Futures higher, Berkshire Hathaway slashes Apple stake - what's moving markets

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Futures higher, Berkshire Hathaway slashes Apple stake - what's moving markets
Credit: © Reuters.

Investing.com -- U.S. stock futures inch higher, pointing to a continued recovery on Wall Street from a decline posted earlier this week. Cisco Systems (NASDAQ: CSCO ) lowers its annual guidance and outlines plans to slash headcount, as executives at the network equipment manufacturer warn of weak future demand. Elsewhere, Warren Buffett's Berkshire Hathaway (NYSE: BRKa ) cuts its stake in tech giant Apple (NASDAQ: AAPL ).

1. Futures edge up

U.S. stock futures gained on Thursday, after equities rebounded in the prior session from a dip earlier in the week.

By 04:00 ET (09:00 GMT), the S&P 500 futures contract had gained 11 points or 0.2%, Nasdaq 100 futures had added 35 points or 0.2%, and Dow futures had risen by 82 points or 0.2%.

The main indices on Wall Street gained on Wednesday, partially recovering from a drop on Tuesday sparked by hotter-than-expected U.S. inflation figures that led markets to push back their bets for the timing of potential Federal Reserve interest rate cuts. The benchmark S&P 500 rose by 1.0%, the tech-heavy Nasdaq Composite advanced by 1.3%, and the blue-chip Dow Jones Industrial Average climbed by 0.4%.

Artificial intelligence chipmaker Nvidia (NASDAQ: NVDA ) jumped ahead of its much-anticipated quarterly results next week, surpassing Google-owner Alphabet (NASDAQ: GOOGL ) as the U.S. stock market's third-most valuable company. Ride-hailing group Lyft (NASDAQ: LYFT ) also surged by more than 30% thanks to a bullish annual free cash flow outlook and better-than-projected profit, while rival Uber (NYSE: UBER ) soared on a new $7 billion share buyback plan.

2. Cisco Systems slashes guidance, unveils plans to cut workforce

Cisco Systems reduced its full-year guidance and detailed plans to cut its global workforce as part of a broader restructuring push, sending shares lower in premarket U.S. trading on Thursday.   

The network equipment maker said it expects to post full-year adjusted earnings per share (EPS) of $3.68 to $3.74 on revenue between $51.5 billion to $52.5 billion, compared with a prior estimate for adjusted EPS of $3.87 to $3.93 and revenue of $53.8 billion to $55.0 billion. In a call with analysts, Chief Executive Charles Robbins flagged that the business expects to see "weak demand with our telco and cable service provider customers."

Cisco added that it would slash headcount by about 5%. It said the move will result in an $800 million charge from severance and other one-time termination benefits and other costs. The bulk of these expenses are expected recognized in the first half of its 2025 fiscal year. 

Highlighting the earnings calendar on Thursday will be results from agricultural equipment firm Deere & Company (NYSE: DE ), sports betting service DraftKings (NASDAQ: DKNG ) and cryptocurrency exchange Coinbase (NASDAQ: COIN ).

3. Buffett's Berkshire Hathaway trims Apple stake

Warren Buffett's Berkshire Hathaway lowered its position in tech giant Apple in the fourth quarter.

According to a securities filing on Wednesday, Berkshire offloaded 10 million shares in the iPhone maker, or about 1.1% of its stake in the firm.

Apple still remains crucial for Berkshire, the massive investment conglomerate that has an interest in swathe of major corporations across multiple industries. Following the sale, Berkshire, which first invested in Apple in 2016, had holdings in the group worth $174B at the end of last year -- well ahead of its second-biggest investment in lender Bank of America (NYSE: BAC ).

Speaking at Nebraska-based Berkshire's annual meeting in 2023, Buffett lauded Apple -- whose stock price has skyrocketed by more than 330% over the past five years -- as "a better business than any we own."

But Apple has recently lagged behind its peers in Big Tech as worries mount around its operations in China and regulatory scrutiny of its App Store. Microsoft (NASDAQ: MSFT ) overtook Apple as the world's most valuable company earlier this year.

4. TSMC shares jump after Morgan Stanley lifts Nvidia price target

Shares in Taiwan Semiconductor Manufacturing Company (TW: 2330 ) touched a fresh record high on Thursday after analysts at Morgan Stanley raised their price target of client Nvidia.

TSMC, the world's largest contract chipmaker, is a key supplier for tech titans like Nvidia and Apple. The spike in shares in TSMC, which restarted trading following the Lunar New Year holiday, spurring on a broader rally in tech stocks in Asia.

Underpinning the increase was a note from analysts at Morgan Stanley in which they bumped up their price target for Nvidia to $750 from $603, citing booming demand for nascent AI technology. Nvidia manufactures the powerful graphics processing units needed to power large language models like the popular ChatGPT chatbot, making the California-based group one of the focal points of soaring enthusiasm around AI.

5. Oil subdued

Oil prices hovered around the flatline in early European trade on Thursday, as traders digested a substantially bigger-than-expected build in U.S. inventories and Japanese quarterly growth figures. 

Brent oil futures expiring in April were mostly unchanged at $81.59 a barrel, while West Texas Intermediate crude futures were down 0.1% at $76.29 per barrel by 04:30 ET.

Crude prices had lost over $1 each on Wednesday after data showed U.S. oil inventories grew a staggering 12 million barrels in the week to February 9, much higher than expectations for a build of 3.3 million barrels. The reading was driven chiefly by record-high U.S. production, indicating that the world’s largest fuel consumer remained well-supplied with oil.

Meanwhile, gross domestic product (GDP) data from Japan showed the country unexpectedly entered a technical recession in the fourth quarter due in part to persistent weakness in private consumption.

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