Shares in Twitter Inc. plunged during the week ended Oct. 25 as analysts digested the company's quarterly earnings results, which were plagued by an ad-related technical glitch. Meanwhile, Charter Communications Inc. and Intel Corp. stock jumped following the companies' respective earnings reports.
Twitter on Oct. 24 missed third-quarter revenue and profit expectations due in large part to technical problems with its ad platform. Executives said this will continue to weigh on fourth-quarter results, leading several analysts to downgrade the stock.
Goldman Sachs technology analyst Heath Terry in a research report downgraded Twitter shares to "neutral" from "buy" while slashing his 12-month price target to $34 from $52, reflecting the company's ongoing advertising woes. While the analyst remains optimistic about Twitter's increasing value as demonstrated by its "broad-based" and "accelerating" growth in daily active users, he believes the company faces significant ad-related challenges ahead.
The uncertainty around the resolution of Twitter's ad problems should prompt investors to hold off on buying the stock in the near term, said Jefferies technology analyst Brent Thill, who lowered his price target on the stock to $38 from $44 while maintaining his "hold" rating.
Around midday Oct. 25, Twitter shares were trading down 22.22% from their Oct. 18 closing price, at $30.33 apiece.
Meanwhile, Intel shares surged after the tech giant on Oct. 24 posted third-quarter earnings that exceeded Wall Street's expectations and raised its full-year outlook, despite continued CPU supply shortages.
Intel CFO George Davis said on an earnings call that demand for PC chips exceeded the company's expectations and surpassed second-quarter forecasts, making it difficult to create "inventory buffers."
Intel raised its full-year revenue outlook to $71 billion, up $1.5 billion from its July guidance. The company now expects full-year GAAP EPS of $4.42 and full-year non-GAAP EPS of $4.60. For the fourth quarter, the company expects revenue of $19.2 billion, GAAP EPS of $1.28 and non-GAAP EPS of $1.24.
However, Morgan Stanley analyst Joseph Moore said in a note obtained by MarketWatch that he would "contain [his] enthusiasm" over Intel's upside and also questioned the sustainability of the company's momentum given the "intensifying" shortages of its microprocessors.
Intel shares were trading at $56.19 around midday Oct. 25, up 9.40% for the week.
Turning to telecommunications, Charter shares rose after the cable giant on Oct. 25 delivered earnings results that outlined continued growth in its mobile business.
During the third quarter, Charter reported 276,000 additional Spectrum Mobile lines, building on 208,000 additions in the second quarter. The company launched its 4G LTE Spectrum Mobile wireless service in September 2018. The service is connected to the operator's Wi-Fi hotspots across the country.
The gains were attributed especially to the expansion of the Bring Your Own Device program to all of its sales channels; the introduction of the product to small and medium-sized businesses; and an emphasis on converting its wireline customer base to the wireless option.
Pivotal Research Group analyst Jeff Wlodarczak raised his price target on Charter shares to $600 from $500 while reiterating his "buy" rating in response to the earnings results, calling them "terrific" and noting that they emphasize Charter's latest initiatives are "paying off."
Charter stock was trading at $467.40 midday Oct. 25, up 6.22% for the week.