Nasdaq Mints Record Breaking Week, Wall Street’s New Fast Food Darling Jumps 300%

US stocks wrapped up Friday with a mixed bag, but overall, tech stocks had a banner week. The Dow Jones took a slight tumble, dropping around 0.2%, while the S&P 500 barely moved, slipping just 0.04%.

All while the Nasdaq decided to be the overachiever in the room, inching up 0.1% to snag its fifth consecutive record close.

But before we wrap up the work week, let’s cover some stock market highlight plays. (Sidenote: Who remembers this guy?)

Anyways, today’s edition will cover the fast-food restaurant blowing the doors off of Chipotle’s numbers and popping 300%...

As well as how the Google-backed AI company fared in it’s first day of trading... And of course, our top gainers of the day.

Here’s our heatmap.

For the week, the S&P 500 ended up about 1.5%, and the Nasdaq shot up more than 3%, thanks to the tech sector flexing its muscles. Apple’s big AI plans and Elon Musk’s wallet-fattening pay package were the highlights. Investors were feeling pretty good after a surprise dip in wholesale prices, which is like finding out your favorite pizza place lowered its prices without warning.

However, like we talked about earlier this week, the Federal Reserve threw a bit of cold water on the excitement, reducing its forecasted rate cuts for this year from three to one. It’s like promising three scoops of ice cream but then only giving one – still good, but a bit of a letdown.

Tesla had a rough day, with shares dipping 2% despite Elon Musk getting a big thumbs-up for his pay package from shareholders.

On the flip side, Adobe had a fantastic day, with shares jumping nearly 15% after optimistic AI sales forecasts. Overall, the market was a mixed bag, with some stocks celebrating and others licking their wounds.

In summary, while the stock market ended the week with a bit of a shrug, tech stocks continued to dazzle, and inflation fears took a back seat – at least for now.

Stock.News Spikers of the Day

Histogen Inc.: [HSTO] [+62.16%]

Kaival Brands Innovations Group, Inc.: [KAVL] [+338.24%]

Cava Crushes It: The Mediterranean Chipotle’s 300% Surge

Of all the sizzling IPOs over the past year, from AI startups to biotech miracles, none has cooked up more excitement on Wall Street than Cava Group Inc. If you’re wondering why everyone’s talking about this Mediterranean-inspired eatery, let’s dig into the numbers.

Since its June 2023 IPO, Cava has skyrocketed over 300%, bringing its market valuation to a mouth-watering $10 billion. That’s about $33 million per restaurant for each of its 323 locations. To put that in perspective, when Chipotle hit its one-year mark as a public company, it was valued at a modest $3 million per restaurant. Talk about a glow-up.

This meteoric rise highlights a broader trend: the IPO market is coming back to life after a couple of years in a slump. If you bring the right kind of stock to market – say, a trendy fast-casual chain – investors will swarm like bees to honey.

But this kind of hype isn't without its headaches. Within four days, two of the 15 analysts covering Cava – JPMorgan’s John Ivankoe and Piper Sandler’s Brian Mullan – downgraded the stock from “overweight” to “neutral.” Ivankoe noted that each Cava location rakes in less than $3 million a year on average. He even suggested buying Chipotle stock instead, echoing a broader sentiment: about two-thirds of analysts prefer Chipotle, compared to just over half backing Cava.

Even some Cava insiders are cashing in on their shares. Despite a sluggish start to June, Cava is still up more than 100% this year. Wall Street is enamored with fast-casual dining, and Cava is the new darling poised to follow in Chipotle’s footsteps.

Jim Salera, a restaurant stock analyst at Stephens, explains that investors are willing to pay a premium for these growth-focused concepts. “There are only a handful of restaurants that offer such growth,” he says.

But not everyone is on the Cava bandwagon. Lauren Balik, CEO of Upright Analytics, sees some risks. Sure, Cava could expand rapidly like Chipotle – with plans to hit 1,000 restaurants in a decade – but fast growth has its pitfalls. Remember when Chipotle struggled with food safety issues in 2015? It took them two years to bounce back.

So far, Cava has avoided such dramas, opening over 50 new locations last year without any major hiccups. Yet, Balik remains skeptical, having placed a short trade on the stock in January. “If you compare Cava to early Chipotle, it’s a similar story,” she says. “Fast growth can lead to operational issues, as Chipotle learned the hard way.”

In the end, whether Cava becomes the next big thing or hits some bumps along the way, one thing’s clear: the fast-casual food fight is far from over.

Google-Backed Tempus AI Surges on First Day of Trading

Tempus AI, the healthcare company backed by Google, made an impressive debut on the Nasdaq, starting strong with a 15% increase before closing the day up by nearly 9%. Trading under the ticker "TEM," Tempus priced its 11.1 million shares at $37 each, right at the top of its anticipated range. This move raised $410 million and gave the company an initial valuation just over $6 billion. By the end of the day, Tempus was valued at approximately $6.65 billion.

Based in Chicago, Tempus uses artificial intelligence to enhance medical tests, helping doctors determine the most effective treatments for their patients. In 2023, the company generated $531.8 million in revenue but also reported a net loss of $214.1 million. Despite this, CEO Eric Lefkofsky expressed confidence on CNBC’s “Squawk Box,” stating that Tempus is on track to be cash flow and EBITDA positive within the next year.

Tempus aims to revolutionize diagnostics with "Intelligent Diagnostics," applying AI to make lab tests more accurate and personalized. They connect lab results with a patient’s clinical data, providing tailored insights. During the pandemic, Tempus quickly introduced an at-home testing kit, addressing broader issues beyond Covid-19.

The inspiration for Tempus came to Lefkofsky after his wife’s breast cancer diagnosis, highlighting gaps in the healthcare system. Now, Tempus focuses significantly on oncology, using genomic tests to understand tumors at a molecular level and tailor treatments to individual patients.

While Tempus still has challenges to overcome, its strong market debut indicates that investors are optimistic about its potential. With Lefkofsky’s successful track record, Tempus could become a significant player in the healthcare industry.

(Stock.News has positions in Tesla and Apple, mentioned in article.)