Amazon vs. transport stocks, DraftKings sees prediction markets boost

Yahoo Finance Senior Autos Reporter Pras Subramanian and Market Domination host Josh Lipton take a closer look at some of Wednesday's trending tickers and stories.

Transportation stocks are plunging as Amazon (AMZN) expands its truckload offerings.

Super Micro Computer (SMCI) stock is under pressure due to the company's latest artificial intelligence (AI) plans.

DraftKings' (DKNG) trading volume saw a boost from prediction markets activity.

It's time to cover some of today's trending tickers brought to you by CBO. We're watching transport stocks, Super Microcomputer, and Draft Kings.

Joining me now got Yahoo Finance's Pras Suma. All right,

topic one, Pras. Amazon keeps moving deeper into logistics. expanding its less than truckload offering. Trucking companies sinking in today's trade. Now, Bloomberg did note, listen, these stocks they'd rallied hard, valuations were stretched.

So there were some other variables here we have to consider, but they did site Morgan Stanley as saying, you know what? Amazon, Morgan Stanley saying, could grab share even without best-in service initially. What do you make of it?

So I I think that first part of your analysis is correct, right? I think it's really about the Dow Jones Transport were surging, right? up five days in a row, right? Uh up a lot. So you have these people, these companies that people were owning shares in these trucking companies like Old Dominion, FedEx Freight, etc.

They're taking some gains here, right? And it helps that Amazon is doing this move, right?

So it's a it's a subset of the trucking business that some of these uh companies operate in. Um the reason why this analyst talks about how it's it could actually have a sub standard service and still take some share. and they're going to cut on price. But I think the analysis is that people who use these specialized shippers will continue to do so and maybe they might try Amazon, but for the most part, you know, they're going to stick with their shippers they normally use. But but hey, Amazon's Amazon. like they they disrupt everything they get into. So you can't necessarily count them out there. So I think that maybe there is some some some reason for some selling in this in this space.

Yeah. If Amazon succeeds, does it mean cheaper shipping and faster delivery for Josh Lipton. That's that's the main question, Chris. That's what we're asking.

All right, super microcomputer under pressure. That's after announcing plans to raise about $7 billion. This one's interesting. So here's here's what happens. They announced a $7 billion equity raise uh to fund $39 billion of AI server orders.

Now, some might say, they look at that and say, hey, that that reinforces the bull case for this mega AI infrastructure build out. that sounds good like good news. Team at Bernstein, I I thought this was an interesting note. They throw a yellow flag here.

They do a little digging, right? They tell their clients this. They say, these orders are not firm commitments and are all subject to cancellation. They they say they caught the the company saying that in the filing. So Bernstein's analysis to their clients was, hold on.

While 39 billion in AI server orders sounds massive, they say we struggle to understand how real those orders really are.

They rate super micro market perform. So they're on the sidelines for a while.

So you said you said yellow flag. I think you want to say yellow card and a red card here with World Cup coming up tomorrow, right? But hey,

when Google sells, sells Google sells stock, investors say, Daddy likes, right? They want more.

when Super Micro does, they say, no thanks. No. Daddy no likey. Massive delusion. Not likey, right? So Super Micro shares up 40%, right?

before today's move. Come on.

you see what's going on here, right? People want to lock in some gains.

again, like the truckers

argument we're saying here. But in this case, how is super micro any different than like let's say Dell that's had a monster runup.

Well, this is what Bernstein is getting at is how really orders are. That was their point.

Maybe that's about maybe that's a little bit what you saw today.

Well, how the orders are sort of hey, uh

well, let's say we're

that they're not firm commitments. That was Bernstein's point. That's the differentiation.

maybe look at that chart. Uh that could be what you're saying.

I mean you can say that about a lot of these.

and and the dilution.

I mean that's what spooks folks.

Uh you know, I I I I think Super Micro not a name like Dell obviously, but operating in the same space here. It's only the server stuff. So yeah, I I I I get it. I get it. We're both revenue jumped over 100% last quarter. I get it. It's time to take some money off the table. Um but yeah, it's for stuff. You can apply that across the board in the space, right? So

Last one. DraftKings. Now this was interesting. Making news reports that annualized consumer trading volume on DraftKings predictions, that rose 24% month over month to 1.3 billion.

Total volume increases 34% to 3.1 billion. I have had analysts on the show who cover this space price and they say, you know what, in the prediction markets, it's the sports books that are going to win. It's DraftKings, it's Flutter, FanDuel. They got the experience, they got the balance sheet. They know their customers, they know Proce Moranian. They're going to be winners here.

Yeah, I mean it's just they know how to navigate the the space with, you know, right, there's federal laws right now that that that allow prediction markets uh that, you know, sort of supersede stuff like state gambling laws, right? So the state state by state can can can can ban or approve sports gambling, but they can't really effectively affect or change prediction markets, right?

Now, what happens if that change is a new administration? Well, guess who's knows how to deal how to deal with that. It's the DraftKings, the flutter of the world. This is their space. This is a nobrainer for them to get into prediction markets, right? Makes total sense to me. Um yeah, like I said, they they can navigate it like better than anybody. And and the concern was that they were going to lose market because the prediction markets would take over sports. Now they're in it too.

So it's all kind of level playing field. Both say they have plenty of advantages of their own. We'll find out. Pros, thank you, buddy.