Morning Brew: Morgan Stanley Picks PDD Over BABA; Bitcoin Rallies to Yearly High

Morning Brew: Morgan Stanley Picks PDD Over BABA

Summary
  • Morning Brew: Morgan Stanley Picks PDD Over BABA
  • Bitcoin Rallies to Yearly High
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Morgan Stanley has shifted its focus within China's e-commerce sector, naming PDD (PDD, Financial) as its top pick and downgrading Alibaba (BABA, Financial) to Equal-weight, while maintaining its rating for JD.com (JD, Financial). The firm expects PDD to continue gaining market share, bolstered by its business model and the underappreciated value of its cross-border business, Temu. A consumer survey indicated a shift towards price sensitivity due to reduced household income and a challenging property market, which could benefit cost-effective platforms like PDD.

Bitcoin (BTC-USD, Financial) has surged to its highest level since May 2022, reaching $38.9K in early morning trading and lifting crypto-exposed stocks. The rally comes despite recent regulatory crackdowns, including Binance's $4.3B settlement. Investment funds in digital assets saw net inflows of $346M last week, the largest this year, amid expectations for a U.S. spot bitcoin ETF approval. Crypto-related stocks like MicroStrategy (MSTR, Financial), Marathon Digital (MARA, Financial), Riot Platforms (RIOT, Financial), Bakkt Holdings (BKKT, Financial), and HIVE Blockchain Technologies have all seen gains.

Investors are showing mixed reactions to Dell Technologies' (DELL, Financial) third-quarter results. Despite a sales miss and a premarket share drop, analysts remain optimistic, citing strong server sales and potential future demand driven by PC refreshes and AI-enabled computers. Dell's guidance for the fourth quarter, however, was cautious, reflecting subdued enterprise spending on PCs.

Marvell Technology (MRVL, Financial) saw its stock dip after providing revenue guidance for the current quarter below consensus. The company's CEO expressed concerns about demand softness impacting revenue from enterprise and carrier markets, despite data center revenue driving a significant portion of total revenue.

ImmunoGen (IMGN, Financial) received downgraded ratings from multiple Wall Street firms following AbbVie's (ABBV, Financial) $10.1B acquisition announcement. Analysts believe that ImmunoGen, which markets an ovarian cancer drug, is unlikely to attract additional bids and does not pose antitrust concerns due to minimal overlap with AbbVie's cancer products and pipeline.

Pfizer (PFE, Financial) announced positive results from a Phase 2b trial of its weight-loss pill, danuglipron, which met its primary endpoint. However, due to side effects, the company will focus on a once-daily formulation for future development, discontinuing the twice-daily version's advancement to Phase 3 studies.

Tesla (TSLA, Financial) introduced its first new model in nearly four years, the Cybertruck, which analysts believe could signal the beginning of a new phase of model rollouts. Morgan Stanley suggests that Tesla may limit production to maintain scarcity and focus on more profitable products, with the Cybertruck accounting for a minimal portion of future revenues and profits.

Apple (AAPL, Financial) is reportedly in early discussions with Paramount (PARA, Financial) (PARAA, Financial) to bundle their streaming services, Apple TV+ and Paramount+, to address high customer churn rates and improve affordability. Both companies have previously engaged in partnerships to enhance their streaming offerings.

Brookfield Asset Management (BAM, Financial) successfully raised $28B for its flagship global infrastructure equity fund, surpassing its target and marking the largest fund ever raised by the firm. The fund aims to capitalize on opportunities related to digitalization, decarbonization, and deglobalization, with significant capital already deployed in various assets.

Intel (INTC, Financial) and AMD (AMD, Financial) could face implications from Dell's (DELL, Financial) third-quarter PC segment performance and cautious guidance, potentially signaling challenges for the PC and server segments.

Texas has filed a lawsuit against Pfizer (PFE, Financial) over claims made about its COVID-19 vaccine, seeking fines for deceptive marketing and a court order to prevent the company from making efficacy statements. Pfizer defends its vaccine as accurate and science-based.

Super Micro Computer (SMCI, Financial) saw its shares drop after pricing a public offering to raise $524M, with proceeds intended to support operations, including manufacturing capacity expansion and R&D investments.

Paylocity (PCTY, Financial) announced the acquisition of TraceHQ.com, a platform for managing headcount plans and forecasting budgets, which is not expected to have a material impact on the company's financial results.

Dividend activity this week included increased payouts from Merck (MRK, Financial) and TD Bank (TD, Financial), with declarations from Microsoft (MSFT, Financial) and Goldman Sachs (GS, Financial). Upcoming ex-dividend dates include Kohl's Corp (KSS, Financial) and Haliburton (HAL, Financial).

Stock futures indicated a slight uptick, with notable movers including Altimmune (ALT, Financial) and Elastic (ESTC, Financial), which saw significant gains following positive drug trial results and strong financial outlooks, respectively.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure