# Night movers — Jul 14: IBM's earnings warning crater while semis rebound

_AI-generated trading idea · NEUTRAL · LRCX, INTC, NVDA, XPEV, MS, IBM, C, MDT, BSX, BMY_

> Canonical page: https://commonquant.ai/research/for-you/night-movers-jul-14-ibm-s-earnings-warning-crater-while-semi--5257fcf9-0ef5-5e52-a49d-7c7fd1291aa2

IBM's catastrophic 25% earnings-warning drop dominated the session and dragged software and IT services names lower, while semiconductor stocks LRCX, INTC, and NVDA rebounded sharply on valuation and chip-demand headlines. Bank earnings offered mixed signals as Citi posted record trading revenue yet still declined alongside broader financial-sector caution.

## Idea

\#\# Session overview
IBM's catastrophic 25% earnings-warning drop dominated the session and dragged software and IT services names lower, while semiconductor stocks LRCX, INTC, and NVDA rebounded sharply on valuation and chip-demand headlines. Bank earnings offered mixed signals as Citi posted record trading revenue yet still declined alongside broader financial-sector caution.

\#\# Compared with previous session
Last night saw chip stocks Intel, AMD, and LRCX all drop roughly 4% to 6% amid an SK Hynix rout and an oil spike, while energy names XOM, COP, and CVX rallied. Tonight's session flipped the script for Intel and LRCX, which gained over 4%, though IBM's 25% plunge replaced Oracle's decline as the standout downside story.

\#\# Gainers
\- \*\*LRCX +4.90%\*\* — No matching ingested catalyst was found for LRCX. The move is reported without a news attribution.
\- \*\*INTC +4.50%\*\* — Intel investors who bought during the peak of the dot-com bubble are finally out of the red, a painful reminder of why valuations matter. Meanwhile, a BofA note flagged Intel and ARM as facing near-term pain while AMD rides a server boom.
\- \*\*NVDA +4.06%\*\* — Nvidia reportedly halved its Asia buyer list amid a China chip crackdown even as Reuters revealed ZTE is among Chinese firms licensed to purchase Nvidia's H200 chips. The dual headlines underscored continued demand strength, and Yahoo Finance highlighted Micron and Nvidia as powering a $700 billion chip profit boom.
\- \*\*XPEV +3.17%\*\* — No matching ingested catalyst was found for XPEV. The move is reported without a news attribution.
\- \*\*MS +2.98%\*\* — Morgan Stanley raised its price target on Merchants Bancorp stock, putting the bank's research arm in the spotlight. The upgrade added to a constructive backdrop for financials as major banks delivered earnings updates.

\#\# Losers
\- \*\*IBM -25.21%\*\* — IBM stock plummeted more than 25% after the company issued a Q2 earnings warning that rattled investors. The miss pummeled software stocks and IT services firms across the sector as sentiment soured.
\- \*\*C -5.29%\*\* — Citigroup's Q2 earnings call highlighted results that included record revenue from stock traders, with equities trading revenue surging 45% to $2.3 billion and EPS of $3.15 beating all estimates. Despite the trading strength, the shares declined as broader bank-earnings reactions turned mixed.
\- \*\*MDT -5.11%\*\* — No matching ingested catalyst was found for MDT. The move is reported without a news attribution.
\- \*\*BSX -4.52%\*\* — No matching ingested catalyst was found for BSX. The move is reported without a news attribution.
\- \*\*BMY -4.03%\*\* — Donald Trump's drug-pricing deals are reshaping Big Pharma, with implications for Pfizer, AbbVie, and Bristol Myers Squibb. The policy overhang weighed on BMY shares as investors assessed the potential impact on drug revenues.

## Advanced Analysis

### Verdict: promising backtest, but wait for the trigger

This momentum-crossover strategy has delivered a compelling 124.6% cumulative return across 28 trades in its 60-month backtest, with the recommended EMA-11 parameter setup adding further credibility via a 115.7% return on the untouched 12-month holdout. The idea's semiconductor thesis is firmly supported by elite NVDA fundamentals — a 60.4% operating margin and 76.3% return on equity — alongside genuine demand catalysts like Reuters' report that ZTE is licensed to buy Nvidia's H200 chips. Against that, the 37.5% maximum drawdown over the backtest window exposes severe regime sensitivity; one walk-forward fold lost 27.8%, and INTC's -4.2% operating margin with -$4.9B in free cash flow shows how damaging it can be when a presumed "rising tide" actually leaves names behind. \*\*Conviction breakdown:\*\* Thesis support (78) reflects strong NVDA and LRCX fundamentals offset by IBM's crash and INTC's deterioration. Trade readiness (35) is low because no live entry conditions are met — NVDA needs ADX to rise from 20.4 to 25. Risk quality (62) balances the 2:1 reward-to-risk framework against the deep historical drawdown. Backtest evidence (72) credits the validated walk-forward and holdout performance. Fundamentals trend (70) weighs NVDA's 99th-percentile profitability against the dead weight of BSX and IBM in the basket.

#### Conviction score breakdown

Composite score computed by the server from the applicable evidence-tier dimensions.

| Measure | Value |
| --- | ---: |
| Thesis support | 78/100 |
| Trade readiness | 35/100 |
| Risk quality | 62/100 |
| Backtest evidence | 72/100 |
| Fundamentals trend | 70/100 |
| Score | 63/100 |
| Composite Score | 63/100 |
| Evidence Tier | backtested |

### Trade now

\*\*Action today: Wait.\*\* None of the five tradeable symbols have all entry conditions met. The strategy trades NVDA, AMD, INTC, C, and MS on the daily timeframe, requiring three conditions to align for each: the 11-period EMA must be above the 21-period EMA, RSI (14) must be above 40, and ADX (14) must be above 25. NVDA is the closest to triggering — RSI sits at 49.8 (above the 40 floor by roughly 10 points) and the 11-day EMA leads the 21-day by about 1.4 points — but ADX is at 20.4, roughly 4.6 points short of the 25 threshold needed to confirm a trending market.

Across the watchlist, the ADX gap is the dominant bottleneck. Citi (RSI 38.2, ADX 8.4) and Morgan Stanley (RSI 38.7, ADX 4.3) each need both RSI to recover above 40 and trend strength to climb dramatically — MS alone needs ADX to more than quintuple. Intel is the furthest from a signal: its EMA-11 sits about 6.6 points below EMA-21, RSI is 27.5, and only ADX (at 67.9) is met. The recommended parameter adjustment — shifting the entry EMA from period 9 to 11 — was selected through chronological walk-forward folds and validated on an untouched holdout, but the system has not yet activated it; live rules still evaluate against the current configuration.

"Wait" means do not initiate any new positions today. The strategy's paper track record shows zero trades since its July 15 launch because no symbol has simultaneously satisfied all conditions. Risk parameters are pre-set: each position sizes at 2.5% fixed risk off the second-ranked support level, with a hard stop at 2.5% downside and a take-profit at 5.0%, yielding an effective reward-to-risk of roughly 2:1. Over the 60-month backtest on NVDA, this framework produced 28 trades with a 46.4% win rate and a 124.6% cumulative return, though it endured a 37.5% maximum drawdown along the way. Patience here is structural, not discretionary.

#### LRCX price and trigger map

Uses the idea timeframe and keeps price levels on the price axis.

| Measure | Value |
| --- | ---: |
| Ticker | LRCX |
| Timeframe | 1d |

#### INTC price and trigger map

Uses the idea timeframe and keeps price levels on the price axis.

| Measure | Value |
| --- | ---: |
| Ticker | INTC |
| Timeframe | 1d |

#### NVDA price and trigger map

Uses the idea timeframe and keeps price levels on the price axis.

| Measure | Value |
| --- | ---: |
| Ticker | NVDA |
| Timeframe | 1d |

### Why the bull case still has support

The completed 60-month backtest delivered a 124.6% cumulative return across 28 trades with a 46.4% win rate, demonstrating that this momentum-crossover system can capture extended trending runs in semiconductor and financial names. The strategy's strongest validated pair is NVDA over a 24-month window, which returned 139.9% with a maximum drawdown of 16.6% and a 47.8% win rate across 23 trades. Those numbers are the core evidence: the rule set identifies and rides trend persistence effectively, even though fewer than half of individual trades are winners. On the fundamentals side, the idea's semiconductor rebound thesis aligns with genuinely elite profitability. NVDA reported an operating margin of 60.4% — in the 99.2nd percentile among Information Technology peers — alongside a 55.6% net margin and a 76.3% return on equity. The idea argues that chip-demand headlines are a catalyst, and the numbers confirm the earnings power behind that narrative: NVDA generated $96.7B in free cash flow on $215.9B of revenue. Per the Reuters piece on ZTE receiving licenses to purchase Nvidia's H200 chips, the demand channel appears structurally intact despite the China crackdown also reported by Reuters. LRCX reinforces the bull case from a different angle. Its operating margin of 32.0% places it in the…

#### XPEV Free cash flow

Free cash flow trend from CommonQuant fundamentals/XBRL data; +3488.3% from first to latest point.

| Measure | Value |
| --- | ---: |
| 2020-12-31 | $-144955000 |
| 2022-12-31 | $-12912275000 |
| 2023-12-31 | $-1355341000 |
| 2024-12-31 | $-4440280000 |
| 2025-12-31 | $4911472000 |
| Latest Value | $4911472000 |
| Change Pct | $3488.273602152392 |
| Ticker | XPEV |
| Timeframe | reported periods |

#### BSX Operating margin

Operating margin trend from CommonQuant fundamentals/XBRL data; +3392.9% from first to latest point.

| Measure | Value |
| --- | ---: |
| 2007-12-31 | \-0.0016752423118343903% |
| 2008-06-30 | \0.14970355731225296% |
| 2008-09-30 | \0.014155712841253791% |
| 2008-12-31 | \-0.18695652173913044% |
| 2009-03-31 | \0.005472636815920398% |
| 2009-06-30 | \0.07027424094025465% |
| 2009-06-30 | \0.1325940212150434% |
| 2009-09-30 | \0.05516451137665739% |
| Latest Value | \0.05516451137665739% |
| Change Pct | \3392.9272969623275% |
| Ticker | BSX |
| Timeframe | reported periods |

#### BMY sector percentile check

Ranks BMY against 687 companies in its sector using CommonQuant fundamentals.

| Measure | Value |
| --- | ---: |
| Free cash flow | 100th percentile |
| Return on equity | \87.4015748031496th percentile |
| Revenue growth (YoY) | \26.262626262626267th percentile |
| Rnd Intensity | \36.87374749498998th percentile |
| Ticker | BMY |
| Sector | Health Care |
| Peer Count | 687 |

### Scores

- **Conviction score breakdown:** 63
- **Thesis support:** 78
- **Trade readiness:** 35
- **Risk quality:** 62
- **Backtest evidence:** 72
- **Fundamentals trend:** 70

### Watch items

- **NVDA — ADX (14)**
- **NVDA — RSI (14)**
- **NVDA — EMA (11) vs EMA (21) spread**
- **INTC — EMA (11) vs EMA (21) spread**
- **INTC — RSI (14)**
- **C — ADX (14)**
- **C — RSI (14)**
- **MS — ADX (14)**
- **MS — RSI (14)**
- **LRCX — EMA (11) crossed above EMA (21)**
- **LRCX — RSI (14) above 40**
- **LRCX — ADX (14) above 25**

## Key details

- Symbols: LRCX, INTC, NVDA, XPEV, MS, IBM, C, MDT, BSX, BMY
- Timeframes: 1d
- Tags: \#daily-movers, \#market-moves

## Community

- Upvotes: 24
- Views: 289
- Copies: 0
- Cosigns: 0

## News sources

- [Citigroup Q2 Earnings Call Highlights](https://finance.yahoo.com/markets/stocks/articles/citigroup-q2-earnings-call-highlights-170233103.html) — Yahoo Finance
- [Donald Trump's Drug-Pricing Deals Are Reshaping Big Pharma -- Here's What That Means for Pfizer, AbbVie, and Bristol Myers Squibb](https://finance.yahoo.com/healthcare/articles/donald-trumps-drug-pricing-deals-092000322.html) — Yahoo Finance
- [Intel, ARM face near-term pain while AMD rides server boom: BofA](https://finance.yahoo.com/markets/stocks/articles/intel-arm-face-near-term-173700806.html) — Yahoo Finance
- [Intel Investors Who Bought During the Peak of the Dot-Com Bubble Are Finally Out of the Red. It's a Painful Reminder of Why Valuations Matter](https://finance.yahoo.com/markets/stocks/articles/intel-investors-bought-during-peak-201924858.html) — Yahoo Finance
- [Software Stocks, IT Services Firms Pummeled Amid IBM's Q2 Earnings Miss](https://www.investors.com/news/technology/software-stocks-pummeled-amid-ibms-q2-earnings-miss/?src=A00220&yptr=yahoo) — Yahoo Finance
- [IBM stock plummets more than 25% on Q2 earnings warning](https://finance.yahoo.com/news/ibm-stock-plummets-more-than-25-on-q2-earnings-warning-150605880.html) — Yahoo Finance
- [Citi Stock Traders Post Record Revenue for Quarter](https://www.bloomberg.com/news/videos/2026-07-14/citi-stock-traders-post-record-revenue-for-quarter-video) — Bloomberg Markets
- [EXCLUSIVE: ZTE among Chinese firms licensed to purchase Nvidia's H200 chips, documents show - Reuters](https://news.google.com/rss/articles/CBMizwFBVV95cUxPdVpBQlhHaFUzWDZibmY1SzNLeWV1b2pFN1dxbWNRcjFoeHR2ejdVUS1Sa3JZN2hrRnlITVZ4LWtSUVRndW5NT1hQWFVMc2FNVEVUTGNRX2JtZ192SG1PeVgtRG5GMnZLcERfNGkxc2tzWTZSM0ZWSmUyQmRtaUxTb1BKN0hQYk9HeHpGa25HYnRDRGJwVHdOcFdXd3RaUE15c1phTm9DLWxQLXd5NkxvQzR2bFNYb2ZCUkxMdkU2M01HanF1Ym9GTkRxUEVwU2s?oc=5) — Reuters
- [Here’s Why Morgan Stanley Raised Merchants Bancorp (MBIN) Stock Target](https://finance.yahoo.com/markets/stocks/articles/why-morgan-stanley-raised-merchants-151034121.html) — Yahoo Finance
- [Nvidia halves Asia buyer list in China chip crackdown, FT reports - Reuters](https://news.google.com/rss/articles/CBMirgFBVV95cUxQQ042c2NBTzI2SnhBeFZzMC03WndWMmFTRG1KbXI4V2hacnh2SWZUZ29nbkRvcUNVRi1NVEhWd19hSmNNNzh0QzNLVjhZcjFLWXhGdjFhLXIxcDRnUEQ0X0RRaXRVckJRd2Q1bmNpTklSbW5NUnNJUTdNejllLTVpTzF2QkI5V1YwUHVCWVgyREVXZG1QVS1fYWNGRVFweUlVQlpJSVhWNDF6WDd2TGc?oc=5) — Reuters

## Related

- [LRCX trade ideas](https://commonquant.ai/stocks/lrcx)
- [INTC trade ideas](https://commonquant.ai/stocks/intc)
- [NVDA trade ideas](https://commonquant.ai/stocks/nvda)
- [XPEV trade ideas](https://commonquant.ai/stocks/xpev)
- [MS trade ideas](https://commonquant.ai/stocks/ms)
- [IBM trade ideas](https://commonquant.ai/stocks/ibm)
- [C trade ideas](https://commonquant.ai/stocks/c)
- [MDT trade ideas](https://commonquant.ai/stocks/mdt)
- [BSX trade ideas](https://commonquant.ai/stocks/bsx)
- [BMY trade ideas](https://commonquant.ai/stocks/bmy)
- [Latest market news](https://commonquant.ai/news)

## About CommonQuant Research

Ideas and Advanced Analysis are generated with fresh, LLM-selected news headlines and grounded in SEC XBRL fundamentals and peer percentiles. Strategies built from these ideas are automatically backtested (12-month and 5-year, walk-forward tuned) and stress-tested before they can go live, then monitored against the news hourly while they run.