Stocks surged as the market welcomed May, with the S&P 500 closing above the 7,200 mark for the first time, largely driven by a strong performance from Apple. Shares of the tech giant rose 3.5% following a stellar quarterly report, which included better-than-expected revenue guidance for the coming months. Apple’s June quarter revenue is forecasted to rise between 14% to 17% compared to the previous year, far outpacing Wall Street’s prediction of 9%. The company’s services revenue hit an all-time high of $30.97 billion, and sales in China showed promising signs of recovery, with reports of sold-out inventory for Macs and iPhone 17s. In reaction to the robust performance, Wells Fargo increased its price target for Apple to $310 from $300.
In contrast, memory chip manufacturer Sandisk faced turbulence despite posting earnings that exceeded expectations. The company’s shift to long-term contracts aimed at providing stability came amid concerns about increasing prices for memory chips, prompting a 5% drop in shares. Bank of America adjusted its price target for Sandisk upward to $1,550 from $1,080, indicating some confidence in the firm’s long-term outlook.
Morgan Stanley also raised its price target for Arm Holdings after the company announced plans to introduce its first in-house central processing unit, the AGI CPU, designed specifically for artificial intelligence. This strategic pivot from merely licensing chip designs to developing its own marks a significant change for Arm, which has partnered with industry giants like Nvidia and Apple.
Chevron reported strong cash flow, with $4.1 billion in earnings for the quarter and an earnings per share of $1.41, surpassing estimates and marking its most substantial earnings beat since late 2020. Meanwhile, Mastercard continued to expand its footprint in digital payments, including stablecoins, although market reaction to its latest quarterly results was lukewarm.
On the social media front, Reddit’s stock gained momentum as Wells Fargo and Piper Sandler hiked their price targets significantly, attributing this to an increase in daily active users and robust quarterly sales, which saw a remarkable 69% rise.
Conversely, Cardinal Health’s price target was slightly reduced by Citi, who cited risks following the company’s earnings announcement. Despite this adjustment, Citi maintained a buy rating, suggesting that the market overreacted to the news.
Roblox experienced a sharp decline, with Bank of America downgrading its rating to hold amid concerns over lower-than-expected first-quarter bookings and a disappointing guide for the second quarter. Shares of the gaming platform plummeted nearly 25% in premarket trading following the announcement.
Lastly, Caterpillar drew attention with an upward revision of its price target, as JPMorgan highlighted expectations for significant earnings growth over the next several years. Following a positive earnings report, the equipment manufacturer raised its annual revenue forecast, indicating a promising outlook.
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