Alphabet Rises while Chipotle Sinks; Metsera Acquisition Proposal

On this episode of Stock Movers:
- Alphabet (GOOG) shares are higher after reporting earnings yesterday. The Google parent reported third-quarter results that beat expectations. Analysts are especially positive on its cloud-computing business.
- Chipotle (CMG) is diving in the premarket as it cut its full-year outlook for a third time this year as diners pulled back from eating out at the fast-casual chain. The company now sees sales for the full year slipping in the low-single digit range from a year earlier, and Chief Executive Officer Scott Boatwright said “The consumer slowdown is really affecting our business in a meaningful way."
- Metsera (MTSR) shares are moving on news it received an unsolicited proposal from Novo Nordisk to acquire Metsera, valuing the company at up to $77.75 per share, a total of approximately $9 billion, deeming the proposal as “superior.”

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news, The Stock Movers Report,
your roundup of companies making moves in the stock market
harnessing the power of Bloomberg Data. Let's take a look
at some of the stocks on the move today on
Paul Swine alongside Norm Me.

Speaker 2 (00:20):
Linda, We're joined by Bloomberg's John Tucker. John, what do
you got for us tech standout this morning? You want
to guess what it is? Yes, Alphabet reporting a surgeon
demand for the cloud and artificial intelligence services for the
quarter just handed. So that's pleasing investors. They sent their
shares up, even as the company said that capital spending
for the year will be higher than expected. So third

(00:44):
quarter sales, this is when you strip out the partner payouts,
rose to eighty seven and a half billion dollars, the
company's investing record amounts. Try to push progress in AI
and infuse answers and assistance from the large language model
that it has Gemini into some of the popular products,
including search. So the company says capex for the year

(01:06):
is going to be ninety one billion to ninety three
billion dollars. That's up from the eighty five billion of
earlier estimates. And what seems to set it apart from
Microsoft and Meta is that Alphabet was able to prove
two investors that the spending on artificial intelligence is actually
paying off.

Speaker 1 (01:24):
And John just put that into context, ninety billion of
capecs this year.

Speaker 2 (01:28):
In twenty twenty one, they had twenty five billion in CAPEX.
So just scramp up enormous investors they've been clamoring for
this evidence. Revenue from products built on Google's generative AI
models here it is, grew more than two hundred percent
from a year earlier. So the investment in infrastructure research

(01:48):
is really paying off at this point.

Speaker 1 (01:50):
And we're releasing a divergent in divergence in terms of
the equity market.

Speaker 2 (01:54):
Trade right now shares a rule up about eight percent,
but Meta town more than ten percent right now. Yeah,
so I mean it's pretty stark. Let's move on to food.
Mexican Grill you will see, Paul, they are on occasion
that's falling, cutting the full year outlook for the third
time this year. It appears that diners are pulling back

(02:16):
from eating out in the fast casual food category. The
burrito chain now sees sales for the full year slipping
into the low single digit range from a year earlier. Earlier,
they projected that performance would be flat. By the way,
in the third quarter, comp sales rising slightly, but it
also fell short of Wall Street expectations. So the new CEO,

(02:38):
Scott boat Royd, said, this was the analyst call. The
consumer slowdown is really affecting our business in a meaningful way.
Chipotli has fallen about thirty four percent. This is the
stock with a five point seven percent rise for a
comparable consumer discussionary companies in the S and P five
hundred restaurants struggling with consumer reluctance to spend for the

(03:02):
restaurant holding Paul, are you getting a bowl or a burrito?
Taco's chicken? Yeah, that's how I roll.

Speaker 1 (03:11):
That's okay.

Speaker 2 (03:12):
Yeah, I got to try the taco Starbucks. On the
other hand, the CEO there used to be the CEO
at Chipotle. He says, you know, things are looking up.
The comparable sales broke a string of comparable sales declines
at Starbucks. By the way, Uh, if you go to
Chipotle enough times, you'll need some weight loss medication. And

(03:33):
Paul's what's your what's your Starbucks order? It's like a
double short Noka double on Saturdays. Have no idea.

Speaker 1 (03:38):
I don't know either. Yeah.

Speaker 2 (03:41):
Anyway, Novo nordis making an unsolicited bid for Metsarah and
this has sparked a real heated battle with Pisor. They're
both trying to get their hands on uh they were,
Metsarah's weight loss drug in order to gain some of
the lost ground in this booming, cut throat market. Novoe
offering to buy the company for at least six and

(04:01):
a half billion. We're trying to trump an earlier agreed
upon deal with Pfizer. Met Sarah called the new offer
superior to the previous one from Pfiser, which had actually
accepted just last month. Pfiser counters that Novo's attempt to
derail the deal is reckless and an attempt to abuse
its dominant market positions. Actually this morning making some what

(04:25):
sounds like some legal arguments.

Speaker 1 (04:29):
This stock Moover's report from Bloomberg Radio. Check back with
us throughout the day for the latest roundup of companies
making news on Wall Street and for the latest market
moving headlines. Listen to Bloomberg Radio Live, catch us on YouTube,
Bloomberg dot com, and on Applecarplay, and Android Auto with
the Bloomberg Business app.