Image: NVIDIA.
As much as bullish investors may have wanted it, the stock market couldn't manage to post a four-day winning streak, and major market benchmarks fell a quarter- to a half-percentage point on Thursday. Fears in the market stemmed, in part, from the retail sector, where the industry's largest player reported holiday-quarter results that raised new concerns about its ability to fend off the onslaught of Internet- and mobile-based e-commerce. Yet even though doubts were enough to take the overall market lower, there were several bright spots among stocks, and NVIDIA (NVDA -4.39%), Ingram Micro (IM), and Rackspace Hosting (RAX) were among Thursday's best performers.
NVIDIA jumped 9% after the chipmaker reported its fourth-quarter financials on Wednesday night. The company, known for its graphics chips, posted revenue growth of 12%, and adjusted earnings-per-share gains of 21%, both of which were better than investors had expected. NVIDIA also gave investors strong guidance looking forward, pointing to revenue of $1.26 billion for the current quarter.
The company sees several key drivers of potential future growth, including PC gaming, virtual reality, self-driving automobiles, and deep learning. What's perhaps most important is that, unlike some of its chip-making rivals, NVIDIA appears to have plotted a course that will free it from the decaying market for PCs, and that should help it avoid the pullbacks that other chipmaker stocks have suffered lately.
Ingram Micro soared 23% in the aftermath of receiving a takeover bid. China's Tianjin Tianhai agreed to buy the electronics distribution company for about $6 billion, working out to $38.90 per share in cash. The deal will make Ingram a piece of the larger HNA Group, which is the largest shareholder in Tianjin Tianhai, and has exposure to a variety of sectors ranging from aerospace to logistics and tourism.
Ingram CEO Alain Monie said that the move will give Ingram "the ability to accelerate strategic investment as we continue to capitalize on the constant evolution of technology and emerging trends." Ingram also expects that complementary aspects of the businesses should improve both companies going forward, and HNA Group believes that the merged entity will be able to add more extensive supply-chain management services to its existing logistics business, and assist clients with a larger portion of their overall needs.
Finally, Rackspace Hosting climbed 13%. The cloud-computing company reported its fourth-quarter results on Tuesday afternoon, and during the past two days, the stock has made huge moves in both directions. Sales rose 11%, but net income fell 13%. Even though both figures were better than investors had expected, poor guidance led several analysts to reduce their ratings on Rackspace.
The stock initially fell immediately after the report, but by the end of yesterday's session, the stock closed up 3%. Today's climb continued that divergence, and some investors apparently believe that, even if the cloud-computing space struggles in 2016, Rackspace, in particular, has been beaten down further than some of its peers, and therefore deserves a closer look as a value proposition.
