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5 Things to Know Before the Stock Market Opens

Taiwan Semiconductor Manufacturing Company (TSM) American depositary receipts (ADRs) are gaining in premarket trading after the chipmaker reported continued strong demand for artificial intelligence (AI) products; Netflix (NFLX) is expected to report another jump in quarterly revenue after the bell today; United Airlines’ (UAL) guidance comes in lower than expected; Nokia (NOK) shares are diving as the telecom equipment maker continues to contend with weak sales; and Novartis (NVS) raises its full-year core operating income guidance on strong drug sales. Nasdaq futures are rising as TSMC’s results are lifting chip shares after the sector sank yesterday. Here’s what investors need to know today.

1. TSMC Rises on Q2 Earnings Beat

Taiwan Semiconductor Manufacturing Company (TSM) shares are rising almost 2% in premarket trading after it reported better-than-expected profit and revenue in the second quarter, pointing to continued strong demand for artificial intelligence (AI) technology. The chipmaker’s quarterly net revenue of 673.51 billion New Taiwan dollars ($20.8 billion) was higher by 40% from a year ago, and earnings per share (EPS) of NT$9.56 ($1.48 per ADR) also beat estimates. TSMC’s premarket gains help it rebound from yesterday’s tech selloff, where fears of tightening restrictions on exports of semiconductor equipment to China helped sink chip stocks. 

2. Netflix in Focus Ahead of Earnings Report

Investors are watching Netflix (NFLX) ahead of its earnings report after the bell today, as the streamer is set to show if it can continue to grow its subscriber base while adding new programming. According to estimates compiled by Visible Alpha, Netflix is projected to report a 16% year-over-year rise in revenue to $9.51 billion, while its expected earnings of $4.74 per share would be well above the year-ago mark of $3.29. The streaming giant is looking to draw in new subscribers with sports programming, looking to improve on the 16% annual growth in subscribers that it reported in the prior quarter. Shares of Netflix are edging higher in premarket trading.

3. United Airlines Profits Take Off, Guidance Comes Up Short

United Airlines (UAL) reported a 23% year-over-year jump in second-quarter profit as it capitalized on strong demand for international travel, though its third-quarter forecasts caused some concerns for investors. The air carrier reported adjusted earnings of $4.14 per share, better than expected, but its revenue of $14.99 billion came in just under analysts’ estimates. The company said it expects to report adjusted EPS of between $2.75 and $3.25 a share in the current quarter, lower than analysts’ projections. Shares of United Airlines are rising more than 1% in premarket trading.

4. Nokia Falls on Quarterly Loss, Weak Sales Expectations

Nokia (NOK) shares are falling more than 4% in premarket trading after the Finnish telecommunications firm reported a second-quarter loss of 142 million euros ($155 million), when analysts were looking for a profit of EUR264 million. Chief Executive Officer (CEO) Pekka Lundmark said the industry was stabilizing and projected a “significant acceleration in net sales growth in the second half,” noting that an expected recovery in sales was coming later than expected, potentially impacting 2024 revenue projections. The company reported a big drop in first-quarter revenue three months ago.

5. Novartis Raises Guidance on Strong Drug Sales

Drugmaker Novartis (NVS) raised its full-year core operating income guidance, with expectations that its sales would grow by a mid- to high-teen-percentage rate, up from a low-double-digit to mid-teen rate. The company reported second-quarter core operating income of $4.95 billion, an increase of 17% year-over-year, better than estimates. Sales of heart failure drug Entresto, arthritis medication Cosentyx, and multiple sclerosis treatment Kesimpta all came in better than expected. ADRs of Novartis fell by more than 2% in premarket trading.

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