Stocks were solidly in positive territory for most of Tuesday, but turned lower in the last hour of trading. Investors are anticipating news on trade talks with China and actions by the Federal Reserve and European central banks. The Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) closed nearly flat on light volume.
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Healthcare was the strongest sector, with the Health Care Select Sector SPDR ETF (NYSEMKT: XLV) rising 0.8%. Bank stocks slumped; the SPDR S&P Regional Banking ETF (NYSEMKT: KRE) fell 2.5%.
As for individual stocks, NVIDIA (NASDAQ: NVDA) made gains in the wake of some product announcements, and Tilray (NASDAQ: TLRY) reported fourth-quarter results.
NVIDIA strengthens its position in data centers
NVIDIA used the annual GPU Technology Conference to announce slew of new products and technologies, many of which aimed at bolstering the company's position in the data center. Investors were impressed, pushing the stock up 4%.
Founder and CEO Jensen Huang focused his keynote speech on the expansion of NVDIA's ecosystem for development using the company's graphics processing units (GPUs). Huang said that the number of developers using NVIDIA's tools to build applications has grown from 800,000 to 1.2 million in the last year. The company introduced new tools based on its CUDA platform for accelerating computing in data centers, saying that its artificial intelligence (AI) platform has been adopted by all major cloud providers, and that the top server providers were announcing products equipped with NVIDIA T4 GPUs.
The broad product announcements also included advances in real-time ray tracing and a $129 module to accelerate AI in mass-market devices like robots, but it's likely investors were most pleased with the focus on the data center. Last quarter's disappointing earnings report included news of slowing sales into that market.
Tilray ramps production and boosts spending for its future
Canadian cannabis producer Tilray beat expectations for revenue in the fourth quarter as production grew, but losses widened, and shares fell 3.4%. Revenue grew 204% to $15.5 million, exceeding expectations for $14.2 million. The company lost $0.33 per share compared with $0.04 per share in the period a year earlier and Wall Street's estimate of a loss of $0.12 per share.
Total kilogram equivalents sold in Q4 increased 296% to 2,053 kilograms and average net selling price per gram grew 5.5% to $7.52. Gross margin plummeted from 57% in Q4 last year to 20%, due largely to costs related to ramping up production.
That revenue growth might be impressive if it weren't for the fact that $43.1 million in sales for all of 2018 is minuscule for a company valued at $6.7 billion. For Tilray investors, it's all about the future, which is why the company has had to sell $475 million in convertible senior notes to ramp production and make acquisitions like last month's purchase of hemp food seller Manitoba Harvest.
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