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Plug Power (PLUG), Trade Desk (TTD) Stock Hammered on Weak Forecasts
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After U.S. markets closed Thursday, more than 40 companies reported quarterly earnings. Two stand out for the beating they are taking Friday morning. Neither is an S&P 500 stock, but both indicate what may be in store for their industries in the near term.
The company’s earnings release was like a press release from a politician about to start an apology tour for some misbehavior:
We believe this hydrogen supply challenge is a transitory issue, especially as we expect our Georgia and Tennessee facilities to produce at full capacity by year-end.
Lessons from ramping up our Georgia green hydrogen facility coupled with our manufacturing ramp, diversity of products, and major new customer wins reinforce Plug’s leadership position in the global green hydrogen economy.
The company is making significant investments in green hydrogen production and took a $41.6 million charge in the third quarter to cover projected future costs for supplying its current fleet of plants. Plug Power blames “severe hydrogen shortages” for their impact on direct costs and planned upgrades compounded by higher costs due to inflation. The company concluded, “If these trends continue, the Company may have to record additional service loss provisions in future periods.”
That’s all investors needed to hear. Friday morning’s sell-off has taken the stock down by some 37%. Plug Power stock fell to a new 52-week low of $3.58 at the opening bell Friday and traded down by around 38% a few minutes later. The stock’s 52-week high is $18.88.
Company spending on R&D was higher than spending on sales and marketing, a sign of Trade Desk’s commitment to its AI-powered ad placement products. The company also repurchased $90 million worth of stock in the quarter and has $273 million remaining in its current package.
Trade Desk did not fall short by much, but it was enough. Trade Desk’s sinking share price could be a contributing factor to both Alphabet’s and Amazon’s declining share price Friday morning. After all, advertising is Alphabet’s lifeblood and one of Amazon’s fastest-growing sources of revenue.
Trade Desk stock traded down about 25% in Friday’s premarket session and was down about 18% at around $62.90 shortly after the opening bell. The stock’s 52-week range is $41.20 to $91.85.
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