Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Warren Buffett’s Berkshire Hathaway (BRKB) reported strong earnings and cash growth with the billionaire investor expecting further increases during the company’s annual shareholder meeting.
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The stock market rally had a strong week, with the Nasdaq punching above a key level thanks to a tame jobs report and rebounding Apple (AAPL).
Nvidia (NVDA) regained a key level, flashing an early buy signal Friday, recovering from a midweek slide.
Palantir Technologies (PLTR), Astera Labs (ALAB), Arista Networks (ANET), Datadog (DDOG) and Constellation Energy (CEG) all have earnings on tap. All are AI-related plays that are setting up.
Nvidia stock is on IBD Leaderboard, SwingTrader and the IBD 50. ALAB stock is on the Leaderboard watchlist.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Berkshire Hathaway Earnings
Berkshire’s operating earnings jumped 39% in the first quarter vs. a year earlier. Revenue rose 5% to $89.87 billion. Both beat estimates.
The conglomerate bought $2.6 billion of its own shares in Q1. Berkshire’s cash swelled to a record $188.99 billion, up from Q4’s $167.6 billion.
Buffett, speaking at Berkshire’s annual shareholder meeting, expects “modest” earnings growth for the full year and sees cash levels hitting $200 billion by the end of Q2.
Berkshire cut its massive Apple stake for a second straight quarter. It reported its Apple stake was worth $135.4 billion, signaling a 13% decline in shares held to about 790 million. In Q4, Berkshire trimmed its Apple stake by 10 million shares.
Buffett said he expects Apple stock to remain Berkshire’s top holding.
Berkshire stock edged down 0.3% last week to 400.60, below the 50-day line. BRKB stock has a 430 flat-base buy point. Investors could use a decisive move above the 50-day that could offer an early entry.
Stock Market Rally
The stock market rally had midweek wobbles but came on strong Thursday and Friday, helped by earnings reports and a tame jobs report.
The Dow Jones Industrial Average rose 1.1% in last week’s stock market trading. The S&P 500 index gained 0.55%. The Nasdaq composite rose 1.4%. The small-cap Russell 2000 jumped 1.7%.
The Nasdaq rallied above its 50-day line on Friday, jumping 2%. But for the third time in six sessions, the Nasdaq had a strong price gain with volume that was slightly lower than in the prior session. So there’s still no official follow-through day for the market rally attempt.
The S&P 500, Dow Jones and Russell 2000 moved above their 50-day lines Friday but closed below that key level, though the S&P is just below it.
Nvidia cleared an early buy point and a number of stocks are setting up, but there weren’t many buying opportunities Friday.
The 10-year Treasury yield tumbled 17 basis points to 4.5%, backing off from 2024 highs.
U.S. crude oil futures plunged 6.85% to $78.11 a barrel last week.
ETFs
Sector ETFs had modest moves but generally closed near weekly highs.
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.3% last week, with DDOG stock a member. The VanEck Vectors Semiconductor ETF (SMH) rose a fraction. Nvidia stock is the No. 1 holding.
SPDR S&P Metals & Mining ETF (XME) lost less than 0.1% in yet another tight weekly close. The Global X U.S. Infrastructure Development ETF (PAVE) climbed 0.4%. U.S. Global Jets ETF (JETS) dipped 0.1%. SPDR S&P Homebuilders ETF (XHB) stepped up 1.4%.
The Health Care Select Sector SPDR Fund (XLV) added 0.7%. The Industrial Select Sector SPDR Fund (XLI) nudged 0.1% higher. The Financial Select SPDR ETF (XLF) dipped 0.6%.
The big exception: The Energy Select SPDR ETF (XLE) slumped 3.3%.
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Nvidia Stock
Nvidia stock climbed 1.2% last week to 887.83, bouncing 3.6% on Friday. Shares reclaimed the 50-day line and cleared a trendline, offering an early entry. NVDA stock also briefly topped the April 30 high of 888.19, but didn’t close above it.
Nvidia stock has an official 974 buy point from a consolidation going back to the March 8 peak. Shares shrugged off Wednesday’s slide following lackluster guidance from rival Advanced Micro Devices and AI server partner Super Micro Computer (SMCI).
Nvidia earnings are due May 22.
AI Earnings
Palantir earnings are due Monday night. Analysts expect booming earnings growth and a solid revenue gain, with commercial sales in focus. PLTR stock popped 3.55% last week to 23.32, just below the 50-day line. A decisive move above that level after earnings could offer an early entry. Palantir stock has a 27.50 consolidation buy point, according to MarketSurge.
Datadog earnings are early Tuesday. Analysts expect 22% EPS and revenue gains, but have penciled in lower profit for the rest of the year. DDOG sank 5.5% last week to 124.27, falling below the 50-day line on Friday as Cloudflare (NET) plunged on lackluster guidance. Datadog has a 138.61 buy point from a flat base. Investors could use the April 26 high of 132.90 as an early entry.
Arista Networks earnings are late Tuesday. The networking leader had a big run in 2023, finally peaking on March 22, 2024. After tumbling in mid-April below the 50-day line, shares are bouncing back as tech titans tout big AI spending plans, including key Arista customers Microsoft (MSFT) and Meta Platforms (META). ANET stock rose 3.7% to 274.38 last week, bouncing 4.8% on Friday but hitting 50-day resistance. It has a new base with a 307.74 buy point.
Astera Labs also reports Tuesday night, its first earnings since coming public in March. ALAB stock slid 0.5% last week to 76.96 on the Super Micro and AMD sell-off, but came well off lows. The AI networking chipmaker has an IPO base with a 95.21 buy point on a daily chart, but it’ll have an 88.59 handle entry after Monday. That handle is already valid on a weekly basis.
Constellation Energy earnings are due early Thursday, with analysts expecting booming Q1 results. The nuclear power leader has become an AI-adjacent play as artificial intelligence chips have enormous power needs.
CEG stock rose 4.7% on Friday to 194.86, bouncing from the 21-day line, breaking a trendline and setting a record close. The relative strength line hit a new high. All of that offered a buy signal, but upcoming earnings raise the risks. Constellation Energy stock has a 198.83 flat-base buy point.
Market Rally Analysis
The stock market rally cleared some key technical hurdles while a huge week of earnings and economic news largely came in positive.
There were opportunities to make some new buys on Friday. Investors could keep adding exposure to modest levels if the market rally continues to act well.
So update your watchlists. While this article highlighted Nvidia and AI plays, stocks from a wide variety of sectors are actionable or setting up, including retail, finance, health care and energy.
The S&P 500 and Russell 2000 reclaiming the 50-day line would be a positive signal. On the other hand, it wouldn’t take much for the Nasdaq to fall back below that key level.
Earnings season is starting to ease up while the economic calendar is light this coming week, reducing the risk of a major market move.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson.
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