuation call.
• VIK -4%; reported another quarterly beat and saw stable forward pricing (revs +18.5% y/y to $1.88B) while advance bookings for 2026 total $3.883 billion, up 13% y/y, while shares fell as released year-ahead pricing data showing modest year-over-year increases.
• VKTX -38%; after announced top-line results from the Phase 2 clinical trial of its oral obesity drug VK2735 that showed statistically significant reductions in body weight compared with placebo, but the rate of gastrointestinal distress was substantial, as roughly 38% of the subjects taking the highest dose ultimately discontinued the medication early while discontinuation rates across all other dose levels were also high
• VRT -3%; after being initiated at Sell and $112 tgt at GLJ Research saying while VRT has enjoyed a largely justified multi-year re-rate on the back of AI infrastructure tailwinds, GLJ believes the stock embeds 2027–2028 peak cycle economics completely when unanswered questions.