The S&P 500 this year had its best May since the rip-roaring days of 2020, rising 4.8% over the month. However, much of that gain came at the beginning of the month as Wall Street cheered encouraging economic data and a slew of earnings reports showing the resilience of corporate earnings. The ebullience fizzled out near the end of the month as earnings reports from Salesforce (CRM) and Dell (DELL) failed to meet investors' high expectations.
That means stocks are on relatively shaky ground heading into June. Below, we look at a few companies whose stocks could move markets this month.
Apple
Apple (AAPL) had a rough start to the year. Once the world’s most valuable company, it lost that title to Microsoft (MSFT) in early January amid reports of sluggish iPhone sales and concern that Cupertino had dropped the ball on artificial intelligence.
Investors will be hoping the company can inspire a little optimism at its annual Worldwide Developer Conference (WWDC) in June. The weeklong conference will kick off on June 10 with a keynote address during which Apple is expected to unveil new operating systems, including iOS 18.
The focus of those operating system updates is likely to be—you guessed it—AI. Apple has reportedly spoken to both Google and OpenAI about licensing their respective AI models, Gemini and GPT-4o, to be included in iOS 18. So expect plenty of demos of generative AI features built into apps like iMessage, Photos, and Safari. Siri, Apple’s smart assistant, could also get an update.
Regardless of what exactly is unveiled on June 10, the keynote could give investors the general outline of Apple’s overall AI strategy and remove a major uncertainty that’s been looming over its stock all year.
Nvidia
No list of stocks to watch would be complete without Nvidia (NVDA). Its shares have more than doubled in value so far this year, and that’s after tripling in 2023.
The AI chipmaker’s stock soared above $1,000 in May after another blowout earnings report and the announcement that it would split its stock 10 for 1. That stock split is expected to take effect after markets close on June 7.
Nvidia’s dominance in the market for AI accelerators—BofA analysts recently estimated its market share exceeds 80%—has put it in the extremely enviable position of benefiting from most AI developments. And with just about every tech company scrambling to claim the lead in the AI arms race, there could be plenty of updates this month that bode well for Nvidia.
Other possible catalysts for Nvidia in June include a presentation at the Bank of America Securities Global Technology Conference on June 5 and its annual general meeting on June 26.
Broadcom
Broadcom (AVGO), the third-largest semiconductor company trading on U.S. exchanges, will report fiscal 2024 second-quarter earnings on June 12.
The company reported a 34% increase in revenue last quarter, or 11% excluding the benefit from its acquisition of cybersecurity firm VMWare. Semiconductor revenue, which will likely be the focus of Broadcom’s upcoming report, increased 4% to $7.39 billion in the first quarter, thanks in no small part to a quadrupling in AI semiconductor revenue to $2.3 billion. Adjusted earnings increased 17% to $5.25 billion.
Nvidia’s massive earnings beat last month already showed markets that AI demand remains as strong as ever. Broadcom’s earnings, on the other hand, could support or challenge the thesis that the rising tide of AI spending is in fact lifting all boats.
Tesla
Elon Musk, already one of the world’s richest people, could be in for a hefty raise this month.
Tesla (TSLA) shareholders will vote on the chief executive’s pay package at the company’s annual general meeting on June 13.
Musk was originally awarded this same compensation package, with a maximum value of nearly $56 billion, by shareholders in 2018. But the plan was struck down in January by Delaware’s top Chancellory Court judge, who ruled the package—”the largest potential compensation opportunity ever observed in public markets by multiple orders of magnitude”—was awarded unfairly given Musk’s ties to Tesla’s board and flaws in the shareholder voting process.
Musk’s response was swift. “Never incorporate your company in the state of Delaware,” he posted to X shortly after the court’s decision was revealed. He then asked his followers whether Tesla should reincorporate in Texas, a question on which shareholders will also vote this month.
Tesla and independent die-hards have launched an aggressive campaign in support of both proposals. And Musk himself has implied that Tesla’s development of AI and robotics is contingent on their approval. He has also previously insisted that he would invest in AI development outside of Tesla if not granted a 25% stake in the company, up from his current 13% stake.
Oracle
Oracle (ORCL) is expected to report fiscal 2024 fourth-quarter and full-year results in mid-June.
The enterprise software company has set itself a high bar to clear. In its March earnings report, Oracle reported a record $80 billion order backlog, a 29% increase that CEO Safra Catz said was driven by “large new cloud infrastructure contracts.” Catz forecast that 43% of that backlog would be recognized as revenue within a year, and that the company’s cloud infrastructure business would “remain in a hypergrowth phase—up 53% in Q3—for the foreseeable future.”
Investors will be looking for evidence some of that backlog was converted into revenue in the three months ending May 31. Wall Street will likely also be looking for signs that demand for artificial intelligence products, which contributed to double-digit revenue growth in Oracle’s cloud business last quarter, remains robust.
Those figures will be of particular interest after Salesforce on Wednesday missed revenue estimates for the first time since 2006. Salesforce, an Oracle peer, faced “elongated deal cycles, deal compression, and high levels of budget scrutiny,” COO Brian Millham said on the company’s earnings call.
Possible Events To Watch
Eli Lilly
Eli Lilly’s (LLY) Alzheimer’s drug donanemab will be the subject of discussion when the Food and Drug Administration convenes its Peripheral and Central Nervous System Drugs Advisory Committee (PCNS) on June 10.
The drug was found to be safe and effective in a Phase III clinical trial, the results of which were published last July. Eli Lilly expected the FDA to approve donanemab in the first quarter of this year, and was surprised when regulators delayed their decision to evaluate the clinical trial’s design and conclusions.
The delay is unusual but not unprecedented. The FDA convened this same panel before approving the two donanemab competitors already on the market. One of those drugs, Biogen’s (BIIB) Leqembi, was officially approved by the FDA last July, about one month after its PCNS review. A decision on donanemab could come before the end of June.
Nike
Nike (NKE) is likely to report results for its fiscal 2024 fourth quarter near the end of the month. The shoemaker has struggled with sluggish sales, especially in China, for the past several quarters. Expectations for the upcoming report are low after management warned in March that revenue is expected to decline by low single digits in the first half of its 2025 fiscal year, which starts in June.
Investors will be looking for signs the company is making progress on the $2 billion cost-cutting plan it announced in December. Executives may also take the occasion of the Summer Olympics, which will kick off in Paris in late July, to tout new high-performance products.
