Thursday evening’s earnings headlines contained a giant curve ball: Alphabet’s Google announced its first-ever quarterly dividend, twenty cents a share, and also added to its share buyback program another seventy billion dollars.

Before you get too excited, note that the dividend yield on an 80-cent payout, annually, based on Alphabet’s after-hours price of $174, is a yield of barely one half of a percent. That makes it one of the lowest payouts of large tech firms, putting it below Microsoft’s three quarters of a percent, Apple’s half a percent, and chip giant Intel’s one percent.

Nevertheless, lots of income investors will have to own Google now, which prompted Alphabet shares to rise twelve percent after-hours on Thursday.

The announcement obscured what had been the main event expected by investors: The cloud and artificial intelligence battle between Google and Microsoft, which also reported.

The tech initial public offering market has been gradually crawling its way back, though it is nothing like it was in the go-go days of 2020 and 2021. Reddit was the most notable recent example, and on Wednesday, a cyber-security vendor, eleven-year-old Rubrik of Palo Alto, California, priced its offering at $32 per share, above an expected range of $28 to $31.

Rubrik’s prospectus describes its software, called Rubrik Security Cloud, as a “cloud native SaaS platform that detects, analyzes, and remediates data security risks and unauthorized user activities.” In that respect, Rubrik appears similar to many existing players in the market, Zscaler and Palo Alto Networks among them.

Not a lot changed for Tesla on Tuesday between 4 pm and 4:05 pm, save that its quarterly results were not as bad as feared, and the company said it would introduce more economical cars sooner than expected, relieving some investor fears. That was enough to drive the stock up over ten percent in late trading.

Tuesday, the gain totaled twelve percent by the end of the day. Given a huge sell-off in the stock leading up to the report, down forty-two percent, and a slew of bad news in recent weeks, the gains on Wednesday are not exactly surprising.

The good news, though, may not be as goos as it seems. The company’s announcement of cheaper models of car is not all it appears, as analyst Toni Sacconaghi of Bernstein related on Tuesday.

Earnings reports from Enphase, Seagate and Texas Instruments, three struggling names, all had an element of recovering markets in them, Super Micro has a bright future but the stock is fully valued at this point, and Qualcomm could find new appeal based on the “edge” market for AI.

The past several months have been a “horror show” for Tesla investors, as one analyst put it, but that meant a much lowered bar for the auto maker that lead to a better-than-expected sales report on Tuesday evening, prompting a ten percent after-hours jump in the stock.

Revenue of $21.3 billion came in below the average estimate for $21.59 billion, but it was better than the vast majority of estimates, if you look at the distribution of estimates. So, the company avoided the worst expectations.

On the profit side, things were better than expected. Adjusted Ebitda of $3.38 billion was higher than the average estimate for $3.1 billion, and although Tesla’s free cash flow came in negative, at $2.5 billion, the average estimate was just $281 million, meaning, the Street had ramped down that expectation to very little.

The period between earnings reports is a good time for companies to either meet with investors or meet with customers. Monday, at the Nasdaq in Manhattan, it was the latter for software maker HashiCorp, which held a cocktail hour and presentation for clients to discuss the company’s new emphasis on its cloud computing service.

I swung by the event to listen the pitch. The sell-side analysts were not invited, and the event offered nothing pertaining to the financials, but it was useful food for thought.

Twelve-year-old, San Francisco-based HashiCorp sells a piece of software called Terraform, and accompanying applications, that is used to set up and manage servers in cloud computing. The company went public in December of 2021. 2023 was a hard year for HashiCorp, as growth was cut dramatically amidst belt-tightening by customers.

At Monday’s event, CEO Dave McJannet, and two deputies, head of field service Susan St. Ledger and CTO Armon Dadgar, made the case that moving to the company’s cloud computing version of its product will bring numerous benefits to clients versus running the code in their own data centers.

• The big event for the week ending April 19th, of course, was the fall of 10% in Nvidia stock on Friday the 19th. All of the news reports covering the share price decline noted that there was in fact no news regarding Nvidia out on Friday. The Financial Times’s George Steer notes Nvidia endured its worst session since March of 2020, losing more than $200 billion of its market value in one day.

• Mega Tech was terrible across the board last week, with Apple, Amazon and Meta all down 6%. The Nasdaq Composite Index declining 5.5%. The Standard & Poor’s  500 index down 3%.

• Nvidia is more than half of the value of the TL20 group of stocks to consider, which was down 12% with the 8% decline on Friday, its worst decline since October of 2022.

“We have big plans there for using generative AI across the whole lifecycle of build, deploy and operate your cloud application.”

Taiwan Semi lowered its outlook for the chip industry this year, but its sales are still expected to rise on the AI chip race, Oracle may have to spend like crazy to stay in the AI game, and Zscaler’s competition from Microsoft and others looks not as bad as previously thought.

Shares of Netflix are down almost six percent in late trading despite the company beating on revenue and profit with its Q1 report, and forecasting this quarter’s profit higher as well, with new subscribers coming in well above consensus.

Seems that after a twenty-five percent run-up this year, people are taking profits on what looks to be less upside in the current quarter. Tonight’s drop is the reverse of the large gains the stock saw the prior two quarters. The giant addition of subscribers in the January report boosted the stock by eleven percent at the time, but, clearly, adding subscribers doesn’t always carry the day for the stock.

But there’s also a disheartening surprise in the forecast section of the shareholder letter: Netflix will stop disclosing the number of members next year.

ASML Holding, one of the top chip-equipment makers in the world, missed with its first-quarter revenue report Thursday morning, and missed with its outlook for this quarter, but the bulls on the stock are taking it in stride.

“We attribute the shortfall to quarter-to-quarter lumpiness, and do not see a demand issue,” writes Raymond James analyst Srini Pajjuri in a note to clients Thursday.

“A near-term hiccup” is how TD Cowen analyst Krish Sankar describes the report. The focus of the Street is not so much revenue as is it is the company’s number for “bookings,” the contract value signed during the quarter. Bookings are a prelude to revenue, as the product is delivered and the money is formally recognized on the income statement.

Those bookings, at €3.6 billion, were well below expectations for about five and a half billion euros.

• Earning season is getting underway as I record this, with the early reports IBM, Netflix and ASML.

• The week that ended April 12th saw some sell-offs in names that include Nvidia, one of the TL20 stocks worth considering. Nvidia ended the week of the 12th up fractionally, reversing a 3% loss the ending April 5th.

• I had written about Nvidia’s plight on April 4th. It's what I call “inverse estimates behavior.” The stock is way down from a recent high of about $950, and over the course of the past two weeks, it has really meandered through ups and downs.

• I can't tell you when it will relieve itself, but I will tell you that estimates have continued to rise and my inverse estimates behavior theory for Nvidia would be that it will see some gains when some of these increases slow down.

The people who sold the Reddit IPO don’t believe in its immediate future, Amazon is your best bet among social and commerce stocks this earnings season, and Enovix announces positive development amidst nail-biting.

Things keep getting worse for Tesla heading toward its earnings report, Cisco will be fine after the speed bump, the Street loves Astera Labs’s expensive stock, and Informatica and Salesforce are each other’s problems at the moment.

“We are at that kind of watershed moment in quantum where you transition from research experimentation to business benefit.”

The news flow of late is filled with big dollar signs for the potential investment in AI. They range from Advanced Micro Devices CEO Lisa Su’s comment in December that the market for AI chips could be worth four hundred billion dollars by 2027 to the report two weeks ago from The Information that OpenAI is contemplating building hundred-billion-dollar AI computers.

What to believe? The average individual will note that many AI programs have issues, such as “hallucinations.” Either the money is therefore good money after bad or it’s a desperate attempt to fix a big mess.

But there is another view to consider.

Tesla could transition away from the car business, Amkor is less expensive than a lot of AI stocks, there’s a reason ASML is pricier than many other chip stocks, and Meta’s trends are looking good now and through 2028.

We are just approaching the very beginning of earnings season — how time flies! — which gets underway a week from Thursday, when Taiwan Semiconductor Manufacturing and Netflix will both report results, the traditional early birds of the season.

And that means it’s time for earnings upgrade season, when analysts tune up their spreadsheets, and, if they’re feeling chipper, raise price targets and ratings on stocks.

Nvidia’s having another lousy week, falling about two percent so far, though it is recouping some losses Friday afternoon. That follows a four percent decline the week prior. Thanks to the sudden surge in the stock this year — still up almost eighty percent — the market is anxious about Nvidia being a “bubble,” part of a bigger bubble in all things artificial intelligence.

But there’s another factor to consider as well, slightly less emotional, slightly more mechanical. As I noted last fall, Nvidia tends to trade for a period of time opposite to how revenue and earnings estimates are running. When estimates go up, the stock sells off, and the opposite if estimates remain flat or go down, though Nvidia estimates don’t go down too much these days.

• The abbreviated holiday week that ended Thursday the 28th of March, with Friday closed for Good Friday for most markets, saw the Nasdaq Composite Index down slightly, about 0.3%, the Standard & Poor’s 500 Index managing to eke out a 0.3% gain, and the TL20 group of stocks worth considering, down 2.5% — weighed down mostly by Nvidia, which saw a decline of 4% for the week. It's one of the largest weekly declines for Nvidia in a while that I can remember.

• I mentioned in last week's podcast that a number of observers have been warning of frothiness in the AI market, and so there's been some pressure on Nvidia shares of late. I continue to think it is a very valuable company and a very valuable stock to own and that it is not overvalued by most measures.

• It was a mediocre week for Nvidia, but it was the prelude to a terrible week for Tesla. Sales have been seeking out of the EV market like a balloon losing air. First it was a warning from Aehr Test Systems, supplier to the chip makers for EVs, ON Semiconductor and Wolfspeed.

“I am not just selling something to secure some piece of technology, but I am trying to secure that entity […] That’s the kind of longevity and mindset that lets you get a company to a billion dollars and beyond.”

Intel on Tuesday evening offered up an eagerly-anticipated re-categorization of its income statement. There’s a huge operating loss in the middle of those numbers. The reality that it will take Intel years to close that gap has had the effect of a nearly seven-percent sell-off in the stock Wednesday morning.

Analysts are debating, as they often do, Is a huge operating loss a glass half empty or half full?

The new numbers reflect Intel’s decision, announced last summer, to report the financials for its factories, its “foundry,” as a stand-alone business — what I called Le Divorce. The point of Le Divorce is to say what belongs to whom — to make the foundry accept its own profit and loss, separate from chip product sales, as CEO Pat Gelsinger builds the foundry into a third-party contract house, “Intel Foundry Services,” serving not just Intel but also competitors.

Tesla showed its worst miss on deliveries in years, which is probably from much weaker demand in the U.S., solar energy equipment maker Array Technologies has good prospects for a comeback, and BE Semi and Alphawave Semi are best Ides in the AI chip race among European stocks.

Analysts are salivating over the opportunity for fiber-optic components in artificial intelligence, Semtech is one of the big beneficiaries, Micron Technology is going to see a big lift from “HBM” memory chips, and Zscaler and others are in the early innings of the “SASE” change in cyber-security.

Electric vehicles may have seen their first quarterly decline in sales in four years, another bad sign for Tesla, Palantir’s stock has grown too pricey on AI hype, the big annual fiber-optics show reflects a still-struggling industry, and chip maker Monolithic Power’s doing a lot better than rumor suggests.

The week that ended March 22nd was generally a favorable one for markets, with the Nasdaq Composite Index rising 3%, and the Standard & Poor’s 500 Index rising 2%.

The biggest news of the last two weeks was the amazing performance of Micron Technology. In the week ending the 22nd, Micron shares surged 18%. The stock since the start of the year is up 29%. The proximate cause was the company’s earnings report on March 20th, in which it said that demand is improving for both DRAM and NAND chips.

Micron CEO Sanjay Mehrotra said that prices for chips will be improving through the rest of this year and gross profit margin will be improving as a result of both those prices and because of the improving “mix” of chips — specifically, more ““high-bandwidth memory,” the stuff that’s needed for the fastest AI chips.

“We have a number of new growth vectors that will start contributing in fiscal year ’25, but it takes a while for them to make a meaningful impact.”