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Opening Bell

9:35 am — AVGO +3.3%, META +0.9%

The S&P 500 edged higher Wednesday, sitting less than 1% below its January all-time high. Markets are fueled by optimism regarding U.S.-Iran negotiations and a tech sector resurgence. Broadcom (AVGO +3.60%) led gainers, rising 2% after Meta Platforms (META +1.01%) expanded their partnership to deploy custom chips using Broadcom technology. This momentum follows a strong Tuesday session that fully erased the “war discount” applied since February. While some analysts warn of lingering geopolitical volatility, investors are aggressively returning to growth favorites as the Nasdaq secures its tenth consecutive day of gains.

Top of the Morning

9:20 am

By Morning Show host Jim Gillies

Quick question — no Googling or cheating — what would you think the market capitalization of a company with the following parameters might be?

• $4.5 billion in trailing revenue.
• $415 million of trailing free cash flow (FCF).
• Excellent history of cash generation-cumulative FCF over the past decade is $7.5 billion.
• Iconic American brand. Seriously, I promise you’ve heard of it.
• Aggressively deleveraging. Now has more cash than debt on the balance sheet, so financial risk is arguably an irrelevancy.
• Aggressive returns of capital to shareholders – company has repurchased 40% of its shares over the past decade and presently yields 3.2%

Would you guess that this company is worth maybe $20 billion — roughly 4.5 times sales? How about $8 billion — just under 20 times FCF. Or would you believe around $2.6 billion?

That last one is the correct number, and full disclosure, I think that’s an absurd valuation for Harley-Davidson (HOG 0.73%), but here we are.

Snap Jumps as Spiegel Axes 1,000 Jobs

8:05 am — SNAP +7.14% in pre-market trading

Snap (SNAP +7.14%) CEO Evan Spiegel announced a sweeping restructuring Wednesday, laying off 1,000 employees–roughly 16% of the workforce–as the company faces a “crucible moment.” In a letter to team members, Spiegel stated he is “deeply sorry” for the cuts but insisted they are “necessary to ensure the long-term success of our business” and to accelerate revenue growth. The move, which aims to reduce annualized expenses by over $500 million, comes after activist investor Irenic Capital Management pressured the Snapchat parent to improve performance. Despite a 31% drop in share price this year, the stock rallied 9% in premarket trading as investors cheered Spiegel’s commitment to a leaner, more focused organization.

• Strategic Refocus: Spiegel is narrowing Snap’s priorities to community growth, revenue reacceleration, and augmented reality, while discontinuing several “non-core” projects to prioritize free cash flow.
• Advertising Vulnerability: The downsizing highlights the pressure on smaller social platforms to prove their value to marketers, who have increasingly consolidated their budgets into giants like Meta (META +1.01%) and Alphabet (GOOG 0.22%) during periods of geopolitical and economic instability.

Today’s Change

(7.14%) $0.40

Current Price

$6.00

Key Data Points

Market Cap

$9.5B

Day’s Range

$5.83 – $6.09

52wk Range

$3.81 – $10.41

Volume

2.3M

Avg Vol

54M

Gross Margin

52.33%

StoneCo Surges on Huge Special Dividend

8:00 am — STNE +6.57% in pre-market trading

StoneCo (STNE +3.08%) shares jumped after the company announced a one-time extraordinary cash dividend of $2.53 per share. The dividend totals about R$3.08 billion and is funded by proceeds from the Linx software business sale.

• Board approves major payout: StoneCo’s board approved the extraordinary dividend covering both Class A and Class B shares, with payment scheduled for May 4, 2026 to shareholders of record as of April 24, 2026.
• Market responds positively: The dividend announcement represents 14.2x the company’s 2025 operating result after tax, providing substantial value return to shareholders from the strategic divestiture.

Today’s Change

(3.08%) $0.45

Current Price

$15.06

Key Data Points

Market Cap

$4.0B

Day’s Range

$14.90 – $15.37

52wk Range

$11.72 – $19.95

Volume

1.2M

Avg Vol

5.3M

Gross Margin

-66.32%

This Morning’s Breakfast News

7:30 am — ASML +0.27% in pre-market trading

ASML Holding (ASML 5.20%) reported beats on first-quarter revenue and earnings expectations this morning, and raised full-year net sales guidance to between $42.4 billion and $47.2 billion – as AI spending continues to drive semiconductor production growth. Weaker-than-expected sales forecasts for Q2, however, held the stock back – it gained around 1% pre-market.

• “We expect … supply will not meet the demand for the foreseeable future”: CEO Christophe Fouquet highlighted the growth potential for ASML, the only maker of the extreme ultraviolet lithography machines needed to fabricate advanced chips for companies like Nvidia (NVDA +0.75%).
• “ASML controls the bleeding edge of semiconductor manufacturing and is Europe’s most valuable company”: Fool analyst Loren Horst earlier this year described ASML as “a potentially significant missing piece for portfolios built around U.S. large-cap indexes.”

Before the Opening Bell

7:25am

Stock futures held steady Wednesday morning as the S&P 500 sits within striking distance of its January all-time high of 7,002.28. Markets extended a powerful relief rally on Tuesday, fueled by a 1.18% jump in the broad index and a nearly 2% gain for the Nasdaq Composite. Investor sentiment has pivoted sharply on news that the White House is discussing a second round of negotiations in Islamabad to end the Middle East war. Despite the standing naval blockade, President Trump’s recent claims that Tehran is eager for a deal have effectively neutralized the “war discount,” returning major indices to levels not seen since before the February 28 conflict began.

• Diplomatic Momentum: While a formal second round hasn’t been scheduled, the mere discussion of renewed Islamabad talks has triggered a 10-session winning streak for tech shares, as traders bet on a permanent de-escalation.
• Economic Resilience: The rally’s strength suggests Wall Street is prioritizing the “grand deal” narrative over immediate supply chain frictions, with the S&P 500 erasing more than a month of geopolitical volatility in just 10 days of trading.

GitLab Jumps on Google Cloud AI Alliance

6:00 am — GTLB +7.07% in pre-market trading

GitLab (GTLB +5.43%) shares rose about 7% in after-hours trading following the announcement of an expanded Google Cloud partnership that integrates Vertex AI into its Duo Agent Platform.

• Vertex AI Integration: The collaboration allows Google Cloud customers to use Vertex AI models, including Gemini, within GitLab’s Duo Agent Platform while counting usage toward existing cloud commitments.
• Simplified AI Deployment: Organizations can run GitLab’s AI Gateway on Google Cloud services like GKE and Cloud Run without provisioning separate AI infrastructure, streamlining enterprise adoption.

Meta, Broadcom Build AI Silicon Through 2029

5:15 am — META +0.14%, AVGO +3.19% in pre-market trading

Meta Platforms (META +1.01%) and Broadcom (AVGO +3.60%) announced a major strategic expansion Tuesday, extending their partnership to co-develop custom AI accelerators through 2029. The deal focuses on Meta’s “MTIA” chips–the industry’s first AI silicon to utilize a cutting-edge 2-nanometer process–aiming to build a “massive computing foundation” for what CEO Mark Zuckerberg calls “personal superintelligence.” Coinciding with the pact, Broadcom CEO Hock Tan will step down from Meta’s board to serve as a specialized advisor on custom silicon. Broadcom shares jumped 3% as the company confirmed an initial 1-gigawatt deployment, with plans to scale to multiple gigawatts by 2027 to power AI across Instagram, WhatsApp, and Threads.

• Strategic Independence: By co-designing its own Training and Inference Accelerators, Meta is aggressively reducing its reliance on expensive, external GPUs from vendors like Nvidia (NVDA +0.75%).
• Network Integration: The deal goes beyond silicon, leveraging Broadcom’s advanced Ethernet and packaging technologies to connect Meta’s rapidly expanding clusters of AI data centers at a global scale.

Today’s Change

(3.60%) $13.71

Current Price

$394.49

Key Data Points

Market Cap

$1.8T

Day’s Range

$385.69 – $395.72

52wk Range

$161.61 – $414.61

Volume

215K

Avg Vol

27M

Gross Margin

64.96%

Dividend Yield

0.65%

ICYMI: Tuesday’s Scoreboard

5:00 am — CL unchanged in pre-market trading

Colgate-Palmolive (CL 0.26%) was the subject of the latest Scoreboard video.

Report: Uber Spends $10B to Own the Robotaxi Fleet

4:30 am — UBER +0.30% in pre-market trading

The FT reports that Uber Technologies (UBER +4.05%) is abandoning its hallmark “asset-light” gig economy model, committing over $10 billion to acquire thousands of autonomous vehicles and secure equity stakes in their developers. This strategic reversal follows investor fears that AV providers like Alphabet‘s (GOOG 0.22%) Waymo and Tesla (TSLA +1.25%) could cut out intermediaries. CEO Dara Khosrowshahi, who sold Uber’s in-house AV unit in 2020, is now aggressively spending to guarantee supply, surpassing last year’s $9.8 billion in free cash flow. Partnerships already span from Lucid (LCID 3.24%) and Rivian (RIVN +0.31%) to China’s Baidu (BIDU +0.77%), aiming for robotaxi launches in 15 cities this year.

• Narrative Shift: Analysts view this $10 billion spree as a fundamental move to own the fleet, transforming Uber from a driver marketplace into a capital-heavy autonomous transportation funnel.
• Competitive Arm’s Race: This massive reinvestment pits Uber against trillion-dollar giants like Amazon (AMZN 0.10%) and Alphabet, forcing the company to balance growth-oriented spending with its recent turn to profitability.

Today’s Change

(4.05%) $2.95

Current Price

$75.86

Key Data Points

Market Cap

$149B

Day’s Range

$73.65 – $75.97

52wk Range

$68.46 – $101.99

Volume

108K

Avg Vol

20M

Gross Margin

32.89%