Reddit surges premarket on index inclusion; Applied Materials’ dips

Investing.com - U.S. stock futures were little changed on Friday, pointing to a muted open after the S&P 500 closed at a record high in the previous session, while investors weighed a fresh batch of corporate news and analyst actions.

By 05:49 ET (09:49 GMT), the Dow futures contract had fallen by 70 points, or 0.1%, while S&P 500 futures were mostly flat and Nasdaq 100 futures had edged up by 34 points, or 0.1%.

Here are the biggest premarket movers for today:

Reddit shares jumped 12.6% in premarket trading after S&P Dow Jones Indices announced that the social media company would join the S&P 500, replacing AvalonBay Communities.

The inclusion is expected to generate significant buying from passive funds tracking the benchmark. JPMorgan analysts estimate that index funds could need to purchase about 16.7 million Reddit shares, nearly three times the stock’s average daily trading volume of around 5.98 million shares since its March 2024 debut.

The expected demand from index-tracking investors helped push Reddit shares to $177.97 in premarket trading.

SanDisk shares rose 3.8% before the bell, extending a rally sparked by the company’s investor day, after JPMorgan upgraded the memory-chip maker to Overweight and set a $2,250 price target, implying substantial upside from its previous close.

Management outlined an ambitious long-term growth strategy at the event, targeting mid-to-high double-digit annual revenue growth between fiscal 2028 and 2030, alongside non-GAAP gross margins of about 80% and adjusted free-cash-flow margins of roughly 50%.

Applied Materials shares, meanwhile, fell about 5% despite the chip-equipment maker issuing an upbeat outlook, as investors remained concerned about its competitive position against rivals such as ASML and Lam Research.

Summit Insights Group said Applied Materials’ topline performance has lagged its peers, raising concerns after the stock had already more than doubled this year. The reaction highlights the increasingly high expectations facing semiconductor equipment companies amid the ongoing AI infrastructure investment boom.

Fox Corp Class A shares rose 4.1% after JPMorgan upgraded the stock to Overweight from Neutral and raised its price target to $82 from $70.

The bank pointed to strong fundamentals, including expected benefits from Fox’s pending acquisition of Roku, favorable economics around the FIFA World Cup and an improving distribution-revenue outlook.

The upgrade follows a strong fiscal fourth-quarter report from Fox, which posted adjusted EPS of $1.79 against expectations of $1.45 and revenue of $4.21 billion, up 28% year-over-year.

Birkenstock shares fell 2.7% after an entity affiliated with the German footwear company’s majority shareholder announced a roughly $1 billion secondary share offering.

The offering is priced at about a 4% discount to Birkenstock’s previous close. The company itself is not selling shares and will not receive proceeds from the transaction, but the additional supply of stock weighed on shares in premarket trading.

Globant shares tumbled 14.6% after the digital consulting company reported weaker-than-expected second-quarter earnings and cut its full-year revenue and margin outlook.

Adjusted EPS came in at $1.40, below the $1.50 analyst consensus, while revenue of $614.4 million was essentially flat from a year earlier. The company lowered its full-year revenue forecast to $2.428 billion to $2.462 billion from a previous range of $2.462 billion to $2.508 billion.

Management also reduced its full-year adjusted operating margin forecast to 13.5%-14.5%, citing weakness in new markets, slower spending in travel and hospitality linked to higher oil prices and longer decision-making cycles among North American customers.

Swarmer shares fell 8.5% after the drone technology company reported a sharp increase in its quarterly loss despite higher revenue. Revenue rose about 56.5% year-over-year to roughly $220,000, but the net loss widened to about $7.2 million from $1.6 million a year earlier as operating expenses jumped roughly 777% to $7.5 million.

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