Active Stocks Today: DELL, SOUN, and NYCB
Dell Technologies (NYSE: DELL) shares rose over 24% after strong demand for its AI servers boosted net income in the fourth quarter. SoundHound AI (NASDAQ: SOUN) stock sank 23% as the AI firm missed expectations and pushed back profitability timelines, and the New York Community Bancorp (NYSE: NYCB) plummeted 21% in extended trading after removing its CEO, revising losses sharply higher, and disclosing material weaknesses in financial controls.
Dell Shares Rise After AI Demand Improves Net Income in Q4
Dell Technologies reported a double-digit increase in adjusted net income for the fourth quarter ended Feb. 2, as demand for its AI-optimized servers increased significantly. Adjusted net income rose by 22 percent to $1.61 billion, or $2.20 per share, on revenue of $22.32 billion. Though revenue declined 11 percent from a year earlier, it exceeded forecasts, sending Dell’s shares up over 24% in after-hours trading.
Chief Operating Officer Jeff Clarke said AI-optimized server momentum remains strong, with orders increasing nearly 40 percent sequentially and backlog nearly doubling. Dell noted orders for the AI servers came from a wider range of customers and geographies. On the back of fourth-quarter performance, Dell is increasing its annual cash dividend by 20 percent to $1.78 per share.
SoundHound Shares Plunge after Firm’s Q4 Fails to Meet Expectations
In the fourth quarter of 2023, SoundHound AI, an AI-powered voice solutions provider with a small stake held by Nvidia, experienced significantly accelerating revenue growth but missed earnings expectations, leading to its stock dropping 23% from its last close Thursday.
The AI company pushed back its target for positive adjusted EBITDA to 2025 from the previously expected fourth quarter of 2023. SoundHound narrowed its GAAP operating loss by 57 percent to $12.4 million and EPS loss by 53 percent to $0.07.
For full year 2023, the company improved cash usage from operations to $68.3 million compared to $94 million in 2022. CEO Keyvan Mohajer highlighted new generative AI capabilities and the acquisition of SYNQ3, establishing SoundHound as the largest voice AI provider for restaurants. Management issued guidance targeting over $100 million revenue and positive adjusted EBITDA in 2025.
New York Community Bankcorp Removes CEO, Reports Internal Controls Issue
New York Community Bancorp replaced its CEO and reported a fourth-quarter loss over 10 times its previous statement, along with disclosing faults in financial reporting. The bank appointed Alessandro DiNello, executive chairman, as president and CEO, succeeding Thomas Cangemi, who resigned from those roles on Feb. 23. NYCB revised its Q4 loss to $2.7 billion following a January net loss.
The lender identified material weaknesses in internal controls related to loan review, resulting from ineffective oversight, risk assessment, and monitoring. NYCB will delay its annual report due to ineffective controls when books closed in 2023.
Shares plummeted almost 21% in extended trading to $3.80. Portfolio manager JP Geygan expressed surprise and disappointment, expecting further stock declines and emphasizing the need to understand issues and prevent recurrence. Recent acquisitions pushed NYCB’s balance sheet over a $100 billion threshold, leading to stricter requirements.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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