Health insurers fall, Affirm’s stock tumbles, AMD shares higher: Trending tickers

Health insurance stocks UnitedHealth and Humana fall as Americans get surgeries they delayed due to the pandemic. Affirm shares tumble after receiving a “sell” rating from BTIG. AMD closes higher after Reuters reported AWS is considering using AMD’s new AI chips. Yahoo Finance Live breaks down some of the trending tickers of the day.

Video Transcript

JULIE HYMAN: Let’s take a look at some of the individual top movers of the day because there were other things going on, of course. And one of the biggest things going on was the absolute bloodbath happening in the health insurance industry. And this is, by the way, this is not an area where we tend to see this much movement.

UnitedHealth warning of rising costs as a result of an increase in surgeries among older adults. So not only did it fall, not only did Humana fall, but, like, anything touched by health insurance and in particular Medicare and Medicaid falling in today’s session as a result of this commentary.

AKIKO FUJITA: Here’s a number to keep in mind. $42 billion wiped out from the market cap.

JULIE HYMAN: Geez.

AKIKO FUJITA: Given what we saw there today. And you talk about Humana down well over 10%, as well as other Medicare or at least we should say health care providers as well. I mean, some of this is about surgeries that were delayed during the pandemic. We’re talking three years later now. But certainly, just an ugly day.

JULIE HYMAN: Yeah. The other number that people have to keep in mind when you’re talking about the insurers is something called the medical loss ratio. How much of the premiums do we that we take in do we pay out to cover what people– the operations and such that people are having.

And for UnitedHealth, it’s 82.1% to 83.1%. They said the higher the number, the worse number, right? So they said that it might be at the higher end of those estimates.

By the way, what’s been bad news today for the health insurers has been good news for who they’re paying that money to– medical device makers, hospital chains. We actually saw shares of those types of companies go higher on the day. Look at these. All of them trading higher. Stryker, Boston Scientific, Medtronic, Intuitive Surgical, all of them climbing on the perception if there are more surgeries and the health insurers are paying more–

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AKIKO FUJITA: They benefit.

JULIE HYMAN: These are the guys getting the money.

AKIKO FUJITA: You see the correlation there. All right. Let’s talk about Affirm’s share sliding after BTIG-initiated coverage on the stock with a bearish tone noting the company’s business model is under pressure as in their words, “We enter a new stage in the macro environment, where discretionary spending is tightening quickly.

This is an interesting one for me because you could also argue on the other end that as discretionary spending really gets tightened, you don’t have as much money to use. Wouldn’t consumers go and really maybe extend their purchases to buy now pay later?

JULIE HYMAN: I think that there’s also the concern about expense growth though, as a result of that, right? If you have– and Affirm the management of Affirm has been very careful to say that they do not lend irresponsibly. So we’ll see kind of what that balance looks like. I mean, this note is interesting overall because it’s an initiation not just of Affirm, but of the financial technology industry as a whole.

And they like SoFi and say it’s best positioned to succeed in this environment because they see them as more diversified rate. Affirm, a little more narrow in its scope, right? SoFi offers a bigger suite of services. But I just thought that was an interesting contrast in this note as well that one would benefit more than the other. But we’ll obviously see what happens.

And shares of Advanced Micro Devices edging higher. That’s after Amazon Web Services reportedly considering using AMD’s new artificial intelligence chips. That is according to Reuters. The shares of AMD trading up by about two and a quarter percent today. Although you also saw a lift in tech overall.

AKIKO FUJITA: Yes, Nvidia hitting another high.

JULIE HYMAN: Yeah, so it’s unclear to me how much of it is enthusiasm over this report.

AKIKO FUJITA: Well, again, this is a report we should point out, not necessarily confirmed yet. It certainly would be significant to have that partnership in place. But if you look at the moves in a stock like Nvidia, that points to what we’ve been hearing over and over from analysts, which is to say that AI is such a huge opportunity. There is just enough to go around. It’s not about one winner in Nvidia, another one in AMD. There’s plenty of opportunities out there.

But this would be certainly significant because Nvidia has been the leader, especially on the data center side of things. And if this partnership is, in fact, true, that’s a big one.

JULIE HYMAN: Guess what, though, that’s another record high, record close for Nvidia today.

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