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What to Watch in Williams-Sonoma Q4’s Report
7:00 am — WSM -1.18% in pre-market trading
Williams-Sonoma (WSM 0.10%), a leading U.S. retailer of home furnishings and kitchenware, is expected to report earnings for the fourth quarter of fiscal year 2025 before the market opens. Here’s what to watch:
- Tariff impact on margins: Management has flagged that tariffs will have a larger effect on operating margin in Q4. Investors should watch for how much of this impact is offset by the company’s mitigation strategies.
- Promotional activity and full-price selling: The company aims to reduce promotions and maintain strong full-price sales. Any deviation could affect both revenue and margin outcomes.
- Holiday-season performance and inventory levels: Q4 includes the key holiday period. Watch for commentary on sell-through rates, inventory composition, and how well the company managed seasonal demand.
- Status of new initiatives and acquisitions: Look for updates on the Dormify intellectual property acquisition (announced; relaunch planned for 2026), the expanded Affirm (AFRM 0.21%) payment partnership in Canada (completed), and the OpenAI Ad Pilot Program participation (ongoing).
- AI-driven operational efficiencies: The company has highlighted early benefits from AI in customer service and supply chain. Investors should look for further evidence of cost savings and productivity gains in the Q4 results.
Today’s Change
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Discoveries From the Databases: A Lesson in ROUNTA
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By Josh Simka
Sometimes the most revealing metric isn’t revenue growth, margin expansion, or even return on equity. Sometimes it’s whether management can consistently turn real assets into real money.
Imagine two neighborhood pizzerias. Ottavio’s has a large dining room, expensive ovens, and the storefront has undergone near-constant remodeling. They bring in $100,000 a year in revenue. Nemorino’s, just a few blocks over, operates mostly takeout, has a tiny kitchen, and makes the same $100,000 with far less staff and equipment. Both earn the same profit, but one needs far fewer real-world assets to get there. Nemorino’s is converting real stuff like ovens, space, and equipment into earnings far more efficiently. And importantly, we’re not giving either pizzeria credit for how they financed those ovens — cash or debt. We’re just asking: How productive are the assets themselves?
Enter a metric called ROUNTA (return on unlevered net tangible assets).
This Morning’s Breakfast News
7:30 am — RKLB -3.18% in pre-market trading
Rocket Lab (RKLB +10.10%) closed 10% up yesterday, with investors optimistic ahead of new launches. Dubbed “Eight Days A Week” and “Daughter of the Stars”, the company’s next two Electron missions are planned for the coming week.
- “Hungry Hippo” ready to go: The curiously named fairing assembly for Rocket Lab’s Neutron rocket is now qualified for integration, the company announced, along with news of a new $816 million defense contract with the U.S. Space Development Agency.
- Down around 3% in pre-market trading: The stock lost some ground this morning on the back of a new equity offering announced late yesterday, valued at up to $1 billion. Rocket Lab is 55% ahead of the S&P 500 since its August 2025 SA rec.
ICYMI: Tuesday’s Scoreboard
6:15 am — ONTO +2.76% in pre-market trading
Onto Innovation (ONTO +1.01%) was the subject of the latest Scoreboard video.
Meta Bets on Manus to Capture Enterprise AI
6:00 am — META +0.45% in pre-market trading
Meta Platforms (META 0.80%) is moving its AI ambitions from the cloud to your hard drive with the launch of the Manus Desktop application. Featuring a new “My Computer” tool, the agent can now natively read, edit, and organize local files–a direct response to the viral success of the open-source rival OpenClaw. While Nvidia (NVDA 0.74%) CEO Jensen Huang recently dubbed OpenClaw “the next ChatGPT,” Meta is banking on Manus’s polished, subscription-based model to capture the enterprise market. However, the $2 billion acquisition remains under a cloud of geopolitical tension; Chinese regulators are currently investigating the deal for potential technology export violations, even as Meta integrates the Singapore-based team into its core “Superintelligence” lab.
- The Local Advantage: By operating directly on the user’s terminal, Manus can build apps and manage complex local workflows without the latency or data-transfer costs of cloud-only models like those from Alphabet (GOOG +1.61%).
- Security Guardrails: To combat privacy fears, Meta has implemented an “explicit approval” system, requiring users to greenlight every system-level action the agent takes on their machine.
Nvidia Gets U.S. and China Nod for H200 Sales
5:30 am — NVDA +0.92% in pre-market trading
Nvidia (NVDA 0.74%) has been approved to ship its H200 processors to customers in China, CEO Jensen Huang said at the company’s GTC conference yesterday, adding the export deal has clearance from U.S. authorities and from Beijing. Chinese AI stocks got a boost after Huang described OpenClaw AI as “definitely the next ChatGPT.”
Before the Opening Bell
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Stock futures are climbing Wednesday morning as a relief rally in technology and a cooling in energy prices provide a tailwind ahead of the Federal Reserve’s policy announcement. S&P 500 and Nasdaq futures rose roughly 0.5% following bullish AI commentary from Nvidia (NVDA 0.74%) CEO Jensen Huang and a $20 billion buyback announcement from Qualcomm (QCOM +1.62%). Brent crude retreated to $102 per barrel after Iraq signaled a deal to resume oil exports via Turkey, easing some “war premium” fears. While the Fed is 99% certain to keep rates in the 3.5% to 3.75% range, investors are laser-focused on Chair Jerome Powell’s 2:30 PM ET press conference for clues on whether the Middle East conflict has permanently delayed 2026 rate cuts.
- The Boeing Headwind: Boeing (BA 1.24%) is bucking the morning rally, with shares under pressure after the company warned that 737 MAX wiring defects and supplier turnaround costs will significantly weigh on first-quarter deliveries.
- AI Resilience: Risk appetite is being anchored by the semiconductor sector; Samsung Electronics surged 7% overnight, signaling that the global AI infrastructure build-out remains decoupled from geopolitical volatility.
This article was created using Large Language Models (LLMs) based on The Motley Fool’s insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. Joshua Simka has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Boeing, Meta Platforms, Nvidia, Qualcomm, Rocket Lab, and Williams-Sonoma. The Motley Fool has a disclosure policy.
