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Nvidia 'Modestly At Risk' Amid AI Chip Concerns, Analyst Notes: Momentum Money Swirling Around 'Sells First, Asks Questions Later'

19.11.2024 by admin

Nvidia Corp. NVDA faces heightened scrutiny ahead of its earnings as technical challenges with its latest artificial intelligence chips and broader market pressures raise concerns, according to Mizuho analyst Jordan Klein.

What Happened: Klein, a longtime Nvidia bull, warned investors that the semiconductor giant’s shares are “modestly at risk” following reports of overheating issues in its new Blackwell systems, reported Investing.com.

The timing is particularly sensitive given Nvidia’s recent ascent to become the world’s most valuable company, with a market capitalization of $3.482 trillion.

“There is just so much quant, passive, and fast momentum money swirling around in markets these days and I assume that style sells first, asks questions later,” Klein noted in his investor communication, highlighting the volatile nature of current market dynamics.

Why It Matters: The Blackwell chips, unveiled in March and promising 30 times faster performance than previous generations, have reportedly encountered thermal issues when installed in high-density server racks.

Major customers potentially affected include Meta Platforms Inc. META, Microsoft Corp. MSFT, and Alphabet Inc. GOOGL GOOGL subsidiary Google.

Nvidia has responded to the situation, with a spokesperson telling Reuters that “engineering iterations are normal and expected” while working with cloud service providers.

Despite these immediate challenges, Klein maintains his long-term optimistic outlook for Nvidia but cautions about near-term volatility, particularly from retail and momentum-driven investors who “purely react to headlines and initial stock moves.”

However, CNBC’s Jim Cramer offered a contrasting view, suggesting the market’s reaction might be overdone. “Be skeptical about the negatives with Nvidia,” Cramer posted on X. He later expanded on CNBC, saying, “I’m more inclined to think you’re getting a buying opportunity in Nvidia thanks to The Information publishing a story that may simply not be that.”

Be skeptical about the negatives with Nvidia…

— Jim Cramer (@jimcramer) November 18, 2024

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Earnings News

Vipshop Reports Unaudited Third Quarter 2024 Financial Results

19.11.2024 by admin

Conference Call to Be Held at 7:30 A.M. U.S. Eastern Time on November 19, 2024

GUANGZHOU, China, Nov. 19, 2024 /PRNewswire/ — Vipshop Holdings Limited VIPS, a leading online discount retailer for brands in China (“Vipshop” or the “Company”), today announced its unaudited financial results for the quarter ended September 30, 2024.

Third Quarter 2024 Highlights

Total net revenues for the third quarter of 2024 were RMB20.7 billion (US$2.9 billion), compared with RMB22.8 billion in the prior year period.
GMV^[1] for the third quarter of 2024 was RMB40.1 billion, compared with RMB42.5 billion in the prior year period.
Gross profit for the third quarter of 2024 was RMB5.0 billion (US$706.1 million), compared with RMB5.4 billion in the prior year period.
Net income attributable to Vipshop’s shareholders for the third quarter of 2024 was RMB1.0 billion (US$149.0 million), compared with RMB1.2 billion in the prior year period.
Non-GAAP net income attributable to Vipshop’s shareholders^{^[2]} for the third quarter of 2024 was RMB1.3 billion (US$186.8 million), compared with RMB1.8 billion in the prior year period.
The number of active customers^[3] for the third quarter of 2024 was 39.6 million, compared with 42.3 million in the prior year period.
Total orders^[4] for the third quarter of 2024 were 163.9 million, compared with 179.9 million in the prior year period.

Mr. Eric Shen, Chairman and Chief Executive Officer of Vipshop, stated, “Our third-quarter performance reflected soft industry trends in discretionary categories. During the quarter, we swiftly adapted our business priorities to address external challenges and identify the biggest opportunities for improvement. We observed some early positive results from a series of adjustments, which further enhanced our merchandising portfolio and operational efficiency, while active Super VIP customers continued to experience double-digit growth. With consumer spending yet to fully recover, we remain laser-focused on our long-term strategies, while driving necessary changes and executing the retail fundamentals that are pivotal to our long-term growth.”

Mr. Mark Wang, Chief Financial Officer of Vipshop, further commented, “Our third-quarter results were largely in line with our expectations. We maintained solid profitability through disciplined financial management. At the same time, we continued to invest to grow, reallocating resources to maximize customer impact and growth, with the goal of creating a better balance in our business. In addition, we continued to return value to our shareholders by repurchasing US$275.0 million worth of shares during the quarter, and we are committed to a new US$1.0 billion program once we fully utilize the current repurchase program.”

Third Quarter 2024 Financial Results

REVENUES

Total net revenues for the third quarter of 2024 were RMB20.7 billion (US$2.9 billion), compared with RMB22.8 billion in the prior year period.

GROSS PROFIT

Gross profit for the third quarter of 2024 was RMB5.0 billion (US$706.1 million), compared with RMB5.4 billion in the prior year period. Gross margin for the third quarter of 2024 increased to 24.0% from 23.6% in the prior year period.

OPERATING EXPENSES

Total operating expenses for the third quarter of 2024 decreased by 6.1% year over year to RMB3.8 billion (US$536.6 million) from RMB4.0 billion in the prior year period. As a percentage of total net revenues, total operating expenses for the third quarter of 2024 was 18.2%, compared with 17.6% in the prior year period.

Fulfillment expenses for the third quarter of 2024 decreased by 2.0% year over year to RMB1.7 billion (US$247.3 million) from RMB1.8 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses for the third quarter of 2024 was 8.4%, compared with 7.8% in the prior year period.
Marketing expenses for the third quarter of 2024 decreased by 7.7% year over year to RMB617.8 million (US$88.0 million) from RMB669.6 million in the prior year period. As a percentage of total net revenues, marketing expenses for the third quarter of 2024 was 3.0%, compared with 2.9% in the prior year period.
Technology and content expenses for the third quarter of 2024 increased by 4.3% year over year to RMB454.2 million (US$64.7 million) from RMB435.3 million in the prior year period. As a percentage of total net revenues, technology and content expenses for the third quarter of 2024 was 2.2%, compared with 1.9% in the prior year period.
General and administrative expenses for the third quarter of 2024 decreased by 15.3% year over year to RMB957.8 million (US$136.5 million) from RMB1.1 billion in the prior year period. As a percentage of total net revenues, general and administrative expenses for the third quarter of 2024 decreased to 4.6% from 5.0% in the prior year period.

INCOME FROM OPERATIONS

Income from operations for the third quarter of 2024 was RMB1.3 billion (US$189.5 million), compared with RMB1.5 billion in the prior year period. Operating margin for the third quarter of 2024 was 6.4%, compared with 6.7% in the prior year period.

Non-GAAP income from operations^[5] for the third quarter of 2024, which excluded share-based compensation expenses, was RMB1.7 billion (US$242.4 million), compared with RMB2.1 billion in the prior year period. Non-GAAP operating margin^[6] for the third quarter of 2024 was 8.2%, compared with 9.1% in the prior year period.

NET INCOME

Net income attributable to Vipshop’s shareholders for the third quarter of 2024 was RMB1.0 billion (US$149.0 million), compared with RMB1.2 billion in the prior year period. Net margin attributable to Vipshop’s shareholders for the third quarter of 2024 was 5.1%, compared with 5.3% in the prior year period. Net income attributable to Vipshop’s shareholders per diluted ADS^[7] for the third quarter of 2024 was RMB1.97 (US$0.28), compared with RMB2.19 in the prior year period.

Non-GAAP net income attributable to Vipshop’s shareholders for the third quarter of 2024, which excluded (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) investment loss (gain) and revaluation of investments excluding dividends, (iv) reconciling items on the share of equity method investments, and (v) tax effects on non-GAAP adjustments, was RMB1.3 billion (US$186.8 million), compared with RMB1.8 billion in the prior year period. Non-GAAP net margin attributable to Vipshop’s shareholders^[8] for the third quarter of 2024 was 6.3%, compared with 8.1% in the prior year period. Non-GAAP net income attributable to Vipshop’s shareholders per diluted ADS^[9] for the third quarter of 2024 was RMB2.47 (US$0.35), compared with RMB3.33 in the prior year period.

For the quarter ended September 30, 2024, the Company’s weighted average number of ADSs used in computing diluted income per ADS was 530,188,575.

BALANCE SHEET AND CASH FLOW

As of September 30, 2024, the Company had cash and cash equivalents and restricted cash of RMB22.5 billion (US$3.2 billion) and short term investments of RMB1.6 billion (US$222.3 million).

For the quarter ended September 30, 2024, net cash generated from operating activities was RMB508.9 million (US$72.5 million), and free cash flow^[10], a non-GAAP measurement of liquidity, was as follows:

For the three months ended
	Sept 30, 2023 RMB’000	Sept 30, 2024 RMB’000	Sept 30, 2024 US$’000
Net cash generated from operating activities	1,204,020	508,890	72,516
Reconciling items:
Net impact from internet financing activities^[11]	(102,537)	(15,603)	(2,223)
Capital expenditures	(1,071,555)	(1,083,596)	(154,411)
Free cash inflow (outflow)	29,928	(590,309)	(84,118)

For the trailing twelve months ended
	Sept 30, 2023 RMB’000	Sept 30, 2024 RMB’000	Sept 30, 2024 US$’000
Net cash generated from operating activities	12,243,732	8,931,635	1,272,748
Reconciling items:
Net impact from internet financing activities	295,072	2,152	307
Capital expenditures	(4,419,331)	(4,372,251)	(623,041)
Free cash inflow	8,119,473	4,561,536	650,014

Share Repurchase Program

During the quarter ended September 30, 2024, the Company repurchased US$275.0 million of its ADSs under its current US$1.0 billion share repurchase program, which is effective through March 2025. As of September 30, 2024, the Company has an unutilized amount of US$55.3 million under this program.

In August 2024, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to US$1.0 billion of its ADSs or Class A ordinary shares for a 24-month period commencing from the full utilization of the existing share repurchase program adopted in March 2023, as amended.

Business Outlook

For the fourth quarter of 2024, the Company expects its total net revenues to be between RMB31.2 billion and RMB32.9 billion, representing a year-over-year decrease of approximately 10% to 5%. These forecasts reflect the Company’s current and preliminary view on the market and operational conditions, which is subject to change.

Exchange Rate

The Company’s business is primarily conducted in China and the significant majority of revenues generated are denominated in Renminbi. This announcement contains currency translations of Renminbi amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars are made at a rate of RMB7.0176 to US$1.00, the effective noon buying rate on September 30, 2024 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on September 30, 2024, or at any other rate.

Conference Call Information

The Company will hold a conference call on Tuesday, November 19, 2024 at 7:30 am U.S. Eastern Time, 8:30 pm Beijing Time to discuss the financial results.

All participants wishing to join the conference call must pre-register online using the link provided below.

Registration Link: https://register.vevent.com/register/BIb7dd20b068014c73a6cc797c134be1b5

Once pre-registration has been completed, each participant will receive dial-in numbers and a unique access PIN via email. To join the conference, participants should use the dial-in details followed by the PIN code.

A live webcast of the earnings conference call can be accessed at https://edge.media-server.com/mmc/p/x863x7sh. An archived webcast will be available at the Company’s investor relations website at http://ir.vip.com.

About Vipshop Holdings Limited

Vipshop Holdings Limited is a leading online discount retailer for brands in China. Vipshop offers high quality and popular branded products to consumers throughout China at a significant discount to retail prices. Since it was founded in August 2008, the Company has rapidly built a sizeable and growing base of customers and brand partners. For more information, please visit https://ir.vip.com/.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Vipshop’s strategic and operational plans, contain forward-looking statements. Vipshop may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Vipshop’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Vipshop’s goals and strategies; Vipshop’s future business development, results of operations and financial condition; the expected growth of the online discount retail market in China; Vipshop’s ability to attract customers and brand partners and further enhance its brand recognition; Vipshop’s expectations regarding needs for and market acceptance of flash sales products and services; competition in the discount retail industry; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Vipshop’s filings with the SEC. All information provided in this press release is as of the date of this press release, and Vipshop does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Use of Non-GAAP Financial Measures

The condensed consolidated financial information is derived from the Company’s unaudited interim condensed consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), except that comparative consolidated statements of income and cash flows for the period presented and the detailed footnote disclosures required by Accounting Standards Codification 270, Interim Reporting (“ASC270”) have been omitted. Vipshop uses non-GAAP net income attributable to Vipshop’s shareholders, non-GAAP net income attributable to Vipshop’s shareholders per diluted ADS, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net margin attributable to Vipshop’s shareholders, and free cash flow, each of which is a non-GAAP financial measure. For the periods presented in this press release, non-GAAP net income attributable to Vipshop’s shareholders is net income attributable to Vipshop’s shareholders excluding (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) investment loss (gain) and revaluation of investments excluding dividends, (iv) reconciling items on the share of equity method investments, and (v) tax effects on non-GAAP adjustments. Non-GAAP net income attributable to Vipshop’s shareholders per diluted ADS is computed using non-GAAP net income attributable to Vipshop’s shareholders divided by weighted average number of diluted ADS outstanding for computing diluted earnings per ADS. Non-GAAP income from operations is income from operations excluding share-based compensation expenses. Non-GAAP operating margin is non-GAAP income from operations as a percentage of total net revenues. Non-GAAP net margin attributable to Vipshop’s shareholders is non-GAAP net income attributable to Vipshop’s shareholders as a percentage of total net revenues. Free cash flow is net cash from operating activities adding back the impact from internet financing activities and less capital expenditures, which include purchase and deposits of property and equipment and land use rights. Impact from internet financing activities added back or deducted from free cash flow contains changes in the balances of financial products, which are primarily consumer financing and supplier financing that the Company provides to customers and suppliers. The Company believes that separate analysis and exclusion of the non-cash impact of (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) investment loss (gain) and revaluation of investments excluding dividends, (iv) reconciling items on the share of equity method investments, and (v) tax effects on non-GAAP adjustments add clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses these non-GAAP financial measures for planning, forecasting, and measuring results against the forecast. The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) investment loss (gain) and revaluation of investments excluding dividends, (iv) reconciling items on the share of equity method investments, and (v) tax effects on non-GAAP adjustments. Free cash flow enables the Company to assess liquidity and cash flow, taking into account the impact from internet financing activities and the financial resources needed for the expansion of fulfillment infrastructure, technology platform, and Shan Shan Outlets. Share-based compensation expenses have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company’s net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. One of the key limitations of free cash flow is that it does not represent the residual cash flow available for discretionary expenditures.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Vipshop Holdings Limited Reconciliations of GAAP and Non-GAAP Results” at the end of this release.

Investor Relations Contact

Tel: +86 (20) 2233-0732
Email: IR@vipshop.com

^[1] “Gross merchandise value (GMV)” is defined as the total Renminbi value of all products and services sold through the Company’s online sales business, online marketplace platform, Shan Shan Outlets, and other offline stores during the given period, including the Company’s websites and mobile apps, third-party websites and mobile apps, Shan Shan Outlets, and other offline stores, which were fulfilled by either the Company or its third-party merchants, regardless of whether or not the goods were delivered or returned. GMV includes shipping charges paid by buyers to sellers. For prudent considerations, the Company does not consider products or services to be sold if the orders were placed and canceled pre-shipment and only included orders that left the Company’s or other third-party vendors’ warehouses.

^[2] Non-GAAP net income attributable to Vipshop’s shareholders is a non-GAAP financial measure, which, for the periods presented in this press release, is defined as net income attributable to Vipshop’s shareholders excluding (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) investment loss (gain) and revaluation of investments excluding dividends, (iv) reconciling items on the share of equity method investments, and (v) tax effects on non-GAAP adjustments.

^[3] “Active customers” is defined as registered members who have purchased from the Company’s self-operated online sales business or the Company’s online marketplace platforms, excluding those who made their purchases from the Company’s online stores operated at third-party platforms, at least once during the relevant period. Beginning in the fourth quarter of 2023, the Company updated its definition of “active customers” to exclude registered members who make their purchases from the Company’s online stores operated at third-party platforms. The active customer figures for the historical periods presented in this press release have been retrospectively adjusted accordingly.

^[4] “Total orders” is defined as the total number of orders placed during the given period, including the orders for products and services sold through the Company’s online sales business and on the Company’s online marketplace platforms (excluding, for the avoidance of doubt, orders from the Company’s offline stores and outlets), net of orders returned.

^[5] Non-GAAP income from operations is a non-GAAP financial measure, which is defined as income from operations excluding share-based compensation expenses.

^[6] Non-GAAP operating margin is a non-GAAP financial measure, which is defined as non-GAAP income from operations as a percentage of total net revenues.

^[7] “ADS” means American depositary share, each of which represents 0.2 Class A ordinary share.

^[8] Non-GAAP net margin attributable to Vipshop’s shareholders is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to Vipshop’s shareholders, as a percentage of total net revenues.

^[9] Non-GAAP net income attributable to Vipshop’s shareholders per diluted ADS is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to Vipshop’s shareholders, divided by the weighted average number of diluted ADSs outstanding for computing diluted earnings per ADS.

^[10] Free cash flow is a non-GAAP financial measure, which is defined as net cash from operating activities adding back the impact from internet financing activities and less capital expenditures, which include purchase and deposits of property and equipment and land use rights.

^[11] Net impact from internet financing activities represents net cash flow relating to the Company’s financial products, which are primarily consumer financing and supplier financing that the Company provides to its customers and suppliers.

Vipshop Holdings Limited
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income
(In thousands, except for share and per share data)

	Three Months Ended
	September 30,2023	September 30,2024	September 30,2024
	RMB’000	RMB’000	USD’000

Product revenues	21,077,354	18,920,273	2,696,117
Other revenues (1)	1,688,507	1,755,668	250,181
Total net revenues	22,765,861	20,675,941	2,946,298
Cost of revenues	(17,384,331)	(15,720,539)	(2,240,159)
Gross profit	5,381,530	4,955,402	706,139
Operating expenses:
Fulfillment expenses (2)	(1,771,903)	(1,735,673)	(247,331)
Marketing expenses	(669,608)	(617,815)	(88,038)
Technology and content expenses	(435,279)	(454,154)	(64,716)
General and administrative expenses	(1,131,241)	(957,798)	(136,485)
Total operating expenses	(4,008,031)	(3,765,440)	(536,570)
Other operating income	160,165	139,939	19,941
Income from operations	1,533,664	1,329,901	189,510
Investment (loss) gain and revaluation of investments	(94,939)	96,934	13,813
Impairment loss of investments	0	(43,555)	(6,207)
Interest expense	(466)	(15,895)	(2,265)
Interest income	166,246	174,651	24,888
Exchange loss	(33,632)	(86,182)	(12,281)
Income before income tax expense and share of income of equity method investees	1,570,873	1,455,854	207,458
Income tax expenses	(364,835)	(474,220)	(67,576)
Share of income of equity method investees	24,528	79,043	11,264
Net income	1,230,566	1,060,677	151,146
Net income attributable to non-controlling interests	(22,274)	(15,338)	(2,186)
Net income attributable to Vipshop’s shareholders	1,208,292	1,045,339	148,960

Shares used in calculating earnings per share (3):
Weighted average number of Class A and Class B ordinary shares:
—Basic	108,463,991	104,496,269	104,496,269
—Diluted	110,416,154	106,037,715	106,037,715

Net earnings per Class A and Class B ordinary share
Net income attributable to Vipshop’s shareholders——Basic	11.14	10.00	1.42
Net income attributable to Vipshop’s shareholders——Diluted	10.94	9.86	1.41

Net earnings per ADS (1 ordinary share equals to 5 ADSs)
Net income attributable to Vipshop’s shareholders——Basic	2.23	2.00	0.28
Net income attributable to Vipshop’s shareholders——Diluted	2.19	1.97	0.28
(1) Other revenues primarily consist of product promotion and online advertising revenues, lease income mainly earned from the Shan Shan Outlets, fees charged to third-party merchants which the Company provides platform access for sales of their products, revenue from third- party logistics services, loan facilitation service income and membership fee income.
(2) Fulfillment expenses include shipping and handling expenses, which amounted RMB 1.2 billion and RMB1.2 billion in the three month periods ended September 30, 2023 and September 30, 2024, respectively.
(3) Authorized share capital is re-classified and re-designated into Class A ordinary shares and Class B ordinary shares, with each Class A ordinary share being entitled to one vote and each Class B ordinary share being entitled to ten votes on all matters that are subject to shareholder vote.


	Three Months Ended
	September 30,2023	September 30,2024	September 30,2024
	RMB’000	RMB’000	USD’000
Share-based compensation expenses are included in the operating expenses as follows:
Fulfillment expenses	20,798	20,241	2,884
Marketing expenses	7,985	7,584	1,081
Technology and content expenses	89,333	94,101	13,409
General and administrative expenses	421,423	249,179	35,508
Total	539,539	371,105	52,882


Vipshop Holdings Limited
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except for share and per share data)

	December 31,2023	September 30,2024	September 30,2024
	RMB’000	RMB’000	USD’000
ASSETS
CURRENT ASSETS
Cash and cash equivalents	25,414,729	21,870,029	3,116,454
Restricted cash	882,637	583,747	83,183
Short term investments	1,983,201	1,560,246	222,333
Accounts receivable, net	778,767	895,057	127,545
Amounts due from related parties,net	553,502	678,032	96,619
Other receivables and prepayments,net	2,298,612	2,508,604	357,473
Loan receivables,net	4,437	5,871	837
Inventories	5,644,713	4,626,792	659,313
Total current assets	37,560,598	32,728,378	4,663,757
NON-CURRENT ASSETS
Property and equipment, net	16,882,100	18,106,529	2,580,160
Deposits for property and equipment	200,739	172,570	24,591
Land use rights, net	10,132,626	10,744,108	1,531,023
Intangible assets, net	332,821	328,789	46,852
Investment in equity method investees	2,155,561	2,118,264	301,850
Other investments	2,916,189	3,166,681	451,248
Other long-term assets	147,669	179,564	25,588
Goodwill	755,213	755,213	107,617
Deferred tax assets, net	685,017	733,805	104,566
Operating lease right-of-use assets	554,061	450,714	64,226
Total non-current assets	34,761,996	36,756,237	5,237,721
TOTAL ASSETS	72,322,594	69,484,615	9,901,478

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short term loans	1,425,576	5,401,127	769,654
Accounts payable	17,259,395	11,352,270	1,617,686
Advance from customers	1,689,881	1,570,520	223,797
Accrued expenses and other current liabilities	9,560,449	8,176,729	1,165,175
Amounts due to related parties	150,373	156,123	22,247
Deferred income	457,594	437,622	62,361
Operating lease liabilities	80,868	62,162	8,858
Total current liabilities	30,624,136	27,156,553	3,869,778
NON-CURRENT LIABILITIES
Deferred tax liability	692,492	490,498	69,895
Deferred income-non current	1,756,949	2,103,696	299,774
Operating lease liabilities	689,259	602,394	85,840
Total non-current liabilities	3,138,700	3,196,588	455,509
TOTAL LIABILITIES	33,762,836	30,353,141	4,325,287

EQUITY:
Class A ordinary shares (US$0.0001 par value, 483,489,642 shares authorized,98,877,929 and 100,125,194 shares issued, of which 92,900,247 and 87,105,180 shares were outstanding as of December 31, 2023 and September 30, 2024, respectively)	62	64	9
Class B ordinary shares (US$0.0001 par value, 16,510,358 shares authorized, and 15,560,358 and 15,560,358 shares issued and outstanding as of December 31, 2023 and September 30, 2024, respectively)	11	11	2
Treasury shares, at cost (5,977,682 and 12,908,649 Class A shares as of December 31, 2023 and September 30, 2024, respectively)	(3,624,763)	(7,086,151)	(1,009,768)
Additional paid-in capital	4,444,755	4,955,622	706,170
Retained earnings	36,836,928	40,459,508	5,765,434
Accumulated other comprehensive loss	(695,589)	(725,612)	(103,399)
Non-controlling interests	1,598,354	1,528,032	217,743
Total shareholders’ equity	38,559,758	39,131,474	5,576,191
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	72,322,594	69,484,615	9,901,478


Vipshop Holdings Limited
Reconciliations of GAAP and Non-GAAP Results

	Three Months Ended
	September 30,2023	September 30,2024	September 30,2024
	RMB’000	RMB’000	USD’000
Income from operations	1,533,664	1,329,901	189,510
Share-based compensation expenses	539,539	371,105	52,882
Non-GAAP income from operations	2,073,203	1,701,006	242,392


Net income attributable to Vipshop’s shareholders	1,208,292	1,045,339	148,960
Share-based compensation expenses	539,539	371,105	52,882
Impairment loss of investments	0	43,555	6,207
Investment loss (gain) and revaluation of investments excluding dividends	95,192	(96,934)	(13,813)
Reconciling items on the share of equity method investments(4)	17,717	(41,078)	(5,854)
Tax effects on non-GAAP adjustments	(19,695)	(11,242)	(1,602)
Non-GAAP net income attributable to Vipshop’s shareholders	1,841,045	1,310,745	186,780
(4) To exclude the GAAP to non-GAAP reconciling items relating to investment (gain) loss and revaluation of investments on the share of equity method investments.

Shares used in calculating earnings per share:
Weighted average number of Class A and Class B ordinary shares:
—Basic	108,463,991	104,496,269	104,496,269
—Diluted	110,416,154	106,037,715	106,037,715

Non-GAAP net income per Class A and Class B ordinary share
Non-GAAP net income attributable to Vipshop’s shareholders——Basic	16.97	12.54	1.79
Non-GAAP net income attributable to Vipshop’s shareholders——Diluted	16.67	12.36	1.76


Non-GAAP net income per ADS (1 ordinary share equal to 5 ADSs)
Non-GAAP net income attributable to Vipshop’s shareholders——Basic	3.39	2.51	0.36
Non-GAAP net income attributable to Vipshop’s shareholders——Diluted	3.33	2.47	0.35

View original content:https://www.prnewswire.com/news-releases/vipshop-reports-unaudited-third-quarter-2024-financial-results-302309614.html

SOURCE Vipshop Holdings Limited

Markets News

Nasdaq Gains Over 100 Points As Tesla Surges: Investor Sentiment Declines, Fear & Greed Index Remains In 'Neutral' Zone

19.11.2024 by admin

The CNN Money Fear and Greed index showed a further decline in the overall market sentiment, while the index remained in the “Neutral” zone on Monday.

U.S. stocks settled mixed on Monday, with the Nasdaq gaining more than 100 points during the session as the Tesla, Inc. TSLA stock surged 5.6% following reports of President-elect Donald Trump’s policy outlook on regulations for autonomous driving.

U.S. stocks recorded losses last week, with the S&P 500 falling 2.1% and the Nasdaq Composite losing around 3.2%. The 30-stock Dow lost 1.2% during the week.

As far as the earnings season is concerned, around 93% of the S&P 500 companies have released quarterly results so far, with around 74% of those exceeding earnings estimates.

On the economic data front, the NAHB/Wells Fargo Housing Market Index climbed to 46 in November, recording the highest reading in seven months, compared to 43 in October.

Most sectors on the S&P 500 closed on a positive note, with energy, communication services, and consumer discretionary stocks recording the biggest gains on Monday. However, industrials stocks bucked the overall market trend, closing the session lower.

The Dow Jones closed lower by around 55 points to 43,389.60 on Monday. The S&P 500 rose 0.39% to 5,893.62, while the Nasdaq Composite gained 0.60% to close at 18,791.81 during Monday’s session.

Investors are awaiting earnings results from Walmart Inc. WMT, Lowe’s Companies, Inc. LOW, and Medtronic Plc. MDT today.

What is CNN Business Fear & Greed Index?

At a current reading of 50.1, the index remained in the “Neutral” zone on Monday, versus a prior reading of 51.1.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

Read Next:

Photo courtesy: Shutterstock

Market News and Data brought to you by Benzinga APIs

Finance News

Billionaire Israel Englander Dumped 90% of Millennium's Stake in Palantir in Favor of This Hypergrowth Electric-Vehicle (EV) Stock

19.11.2024 by admin

Two of the most-important data releases of the fourth quarter occurred last week. While most investors were laser-focused on the October inflation report on Nov. 13, the deadline for institutional investors to file Form 13F on Nov. 14 was just as important.

Following the end to every quarter, institutional investors with at least $100 million in assets under management (AUM) are required to file a 13F with the Securities and Exchange Commission. A 13F offers an under-the-hood look at which stocks Wall Street’s most-successful money managers bought and sold in the latest quarter. In this instance, the Nov. 14 filing deadline pertains to trading activity that occurred in the September-ended quarter.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

A money manager analyzing stock charts and volume data displayed on two computer monitors. — Image source: Getty Images.

The third quarter was an especially active one for billionaire money manager Israel Englander and his investment team at Millennium Management. Millennium ended September with $210.9 billion in AUM spread across thousands of securities, including various put and calls options that often hedge its common-stock positions.

However, a few of these trades really stand out. Specifically, Englander sent shares of artificial intelligence (AI)-driven data-mining specialist Palantir Technologies (NYSE: PLTR) packing, while piling into an up-and-coming hypergrowth stock in the electric-vehicle (EV) space.

With the exception of Nvidia, there’s probably not a hotter AI stock on the planet right now than Palantir. Shares of the company have more than tripled on a trailing-12-month basis, and they’re up close to 690% over the trailing-two-year period. However, this didn’t stop Englander from overseeing the disposition of 4,492,425 shares of Palantir during the third quarter, which reduced his fund’s stake by 90.3%!

The are three reasons Palantir is such a hot commodity right now. At the top of the list, it’s an irreplaceable company with a fairly secure moat. Palantir’s AI-driven Gotham platform aids with mission-planning and execution for federal entities, while its AI- and machine learning-inspired Foundry platform helps businesses makes sense of their data in order to streamline their operations. No company comes remotely close to what Palantir can offer at scale.

Secondly, Palantir firmly shifted to recurring profitability, based on generally accepted accounting principles (GAAP). It’s not uncommon for Wall Street to reward fast-growing companies when they prove they can be profitable quarter after quarter.

The third reason investors are excited about Palantir Technologies is its still nascent but rapidly expanding Foundry segment. The company’s global commercial customer count soared 51% to 498 by the end of September.

However, there are also two very tangible catalysts, beyond simple profit-taking, which may help explain why Englander and his team are headed for the exit.

For starters, Gotham, which has been Palantir’s primary profit driver, has a limited long-term ceiling. Though Palantir has landed numerous lucrative multiyear contracts from the U.S. government, this is a platform that only the U.S. and its allies have access to.

Perhaps the bigger issue for Palantir Technologies is its otherworldly valuation. While there’s no arguing that Palantir deserves some amount of valuation premium given its irreplaceability, shares of the company ended Nov. 15 at 43 times forecast sales for 2025 and a multiple of 140 times consensus forward-year earnings. These valuation multiples are consistent with previous bubble-bursting events in market-leading businesses.

A person writing and circling the word, buy, beneath a dip in a stock chart. — Image source: Getty Images.

But while Englander and his top advisors were sending shares of Palantir to the chopping block during the September-ended quarter, they were absolutely piling into rapidly growing China-based EV stock Nio (NYSE: NIO). Millennium Management’s 13F shows that 9,309,333 shares of Nio were purchased, which increased the fund’s stake by 196.3% in three months.

To be upfront, building an auto company from the ground up to mass production isn’t easy. Like virtually all EV producers not named Tesla and BYD, Nio is losing quite a bit of money. Building out the infrastructure needed to increase output, as well as spending big bucks on innovation, likely means Nio will be losing money for years to come.

Nio has also been contending with margin pressure, which was stoked by Tesla slashing the price of its EV fleet on more than a half-dozen occasions since 2023 began. While increasing competition is great news for the consumer, it’s quickly dashed hopes that EV margins would be noticeably better than internal-combustion engine vehicles.

But just because Nio is facing its fair share of challenges, it doesn’t mean the company’s future isn’t bright.

The first discernable step Nio has taken in the right direction is to sustainably increase its production. Since China removed its COVID-19 mitigation measures in December 2022 and supply chains have, for the most part, returned to normal, we’ve witnessed Nio’s monthly output jump from well below 10,000 units to frequently north of 20,000 units.

Yet the biggest advantage Nio possesses is its innovation — both traditional and out-of-the-box. Nio has been introducing a least one new EV annually, and recently launched its Onvo brand, which is a less-expensive EV that should prove more price-competitive with Tesla in China. It also upgraded its fleet to the NT 2.0 platform, which offers improved driver assistance technologies.

In terms of out-of-the-box innovation, Nio has been aggressively investing in battery swap stations, which should give the company a distinct EV infrastructure edge over its peers. High-margin battery swaps can be done in mere minutes, and should go a long way in keeping buyers loyal to its brand.

The other undeniable positive for Nio is its robust cash position. It closed out the June quarter with $5.7 billion in cash, cash equivalents, restricted cash, and various short/long-term investments. With losses expected in the coming years, Nio has the capital necessary to continue innovating, increasing production, and expanding its EV infrastructure.

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Billionaire Israel Englander Dumped 90% of Millennium’s Stake in Palantir in Favor of This Hypergrowth Electric-Vehicle (EV) Stock was originally published by The Motley Fool

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Earnings News

Atour Lifestyle Holdings Limited Reports Third Quarter of 2024 Unaudited Financial Results

19.11.2024 by admin

A total of 1,533 hotels, or 175,199 hotel rooms, in operation as of September 30, 2024.
Net revenues for the third quarter of 2024 increased by 46.7% year-over-year to RMB1,899 million (US$271 million), compared with RMB1,294 million for the same period of 2023.
Net income for the third quarter of 2024 increased by 45.3% year-over-year to RMB381 million (US$54 million), compared with RMB262 million for the same period of 2023.
Adjusted net income (non-GAAP)¹ for the third quarter of 2024 increased by 41.2% year-over-year to RMB384 million (US$55 million), compared with RMB272 million for the same period of 2023.
EBITDA (non-GAAP)² for the third quarter of 2024 increased by 42.9% year-over-year to RMB529 million (US$75 million), compared with RMB370 million for the same period of 2023.
Adjusted EBITDA (non-GAAP)³ for the third quarter of 2024 increased by 40.0% year-over-year to RMB532 million (US$76 million), compared with RMB380 million for the same period of 2023.

SHANGHAI, Nov. 19, 2024 (GLOBE NEWSWIRE) — Atour Lifestyle Holdings Limited (“Atour” or the “Company”) ATAT, a leading hospitality and lifestyle company in China, today announced its unaudited financial results for the third quarter ended September 30, 2024.

Third Quarter of 2024 Operational Highlights

As of September 30, 2024, there were 1,533 hotels with a total of 175,199 hotel rooms in operation across Atour’s hotel network, representing rapid increases of 37.9% and 36.1% year-over-year in terms of the number of hotels and hotel rooms, respectively. As of September 30, 2024, there were 732 manachised hotels under development in our pipeline.

The average daily room rate⁴ (“ADR”) was RMB456 for the third quarter of 2024, compared with RMB495 for the same period of 2023 and RMB441 for the second quarter of 2024.

The occupancy rate⁴ was 80.3% for the third quarter of 2024, compared with 82.4% for the same period of 2023 and 78.4% for the second quarter of 2024.

The revenue per available room⁴ (“RevPAR”) was RMB380 for the third quarter of 2024, compared with RMB424 for the same period of 2023 and RMB359 for the second quarter of 2024.

The GMV⁵ generated from our retail business was RMB566 million for the third quarter of 2024, representing an increase of 107.7% year-over-year.

“We delivered another strong performance for the third quarter of 2024, driven by synergistic growth across our hotel and retail businesses,” said Mr. Haijun Wang, Founder, Chairman and CEO of Atour. “We accelerated the expansion of our hotel network, with 140 new hotel openings during the quarter, once again setting a quarterly record. As of the end of the third quarter, we had a total of 1,533 hotels in operation, representing a 37.9% year-over-year increase. In October, we officially unveiled our new upscale brand, SAVHE Hotel, strengthening our presence in the upscale market with a long-term approach to growth and branding. Our RevPAR remained at a healthy level this quarter despite evolving market environments and last year’s high comparison base, reaching RMB380. Additionally, our retail business sustained its robust growth momentum, with GMV increasing by 107.7% year-over-year to RMB566 million this quarter, as driven by Atour Planet’s effective and systematic deep sleep idea.

Looking ahead, we will remain committed to executing our core ‘Chinese Experience’ strategy, consistently innovating and elevating our hotel offerings, strengthening our service capabilities to deliver a superior customer experience, and driving high-quality growth in our retail business. We are confident these efforts will holistically amplify our brand influence, reinforcing Atour’s distinctive competitive edges,” concluded Mr. Wang.

Third Quarter of 2024 Unaudited Financial Results
(RMB in thousands)	Q3 2023	Q3 2024
(RMB in thousands)
Revenues:
Manachised hotels	781,112	1,179,211
Leased hotels	238,190	189,531
Retail	235,124	479,704
Others	39,678	50,136
Net revenues	1,294,104	1,898,582

Net revenues. Our net revenues for the third quarter of 2024 increased by 46.7% to RMB1,899 million (US$271 million) from RMB1,294 million for the same period of 2023, mainly driven by the growth in manachised hotel and retail businesses.

Manachised hotels. Revenues from our manachised hotels for the third quarter of 2024 increased by 51.0% to RMB1,179 million (US$168 million) from RMB781 million for the same period of 2023. This increase was primarily driven by our ongoing hotel network expansion and the rapid growth of our supply chain business. The total number of our manachised hotels increased from 1,080 as of September 30, 2023 to 1,504 as of September 30, 2024. RevPAR of our manachised hotels was RMB376 for the third quarter of 2024, compared with RMB418 for the same period of 2023.

Leased hotels. Revenues from our leased hotels for the third quarter of 2024 decreased by 20.4% to RMB190 million (US$27 million) from RMB238 million for the same period of 2023, primarily due to the decrease in the number of leased hotels as a result of our product mix optimization, as well as the decrease in RevPAR. RevPAR of our leased hotels was RMB527 for the third quarter of 2024, compared with RMB571 for the same period of 2023.

Retail. Revenues from retail for the third quarter of 2024 increased by 104.0% to RMB480 million (US$68 million) from RMB235 million for the same period of 2023. This increase was driven by widespread recognition of our retail brands and effective product innovation and development as we successfully broadened our product offerings.

Others. Revenues from others for the third quarter of 2024 increased by 26.4% to RMB50 million (US$7 million) from RMB40 million for the same period of 2023. This increase was driven by our fast-growing membership business.

	Q3 2023	Q3 2024
(RMB in thousands)
Operating costs and expenses:
Hotel operating costs	(616,537)	(876,197)
Retail costs	(112,209)	(227,027)
Other operating costs	(18,473)	(7,814)
Selling and marketing expenses	(112,273)	(218,433)
General and administrative expenses	(79,382)	(81,977)
Technology and development expenses	(20,367)	(30,240)
Total operating costs and expenses	(959,241)	(1,441,688)

Operating costs and expenses for the third quarter of 2024 were RMB1,442 million (US$205 million), including RMB3 million share-based compensation expenses, compared with RMB959 million, including RMB10 million share-based compensation expenses for the same period of 2023.

Hotel operating costs for the third quarter of 2024 were RMB876 million (US$125 million), compared with RMB617 million for the same period of 2023. This increase was mainly due to the increase in variable costs, such as supply chain costs, associated with our ongoing hotel network expansion. Hotel operating costs accounted for 64.0% of manachised and leased hotels’ revenues for the third quarter of 2024, compared with 60.5% for the same period of 2023. This increase was due to a decrease in RevPAR attributable to the high base effect in the same period of 2023, as well as an increased share of revenues generated by the lower-margin supply chain business.

Retail costs for the third quarter of 2024 were RMB227 million (US$32 million), compared with RMB112 million for the same period of 2023. This increase was associated with the rapid growth of our retail business. Retail costs accounted for 47.3% of retail revenues for the third quarter of 2024, compared with 47.7% for the same period of 2023.

Other operating costs for the third quarter of 2024 were RMB8 million (US$1.1 million), compared with RMB18 million for the same period of 2023.

Selling and marketing expenses for the third quarter of 2024 were RMB218 million (US$31 million), compared with RMB112 million for the same period of 2023. This increase was mainly due to our enhanced investment in brand recognition and the effective development of online channels, aligned with the growth of our retail business. Selling and marketing expenses accounted for 11.5% of net revenues for the third quarter of 2024, compared with 8.7% for the same period of 2023.

General and administrative expenses for the third quarter of 2024 were RMB82 million (US$12 million), including RMB3 million share-based compensation expenses, compared with RMB79 million, including RMB9 million share-based compensation expenses for the same period of 2023. Excluding the share-based compensation expenses, this increase was primarily due to an increase in labor costs. General and administrative expenses, excluding share-based compensation expenses, accounted for 4.2% of net revenues for the third quarter of 2024, compared with 5.4% for the same period of 2023.

Technology and development expenses for the third quarter of 2024 were RMB30 million (US$4 million), compared with RMB20 million for the same period of 2023. This increase was mainly attributable to our increased investments in technology systems and infrastructure to support our expanding hotel network and retail business and improve customer experience. Technology and development expenses accounted for 1.6% of net revenues for both the third quarters of 2024 and the same period of 2023.

Other operating income, net for the third quarter of 2024 was RMB35 million (US$5 million) income, compared with RMB6 million income for the same period of 2023. This increase was primarily due to the increase in government subsidies.

Income from operations for the third quarter of 2024 was RMB492 million (US$70 million), compared with RMB341 million for the same period of 2023.

Income tax expense for the third quarter of 2024 was RMB143 million (US$20 million), compared with RMB94 million for the same period of 2023.

Net income for the third quarter of 2024 was RMB381 million (US$54 million), representing an increase of 45.3% year-over-year compared with RMB262 million for the same period of 2023.

Adjusted net income (non-GAAP) for the third quarter of 2024 was RMB384 million (US$55 million), representing an increase of 41.2% year-over-year compared with RMB272 million for the same period of 2023.

Basic and diluted income per share/American depositary share (ADS). For the third quarter of 2024, basic income per share was RMB0.93 (US$0.13), and diluted income per share was RMB0.92 (US$0.13). Basic income per ADS for the third quarter of 2024 was RMB2.79 (US$0.39), and diluted income per ADS was RMB2.76 (US$0.39).

EBITDA (non-GAAP) for the third quarter of 2024 was RMB529 million (US$75 million), representing an increase of 42.9% compared with RMB370 million for the same period of 2023.

Adjusted EBITDA (non-GAAP) for the third quarter of 2024 was RMB532 million (US$76 million), representing an increase of 40.0% compared with RMB380 million for the same period of 2023.

Cash flows. Operating cash inflow for the third quarter of 2024 was RMB433 million (US$62 million). Investing cash outflow for the third quarter of 2024 was RMB572 million (US$81 million). Financing cash outflow for the third quarter of 2024 was RMB421 million (US$60 million).

Cash and cash equivalents and restricted cash. As of September 30, 2024, the Company had a total balance of cash and cash equivalents and restricted cash of RMB2.7 billion (US$391 million).

Debt financing. As of September 30, 2024, the Company had total outstanding borrowings of RMB92 million (US$13 million), and the unutilized credit facility available to the Company was RMB460 million.

Outlook

For the full year of 2024, the Company currently expects total net revenues to increase by 48% to 52% compared with full-year 2023.

This outlook is based on current market conditions and the Company’s preliminary estimates, which are subject to changes.

_______________________________
¹ Adjusted net income (non-GAAP) is defined as net income excluding share-based compensation expenses.
² EBITDA (non-GAAP) is defined as earnings before interest expense, interest income, income tax expense and depreciation and amortization.
³ Adjusted EBITDA (non-GAAP) is defined as EBITDA excluding share-based compensation expenses.
⁴ Excludes hotel rooms that became unavailable due to temporary hotel closures. ADR and RevPAR are calculated based on tax–inclusive room rates.
“ADR” refers to the average daily room rate, which means room revenue divided by the number of rooms in use for a given period;
“Occupancy rate” refers to the number of rooms in use divided by the number of available rooms for a given period;
“RevPAR” refers to revenue per available room, which is calculated by total revenues during a period divided by the number of available rooms of our hotels during the same period.
⁵ “GMV” refers to gross merchandise value, which is the total value of confirmed orders placed and paid for by our end customers with us or our franchisees, as the case may be, and sold as part of our retail business, where the ordered products have been dispatched, regardless of whether they are delivered or returned, calculated based on the prices of the ordered products net of any discounts offered to our end customers.

Conference Call

The Company will host a conference call at 7:00 AM U.S. Eastern time on Tuesday, November 19, 2024 (or 8:00 PM Beijing/Hong Kong time on the same day).

A live webcast of the conference call will be available on the Company’s investor relations website at https://ir.yaduo.com, and a replay of the webcast will be available following the session.

For participants who wish to join the conference call via telephone, please pre-register using the link provided below. Upon registration, each participant will receive a set of participant dial-in numbers and a personal PIN to join the conference call.

Details for the conference call are as follows:

Event Title: Atour Third Quarter 2024 Earnings Conference Call
Pre-registration Link: https://register.vevent.com/register/BI61cf605c124941f491fa85e482178e58

Use of Non-GAAP Financial Measures

To supplement the Company’s unaudited consolidated financial results presented in accordance with U.S. Generally-Accepted Accounting Principles (“GAAP”), the Company uses the following non-GAAP measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission: adjusted net income, which is defined as net income excluding share-based compensation expenses; EBITDA, which is defined as earnings before interest expense, interest income, income tax expense and depreciation and amortization; adjusted EBITDA, which is defined as EBITDA excluding share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of GAAP and non-GAAP results” set forth at the end of this release.

The Company believes that EBITDA is widely used by other companies in the hospitality industry and may be used by investors as a measure of the financial performance. Given the significant investments that the Company has made in leasehold improvements and other fixed assets of leased hotels, depreciation and amortization comprises a significant portion of the Company’s cost structure. The Company believes that EBITDA will provide investors with a useful tool for comparability between periods because it eliminates depreciation and amortization attributable to capital expenditures. Adjusted net income and adjusted EBITDA provide meaningful supplemental information regarding the Company’s performance by excluding share-based compensation expenses, as the investors can better understand the Company’s performance and compare business trends among different reporting periods on a consistent basis, excluding share-based compensation expenses, which are not expected to result in cash payment. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to the Company’s historical performance. The Company believes these non-GAAP financial measures are also useful to investors in allowing for greater transparency with respect to supplemental information used regularly by Company management in financial and operational decision-making. The accompanying tables provide more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

The use of these non-GAAP measures has certain limitations, as the excluded items have been and will be incurred, and are not reflected in the presentation of these non-GAAP measures. Each of these items should also be considered in the overall evaluation of the results. The Company compensates for these limitations by providing the disclosure of the relevant items both in its reconciliations to the U.S. GAAP financial measures and in its consolidated financial statements, all of which should be considered when evaluating the performance of the Company.

In addition, these measures may not be comparable to similarly titled measures utilized by other companies, as these companies may not calculate these measures in the same manner as the Company does.

About Atour Lifestyle Holdings Limited

Atour Lifestyle Holdings Limited ATAT is a leading hospitality and lifestyle company in China, with a distinct portfolio of lifestyle hotel brands. Atour is the leading upper midscale hotel chain in China and is the first Chinese hotel chain to develop scenario-based retail business. Atour is committed to bringing innovations to China’s hospitality industry and building new lifestyle brands around hotel offerings.

For more information, please visit https://ir.yaduo.com.

Investor Relations Contact

Atour Lifestyle Holdings Limited
Email: ir@yaduo.com

Piacente Financial Communications
Email: Atour@tpg-ir.com
Tel: +86-10-6508-0677

—Financial Tables and Operational Data Follow—

ATOUR LIFESTYLE HOLDINGS LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share data and per share data, or otherwise noted)

	As of	As of
	December 31,	September 30,
	2023	2024
	RMB	RMB	USD¹
Assets
Current assets
Cash and cash equivalents	2,840,807	2,741,003	390,590
Short-term investments	751,794	1,569,850	223,702
Accounts receivable	162,101	157,511	22,445
Prepayments and other current assets	251,900	323,258	46,064
Amounts due from related parties	115,900	139,502	19,879
Inventories	119,078	139,246	19,842
Total current assets	4,241,580	5,070,370	722,522
Non-current assets
Restricted cash	946	1,106	158
Contract costs	98,220	117,459	16,738
Property and equipment, net	266,120	221,971	31,631
Operating lease right-of-use assets	1,712,580	1,480,677	210,995
Intangible assets, net	4,247	4,778	681
Goodwill	17,446	17,446	2,486
Other assets	100,939	90,960	12,962
Deferred tax assets	144,947	204,559	29,149
Total non-current assets	2,345,445	2,138,956	304,800
Total assets	6,587,025	7,209,326	1,027,322

Liabilities and shareholders’ equity
Current liabilities
Operating lease liabilities, current	295,721	296,203	42,209
Accounts payable	594,545	564,123	80,387
Deferred revenue, current	406,066	414,374	59,048
Salary and welfare payable	189,823	207,018	29,500
Accrued expenses and other payables	684,391	783,615	111,665
Income taxes payable	136,201	211,632	30,157
Short-term borrowings	70,000	90,000	12,825
Amounts due to related parties	1,104	1,871	267
Total current liabilities	2,377,851	2,568,836	366,058
Non-current liabilities
Operating lease liabilities, non-current	1,583,178	1,346,097	191,817
Deferred revenue, non-current	369,455	460,340	65,598
Long-term borrowings, non-current portion	2,000	2,000	285
Other non-current liabilities	194,452	241,547	34,420
Total non-current liabilities	2,149,085	2,049,984	292,120
Total liabilities	4,526,936	4,618,820	658,178

_____________________________
¹ Translations of balances in the consolidated financial statements from RMB into US$ for the third quarter of 2024 and as of September 30, 2024 are solely for readers‘ convenience and were calculated at the rate of US$1.00=RMB7.0176, representing the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on September 30, 2024.

ATOUR LIFESTYLE HOLDINGS LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share data and per share data, or otherwise noted)

	As of	As of
	December 31,	September 30,
	2023	2024
	RMB	RMB	USD¹
Shareholders’ equity
Class A ordinary shares	244	245	35
Class B ordinary shares	56	56	8
Additional paid in capital	1,555,773	1,601,026	228,144
Retained earnings	507,226	1,016,377	144,833
Accumulated other comprehensive (loss) income	4,769	(16,345)	(2,329)
Total equity attributable to shareholders of the Company	2,068,068	2,601,359	370,691
Non-controlling interests	(7,979)	(10,853)	(1,547)
Total shareholders’ equity	2,060,089	2,590,506	369,144
Commitments and contingencies	–	–	–
Total liabilities and shareholders’ equity	6,587,025	7,209,326	1,027,322

ATOUR LIFESTYLE HOLDINGS LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(All amounts in thousands, except share data and per share data, or otherwise noted)

	Three Months Ended			Nine Months Ended
	September 30,	September 30,		September 30,	September 30,
	2023	2024		2023	2024
	RMB	RMB	USD¹	RMB	RMB	USD¹
Revenues:
Manachised hotels	781,112	1,179,211	168,036	1,854,393	3,042,301	433,524
Leased hotels	238,190	189,531	27,008	645,024	537,913	76,652
Retail	235,124	479,704	68,357	559,705	1,433,029	204,205
Others	39,678	50,136	7,144	101,627	150,679	21,472
Net revenues	1,294,104	1,898,582	270,545	3,160,749	5,163,922	735,853
Operating costs and expenses:
Hotel operating costs	(616,537)	(876,197)	(124,857)	(1,507,682)	(2,314,119)	(329,759)
Retail costs	(112,209)	(227,027)	(32,351)	(281,286)	(698,133)	(99,483)
Other operating costs	(18,473)	(7,814)	(1,113)	(41,871)	(27,558)	(3,927)
Selling and marketing expenses	(112,273)	(218,433)	(31,126)	(262,682)	(617,751)	(88,029)
General and administrative expenses	(79,382)	(81,977)	(11,682)	(346,036)	(250,120)	(35,642)
Technology and development expenses	(20,367)	(30,240)	(4,309)	(54,988)	(87,373)	(12,451)
Total operating costs and expenses	(959,241)	(1,441,688)	(205,438)	(2,494,545)	(3,995,054)	(569,291)
Other operating income, net	6,475	35,464	5,054	43,653	39,530	5,633
Income from operations	341,338	492,358	70,161	709,857	1,208,398	172,195
Interest income	8,456	12,995	1,852	20,812	38,910	5,545
Gain from short-term investments	8,875	13,807	1,967	23,197	34,344	4,894
Interest expense	(723)	(856)	(122)	(4,326)	(2,383)	(340)
Other income (expenses), net	(1,471)	5,678	809	(4,442)	5,127	731
Income before income tax	356,475	523,982	74,667	745,098	1,284,396	183,025
Income tax expense	(94,408)	(143,272)	(20,416)	(225,804)	(342,072)	(48,745)
Net income	262,067	380,710	54,251	519,294	942,324	134,280
Less: net (loss) income attributable to non-controlling interests	1,049	(3,679)	(524)	2,211	(2,875)	(410)
Net income attributable to the Company	261,018	384,389	54,775	517,083	945,199	134,690

Net income	262,067	380,710	54,251	519,294	942,324	134,280
Other comprehensive (loss) income
Foreign currency translation adjustments, net of nil income taxes	3,014	(34,245)	(4,880)	26,006	(21,114)	(3,009)
Other comprehensive (loss) income, net of income taxes	3,014	(34,245)	(4,880)	26,006	(21,114)	(3,009)
Total comprehensive income	265,081	346,465	49,371	545,300	921,210	131,271
Comprehensive (loss) income attributable to non-controlling interests	1,049	(3,679)	(524)	2,211	(2,875)	(410)
Comprehensive income attributable to the Company	264,032	350,144	49,895	543,089	924,085	131,681
Net income per ordinary share
—Basic	0.63	0.93	0.13	1.28	2.29	0.33
—Diluted	0.63	0.92	0.13	1.25	2.27	0.32
Weighted average ordinary shares used in calculating net income per ordinary share
—Basic	412,683,043	413,928,908	413,928,908	403,206,606	413,340,195	413,340,195
—Diluted	416,140,935	416,980,577	416,980,577	414,425,523	416,529,151	416,529,151

ATOUR LIFESTYLE HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of RMB, except share data and per share data, or otherwise noted)

Three Months Ended

Nine Months Ended

September 30,

2023

2024

2023

2024

RMB

USD¹

RMB

USD¹

Cash flows from operating activities:

Net cash generated from operating activities

543,072

432,923

61,690

1,424,637

1,152,800

164,273

Cash flows from investing activities:

Payment for purchases of property and equipment

(4,487)

(23,128)

(3,296)

(31,897)

(55,879)

(7,963)

Proceeds from disposal of property and equipment

670

–

670

–

Payment for purchases of intangible assets

–

(1,147)

(163)

–

(1,429)

(204)

Payment for purchases of short-term investments

(2,494,000)

(6,342,920)

(903,858)

(5,826,210)

(13,584,920)

(1,935,836)

Proceeds from maturities of short-term investments

1,719,014

5,795,448

825,845

5,213,708

12,801,208

1,824,158

Net cash used in investing activities

(778,803)

(571,747)

(81,472)

(643,729)

(841,020)

(119,845)

Cash flows from financing activities:

Proceeds from borrowings

–

40,000

20,000

2,850

Repayment of borrowings

(848)

–

(141,958)

–

Proceeds from stock option exercises

53,159

14,944

2,130

53,159

14,944

2,130

Payment for dividends

(150,579)

(436,048)

(62,136)

(150,579)

(436,048)

(62,136)

Net cash used in financing activities

(98,268)

(421,104)

(60,006)

(199,378)

(401,104)

(57,156)

Effect of exchange rate changes on cash and cash equivalents and restricted cash

3,014

(21,948)

(3,128)

26,684

(10,320)

(1,471)

Net (decrease) increase in cash and cash equivalents and restricted cash

(330,985)

(581,876)

(82,916)

608,214

(99,644)

(14,199)

Cash and cash equivalents and restricted cash at the beginning of the period

2,529,306

3,323,985

473,664

1,590,107

2,841,753

404,947

Cash and cash equivalents and restricted cash at the end of the period

2,198,321

2,742,109

390,748

2,198,321

2,742,109

390,748

ATOUR LIFESTYLE HOLDINGS LIMITED
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(In thousands of RMB, except share data and per share data, or otherwise noted)

Three Months Ended

Nine Months Ended

September 30,

2023

2024

2023

2024

RMB

USD¹

RMB

USD¹

Net income (GAAP)

262,067

380,710

54,251

519,294

942,324

134,280

Share-based compensation expenses, net of tax effect of nil²

9,924

3,282

468

161,502

30,309

4,319

Adjusted net income (non-GAAP)

271,991

383,992

54,719

680,796

972,633

138,599

Three Months Ended

Nine Months Ended

September 30,

2023

2024

2023

2024

RMB

USD¹

RMB

USD¹

Net income (GAAP)

262,067

380,710

54,251

519,294

942,324

134,280

Interest income

(8,456)

(12,995)

(1,852)

(20,812)

(38,910)

(5,545)

Interest expense

723

856

122

4,326

2,383

340

Income tax expense

94,408

143,272

20,416

225,804

342,072

48,745

Depreciation and amortization

21,413

17,150

2,444

65,599

50,989

7,266

EBITDA (non-GAAP)

370,155

528,993

75,381

794,211

1,298,858

185,086

Share-based compensation expenses

9,924

3,282

468

161,502

30,309

4,319

Adjusted EBITDA (non-GAAP)

380,079

532,275

75,849

955,713

1,329,167

189,405

_____________________________
² The share-based compensation expenses were recorded at entities in PRC. Share-based compensation expenses were non-deductible expenses in PRC. Therefore, there is no tax impact for share-based compensation expenses adjustment for non-GAAP financial measures.

Key Operating Data

	Number of Hotels			Number of Rooms
	Opened in Q3 2024	Closed in Q3 2024	As of September 30, 2024	As of September 30, 2024
Manachised hotels	140	18	1,504	170,895
Leased hotels	–	1	29	4,304
Total	140	19	1,533	175,199

Brand³	Positioning		As of September 30, 2024
		Properties		Rooms
		Manachised	Leased
A.T. House	Luxury	–	1	214
Atour S	Upscale	71	5	10,894
Atour	Upper midscale	1,135	22	133,703
Atour X	Upper midscale	161	1	17,509
Atour Light	Midscale	137	–	12,879
Total		1,504	29	175,199

	All Hotels in Operation
	Three Months Ended September 30, 2023	Three Months Ended June 30, 2024	Three Months Ended September 30, 2024

Occupancy rate⁴ (in percentage)
Manachised hotels	82.2%	78.2%	80.2%
Leased hotels	86.6%	83.7%	85.6%
All hotels	82.4%	78.4%	80.3%

ADR⁴ (in RMB)
Manachised hotels	489.4	436.4	452.1
Leased hotels	629.9	573.0	586.6
All hotels	495.4	440.6	455.8

RevPAR⁴ (in RMB)
Manachised hotels	417.9	354.5	375.6
Leased hotels	571.4	503.3	527.4
All hotels	424.1	358.7	379.5

	Hotels in Operation for More Than 18 Months in Q3 2024⁵
	Number of hotels		Same-hotel Occupancy⁴ (in percentage)		Same-hotel ADR⁴ (in RMB)		Same-hotel RevPAR⁴ (in RMB)
	Q3 2023	Q3 2024	Q3 2023	Q3 2024	Q3 2023	Q3 2024	Q3 2023	Q3 2024

Manachised hotels	896	896	83.4%	82.0%	492.9	460.7	427.5	391.8
Leased hotels	29	29	86.6%	85.3%	628.8	580.8	570.9	521.2
All hotels	925	925	83.5%	82.1%	498.6	465.5	433.2	396.8

________________________
³ Effective July 1, 2024, we merged our upscale hotel brand, ZHOTEL, with Atour S as part of our efforts to streamline and optimize our brand portfolio. Consequently, the key information for our Atour S brand in the table includes data for the hotel operated under ZHOTEL up to June 30, 2024.
⁴ Excludes hotel rooms that became unavailable due to temporary hotel closures. ADR and RevPAR are calculated based on tax-inclusive room rates.
⁵ For any given quarter, we define “same-hotel” to be a hotel that has operated for a minimum of 18 calendar months as of the 15th day (inclusive) of any month within that quarter. The OCC, ADR and RevPAR presented above represent such metrics generated by “same hotels” in the third quarter of 2024, compared to the corresponding metrics generated by these “same hotels” during the same period in 2023.

Markets News

Jim Cramer Thinks Trump's Plans For Robotaxis Are 'Fanciful,' But He Is Still Bullish On Tesla Stock: 'The Musk Premium Will Work Its Magic In Other Ways'

19.11.2024 by admin

CNBC’s Jim Cramer said on Monday that he believes reports of President-elect Donald Trump possibly relaxing autonomous driving regulations is a “bad reason” for owning Tesla Inc. TSLA stock. However, the Mad Money host is all for buying the EV giant’s stock.

What Happened: Bloomberg on Sunday reported that the Trump transition team wants to make a federal framework for self-driving cars, making it easier to deploy self-driving vehicles in the country. However, Cramer thinks that it is “too good to be true” and a “bad reason” for buying Tesla stock.

“While I don’t buy the national self-driving mandate, I think nothing truly dulls the case for owning Tesla,” he said. “The Musk premium will work its magic in other ways, perhaps favorable municipalities and Tesla rentals next to federal highways.”

The Trump transition team’s plans for robotaxis are “just plain fanciful,” Cramer said while noting that several state and local governments would have to agree to the new rules.

“No matter what, though, always remember that Tesla’s a tech company,” Cramer added. “The others are automakers, and a tech company can get an insanely high price-to-earnings multiple with no one blinking so much as an eye about it.”

Why It Matters: Tesla is looking to deploy a fleet of autonomous vehicles starting next year in Texas and California. However, the company has yet to receive regulatory approvals for the same or achieve vehicle autonomy with its full self-driving (FSD) driver assistance technology.

Musk, however, has previously expressed optimism that the technology will enable autonomous driving with future software updates. However, the billionaire CEO is known for providing over-ambitious timelines that the company cannot deliver.

Musk has previously said that Tesla’s robotaxi fleet will function like a combination of Airbnb and Uber. While a certain portion of the fleet will be owned by Tesla, individual customers can also add or subtract their vehicles to the robotaxi fleet at will. As for riders, they can summon a car using the Tesla App, Musk said, putting Tesla as a competitor to Uber.

Price Action: Tesla stock closed 5.6% higher on Monday at $338.74, but it was down 1.2% in premarket trading on Tuesday. Year-to-date, Tesla stock is up 36.4%, according to Benzinga Pro data.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

Read Next:

Photo courtesy: Tesla

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Finance News

Palantir Stock Is Up 250% in 2024 and May Be Headed to the Nasdaq-100. History Says This Could Happen Next.

19.11.2024 by admin

Shares of Palantir Technologies (NYSE: PLTR) have advanced more than 250% year to date due to strong financial results. This was driven by strong demand for its artificial intelligence (AI) platform and excitement surrounding the company’s addition to the S&P 500.

Last week, Palantir announced plans to remove itself from the New York Stock Exchange and relist on the Nasdaq exchange, effective Nov. 26. The company said in a press release that it “anticipates meeting the eligibility requirements of the Nasdaq-100 index” once the move is complete.

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Ultimately, transitioning to a different index won’t have a major impact on the business, though it can improve the liquidity and visibility of the stock. Consequently, Palantir shares jumped more than 11% on the news, and history says there may be more gains in store for shareholders if the company is added to the Nasdaq-100.

Here’s what investors should know.

The Nasdaq-100 tracks the 100 largest non-financial companies that trade on the Nasdaq Stock Market. The index is rebalanced quarterly in March, June, and September and reconstituted annually in December. That means Palantir could be added to the Nasdaq-100 within weeks of relisting on the Nasdaq exchange.

Past performance is never a guarantee of future results, but I reviewed historical data to see what typically happened to a company’s stock price after it was added to the Nasdaq-100. Here’s what I found:

The last five years: About 40 companies have been added to the Nasdaq-100 since 2019. Collectively, their stocks returned an average of 11% during the 12-month period following their inclusion in the index.
The last decade: About 85 companies have been added to the Nasdaq-100 since 2014. Collectively, their stocks returned an average of 17% during the 12-month period following their inclusion in the index.

In short, history says Palantir shareholders could see upside between 11% and 17% during the year after the company is added to the Nasdaq-100. Of course, that’s hypothetical at this point because Palantir hasn’ yet been selected to join the index.

More importantly, whether or not Palantir is included in the Nasdaq-100 index has nothing to do with its business, which means any impact on its stock price will likely be transitory. To that end, investors shouldn’t buy Palantir stock simply because it may be added to the Nasdaq-100 in the near future. Instead, the decision to buy or avoid the stock should be based on its financial profile, growth prospects, and valuation.

Palantir specializes in data analytics and artificial intelligence. Its core platforms, Foundry and Gotham, help commercial organizations and government agencies integrate complex data, develop machine learning (ML) models, and query data to surface insights that improve decision-making. And its artificial intelligence platform (AIP) adds support for large language models.

In the commercial sector, manufacturers lean on Palantir’s Foundry platform to optimize production and avoid supply chain disruptions, while retailers use the product to manage inventory and improve marketing. In the government sector, various agencies involved in defense and intelligence rely on the Gotham platform to identify potential threats and prevent criminal activity.

Forrester Research recently recognized Palantir as a leader in AI/ML platforms, a market forecast to grow at 41% annually through 2028, according to the International Data Corp. (IDC). Principle analyst Mike Gualtieri wrote, “Palantir is quietly becoming one of the largest players in this market.”

Palantir reported impressive financial results in the third quarter, beating forecasts on the top and bottom lines. Revenue increased 30% to $726 million, accelerating for the fifth consecutive quarter, and non-GAAP earnings soared 43% to $0.10 per diluted share. CEO Alex Karp told shareholders, “The release of our newest platform, AIP, has transformed our business.”

Unfortunately, Palantir presents investors with a tricky choice. Demand for AI/ML software is expected to rise markedly in the coming years, and Palantir is clearly executing on that opportunity. But the stock trades at an outrageous 175 times adjusted earnings. That multiple looks expensive even if we assume earnings increase at 40% annually through 2028 (i.e., in line with the forecasted growth of the AI/ML platforms market).

I think investors should avoid this stock at the present time. That doesn’t mean Palantir shares will crash in the near future, but rather that other AI stocks trade at more reasonable valuations, which makes them less risky.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $368,131!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,611!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $444,355!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 18, 2024

Trevor Jennewine has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.

Palantir Stock Is Up 250% in 2024 and May Be Headed to the Nasdaq-100. History Says This Could Happen Next. was originally published by The Motley Fool

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Billionaire Stanley Druckenmiller Just Sold All of His Nvidia Shares and Bought This Rapidly Growing Artificial Intelligence Stock-Split Stock

19.11.2024 by admin

Stanley Druckenmiller wowed investors year after year with his winning streak at the helm of Duquesne Capital Management. There, he scored an average annual return of 30% over 30 years — and didn’t post a single year of money losses. This top investor closed the fund in 2010 but has since continued investing through the Duquesne Family Office — and one of his favored stocks in recent times has been artificial intelligence (AI) giant Nvidia (NASDAQ: NVDA).

Druckenmiller bought shares of the AI chip leader in the fourth quarter of 2022, as the AI boom picked up momentum. Since that time, through the beginning of this year, they gained 400%. Earlier this year, this star investor started cutting his Nvidia holding, and in the third quarter, he sold all of his Nvidia shares.

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At the same time, Druckenmiller opened a $41 million position in a rapidly growing AI player that, like Nvidia, also split its stock this year after enormous gains. This represents the investor’s second-biggest new position by value in the quarter. Let’s find out more about this famous investor’s latest moves and consider whether you should follow.

A group of investors meeting in a conference room study a document. — Image source: Getty Images.

First, let’s consider Druckenmiller’s sale of Nvidia. Does this mean he’s lost faith in the AI leader?

Not at all. According to comments made in press interviews, Druckenmiller believed valuation had reached a high point — and it was time to lock in profits. Meanwhile, Nvidia continued to advance and now is heading for an increase of more than 180% this year. In a Bloomberg interview last month, Druckenmiller even said closing the Nvidia position was a mistake, and if the price were to decline, he would consider scooping up Nvidia shares again.

Though Druckenmiller viewed Nvidia shares as a bit pricey, he continues to believe in the Nvidia story and potential for more growth ahead. If Nvidia’s valuation dips at some point moving forward, it’s very possible the stock will once again find itself in Druckenmiller’s portfolio.

Let’s move on to Druckenmiller’s recent AI addition. This company saw its shares soar more than 400% over five years, surpassing $1,000 and, like Nvidia, it announced a 10-for-1 stock split this year to make the stock more accessible for a broad range of investors. A split doesn’t change anything fundamental about a company, but through the issuance of more shares to current holders, it lowers the per-share price.

This stock that caught Druckenmiller’s eye is Broadcom (NASDAQ: AVGO). The company is a giant in the area of networking, selling thousands of products used in areas from data center networking to home connectivity and factory automation. Now is a great time to get in on Broadcom as it’s heading for a new era of growth, thanks to its AI business and the acquisition of cloud computing and virtualization company VMware.

In recent quarters, demand from major cloud service providers has driven growth in Broadcom’s AI networking and custom accelerators. In the latest quarter, custom AI accelerators’ growth more than tripled and Ethernet switching quadrupled. Considering the pace of growth in AI, with today’s $200 billion market expected to reach $1 trillion by the end of the decade, there’s reason to be optimistic about these trends continuing.

As for VMware, Broadcom says it’s on track in the next fiscal year to reach or surpass its goal for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $8.5 billion within three years of the acquisition. In the latest quarter, Broadcom reported a 47% increase in revenue to $13 billion, thanks to AI demand and VMware, and the company predicts a 51% increase in revenue for the next quarter.

Now let’s talk valuation. Broadcom trades at about half the level of Nvidia right now in relation to forward earnings estimates, making it a great time to get in on this company. Like Nvidia, Broadcom is set to benefit from the AI boom over the long term.

NVDA PE Ratio (Forward) Chart — NVDA price-to-earnings ratio (P/E) (Forward) data by YCharts.

Let’s get back to our question: Should you follow Stanley Druckenmiller’s third-quarter moves? Before making a decision, it’s important to consider the top investor’s reason for buying or selling — and your own investment strategy.

Druckenmiller sold all of his Nvidia shares this year as valuation climbed and he locked in gains, but he’s expressed regret about the move and remains optimistic about the company’s future. If you’re a long-term investor, you may want to hold onto your Nvidia stock — or even open a position in Nvidia.

As for Broadcom, you might want to follow Druckenmiller’s lead. This AI company has climbed in the double digits this year, but its valuation remains very reasonable and demand for the company’s products remains high. That means there may be plenty of room for the stock to run over time.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $368,131!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,611!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $444,355!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 18, 2024

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Billionaire Stanley Druckenmiller Just Sold All of His Nvidia Shares and Bought This Rapidly Growing Artificial Intelligence Stock-Split Stock was originally published by The Motley Fool

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