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https://finnhub.io/api/news?id=84d61a7f18354784ccfffbe0dbdb85621d26c039c08ac026a4800ecd122425b5 | Semiconductor investors in should look for companies with secular tailwinds, says Requisite's Talkington | Bryn Talkington, Requisite Capital Management, joins 'Closing Bell: Overtime' to discuss semiconductors and whether she believes the sector is heading toward a surge or slump. | 2022-12-16T09:39:27 | CNBC | Credit Cards
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https://finnhub.io/api/news?id=373d79e05c02f4801a2330ea8ae32cc4cbcfa8f65bcbd77f4caf69030821402f | The 7 Best Growth Stocks to Buy to Retire Early | While there’s always a time and place to play it safe, investors at some point will likely need to consider the best growth stocks to buy to retire early. As the most recent World Cup demonstrated, some teams can successfully deploy defensive counterattacking strategies to win. However, as the tournament progresses, those teams that take the initiative usually perform the best. And really, that’s what the best growth stocks to buy comes down to: moving into the wind and taking risks on potential | 2022-12-16T09:24:07 | Yahoo | The 7 Best Growth Stocks to Buy to Retire Early
While there’s always a time and place to play it safe, investors at some point will likely need to consider the best growth stocks to buy to retire early. As the most recent World Cup demonstrated, some teams can successfully deploy defensive counterattacking strategies to win. However, as the tournament progresses, those teams that take the initiative usually perform the best.
And really, that’s what the best growth stocks to buy comes down to: moving into the wind and taking risks on potentially significant upside opportunities. However, the current circumstances don’t necessarily support going completely contrarian. Despite earlier positive signs regarding monetary policy, the Federal Reserve remains committed to attacking inflation. Therefore, recession concerns ring loudly.
Therefore, investors seeking early retirement should seek out the best growth stocks to buy – but among established blue chips. Here are some of the top enterprises that still offer plenty of room to run.
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Nvidia
$165.29
Adobe
$339.02
Lam Research
$440.64
Veeva Systems
$167.53
Meta Platforms
$120.22
Netflix
$291.47
Tencent
$40.62
Nvidia (NVDA)
Source: Michael Vi / Shutterstock.com
One of the top semiconductor specialists, Nvidia (NASDAQ:NVDA) carries an unparalleled reputation for developing high-end graphics processing units. In particular, these GPUs power advanced gaming applications. As well, their ability to clock in outrageous performance stats makes them an excellent source for cryptocurrency-mining equipment. While the latter segment currently faces a bit of a crisis, the former enjoys a much more auspicious framework.
According to Grand View Research, the global video game market reached a valuation of $195.65 billion in 2021. Further, experts in the field project that this sector will expand at a compound annual growth rate (CAGR) of 12.9% from 2022 to 2030. At the end of the forecasted period, the gaming ecosystem could command revenue of $583.69 billion.
Now, what fundamentally makes NVDA one of the best growth stocks to buy to retire early centers on brand power. While its rivals continue to build competing GPUs, Nvidia remains the performance benchmark for professional gamers. With the underlying industry poised to rise higher, the math just seems to work out quite nicely.
Adobe (ADBE)
Source: Shutterstock
A software technology firm, Adobe (NASDAQ:ADBE) arguably generates the most attention for its Photoshop application. Fundamentally, then, Adobe represents one of the best growth stocks to buy for early retirement due to the gig economy. As white-collar workers discovered during the coronavirus shutdown, working from home facilitates certain benefits in terms of time freedom. However, those freedoms could be going away.
As Resume Builder reported this past September, 90% of companies it surveyed will require their employees to return to the office at least part of the week beginning in 2023. Further, the study noted that “21% of companies will fire workers who do not return to the office.” Should the economy slip into recession as mentioned above, employees will naturally lose bargaining power.
Of course, many if not most will acquiesce. However, a brave few will venture on their own, thus bolstering the gig economy. And since this segment encompasses myriad categories including creatives, Adobe appears to have a cynically bright future.
Lam Research (LRCX)
Source: Khakimullin Aleksandr / Shutterstock
Lam Research (NASDAQ:LRCX) is an American supplier of wafer fabrication equipment and related services to the semiconductor industry. Per its public profile, Lam’s products are used primarily in front-end wafer processing, which involves the steps that create the active components of semiconductor devices and their wiring.
As with other tech firms, Lam disproportionately suffered from the global supply chain disruption. On a year-to-date basis, LRCX stock suffered a steep decline of 38.5% of equity value. While certainly concerning, the back half of 2022 has been much better for Lam Research. In the trailing six-month period, LRCX gained almost 7%.
What should really attract investors to the enterprise, though, is the underlying profitability profile. Currently, the company commands (on a trailing-12-month basis) a net margin of nearly 27%. This ranks better than 88.5% of the competition. As well, its three-year revenue growth rate stands at 26.6%, making it one of the best growth stocks to buy to retire early.
Veeva Systems (VEEV)
Source: MEE KO DONG / Shutterstock
Headquartered in Pleasanton, California, Veeva Systems (NYSE:VEEV) is a cloud-computing company focused on pharmaceutical and life sciences industry applications. In other words, Veeva structures itself as a Software as a Solution enterprise for life science applications. Currently, the company commands a market capitalization of $26.45 billion.
As with other tech-related entities, 2022 has not been kind to VEEV stock. Since the start of the year, shares gave up nearly 34% of equity value. However, the business mitigated most of the pain in the second half. For example, in the trailing six months, the market loss pings at 4%.
To be fair, Veeva doesn’t present the most encouraging picture right now. However, if you’re looking for the best growth stocks to buy for early retirement, it’s difficult to overlook VEEV. Presently, the company features a three-year revenue growth rate of 27.3%, beating out nearly 83% of its peers. In addition, Veeva enjoys excellent stability in the balance sheet (with a cash-to-debt ratio of nearly 49 times) and strong profit margins.
Meta Platforms (META)
Source: Aleem Zahid Khan / Shutterstock.com
Without a doubt, mentioning Meta Platforms (NASDAQ:META) as one of the best growth stocks to buy to retire early raises eyebrows. In particular, the only “growth” that the company sees centers on a negative trajectory. Since the start of the year, META gave up almost 66% of equity value. During the market fallout on Dec. 15, shares plunged 4.5% for the day.
It stinks. I get it. Of course, the caveat is caveat emptor. However, if you are willing to take the risk, Meta may present an intriguing long-term opportunity. Fundamentally, the company still owns the world’s largest social media network in Facebook. And while digital advertising sentiment fell into the toilet this year, businesses must still market their products and services.
Cynically, with certain social networks becoming toxic – no names shall be mentioned – Facebook presents an advertiser-friendly platform. As well, Meta apparently accepted certain harsh realities, particularly given its cost-reduction initiatives. Again, META could be interesting for speculators looking for the best growth stocks to buy.
Netflix (NFLX)
Source: xalien / Shutterstock
One of the riskiest names among the best growth stocks to buy to retire early, Netflix (NASDAQ:NFLX) presents many frustrations. Look, on one side of the equation, you can point to the chart and recognize NFLX’s implosion. Since the January opener, NFLX cratered more than 51%. But on the other hand, Netflix killed it in the back half of 2022. In the trailing six months, shares gained a whopping 67.5%.
Will the real Netflix please stand up? Well, a wrinkle to this rags-to-riches-to-rags-back-to-riches tale materialized. It turns out that the streaming giant’s advertisement-supported subscription tier isn’t doing that well. That’s very disappointing because it appeared that entertainment trends were heading back to the living room following the revenge travel phenomenon.
For speculators seeking the best growth stocks to buy, they may want to exercise patience with NFLX. The company’s three-year revenue growth rate stands at 23.1%, beating out 88% of the competition. Plus, macro headwinds imply that consumers will continue to tighten their discretionary spending. However, streaming offers excellent entertainment dollar for value, potentially keeping Netflix in the game.
Tencent (TCEHY)
Source: Shutterstock
To be quite blunt, I was hesitant to include Tencent (OTCMKTS:TCEHY) on this list of best growth stocks to buy for early retirement. Mainly, the pensiveness centered on Tencent’s native China market. While the country recently relaxed its super strict zero-Covid policy, Chinese stocks still present geopolitical jitters. After all, President Xi Jinping secured a historic third term, which is really unprecedented.
With President Xi’s yes men and yes women occupying the seats of power, China lost the pretense that it wasn’t an authoritarian state. When dealing with free markets, authoritarianism should never be part of the discussion.
Nevertheless, the hard numbers from Tencent command respect. Currently, the company features a three-year revenue growth rate of 24%. This stat beats out over 74% of its rivals. In addition, Tencent delivers on the profitability front, which then leads to its return on equity of 22.6%. Such a high ROE indicates superior capacity to convert equity financing into profits, reflecting a high-quality business.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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The post The 7 Best Growth Stocks to Buy to Retire Early appeared first on InvestorPlace. | NVDA |
https://finnhub.io/api/news?id=ebb762eb6b18c8cb5227e277ed51ad198e09f9a942940e5b13d093fede42e46d | NVIDIA Corp. stock falls Friday, underperforms market | Shares of NVIDIA Corp. shed 2.25% to $165.71 Friday, on what proved to be an all-around grim trading session for the stock market, with the S&P 500 Index... | 2022-12-16T09:14:00 | MarketWatch | Shares of NVIDIA Corp.
NVDA,
+0.37%
shed 2.25% to $165.71 Friday, on what proved to be an all-around grim trading session for the stock market, with the S&P 500 Index
SPX,
-0.53%
falling 1.11% to 3,852.36 and Dow Jones Industrial Average
DJIA,
-0.43%
falling 0.85% to 32,920.46. This was the stock's third consecutive day of losses. NVIDIA Corp. closed $147.59 short of its 52-week high ($313.30), which the company achieved on December 28th.
Trading volume (47.8 M) remained 5.2 million below its 50-day average volume of 53.0 M.
Editor's Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use. | NVDA |
https://finnhub.io/api/news?id=0e682b02332dddcb2da7c4c46cda4c8861b0ec575f1ad5bc71a38368cea3a213 | Nvidia: The Share Price Looks Dangerously High | NVIDIA is facing major headwinds, and I think it's near-term results will likely be pretty bad. Click here to read my most recent analysis of NVDA stock. | 2022-12-16T09:12:30 | SeekingAlpha | Nvidia: The Share Price Looks Dangerously High
Summary
- NVIDIA is facing major headwinds. Its near-term results will likely be pretty bad.
- NVIDIA has seen its shares rise 60% from the lows set this fall, despite no meaningful good news, and despite the earnings outlook worsening.
- This seems totally unjustified to me, and NVIDIA's shares are now dangerously expensive, trading at a major premium compared to the historic norm.
- I do much more than just articles at Cash Flow Club: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »
Article Thesis
NVIDIA Corporation (NASDAQ:NVDA) is a quality company but faces considerable growth headwinds and had a pretty weak third quarter. And yet, shares have risen by a massive 60% from the recent lows already, despite the fact that earnings estimates continue to fall. Shares are now trading at a very elevated valuation again, which does not seem justified to me. While NVIDIA arguably was attractively priced at the lows seen this fall, they have now risen too much too fast, I believe.
NVIDIA Experiences Major Growth Problems
Not all semiconductor companies are created equal. Some have always been growing at a low pace and were focused on dividends, while others have always been cyclical, such as Micron (MU). NVIDIA was seen as a fast-growing company for a long time, but that is over, at least for now. The company has reported a deeply negative revenue comparison for the most recent quarter, and it's likely that revenues will be down during the next two quarters as well, with forecasted sales declines in the 20%+ range.
That is attributable to several headwinds. First, the ongoing crypto winter hurts demands from Ethereum miners. While Bitcoin can't be mined with GPUs efficiently, Ethereum and Ethereum-like cryptocurrencies can be mined with GPUs. While crypto prices were high, miners bought up GPUs from NVIDIA and others at a rapid pace, which was beneficial for NVIDIA's sales volumes and its margins. With crypto prices standing where they are today, cryptocurrency mining has become a lot less profitable, and demand for new GPUs from miners has vanished. Even worse, some miners have started to sell the GPUs that they bought in the past, which adds additional supply to the market, thereby depressing prices further.
Since interest rates continue to climb, it seems unlikely to me that cryptocurrencies will rise a lot in the foreseeable future. Demand from cryptocurrency miners will thus likely not come back in a big way in the foreseeable future.
At the same time, NVIDIA is also facing headwinds from inflation and rising interest rates. Those pressure the disposable incomes of consumers, as they have to pay more for their mortgages and their needs, such as food, energy, and so on. They thus have less cash available to spend on wants, which includes new PCs and gaming equipment. With consumers' pockets getting pinched, fewer consumers are willing to pay the very high prices for high-end graphic cards that NVIDIA was able to demand during the pandemic when consumers were flush with cash thanks to fiscal and monetary stimulus and when other ways of consumer spending, such as travel, were not possible. With consumers now either reducing their overall consumer spending on wants or diverting their spending towards experiences such as travel, concerts, etc. instead of "stay-at-home" spending such as gaming equipment, NVIDIA's sales outlook in the consumer segment is being hurt.
Last but not least, NVIDIA is also being hurt by new regulations that hurt NVIDIA's ability to sell high-end semiconductors to China. NVIDIA has stated in a filing that this regulation could block it from selling some of its newest AI chips, such as the A100 and H100 series, and that $400 million in booked orders were at risk. It seems likely to me that this will not be a one-time issue. Instead, it seems possible to likely that additional regulation will be coming in the foreseeable future, and that NVIDIA's business in China could face even larger headwinds going forward. It should be noted that the same holds true for some of NVIDIA's peers that will also be impacted by these rules.
Recent Results Were Bad, And The Next Two Quarters Will Likely Be Bad As Well
NVIDIA reported its most recent quarterly results in November. Sales dropped by a hefty 17% year over year, and profits were cut in half. That's not really fitting for a company that is seen as a major growth player and that is trading at a pretty high valuation.
There were some positives in the report, such as NVIDIA's strong data center sales. But even those weren't sufficient to offset the headwinds that NVIDIA experienced in other business areas, such as gaming.
NVIDIA's underperformance versus Advanced Micro Devices (AMD) was noteworthy, as the latter was able to push out a huge 29% revenue gain in its most recent quarter, despite also facing some of the headwinds that NVIDIA is suffering from. It looks like AMD is managing those a lot better, partially due to the fact that it isn't as heavily impacted by the crypto winter relative to NVIDIA.
Even worse, NVIDIA looks like it will report even worse results for the next two quarters. Right now, analysts are forecasting that NVIDIA's revenue decline rate will accelerate to more than 20% for the current quarter and the one after that, i.e. Q4 of fiscal 2023 and Q1 of fiscal 2024:
Sales declines of more than 20% are very hurtful, and not at all ordinary for a company like NVIDIA, which has had a pretty consistent revenue growth track record over the last couple of years, even during the pandemic. This is also in stark contrast to AMD's expected performance, as AMD is forecasted to grow its sales by 5% over the next half year. Intel (INTC) is forecasted to see its sales drop by 20%+ in the next two quarters as well, but then again, that's Intel - not a lot of growth is expected from Intel anyways, and the valuation accounts for weak results, with INTC trading for less than 14x forward earnings.
The fact that NVIDIA is expected to experience a quite harsh downturn while trading at a pretty high valuation should give investors pause. A company that is priced for massive growth shouldn't experience large business downturns, and a company experiencing a large downturn shouldn't be priced as if it was growing at a massive pace, I believe.
The Valuation Is Getting Ridiculously High
NVIDIA's shares have underperformed in 2022, and rightfully so - growth was way weaker than expected, and growth forecasts for the next couple of years have taken a big hit. NVIDIA dropped to less than $110 at one point, where shares arguably were a very solid value, as the near-term headwinds seemed accounted for.
Somewhat surprisingly, however, NVIDIA has seen its shares rally by 60% since then. That's a hefty gain for a company the size of NVIDIA, as this pencils out to a $150 billion market capitalization gain in just two months. Was this driven by improving earnings estimates, major upwards revisions to NVIDIA's guidance, or waning macro headwinds? The contrary is true -- macro headwinds such as high inflation, rising rates, and low crypto prices persist, regulation when it comes to AI chip sales to China remains a headwind, and earnings estimates aren't falling. In fact, they have continued to weaken:
NVIDIA's earnings per share estimates for the next five quarters have dropped massively over the last half-year, and EPS estimates for four out of those five quarters have also declined further over the last three months. It is surprising to see that NVIDIA's share price has nevertheless risen so much in such a short period of time - to me, it seems rather ridiculous that the market is not caring for NVIDIA's weak profit outlook.
Looking at expected full-year results, the picture isn't prettier:
Over the last three months, there were 5x as many EPS downward revisions compared to EPS upward revisions, and the ratio isn't much better when it comes to revenue estimates. In the chart below, we see the massive pullback in EPS estimates over the last year. While analysts were predicting that NVIDIA would earn way more than $10 per share by January 2026 (green line) not too long ago, not even the longest-dating estimates for January 2028 see NVIDIA breaching the $10 per share level.
Based on current EPS estimates for this year, NVIDIA is trading at 52x forward earnings today. Let's look at NVIDIA's historic valuation to deduct whether that makes sense:
The 10-year median earnings multiple is 40, which means that NVIDIA trades at a 30% premium compared to the past average right now. At the same time, interest rates are massively higher today relative to the 10-year average, at 3.5% versus ~2% for the 10-year treasury rate. In theory, higher interest rates should result in lower equity valuations. But in NVIDIA's case, the contrary is true - despite the fact that rates are way higher now, NVIDIA is way more expensive than it used to be.
When we look at the company's enterprise value to EBITDA multiple, which accounts for changes in debt usage, the premium is even more elevated:
Right now, based on current estimates, NVIDIA's EV/EBITDA multiple is 140% higher than it was, on average, over the last decade. I do not see a good reason for a way higher valuation at a time when NVIDIA is facing considerable headwinds, when the economy is cooling and a recession becomes more likely, and when interest rates are at a 10-year-high, which should compress equity valuations, all else equal.
Takeaway
NVIDIA is not a bad company, but even good companies can be bad investments at the wrong price, as Cisco (CSCO) and Microsoft (MSFT) have proven during the dot.com bubble.
NVIDIA has rebounded massively from the lows seen this fall, and that seems way overblown to me. Right now, following this 60% rise in its share price, NVIDIA is trading at a substantial premium relative to its historic valuation, despite ongoing headwinds. I do not believe that this massive rally in NVIDIA's shares is justified, and do not believe that chasing shares is a good idea as they are now historically expensive while results will likely be very weak for the next two quarters.
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Comments (65)
deduce?
;) | NVDA |
https://finnhub.io/api/news?id=dd824ffe61b83a714f4ecdf7ad97d2988e07b30f2aead52689c46efbd3c9765a | Wall Street places more bets on chip sector's soft landing in 2023 | More on Wall Street are betting on a soft landing for semiconductor stocks that lagged the broader market in 2022. | 2022-12-16T08:37:00 | MarketWatch | More on Wall Street are betting on a soft landing for semiconductor stocks that lagged the broader market in 2022 as a two-year, pandemic-driven chip shortage suddenly flipped into a glut.
BofA Securities chip analyst Vivek Arya said Friday that a “soft landing could drive hard takeoff in chips stocks,” although he expects a bumpy start to 2023 “as stocks digest Q4 gains and are exposed to softer consumer demand.”
That follows Evercore ISI analyst C.J. Muse on Thursday, who listed Nvidia Corp.
NVDA,
That said, BofA’s Arya listed his top picks as Nvidia, and also had top picks that agreed with Muse with analog chip maker Analog Devices Inc.
ADI,
Also read: Salesforce ‘in the penalty box,’ while Workday sidestepping headwinds, analyst says of cloud software space
Arya differed with Muse in the rest of his picks, highlighting Applied Materials Inc.
AMAT,
“Chip independence as important in next era as energy independence was in last century,” the analyst said.
BofA Securities also upgraded electronic-design automation companies Cadence Design Systems Inc.
CDNS,
The SOX index closed the week down closed down 3.1%, compared with a 2.1% decline on the S&P 500 index
SPX, | NVDA |
https://finnhub.io/api/news?id=b9ca07e351cc143110f09d1f3bd4445353fe0a6efb0c28f21135a2ba255bface | Nvidia (NVDA) Up 8.1% Since Last Earnings Report: Can It Continue? | Nvidia (NVDA) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. | 2022-12-16T08:30:04 | Yahoo | Nvidia (NVDA) Up 8.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Nvidia (NVDA). Shares have added about 8.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nvidia due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NVIDIA Q3 Earnings Miss Estimates, Revenues Surpass
NVIDIA reported mixed results for the third quarter of fiscal 2023. The bottom line missed the Zacks Consensus Estimate, while the top line surpassed the same. However, third-quarter earnings and revenues both declined significantly on a year-over-year basis.
For the third quarter, NVIDIA reported non-GAAP earnings of 58 cents per share, which missed the Zacks Consensus Estimate by 17.1%. Moreover, the reported figure plunged 50% year over year while increasing 14% sequentially. The year-over-year decline in earnings was mainly due to lower revenues and increased operating expenses.
Third-quarter revenues plunged 17% year over year and 12% sequentially to $5.93 billion, primarily due to continued weakness across its Gaming and Professional Visualization market segments. Lower data center demand in China also hurt the top line in the reported quarter. However, the top line beat the consensus mark of $5.81 billion.
Segment Details
NVIDIA reports revenues under two segments — Graphics and Compute & Networking.
Graphics includes GeForce GPUs for gaming and personal computers, the GeForce NOW game-streaming service and related infrastructure. The segment also offers solutions for gaming platforms, Quadro GPUs for enterprise design, GRID software for cloud-based visual and virtual computing and automotive platforms for infotainment systems.
Graphics accounted for 35.7% of fiscal third-quarter revenues. The segment’s top line plunged 48% year over year and 24% sequentially to $2.12 billion.
Compute & Networking represented 64.3% of fiscal third-quarter revenues. The segment comprises Data Center platforms and systems for artificial intelligence, high-performance computing and accelerated computing, the DRIVE development platform for autonomous vehicles, and Jetson for robotics and other embedded platforms.
Compute & Networking revenues soared 27% year over year to $3.82 billion. However, the segment’s revenues declined 2% sequentially.
Market Platform’s Top Line Details
Based on the market platform, Gaming revenues plunged 51% year over year and 23% sequentially to $1.57 billion and accounted for 26.5% of total revenues. The decline was primarily due to a lower sell-in of Gaming products. This reflected a reduction in channel partner inventory levels amid weak demand due to macroeconomic headwinds and lockdowns in China, which continue to weigh on consumer demand.
Revenues from Data Center (64.6% of revenues) jumped 31% year over year and 1% from the previous quarter to $3.83 billion. This year-over-year rise was driven by the strong demand for its chips across U.S. cloud service providers, consumer internet companies and other vertical industries.
However, softness in China and the U.S. government’s new restrictions on the export of A100 and H100-based products to China negatively impacted the top line.
Professional Visualization revenues (3.4% of revenues) decreased 65% year over year and 60% sequentially to $200 million. The decline was primarily due to a lower sell-in to partners to help align channel inventory levels with the current demand expectations.
Automotive sales (4.2% of revenues) in the reported quarter totaled $251 million, up 86% on a year-over-year basis and 14% sequentially. The increase was mainly driven by the increased revenue contribution from self-driving solutions.
OEM and Other revenues (1.3% of revenues) plunged 69% year over year and 48% sequentially to $73 million. The decline was mainly due to the weak performance of Cryptocurrency Mining Processors, which generated nominal sales in the quarter compared with $105 million in the year-ago quarter. Moreover, lower Jetson and notebook OEM sales also negatively impacted the overall unit’s performance in the third quarter.
Operating Details
NVIDIA’s non-GAAP gross margin contracted by 10.9% year over year to 56.1%, mainly due to a $702 million charge for inventory, largely related to the lower Data Center demand in China. This was partially offset by a warranty benefit of approximately $70 million.
Non-GAAP operating expenses flared up 30% year over year and 3% sequentially to $1.79 billion on higher compensation-related expenses associated with employee growth and increased data center infrastructure-related expenses.
The non-GAAP operating income slumped 55% year over year to $1.54 billion.
Balance Sheet and Cash Flow
As of Oct 30, 2022, NVDA’s cash, cash equivalents and marketable securities were $13.14 billion, down from $17.04 billion as of Jul 31, 2022.
As of Oct 30, 2022, the total long-term debt (including current maturities) was $10.95 billion, flat with the previous quarter ended Jul 31, 2022.
NVIDIA generated $392 million in operating cash flows, down from the year-ago quarter’s $1.52 billion and the previous quarter’s $1.27 billion. The free cash flow was an outflow of $156 million compared to the inflow of the year-ago quarter’s $1.28 billion and the previous quarter’s $824 million.
In the first nine months of fiscal 2023, the company generated operating and free cash flows of $3.39 billion and $2.02 billion, respectively.
In the third quarter, the company returned $3.59 billion to shareholders through $100 million in dividend payouts and $3.49 billion in share repurchases. In the first three quarters of fiscal 2023, NVIDIA paid out $300 million in dividends and bought back common stocks worth $8.83 billion.
Fourth-Quarter Guidance
For the fourth quarter of fiscal 2023, NVIDIA anticipates revenues of $6 billion (+/-2%), lower than the Zacks Consensus Estimate of $6.23 billion. The company expects to resume sequential growth in the Gaming segment. It also forecasts modest sequential growth across the Data Center and Automotive divisions.
The GAAP and non-GAAP gross margins are projected at 63.2% and 66%, respectively (+/-50 bps). GAAP and non-GAAP operating expenses are estimated at $2.56 billion and $1.78 billion, respectively.
GAAP and non-GAAP other income and expenses, excluding gains and losses from non-affiliated investments, are anticipated at approximately $40 million.
The GAAP and non-GAAP tax rate for the quarter is estimated at 9% (+/- 1%). The company projects to make capital expenditures between $500 million and $550 million during the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a flat trend in estimates revision.
The consensus estimate has shifted -13.27% due to these changes.
VGM Scores
Currently, Nvidia has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Nvidia has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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To read this article on Zacks.com click here. | NVDA |
https://finnhub.io/api/news?id=d4f72f533f0bb3f866d6a1cb7c47b0a4dcaa59c50ccfcaefa2445342cb114d0b | Broadcom: Time To Pause The Optimism After The Impressive Rally | Broadcom rallied 23.05% since our previous article. Read more to see whether AVGO stock is a buy after this rally. | 2022-12-16T08:00:00 | SeekingAlpha | Broadcom: Time To Pause The Optimism After The Impressive Rally
Summary
- AVGO has impressively rallied by 23.05% since our previous article, significantly aided by the excellent FQ4'22 performance and impressive forward guidance.
- The optimism is further buoyed by the upbeat November CPI reports and the Fed's 50 basis point hike, triggering a tsunami of confidence lifting most boats.
- Due to the minimal margin of safety to our ambitious price target of $627.44, we prefer to exercise caution for now and wait for a moderate digestion.
- The time will come soon enough, once China fuels the prolonged inflation pain and higher terminal rates are introduced through 2023.
Investment Thesis
AVGO YTD Stock Price
Broadcom (NASDAQ:AVGO) has proved itself as the king of the semiconductor chips stocks, due to the excellent financial performance it reported in its recent FQ4'22 call. Thereby, triggering the excellent recovery in its stock valuations at -16.08% YTD against the S&P 500 Index at -16.80%, Qualcomm (QCOM) at -34.91%, Nvidia (NVDA) at -41.78%, Intel (INTC) at -46.08%, and Advanced Micro Devices (AMD) at -52.96%.
Now, the critical question is whether AVGO is able to sustain its current rally, since the stock has previously failed to sustain its resistance level at ~$580 in August 2022. However, we choose to remain optimistic, due to the excellent November CPI report at 7.1% versus estimates of 7.3%. With the Feds also walking the 50 basis point talk, we will likely witness a more dovish stance and moderate terminal rates ahead. Thereby, suggesting that the stock market has already bottomed by now, with a bullish outlook for sustained recovery through 2023.
AVGO's Execution & Margins Continues To Impress
AVGO Revenue, Gross %, EBIT %, Net Income ( in billion $ ) %, and EPS
By FY2022, AVGO reported an excellent expansion in margins across the board, tremendously improving its profitability by 34.38% YoY to adj EPS of $37.64. It is apparent that the management has been aggressively improving its operating efficiencies. This is due to the notable decline in its operating expenses by -9.05% YoY and -19.58% from FY2020 levels, while sustaining its leading R&D efforts at ~$4.9B annually over the past three years. Thereby, leading to the expansion of its GAAP operating margins by 11.8 percentage points YoY.
Furthermore, AVGO has been keeping the lid on its Stock-Based Compensation at $1.53B in FY2022, representing a notable decline of -10% YoY or -29.81% from FY2019 levels of $2.18B. As a result, tremendously improving its GAAP profitability by 76.86% YoY to EPS of $26.53 as well.
AVGO FCF ( in billion $ ) % and Balance Sheet
Meanwhile, AVGO has also outperformed expectations, due to the rapid expansion in its FCF margins and improvement in its balance sheet over the past three years. By FY2022, the company reported an excellent immediate liquidity of $15.38B while keeping its inventory levels manageable at $1.93B compared to INTC at $12.83B, AMD at $3.36B, and NVDA at $4.45B over the last twelve months.
The AVGO management also focused on shareholder returns against early deleveraging, with $7.03B of annual dividends paid and $8.45B of shares repurchased in the last fiscal year, as opposed to a nominal $0.33B debt repaid. However, we are not overly concerned about this strategy, since the company is expected to report an impressive annual FCF generation of ~$18B over the next few years compared to FY2019 levels of $9.27B and FY2022 levels of $16.31B.
AVGO Projected Revenue, Net Income ( in billion $ ) %, EBIT %, and EPS
Since our previous article in October 2022, AVGO's top and bottom line growth through FY2025 has been largely intact, indicating Mr. Market's confidence in the management's forward execution. Furthermore, with China's unexpected reopening cadence, we expect to see a massive boost in demand, due to the projected flurry of 'revenge' spending and 300B Yuan from the government stimulus package. The country accounted for a significant 29.66% or $9.75B of AVGO's revenues in FY2021, with the first three quarters of 2022 bringing the sum even higher for the Asia region at 67.31% and $16.33B.
Thereby, indicating the immense potential for AVGO's upward rerating through 2023. Market analysts already expect China to fully reopen by H1'23, with its GDP recovering tremendously to 5% by 2023, compared to the projected 3% in 2022 and the previous 6% in 2019. Naturally, this may also spark off prolonged inflationary pain through 2024, since Powell may have to raise terminal rates to over 6% to combat the country's elevated spending and demand. Only time will tell.
AVGO Projected FCF ( in billion $ ) %, Dividends, and Debt
There is no doubt about AVGO's FCF generation as well, since market analysts expect the company to steadily continue its deleveraging efforts through FY2025 to $20.53B of net debts against the FY2022 levels of $27.09B. Impressive indeed, with the projection of $575M in annual capital expenditure and $7.91B of annual dividends over the next three years.
In the meantime, we encourage you to read our previous article, which would help you better understand its position and market opportunities.
- Buy Broadcom As A Gift To Yourself During This Deep Pullback
So, Is AVGO Stock A Buy, Sell, or Hold?
AVGO 5Y EV/Revenue and P/E Valuations
AVGO is currently trading at an EV/NTM Revenue of 7.20x, NTM P/E of 13.64x, and NTM Market Cap/ FCF of 12.35x, relatively in line with its 5Y mean of 6.72x, 13.95x, and 12.58x, respectively. Otherwise, somewhat attractive based on its YTD mean of 7.49x, 14.41x, and 12.79x, respectively. However, there is a minimal margin of safety now, due to the recent 38.39% rally from the October bottom. Based on FY2025 adj EPS of $46.0 and current P/E valuations, we are looking at an aggressive price target of $627.44 with a nominal 9.22% upside. Otherwise, the consensus estimate of $653.70 also indicates a minimal 13.79% prospect.
Therefore, we prefer to rerate the AVGO stock as a Hold for now, significantly worsened by the VMware (NYSE:VMW) overhang from the EU regulators. Another Big Tech company, Microsoft (MSFT) is already facing insurmountable challenges in getting its Activision (ATVI) deal approved in all 16 countries, due to the vehemence of the FTC saga, China's refusal for a simplified approval, and the EU's in-depth investigation. Thereby, indicating a potential downside from current levels, with VMware already reporting some internal issues as three top executives exit the company during this uncertain period.
Investors should wait for a deeper retracement and clarity on the deal before adding this excellent stock to their portfolios. There will be more chances through 2023, once this tsunami of optimism has been moderately digested. On the other hand, opportunistic investors may still take advantage of the potential upside. However, one should also beware of getting burned while trying to execute in an extremely volatile macroeconomic environment.
This article was written by
Analyst’s Disclosure: I/we have a beneficial long position in the shares of AVGO, INTC, AMD, NVDA, MSFT, QCOM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Comments (12)
I have solid faith in Hock Tan and this goes to show how a company can be successful under strong management. | NVDA |
https://finnhub.io/api/news?id=17a1c513ab62605186648172b61b28a921790e952a1e3c0595b913f0dfa8bf62 | Nvidia stock: How the mega cap tech name performed in 2022 | Yahoo Finance's Jared Blikre breaks down the year in review for Nvidia stock, one of Yahoo Finance's trending tickers for 2022. | 2022-12-16T07:49:26 | Yahoo | Nvidia stock: How the mega cap tech name performed in 2022
Yahoo Finance's Jared Blikre breaks down the year in review for Nvidia stock, one of Yahoo Finance's trending tickers for 2022.
Video Transcript
BRAD SMITH: Guys, we're counting out the days to the new year. And taking a look back at some of the trending tickers along the way, today's focus, Nvidia. Yahoo Finance's Jared Blikre joins us now. Jared.
JARED BLIKRE: Hi there. Well, looking at our top 10 here, Nvidia is number nine. That is nine, number nine, as of last Friday. And I'll tell you what, Nvidia has been a mainstay of the Yahoo Finance trending tickers for years. But it only topped out at about number four this year. And it did that on two separate occasions. I'm going to pull up a chart here in a second. First of all, Nvidia down about 2 and 1/2% today, just the latest news. Powell under fire here, and chip stocks under fire as a result of the Fed kind of amping up that hawkish rhetoric. We're going to take a look at the sector in a second.
But here's Nvidia over the last two years. This chart is going to look very familiar. Lots of pandemic era charts look like this. Here is the big rise in 2021, only to be met with a huge decline in 2022. Now, at the highs, Nvidia had a stock price of $384.33 with a market cap of $834.4 billion. And when we think mega-caps, don't usually think about Nvidia, but it actually surpassed Meta in market cap on February 7 of this year. So Nvidia was $618.2 billion that day. Meta, because it had one of its worst days in years-- it had a pretty bad year-- that was a day where it sunk to $612.2 billion.
Finally, at the lows of the year here, and that was only about a month and a half ago when the rest of the stock market bottomed here. We have Nvidia hitting a new 2022 low in market cap as well of $279.6 billion. And just looking at some of the mega caps overall, let's hear it. Here, we have-- this is an intraday picture of them, along with their market cap. So here is Nvidia at 411.6 million. You can see where it fits into the grand scheme of things. Bigger than Walmart, but still smaller than Exxon here. And we know that those energy stocks have been some of the year's biggest gainers.
And in fact, when we take a look at the year to date performance here, let me just lap that. We can see, indeed, Nvidia among some of the worst performers of the year here, down 44%. And I just mentioned Exxon-- what a contrast-- that's up 69%, but pretty much in the same group as Amazon and not quite as bad as Meta, guys.
BRAD SMITH: All right.
JARED BLIKRE: Comparison.
BRAD SMITH: Continuing to look back at some of the key performers of the year. Jared, appreciate the time. | NVDA |
https://finnhub.io/api/news?id=3203cccc1933a99786f4c31f12a409ecb88aef9f74f3ee8fafe928ab59e14a8a | 3 Gaming Stocks to Buy Hand Over Fist Before 2022 Ends | The tech industry was hit especially hard, with the Nasdaq-100 Technology Sector falling 34% year to date. According to Grand View Research, the $195.65 billion video game industry will see a compound annual growth rate (CAGR) of 14.1% until at least 2030. With the new year around the corner, now could be an excellent time to add a gaming stock to your portfolio. | 2022-12-16T06:00:00 | Yahoo | 3 Gaming Stocks to Buy Hand Over Fist Before 2022 Ends
The tech industry was hit especially hard, with the Nasdaq-100 Technology Sector falling 34% year to date. According to Grand View Research, the $195.65 billion video game industry will see a compound annual growth rate (CAGR) of 14.1% until at least 2030. With the new year around the corner, now could be an excellent time to add a gaming stock to your portfolio. | NVDA |
https://finnhub.io/api/news?id=2de7053282eb22e425c8ce90980da8b8a216f085d1ef07b42c4499657cad7e12 | Dow Jones Futures Fall After Nasdaq Breaks Key Level, Apple Dives; Here's The Silver Lining | The Nasdaq undercut key support on recession fears, with Apple tumbling. Little is working, but here's the silver lining, | 2022-12-16T04:35:19 | Yahoo | Dow Jones Futures Fall After Nasdaq Breaks Key Level, Apple Dives; Here's The Silver Lining
The Nasdaq undercut key support on recession fears, with Apple tumbling. Little is working, but here's the silver lining,
The Nasdaq undercut key support on recession fears, with Apple tumbling. Little is working, but here's the silver lining,
Mark Spitznagel and Nassim Taleb have been watching for black swans for decades. "We’ve never seen anything like this level of total debt and leverage in the system," he tells Fortune. "It's an experiment."
Warren Buffett is undeniably the most famous and influential investor in modern history, based on his extraordinary performance record. Not surprisingly, the investment portfolio of Berkshire Hathaway Inc. (BRK.A), the holding company employing the Oracle of Omaha as chairman and CEO, receives wide media attention and scrutiny, even though Buffett is no longer making every investment decision. Despite his unparalleled success, Buffett's investment model has long been transparent, straightforward, and consistent.
Stocks have blown past expectations for 2023 – but some analysts are bracing for a sell-off as the market approaches record highs.
The JPMorgan Equity Premium Income ETF’s (NYSEARCA:JEPI) combination of high yield and monthly payments has quickly made it one of the market’s most popular ETFs. Investors who like JEPI’s style now have another high-yield competitor to consider — the NEOS S&P 500 High Income ETF (BATS:SPYI), which also pays on a monthly basis and yields 10.7%. Let’s take a closer look at this intriguing new option for high-yield investors. What is SPYI ETF’s Strategy? Launched in August of 2022, SPYI is still a
Just because you retire doesn't mean you have to stop working. And when work is an option rather than a requirement, it's possible to select a low-stress job that multiplies fulfillment without adding anxiety - but still provides a bit … Continue reading → The post 12 Low-Stress Jobs You Can Do in Retirement appeared first on SmartAsset Blog.
Berkshire Hathaway historically reports its quarterly financial results on weekends, and CEO Warren Buffet has a simple reason why. Berkshire (ticker: BRK.A, BRK.B) reported second-quarter earnings Saturday morning. Many other public companies, however, release their earnings results during the trading week, either before the market opens or after the closing bell.
The market rally is at an infection point after notable losses. Here's what to do. Warren Buffett's Berkshire earnings rose.
Is there a point at which I should stop reinvesting stock dividends and invest the money or save the cash? -Anonymous Many financial experts recommend that you reinvest dividends most of the time – and I'm inclined to agree. The … Continue reading → The post Ask an Advisor: Should I Stop Reinvesting Dividends? appeared first on SmartAsset Blog.
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The week ahead will feature a crucial inflation report and earnings out of Disney, UPS, and Alibaba as second quarter earnings season winds down.
(Bloomberg) -- Dan Loeb is hardly the first Wall Street titan to lament how meme stock traders have made short selling a perilous endeavor. But that Loeb, who runs the hedge fund Third Point LLC, did so now is what’s interesting.Most Read from BloombergTexas Power Prices to Surge 800% on Sunday Amid Searing HeatNetanyahu Seeks to Change How Judges Are Named, Then Stop RevampChina Embassy Rips ‘Brutal’ Russia Border Incident in Rare MoveThe Most Dangerous Job for Lawyers Is Being on Trump’s Legal
AustralianSuper, one of the world’s largest pensions, halved its Apple stock investment and sold Microsoft stock, while buying shares of Tesla and Nvidia.
One in 6 asset and wealth management companies will be bought or shut down in the next five years, according to a PwC survey of asset managers and institutional investors.
Travel scams are on the rise. Don't be a victim.
Warren Buffett's Berkshire Hathaway operating profit rose by 10%. BRKB stock is just out of buy range.
VZ stock provides a dividend but a buyback has been shelved amid 5G wireless investments. When will revenue growth reaccelerate?
Will generative artificial intelligence boost Palantir stock in the commercial market amid slowing revenue growth for the company?
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Dubbed the Oracle of Omaha, Warren Buffett is renowned for his simple and frugal lifestyle. Despite being the sixth richest person globally, with a net worth estimated at $117.9 billion, Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500. Adjusted for inflation, that amount today would be approximately $328,990.80, a mere 0.000279% of his total net worth. Buffett has consistently ranked the purchase of his home as the third-best investment he ha
As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=a7c446fdb06b005b7cad133c7ada1014906bc37385ef109b1512906970fc57e1 | Is Nvidia's Move Into Software a Good Idea? | These two semiconductor investors are back to discuss Nvidia and its current push to the software market. | 2022-12-16T03:30:00 | Yahoo | Is Nvidia's Move Into Software a Good Idea?
These two semiconductor investors are back to discuss Nvidia and its current push to the software market.
These two semiconductor investors are back to discuss Nvidia and its current push to the software market.
Mark Spitznagel and Nassim Taleb have been watching for black swans for decades. "We’ve never seen anything like this level of total debt and leverage in the system," he tells Fortune. "It's an experiment."
Warren Buffett is undeniably the most famous and influential investor in modern history, based on his extraordinary performance record. Not surprisingly, the investment portfolio of Berkshire Hathaway Inc. (BRK.A), the holding company employing the Oracle of Omaha as chairman and CEO, receives wide media attention and scrutiny, even though Buffett is no longer making every investment decision. Despite his unparalleled success, Buffett's investment model has long been transparent, straightforward, and consistent.
Stocks have blown past expectations for 2023 – but some analysts are bracing for a sell-off as the market approaches record highs.
The JPMorgan Equity Premium Income ETF’s (NYSEARCA:JEPI) combination of high yield and monthly payments has quickly made it one of the market’s most popular ETFs. Investors who like JEPI’s style now have another high-yield competitor to consider — the NEOS S&P 500 High Income ETF (BATS:SPYI), which also pays on a monthly basis and yields 10.7%. Let’s take a closer look at this intriguing new option for high-yield investors. What is SPYI ETF’s Strategy? Launched in August of 2022, SPYI is still a
Just because you retire doesn't mean you have to stop working. And when work is an option rather than a requirement, it's possible to select a low-stress job that multiplies fulfillment without adding anxiety - but still provides a bit … Continue reading → The post 12 Low-Stress Jobs You Can Do in Retirement appeared first on SmartAsset Blog.
Berkshire Hathaway historically reports its quarterly financial results on weekends, and CEO Warren Buffet has a simple reason why. Berkshire (ticker: BRK.A, BRK.B) reported second-quarter earnings Saturday morning. Many other public companies, however, release their earnings results during the trading week, either before the market opens or after the closing bell.
The market rally is at an infection point after notable losses. Here's what to do. Warren Buffett's Berkshire earnings rose.
Is there a point at which I should stop reinvesting stock dividends and invest the money or save the cash? -Anonymous Many financial experts recommend that you reinvest dividends most of the time – and I'm inclined to agree. The … Continue reading → The post Ask an Advisor: Should I Stop Reinvesting Dividends? appeared first on SmartAsset Blog.
There are many different approaches and strategies for retirement investing that might appeal to you. But how do you tell if a certain strategy works for your situation? When evaluating different approaches, consider how each strategy is put together and … Continue reading → The post Here's How Much to Keep in Stocks, Bonds and Cash in Retirement appeared first on SmartAsset Blog.
The week ahead will feature a crucial inflation report and earnings out of Disney, UPS, and Alibaba as second quarter earnings season winds down.
(Bloomberg) -- Dan Loeb is hardly the first Wall Street titan to lament how meme stock traders have made short selling a perilous endeavor. But that Loeb, who runs the hedge fund Third Point LLC, did so now is what’s interesting.Most Read from BloombergTexas Power Prices to Surge 800% on Sunday Amid Searing HeatNetanyahu Seeks to Change How Judges Are Named, Then Stop RevampChina Embassy Rips ‘Brutal’ Russia Border Incident in Rare MoveThe Most Dangerous Job for Lawyers Is Being on Trump’s Legal
AustralianSuper, one of the world’s largest pensions, halved its Apple stock investment and sold Microsoft stock, while buying shares of Tesla and Nvidia.
One in 6 asset and wealth management companies will be bought or shut down in the next five years, according to a PwC survey of asset managers and institutional investors.
Travel scams are on the rise. Don't be a victim.
Warren Buffett's Berkshire Hathaway operating profit rose by 10%. BRKB stock is just out of buy range.
VZ stock provides a dividend but a buyback has been shelved amid 5G wireless investments. When will revenue growth reaccelerate?
Will generative artificial intelligence boost Palantir stock in the commercial market amid slowing revenue growth for the company?
Retirement account withdrawals not only help you cover basic living expenses, but they also can fund the lifestyle you've always envisioned in your golden years. That money, however, can have unintended tax consequences. Required minimum distributions (RMDs) and other withdrawals … Continue reading → The post Social Security Taxes Can Hit You Hard in Retirement. Here's How to Lower Them appeared first on SmartAsset Blog.
Dubbed the Oracle of Omaha, Warren Buffett is renowned for his simple and frugal lifestyle. Despite being the sixth richest person globally, with a net worth estimated at $117.9 billion, Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500. Adjusted for inflation, that amount today would be approximately $328,990.80, a mere 0.000279% of his total net worth. Buffett has consistently ranked the purchase of his home as the third-best investment he ha
As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=b7d6e1fc11f35417aa8584ef003bd5118958fc850ab3d6e4f82f09359f795519 | Crypto, the Metaverse, or the Stock Market: Which Is the Best Buy for 2023? | There's been no escape from the bear market of 2022. With such a mess on our hands right now, it's time to start picking up the pieces in preparation for the next bull market. A seemingly endless wave of new crypto and non-fungible token (NFT) projects, 3D virtual worlds, and the like have been wiped out by the bear market of 2022 -- hastened by the Federal Reserve's record interest-rate increases, bringing an end to a decade-plus of easy-money policy. | 2022-12-16T02:51:00 | Yahoo | Crypto, the Metaverse, or the Stock Market: Which Is the Best Buy for 2023?
There's been no escape from the bear market of 2022. With such a mess on our hands right now, it's time to start picking up the pieces in preparation for the next bull market. A seemingly endless wave of new crypto and non-fungible token (NFT) projects, 3D virtual worlds, and the like have been wiped out by the bear market of 2022 -- hastened by the Federal Reserve's record interest-rate increases, bringing an end to a decade-plus of easy-money policy. | NVDA |
https://finnhub.io/api/news?id=e99d9532f78772c8ba48309a6a9063fe349197e89a43048db882e7823ce8e87a | Largest cryptocurrencies fall as Litecoin drops | All of the largest cryptocurrencies were down during morning trading on Friday, with Litecoin seeing the biggest move, falling 5.11% to $68.92. Cardano... | 2022-12-16T02:00:00 | MarketWatch | All of the largest cryptocurrencies were down during morning trading on Friday, with Litecoin
LTCUSD,
-0.23%
seeing the biggest move, falling 5.11% to $68.92.
Cardano
ADAUSD,
-0.11%
dropped 4.53% to 29 cents, and Ethereum
ETHUSD,
-0.24%
fell 3.95% to $1,214.67.
Ripple
XRPUSD,
+0.36%
dropped 3.95% to 36 cents on Friday, while Bitcoin Cash
BCHUSD,
-1.39%
shed 3.00% to $104.09 and Uniswap
UNIUSD,
-0.36%
fell 3.39% to $5.61.
Polkadot
DOTUSD,
+0.62%
and Dogecoin
DOGEUSD,
-1.13%
fell 2.93% to $5.08 and 2.42% to 8 cents
Bitcoin
BTCUSD,
-0.01%
rounded out the decreases with a 2.12% decline to $17,015.88.
In crypto-related company news, shares of Coinbase Global Inc.
COIN,
-3.79%
fell 1.97% to $37.23, while MicroStrategy Inc.
MSTR,
-3.32%
declined 3.24% to $181.92. Riot Blockchain Inc.
RIOT,
-3.93%
shares shed 2.53% to $3.92, and shares of Marathon Digital Holdings Inc.
MARA,
-4.41%
dropped 4.84% to $4.13.
Overstock.com Inc.
OSTK,
-6.52%
rose 0.26% to $20.93, while Block Inc.
SQ,
-13.64%
fell 2.64% to $64.15 and Tesla Inc.
TSLA,
-2.11%
dropped 1.05% to $156.01.
PayPal Holdings Inc.
PYPL,
-2.23%
climbed 0.14% to $69.87, and Ebang International Holdings Inc.
EBON,
-2.53%
shares declined 1.06% to $4.20. NVIDIA Corp.
NVDA,
+0.37%
sank 0.75% to $168.26, and Advanced Micro Devices Inc.
AMD,
+2.36%
inched down 0.14% to $66.25.
In the fund space, blockchain-focused Amplify Transformational Data Sharing ETF
BLOK,
-1.86%
slipped 0.95% to $15.56. The Bitwise Crypto Industry Innovators ETF
BITQ,
-4.08%,
which is focused on pure-play crypto companies, fell 3.14% to $3.71. Grayscale Bitcoin Trust
GBTC,
which tracks the Bitcoin market price, declined 2.29% to $8.11.
Editor's Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use. | NVDA |
https://finnhub.io/api/news?id=f0e53312a49967e00d90452177cfca69e4fc66de31e0db6fad129628233d0c14 | PayPal: A Top Pick For Capital Appreciation In 2023 | PayPal has declined by -62.19% in 2022 and is roughly -76.11% off its 2021 highs. See why PYPL stock could be one of the biggest winners in 2023. | 2022-12-16T01:00:00 | SeekingAlpha | PayPal: A Top Pick For Capital Appreciation In 2023
Summary
- If the market rallies in 2023 a sector rotation into tech is likely to drive the market higher and investors will flock to great tech companies that are on sale.
- PYPL has declined by -62.19% in 2022 and investors may look at this as a company with the potential to regain much of the ground it lost in during the bear market.
- From a valuation standpoint I believe PYPL has at least 32.07% upside from its current level and we could see additional appreciation in 2023.
- I do much more than just articles at Barbell Capital: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »
2022 has been a dismal year for investors. With just over 2 weeks left, the S&P 500 has declined by -16.17% YTD; at several points, its losses exceeded -25%. Many companies have fared worse than the S&P, and some have seen over half their market caps vanish. We are now in the thick of tax loss harvesting season, and many investors are positioning themselves for 2023. Many companies could catch a bid if the market rebounds, but where could the most alpha be captured to compensate for a disappointing 2022? When I think about what could be a top pick for 2023, I look for companies that have declined more than the markets, are a household name, the downside looks to be overdone, their valuation looks unjustified, and a rotation back into their sector could occur if the markets move upward. I am less likely to consider companies that have worked in 2022, such as Exxon Mobil (XOM) or Chevron (CVX), because while they could continue to appreciate, a lot of the upside is already baked into the share price. After building a valuation model and going through many sets of financials, PayPal (NASDAQ:PYPL) has become a top pick in 2023 for me. I do not own shares of PYPL, and my thesis has no bias. PYPL has declined by -62.19% in 2022 and is roughly -76.11% off its 2021 highs. PYPL is an absolute profit center, printing billions in net income and free cash flow (FCF). Based on a valuation methodology I built, PYPL looks to be undervalued by -37.03%, and if the market turns and a rotation into tech happens, PYPL could easily go up 50% or more in 2023.
Establishing a baseline for valuations and determining a realistic fair value
Everyone has an opinion, and investor sentiment is often based on what a company could accomplish in the future. Investors gravitate toward technology companies because they are often disruptors with the largest total addressable markets (TAM). How often have you heard investors justify an investment based on capturing a percentage of the TAM? The days of cheap money are over, and the rising rate environment is likely to extend into 2023, so I am looking for established companies with proven track records rather than companies that may need several years for their potential to unfold. I formulated a numbers-driven approach and took the emotion out of the equation to establish a fair value baseline.
The numbers found within financial statements can't be manipulated, but that doesn't mean an investor's viewpoint can't be skewed or incorrect. Some of the more common valuation tools investors use to determine if there is an opportunity in a specific stock are price to earnings (P/E), price to sales (P/S), enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), and enterprise value to revenue (EV/Revenue). Nothing is ever 1:1, and investors try to justify larger multiples based on growth rates of specific metrics, yet there has never been a universal valuation metric that hasn't been accepted without a rebuttal. I have come to the conclusion that many investors, including myself, have valued stocks incorrectly to fit a personal investment thesis and look toward others for reinforcement that our narrative is correct. This is why I started reverse-engineering and deconstructing the market caps of the largest companies in the market. I wanted to see how much of a true discount or premium to a company's market cap there was using a universal methodology.
In many cases, the market isn't rational, as companies appreciate to unthinkable levels while others decline to levels investors would have never anticipated. Putting market and investor sentiment aside, the numbers are the numbers, as $1 of revenue and $1 of Free Cash flow [FCF] equals $1 of revenue and $1 of FCF regardless of the company's name or sector it does business in. Every investment is the present value of all future cash flow. Therefore, as an investor, I factor into my investment thesis a company's FCF valuation. I have discussed FCF for years because I feel one of the most important valuation metrics is the FCF to Market Cap multiple a company trades at. Coincidently this hasn't been a widely discussed valuation metric. FCF represents a company's cash after accounting for cash outflows to support operations. I like to use this metric rather than net income because FCF is a measure of profitability that excludes the non-cash expenses and includes spending on equipment and assets. It's also a harder number to distort or manipulate due to how companies account for taxes, and other interest expenses. This is also the pool of capital companies utilize to pay back debt, reinvest in the business, pay dividends, buy back shares, and make acquisitions.
My valuation theory is that we should look at every company the same way and implement the same baseline to establish an initial valuation. Ultimately, every company is in the business of generating profits, and $1 of profit is $1 of profit regardless of the sector in which a company conducts business. My baseline valuation formula is simple, 20x the FCF plus the equity on a company's balance sheet. I arrived at this valuation model by breaking down Apple (AAPL) and using it as the benchmark. I chose to deconstruct AAPL for the benchmark because it's the most profitable company, as it generated $99.8 billion in net income and $111.44 billion in FCF in its 2022 fiscal year. Over the previous 5-years, Apple has produced $1.56 trillion in revenue, $400.78 billion in FCF, and $366.68 billion in net income. Over the past 5-years AAPL's revenue has grown by $165.09 billion (72.02%), FCF by $59.67 billion (115.25%), and its net income by $51.45 billion (106.41%). No other company has accomplished what AAPL has achieved, so there is an argument to be made that no company should trade at a larger valuation multiple than AAPL. Today Apple has a $2.3 trillion market cap and is the largest publicly traded company in the world. It would be hard to agree that Apple isn't the standard, considering it represents the largest position in the S&P 500 at 6.51% (SPDR S&P 500 Trust ETF Holdings) and is the most profitable company in the market. If Apple is the standard, then this would be a very accurate methodology for its market cap:
- Apple Market Cap $2,314,152,781,119
- Apple current total equity $50,672,000,000
- Apple 2022 FCF $111,443,000,000
- FCF multiple of 20 = $2,228,860,000,000
- (FCF $111,443,000,000 x 20) + $50,672,000,000 of total equity = $2,279,532,000,000
- Apple trades at a 1.52% premium to 20x its FCF plus total equity
- $2,314,152,781,119 - $2,279,532,000,000 = $34,620,781,119 or 1.52%
Why PayPal is a top pick in 2023 for me
I first established which sector I thought money would rotate into if the market were to rally. I compared SPY to the SPDR Sector ETFs to see which sectors had underperformed the market in 2022. The Technology Select Sector SPDR Fund (XLK), The Real Estate Select Sector SPDR Fund (XLRE), and The Communication Services Select Sector SPDR Fund (XLC) underperformed the market while the SPDR select sector funds in Energy, Utilities, Health Care, Consumer Staples, Industrials, Materials, and Financials have all outperformed the S&P in 2022. Out of Technology, Real Estate, and Communications, I believe we will see the largest rotation into technology if the markets rally in 2023, therefore I want to look at the most popular technology companies and see which are the most undervalued.
I selected 17 of the largest, most well-known technology companies for this comparison. I didn't want anyone to believe I was picking specific companies to make PYPL look better so I selected a wide range of companies which includes:
- Apple (AAPL)
- Microsoft (MSFT)
- Alphabet (GOOGL)
- Amazon (AMZN)
- Tesla (TSLA)
- NVIDIA Corporation (NVDA)
- Meta Platforms (META)
- Broadcom (AVGO)
- Oracle Corporation (ORCL)
- Cisco Systems (CSCO)
- Texas Instruments (TXN)
- Adobe (ADBE)
- International Business Machines (IBM)
- Salesforce (CRM)
- Intel Corporation (INTC)
- PayPal (PYPL)
- Shopify (SHOP)
Based on my baseline valuation methodology of 20x FCF + total equity, only 2 companies looked fairly valued: AAPL at a 1.52% premium and ADBE at a 1.44% premium. There were 7 companies that traded at a discount to my methodology of 20x FCF + total equity: META, PYPL, CSCO, AVGO, IBM, CRM, and GOOGL. There were 8 companies that traded at a premium to my methodology of 20x FCF + total equity: INTC, TXN, MSFT, ORCL, TSLA, NVDA, SHOP, and AMZN. There were 3 companies (INTC, AMZN, SHOP) that have generated negative FCF over the trailing twelve months (TTM), so I assigned a value of 0 to their FCF x 20 column. This is why those cells are blank in the table above. When I think about it, 7 companies trading at a discount, 8 at a premium, and 2 relatively flat to the baseline methodology seem pretty logical as it's a fairly even proportion on both sides of the spectrum. I purposely picked an odd number to see if there would be an even number of companies discounted or with a premium to AAPL's valuation and even though ADBE trades at a 1.44% premium, its lower than AAPL's, which does in fact place 8 companies with a lower valuation multiple and 8 companies with a larger valuation multiple than AAPL.
The two companies that trade at the deepest discounts to my 20x FCF + total equity valuation are META and PYPL. While I am a shareholder of META and believe its undervalued, there is too much of a negative stigma around the company as investors are split on the relevance of the Metaverse for it to be a top pick over PYPL. PYPL has a market cap of $84.02 billion with $20.26 billion in total equity on the balance sheet, and it generates $5.66 billion in FCF. PYPL is trading at a -37.03% discount to its total equity + 20x its FCF. On a pure price-to-FCF basis, PYPL is trading at 14.85x its FCF. When I look at some of the other big tech companies, TSLA trades at 56.59x its FCF, NVDA trades at 92.06x, ORCL trades at 40.42x, and MSFT trades at 30.24x its FCF.
ORCL has generated roughly the same amount of FCF as PYPL in the TTM. ORCL has produced $5.37 billion, while PYPL has generated $5.66 billion of FCF. ORCL actually has negative equity on its books as its liabilities exceed its assets. PYPL has generated $284 million more in FCF, and has $20.64 billion in equity on the books compared to -$5.45 billion for ORCL, yet, ORCL has a market cap of $217.20 billion compared to $84.02 billion for PYPL. These valuations do not make sense considering the idea of business is to generate profits, and there isn't a premium associated with the FCF that ORCL generates compared to PYPL.
Based on this methodology, some companies are overvalued, and some are undervalued. Regardless if you agree with my logic, I reverse-engineered AAPL's market cap very accurately, and a number that can't be distorted is the price to FCF multiple a company trades at. PYPL trades at a 14.85x price to FCF multiple, while there are other tech companies that have been given valuations between 40-92x. I would rather pay 14.85x for PYPL's FCF than 92.06x for NVDA's or 40.42x for ORCL's.
Next, I looked at classic blue chips, which include Johnson & Johnson (JNJ), Procter & Gamble (PG), The Coca-Cola Company (KO), Disney (DIS), PepsiCo (PEP), and Walmart (WMT). If there is a rotation into tech, I wanted to see how these classics, which seem to have worked out well in 2022, are currently valued. Not even one of these trades at a discount to my total equity + 20x FCF methodology, and the premiums range from 9.12% to 80.33%. These companies also trade in a range of 26.41x – 161.85x on a pure price to FCF methodology. If a sector rotation occurs, undervalued tech companies and these classic blue-chips could invert on the valuations as money comes out of one sector and flows into tech. PEP, for instance, trades at a 72.57% premium to my total equity + 20x FCF methodology and at a 39.69x price to FCF multiple. In a tech-led rally, PYPL could certainly catch a bid and trade at the same valuation as some of these blue-chips.
The last comparison I looked at was PYPL compared to Mastercard (MA) and Visa (V). Interestingly enough, V trades at a 2.06% premium to my total equity + 20x FCF methodology and at 22.44x its FCF, which is very close to the baseline. MA trades at a 31.65 price to FCF and at a 53.68% premium to my baseline methodology. If the markets rally, there is no reason why PYPL wouldn't trade closer to the baseline. While V and MA both generate more FCF than PYPL, you're paying a much better price for the FCF that PYPL generates today, indicating that there is much more upside for PYPL than V and MA based on the current valuations.
No matter which group I compare PYPL to, it looks misvalued. I think this numbers-driven approach indicates that PYPL should trade at least 37.03% higher, and based on some of the valuations we are seeing, an argument could be made that PYPL deserves to trade at a premium. If a sector rotation occurs, investors will look for great tech companies that are producing large amounts of FCF that look undervalued. PYPL has brand recognition, it's an established company, and investors remember it trading at much larger share prices which makes me believe they will see it as a value play and allocate capital toward PYPL thinking that there is a large amount of alpha to be generated.
After determining PayPal looked massively undervalued from a valuation standpoint, I conducted further research and concluded they could still see YoY growth in many areas.
PYPL has become synonymous with digital transactions. There are currently 432 million active accounts, including 35 million active merchant accounts. These aren't accounts that remain idle. In Q3, the payments per active account averaged 50.1, which was a 13% YoY increase. PYPL achieved $337 billion of total payment volume in Q3, a 3-year spot CAGR of 24%. In Q3, PYPL generated $6.85 billion in revenue, $1.08 non-GAAP EPS, and $1.8 billion in FCF. PYPL's FCF grew 37% YoY and had a 26% margin based on Q3 revenue. This is the highest level of organic quarterly FCF in PYPL's history, driven by higher cash earnings.
The question is can PYPL continue to grow and drive revenue higher? Management seems to believe so. Next year U.S customers will be able to add their PayPal and Venmo network-branded credit and debit cards to their Apple wallet and use them online and in-store wherever Apple Pay is accepted. This is expected to occur in the first half of 2023, which should increase PYPL's transactional volumes. PYPL is also ramping up pay with Venmo on Amazon (AMZN), a partnership that should drive higher revenue. In addition to PYPL's growth initiatives, they are also on track to increase margins by eliminating $900 million as cost savings across operating and transaction expenses this year, and at least $1.3 billion in cost savings next year. PYPL has projected that it will grow its YoY non-GAAP operating margin in Q4 to approximately 22.5% and deliver at least 100 basis points of operating margin expansion in 2023.
PYPL has continued to grow its revenue YoY, and over the past 5-years, its revenue has increased by 106.61% as it added $13.96 billion in annualized revenue. One aspect that Warren Buffett would love is that PYPL meets his 40% gross profit rule. If you read Warren Buffett and the Interpretation of Financial Statements on page 34 of the Kindle edition it says:
"As a very general rule (and there are exceptions): Companies with gross profit margins of 40% or better tend to be companies with some sort of durable competitive advantage. Companies with gross profit margins below 40% tend to be companies in highly competitive industries, where competition is hurting overall profit margins (there are exceptions here, too).
Over the past 5-years, PYPL has maintained a gross profit margin that has exceeded 40%. In the TTM, PYPL has a gross profit margin of 42.9%, as they have produced $11.61 billion of gross profit. These high margins have led to billions in FCF and net income. PYPL has been a cash cow and cumulatively has generated $24.1 billion in FCF and $15.19 billion in net income over the last 5-years. In the TTM, PYPL has produced its largest amount of FCF with $5.66 billion and $2.3 billion in net income. While PYPL's share price has declined, PYPL has continued to return capital to shareholders through buybacks, as they have allocated $15.1 billion toward buybacks over the past 7 years. Cumulatively PYPL has reduced its shares outstanding by 82.7 million (6.76%) since the close of 2015. PYPL has had a favorable capital allocation plan as it's increasing the ownership for shareholders through buybacks while allocating billions toward acquisitions and strategic investments to drive revenue growth. I am expecting that PYPL will continue its YoY revenue growth trends which will lead to increased FCF, and eventually the market will realize its shares are trading at a discount.
Conclusion
I believe PYPL is a top pick for capital appreciation in 2023. If the market rallies I believe we will see a sector rotation into technology as investors look to make up for 2022's lost gains. If this occurs, the beaten-up tech stocks could attract much of the incoming capital. PYPL is in a prime position to benefit as it declined by -62.19% in 2022 and is roughly -76.11% off its 2021 highs. When I looked at 17 of the largest tech companies and compared them using the same valuation method, PYPL looked to be undervalued by -37.03%. Regardless of its share price declining, PYPL continues to make key strategic investments, form transformational partnerships, and drive revenue and FCF growth. PYPL has allocated more than $15 billion toward buybacks, and management has a proven track record of delivering on their operational goals. I believe PYPL could be one of the biggest winners in 2023, and I wouldn't be surprised if shares appreciate by at least 30% if the bear market goes back into hibernation.
Editor's Note: This article was submitted as part of Seeking Alpha’s Top 2023 Pick competition, which runs through December 25. This competition is open to all users and contributors; click here to find out more and submit your article today!
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This article was written by
Analyst’s Disclosure: I/we have a beneficial long position in the shares of AAPL, META, GOOGL, AMZN, TSLA, INTC, CSCO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. The investments and strategies discussed within this article are solely my personal opinions and commentary on the subject. This article has been written for research and educational purposes only. Anything written in this article does not take into account the reader’s particular investment objectives, financial situation, needs, or personal circumstances and is not intended to be specific to you. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters. Just because something may be an enticing investment for myself or someone else, it may not be the correct investment for you.
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Comments (39)
1. Looking at a normalised FCF number, as a company that has a bad year profitwise, or huge CAPEX one year, will have an abnormally low FCF so would skew your results
2. You have PYPL at 14.8 x FCF so haven't adjusted for the Equity you have in the other calculations, why not instead look at (Market Cap - NTA) / Normalised earnings for a more equivalent multiplier? I also have suggested NTA here as opposed to Equity as this is hard net assets, as opposed to intangibles which perhaps are not as reliable and are no doubt incorporated in some form in the earnings potential and reflected in the market cap and FCF multiplier anyway.I like the focus on the valuation metric but what about the underlying business in terms of future expectations? This article more reflects past FCFs at a time when interest rates were historically low and we had a long term boom, eg META and GOOGL FCFs are likely to drop with lower advertising revenues for instance, so comparing their multiplier or values next to the likes of others in different industries such as APPL perhaps is not so effective.
Maybe it is time for me to increase my stake! | NVDA |
https://finnhub.io/api/news?id=523320824c9e0b45b4c2af8f87d4fe69b3954f24caba7f8db38c1ff374eae3be | Dow Jones Futures: Nasdaq Breaks Key Level, Apple Dives; Here's The Silver Lining | The Nasdaq undercut key support on recession fears, with Apple tumbling. Little is working, but here's the silver lining, | 2022-12-15T16:16:19 | Yahoo | Dow Jones Futures Fall After Nasdaq Breaks Key Level, Apple Dives; Here's The Silver Lining
The Nasdaq undercut key support on recession fears, with Apple tumbling. Little is working, but here's the silver lining,
The Nasdaq undercut key support on recession fears, with Apple tumbling. Little is working, but here's the silver lining,
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As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=f569fdaaceae13ed6f2bcf072e14b5cc87c357b5e0accd4bb1fa3b7e39f3acdb | IYW: Technology Dashboard For December | Semiconductors look attractive regarding value and quality scores. Click here to find out why IYW is an alternative to XLK. | 2022-12-15T16:47:40 | SeekingAlpha | IYW: Technology Dashboard For December
Summary
- Semiconductors look attractive regarding value and quality scores.
- Entertainment and communication equipment are seriously overvalued.
- IYW is an alternative to XLK.
- 6 stocks cheaper than their peers in December.
- Quantitative Risk & Value members get exclusive access to our real-world portfolio. See all our investments here »
This monthly article series shows a dashboard with aggregate industry metrics in technology and communication services. It may also serve as a top-down analysis of sector ETFs like the Vanguard Information Technology Index ETF (VGT), the Technology Select Sector SPDR ETF (XLK), and the iShares U.S. Technology ETF (NYSEARCA:IYW), whose largest holdings are used to calculate these metrics.
Shortcut
The next two paragraphs in italic describe the dashboard methodology. They are necessary for new readers to understand the metrics. If you are used to this series or if you are short of time, you can skip them and go to the charts.
Base Metrics
I calculate the median value of five fundamental ratios for each industry: Earnings Yield ("EY"), Sales Yield ("SY"), Free Cash Flow Yield ("FY"), Return on Equity ("ROE"), Gross Margin ("GM"). The reference universe includes large companies in the U.S. stock market. The five base metrics are calculated on trailing 12 months. For all of them, higher is better. EY, SY and FY are medians of the inverse of Price/Earnings, Price/Sales and Price/Free Cash Flow. They are better for statistical studies than price-to-something ratios, which are unusable or non available when the "something" is close to zero or negative (for example, companies with negative earnings). I also look at two momentum metrics for each group: the median monthly return (RetM) and the median annual return (RetY).
I prefer medians to averages because a median splits a set in a good half and a bad half. A capital-weighted average is skewed by extreme values and the largest companies. My metrics are designed for stock-picking rather than index investing.
Value and Quality Scores
I calculate historical baselines for all metrics. They are noted respectively EYh, SYh, FYh, ROEh, GMh, and they are calculated as the averages on a look-back period of 11 years. For example, the value of EYh for hardware in the table below is the 11-year average of the median Earnings Yield in hardware companies.
The Value Score ("VS") is defined as the average difference in % between the three valuation ratios (EY, SY, FY) and their baselines (EYh, SYh, FYh). The same way, the Quality Score ("QS") is the average difference between the two quality ratios (ROE, GM) and their baselines (ROEh, GMh).
The scores are in percentage points. VS may be interpreted as the percentage of undervaluation or overvaluation relative to the baseline (positive is good, negative is bad). This interpretation must be taken with caution: the baseline is an arbitrary reference, not a supposed fair value. The formula assumes that the three valuation metrics are of equal importance.
Current data
The next table shows the metrics and scores as of last week's closing. Columns stand for all the data named and defined above.
| |
VS
| |
QS
| |
EY
| |
SY
| |
FY
| |
ROE
| |
GM
| |
EYh
| |
SYh
| |
FYh
| |
ROEh
| |
GMh
| |
RetM
| |
RetY
| |
Hardware
| |
0.68
| |
-24.11
| |
0.0486
| |
1.3221
| |
0.0111
| |
4.36
| |
38.46
| |
0.0363
| |
0.9393
| |
0.0405
| |
7.31
| |
41.75
| |
-3.65%
| |
-19.82%
| |
Comm. Equip.
| |
-38.59
| |
3.39
| |
0.0272
| |
0.1818
| |
0.0132
| |
18.72
| |
56.05
| |
0.0314
| |
0.2780
| |
0.0410
| |
15.76
| |
63.67
| |
5.97%
| |
-5.30%
| |
Entertainment
| |
-29.01
| |
-34.98
| |
0.0143
| |
0.6507
| |
0.0141
| |
6.42
| |
41.99
| |
0.0489
| |
0.4441
| |
0.0379
| |
17.17
| |
45.32
| |
-1.33%
| |
-24.86%
| |
Electronic Equip.
| |
-24.01
| |
19.91
| |
0.0395
| |
0.6493
| |
0.0224
| |
17.04
| |
38.68
| |
0.0432
| |
0.8076
| |
0.0399
| |
12.98
| |
35.65
| |
0.04%
| |
-8.15%
| |
Software
| |
-25.23
| |
-5.85
| |
0.0221
| |
0.1199
| |
0.0272
| |
16.39
| |
82.46
| |
0.0269
| |
0.1737
| |
0.0372
| |
17.72
| |
86.04
| |
0.53%
| |
-35.41%
| |
Telecom
| |
-16.38
| |
-8.56
| |
0.0410
| |
0.8628
| |
0.0098
| |
10.06
| |
57.14
| |
0.0501
| |
0.6527
| |
0.0266
| |
11.78
| |
58.59
| |
-7.82%
| |
-41.75%
| |
Semiconductors
| |
2.04
| |
17.20
| |
0.0555
| |
0.2348
| |
0.0327
| |
31.75
| |
62.55
| |
0.0466
| |
0.2474
| |
0.0355
| |
23.72
| |
62.23
| |
1.98%
| |
-28.38%
| |
IT Services
| |
-23.75
| |
9.54
| |
0.0342
| |
0.2215
| |
0.0241
| |
33.04
| |
50.26
| |
0.0386
| |
0.3300
| |
0.0330
| |
25.73
| |
55.41
| |
0.44%
| |
-23.36%
Value And Quality chart
The next chart plots the Value and Quality Scores by industry (higher is better).
Evolution since last month
Value and quality scores have significantly deteriorated in hardware.
Momentum
The next chart plots momentum data.
Interpretation
The most attractive industry in technology and communication is semiconductors. It is close to the historical baseline in valuation, and far above it in quality. Other subsectors are overvalued by 16% to 39% relative to 11-year averages. Overvaluation may be partly justified by a good quality score for electronic equipment, and to a lesser extent for IT services. Entertainment is the less attractive subsector, with both scores stuck far in negative territory for many months.
Focus on IYW
The iShares U.S. Technology ETF (IYW) has been tracking the Dow Jones U.S. Technology Capped Index since 5/15/2000. It has a total expense ratio of 0.39%, which is significantly higher than other passive index ETFs like VGT and XLK (0.10%). IYW holdings are capital-weighted with a capping methodology: the weight of any single issuer is limited to a maximum of 22.50%, and the aggregate weight of constituents exceeding 4.50% of the index is limited to a maximum of 45%. These conditions are assessed quarterly.
As of writing, the fund has 146 holdings. The three heaviest companies are Microsoft (MSFT), Apple (AAPL), and Alphabet (GOOG, GOOGL): they weigh between 9.5% and 18% each, and almost 44% together. Other constituents are under 6%. The next table lists the top 10 companies with growth and valuation ratios (these are the top 11 holdings as I have grouped Alphabet's two stock series). Their aggregate weight is about 64%.
| |
Ticker
| |
Name
| |
Weight%
| |
EPS growth %TTM
| |
P/E TTM
| |
P/E fwd
| |
Yield%
| |
Apple, Inc.
| |
18.08
| |
8.83
| |
23.47
| |
23.12
| |
0.64
| |
Microsoft Corp.
| |
16.14
| |
3.73
| |
27.72
| |
27.03
| |
1.06
| |
Alphabet, Inc.
| |
9.5
| |
-4.28
| |
19.13
| |
20.09
| |
0
| |
NVIDIA Corp.
| |
5.49
| |
-27.50
| |
75.19
| |
54.09
| |
0.09
| |
Meta Platforms, Inc.
| |
3.55
| |
-25.05
| |
11.58
| |
13.36
| |
0
| |
Broadcom, Inc.
| |
3.15
| |
75.49
| |
21.82
| |
14.16
| |
3.20
| |
Texas Instruments Inc.
| |
2.25
| |
22.53
| |
18.41
| |
18.95
| |
2.82
| |
Adobe, Inc.
| |
2.22
| |
-16.14
| |
33.50
| |
24.95
| |
0
| |
QUALCOMM, Inc.
| |
1.89
| |
44.53
| |
10.70
| |
11.77
| |
2.46
| |
International Business Machines Corp.
| |
1.87
| |
-74.03
| |
109.25
| |
16.46
| |
4.40
Data calculated with Portfolio123
IYW and XLK are very similar regarding annualized return and risk-adjusted performance (Sharpe ratio).
| |
Total Return
| |
Annual. Return
| |
Drawdown
| |
Sharpe
| |
Volatility
| |
IYW
| |
247.84%
| |
5.68%
| |
-81.82%
| |
0.27
| |
25.09%
| |
XLK
| |
272.18%
| |
6.00%
| |
-79.65%
| |
0.29
| |
22.97%
Data calculated with Portfolio123
In summary, IYW is a good product for investors seeking exposure in technology with capped weights for the top names. It holds much more stocks than XLK (currently 146 vs. 75), but it doesn't make a big difference in annualized return since 2000. XLK is a better choice regarding management fees and liquidity. Investors who want to avoid high weights in the top holdings may prefer the Invesco S&P 500 Equal Weight Technology ETF (RYT).
Dashboard List
I use the first table to calculate value and quality scores. It may also be used in a stock-picking process to check how companies stand among their peers. For example, the EY column tells us that a hardware company with an earnings yield above 0.0486 (or price/earnings below 20.58) is in the better half of the industry regarding this metric. A Dashboard List is sent every month to Quantitative Risk & Value subscribers with the most profitable companies standing in the better half among their peers regarding the three valuation metrics at the same time. Below is an excerpt of the list sent to subscribers several weeks ago based on data available at this time.
| |
Kulicke & Soffa Industries, Inc.
| |
Thryv Holdings, Inc.
| |
Synaptics, Inc.
| |
Diodes, Inc.
| |
Alpha & Omega Semiconductor Ltd.
| |
Gen Digital Inc.
It is a rotating list with a statistical bias toward excess returns in the long term, not the result of an analysis of each stock.
In these uncertain times, Quantitative Risk & Value (QRV) provides you with risk indicators and data-driven, time-tested strategies. Get started with a two-week free trial now.
This article was written by
Step up your investing experience: try Quantitative Risk & Value for free now (limited offer).
I am an individual investor and an IT professional, not a finance professional. My writings are data analysis and opinions, not investment advice. They may contain inaccurate information, despite all the effort I put in them. Readers are responsible for all consequences of using information included in my work, and are encouraged to do their own research from various sources.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of META, QCOM, TXN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Comments | NVDA |
https://finnhub.io/api/news?id=a8d80f4447e91a1aa4d58ea25ab3756ce81f2ad02a01f82386888e46eebdd6db | Why Nvidia Stock Got Thumped on Thursday | It wasn't good to be a tech stock on Thursday, and it was doubly uncomfortable to be Nvidia (NASDAQ: NVDA). The graphics card and autonomous driving solutions specialist saw its share price tumble by more than 4%, while the S&P 500 index "only" fell at a 2.5% pace on the back of a bearish new analyst report. | 2022-12-15T14:08:00 | Yahoo | Why Nvidia Stock Got Thumped on Thursday
It wasn't good to be a tech stock on Thursday, and it was doubly uncomfortable to be Nvidia (NASDAQ: NVDA). The graphics card and autonomous driving solutions specialist saw its share price tumble by more than 4%, while the S&P 500 index "only" fell at a 2.5% pace on the back of a bearish new analyst report. | NVDA |
https://finnhub.io/api/news?id=e7c6be2b15acc6ee487c107100415469ba25d552b558d84508bfe76a6bf68fd5 | Western Digital, Micron, Nvidia Fall On Chip Glut Amid Recession Fears | Shares in flash memory chipmaker Western Digital tumbled on a Goldman Sachs downgrade, also dragging down Micron Technology. | 2022-12-15T13:54:12 | Yahoo | Western Digital, Micron, Nvidia Fall On Chip Glut Amid Recession Fears
Shares in flash memory chipmaker Western Digital tumbled on a Goldman Sachs downgrade, also dragging down Micron Technology.
Shares in flash memory chipmaker Western Digital tumbled on a Goldman Sachs downgrade, also dragging down Micron Technology.
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Dubbed the Oracle of Omaha, Warren Buffett is renowned for his simple and frugal lifestyle. Despite being the sixth richest person globally, with a net worth estimated at $117.9 billion, Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500. Adjusted for inflation, that amount today would be approximately $328,990.80, a mere 0.000279% of his total net worth. Buffett has consistently ranked the purchase of his home as the third-best investment he ha
As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=37e80f1755cddb1a10df63c25576ffd0de037cdcb7fa8b25a5d8f9ddacba40d8 | The 7 Hottest Virtual Reality Stocks to Own for 2023 and Beyond | Perhaps one of the few silver linings of the otherwise awful coronavirus pandemic was that it provided a boost for the narrative undergirding the hottest virtual reality stocks. With government agencies mandating shelter-in-place policies, going the VR route represented an alternative to socialization. Nevertheless, the sector was already booming well before the global health crisis. According to Grand View Research, the global VR market reached a valuation of $21.83 billion in 2021. Experts pro | 2022-12-15T09:53:26 | Yahoo | The 7 Hottest Virtual Reality Stocks to Own for 2023 and Beyond
Perhaps one of the few silver linings of the otherwise awful coronavirus pandemic was that it provided a boost for the narrative undergirding the hottest virtual reality stocks. With government agencies mandating shelter-in-place policies, going the VR route represented an alternative to socialization. Nevertheless, the sector was already booming well before the global health crisis.
According to Grand View Research, the global VR market reached a valuation of $21.83 billion in 2021. Experts project that the sector will expand at a compound annual growth rate (CAGR) of 15% from 2022 to 2030. By the end of the forecasted period, the sector may bring in a revenue tally of $87 billion. Therefore, investors ought to target the hottest virtual reality stocks to own for next year and beyond.
Microsoft
$248.70
Alphabet
$91.30
Meta Platforms
$115.52
Nvidia
$168.44
Qualcomm
$117.16
Tencent
$40.26
Roblox
$27.01
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Microsoft (MSFT)
Source: Asif Islam / Shutterstock.com
A software and technology icon, Microsoft (NASDAQ:MSFT) simply fits well into almost any circumstance. While it’s technically listed under the broad tech category, MSFT doesn’t carry the typical volatility (this year aside) of the underlying sector. Rather, the company established itself as a staple within the global business ecosystem. For example, its Windows operating system commands a 75.1% market share among desktops.
However, MSFT really makes sense as one of the hottest virtual reality stocks to own. Fundamentally, it owns a major video game console system with the Xbox. Therefore, its VR accessories represent an organic business opportunity. And while Microsoft encountered antitrust pushback, it could potentially own Activision Blizzard (NASDAQ:ATVI). This too should help bolster Microsoft’s VR cred.
Most importantly in my view, the company enjoys solid financials. According to Gurufocus.com’s proprietary calculations for fair market value, MSFT rates as a modestly undervalued investment. As well, Microsoft carries a return on investment of 42.8%, reflecting a superior capacity to convert equity financing into profits.
Alphabet (GOOG, GOOGL)
Source: IgorGolovniov / Shutterstock.com
Another all-around solid enterprise, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) already attracts contrarians for its value proposition. On a year-to-date basis, Alphabet shares dropped over 34% in equity value. While the present macro-environment doesn’t natively support tech firms, the discount is huge, considering that the company’s Google search engine utterly dominates the world market.
Commanding relevancies in both VR and augmented reality, Alphabet presently focuses on the educational component of immersive technologies. For instance, through Google Earth VR, users can explore fascinating places from all over the planet. As well, its technology delivers perspectives that you simply can’t get as a mere mortal tourist. Thus, it makes for one of the hottest virtual reality stocks to own.
Finally, Gurufocus.com’s FMV calculations identify Alphabet as a significantly undervalued investment. For me, I’m looking at the strength of its balance sheet, particularly its Altman Z-Score of 9.72. This indicates a very low risk of bankruptcy. As well, the company features an ROE of 26.6%, suggesting a high-quality business.
Meta Platforms (META)
Source: Aleem Zahid Khan / Shutterstock.com
To be completely fair, Meta Platforms (NASDAQ:META) has more than its fair share of downside threats. Primarily, META already hemorrhaged around 64% of market value. Further, management continues to double down on its bet regarding the metaverse or the next generation of connectivity solutions. For transparency’s sake, I’ve covered many stories regarding the harsh, high-level criticisms that Meta attracted for this commitment.
Still, if you’re a believer in the hottest virtual reality stocks, then it’s difficult to ignore Meta Platforms. It’s not just the devices themselves, with the company delivering several VR headsets and accessories. It also features smart glasses thanks to its partnership with Ray-Ban. But beyond that, Meta aims to be the leader in the metaverse. Therefore, these products are a means to a greater end.
Plus, we can’t forget that Meta owns Facebook, the biggest social media network in the world. True, management expressed concerns throughout this year about the digital advertisement slowdown. Still, enterprises need to advertise if they want to succeed. Arguably, there’s no better place to do it than on Facebook.
Nvidia (NVDA)
Source: Michael Vi / Shutterstock.com
One of the powerhouses in the gaming arena, Nvidia (NASDAQ:NVDA) arguably generates the most attention for its graphics processing units. Powering some of the most intense applications, Nvidia’s GPUs represent the performance benchmark for professional gamers. In addition, its GPUs undergird multiple cryptocurrency-mining initiatives. Unfortunately, though, with the implosion of blockchain-related enterprises, NVDA took a massive hit.
Since the start of the year, NVDA gave up over 41% of its equity value. However, in the trailing month, shares gained 6%. Could this be the start of a bullish recovery? As one of the pioneers of VR technology, Nvidia enjoys relevancies across multiple industries. From gaming to video capture to cloud-based solutions, the company delivers meaningful applications.
Just as well, Nvidia represents a high-quality business. Specifically, it features strong profit margins, leading to a return on equity of 24.4%. This stat rates better than nearly 83% of the competition. It also reflects a superior capacity to convert equity financing into bottom-line expansion. Therefore, NVDA is worth a look among the hottest virtual reality stocks to buy.
Qualcomm (QCOM)
Source: greenbutterfly / Shutterstock.com
Headquartered in San Diego, California, Qualcomm (NASDAQ:QCOM) is a multinational corporation specializing in the manufacturing of semiconductors, software, and services related to wireless technology. Per its corporate profile, Qualcomm owns critical patents tied to 5G, along with prior-generation mobile communication standards. Of course, with the malaise of 2022 imposing particular hardships on the tech space, QCOM stock enjoyed no reprieve.
Since the beginning of this year, QCOM gave up nearly 35% of its equity value. However, it’s starting to look a little bit more interesting. In the trailing five sessions, QCOM gained 2.5%. Leveraging its advanced Snapdragon semiconductor, Qualcomm powers far greater immersion in VR than was previously possible. In addition, the company carries relevancies for AR and mixed-reality solutions.
To be fair, Gurufocus.com warns that QCOM may be a possible value trap. However, it’s difficult to agree because of pandemic-fueled distortions. Fundamentally, Qualcomm enjoys revenue growth and profit margins that rank among the underlying sector’s top echelon. Therefore, for risk-tolerant contrarians, QCOM may be one of the hottest virtual reality stocks to own.
Tencent (TCEHY)
Source: Shutterstock
Previously one of the hottest stocks in general, Tencent (OTCMKTS:TCEHY) tends to draw intrigue no matter what the circumstances. Based in China, Tencent is a multinational technology and entertainment conglomerate. Per its public profile, it’s one of the highest-grossing multimedia companies in the world based on revenue. Unfortunately, fissures in the Chinese economy imposed hardships on TCEHY.
Since the January opener, Tencent shares gave up over 28% of their equity value. That said, it’s been rebounding sharply in recent sessions. In the past five days, it moved up almost 3%. In the trailing month, security gained nearly 13%. As Reuters noted earlier this year, Tencent plans to invest heavily in extended reality, creating unprecedented immersion in VR and AR applications.
For those willing to take a shot, Tencent enjoys a very high-quality business. Per Gurufocus.com, the company’s ROE stands at 22.6%, beating out nearly 82% of its rivals. Therefore, it ranks among the hottest virtual reality stocks to own.
Roblox (RBLX)
Source: Miguel Lagoa / Shutterstock.com
For full disclosure, I’m not entirely sold on the idea of buying Roblox (NYSE:RBLX). With the company suffering severe losses in the equities sector, the free market has already spoken loud and clear. Nevertheless, if you’re dead set on acquiring the hottest virtual reality stocks, RBLX could make for intriguing speculation. But you do have to treat it as that, legal gambling.
Based in San Mateo, California, Roblox is a video game developer which specializes in a community-based endeavor. Essentially, the platform brings developers and users together in a constructive, family-friendly environment. As InvestorPlace contributor Ian Cooper argued, Roblox is “the closest thing to a mainstream social metaverse, with a mission of building a human co-experience platform that enables billions of users to come together to play, learn, communicate, explore and expand their friendships.”
I can dig that sentiment. Nevertheless, investors must recognize the financial realities of RBLX stock. Perhaps most notably, the market prices RBLX at nearly 47 times its book value. That’s above nearly 99% of the competition. Still, if the company meets its mission statement, RBLX could be one of the hottest virtual reality stocks to own.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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The post The 7 Hottest Virtual Reality Stocks to Own for 2023 and Beyond appeared first on InvestorPlace. | NVDA |
https://finnhub.io/api/news?id=32014265e4308df7ac7b66d9af2c02881976e72cde7deee3c546ac2208037bb4 | NVIDIA Corp. stock falls Thursday, underperforms market | Shares of NVIDIA Corp. slipped 4.09% to $169.52 Thursday, on what proved to be an all-around rough trading session for the stock market, with the S&P 500... | 2022-12-15T09:14:00 | MarketWatch | Shares of NVIDIA Corp.
NVDA,
+0.37%
slipped 4.09% to $169.52 Thursday, on what proved to be an all-around rough trading session for the stock market, with the S&P 500 Index
SPX,
-0.53%
falling 2.49% to 3,895.75 and Dow Jones Industrial Average
DJIA,
-0.43%
falling 2.25% to 33,202.22. This was the stock's second consecutive day of losses. NVIDIA Corp. closed $143.78 short of its 52-week high ($313.30), which the company achieved on December 28th.
Trading volume (47.8 M) remained 5.3 million below its 50-day average volume of 53.1 M.
Editor's Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use. | NVDA |
https://finnhub.io/api/news?id=513a59d58c7aba4189e8b2bc55a341c03dcdfe342402930329fbb598212cbe4e | Can Mobileye Extend Its Auto Software Dominance Into Driverless Cars? | Mobileye, the dominant supplier of technologies used in automotive driver assistance systems, also aims to be a big player in self-driving cars. | 2022-12-15T09:08:10 | Yahoo | Can Mobileye Extend Its Auto Software Dominance Into Driverless Cars?
Mobileye, the dominant supplier of technologies used in automotive driver assistance systems, also aims to be a big player in self-driving cars.
Mobileye, the dominant supplier of technologies used in automotive driver assistance systems, also aims to be a big player in self-driving cars.
Mark Spitznagel and Nassim Taleb have been watching for black swans for decades. "We’ve never seen anything like this level of total debt and leverage in the system," he tells Fortune. "It's an experiment."
Warren Buffett is undeniably the most famous and influential investor in modern history, based on his extraordinary performance record. Not surprisingly, the investment portfolio of Berkshire Hathaway Inc. (BRK.A), the holding company employing the Oracle of Omaha as chairman and CEO, receives wide media attention and scrutiny, even though Buffett is no longer making every investment decision. Despite his unparalleled success, Buffett's investment model has long been transparent, straightforward, and consistent.
Stocks have blown past expectations for 2023 – but some analysts are bracing for a sell-off as the market approaches record highs.
The JPMorgan Equity Premium Income ETF’s (NYSEARCA:JEPI) combination of high yield and monthly payments has quickly made it one of the market’s most popular ETFs. Investors who like JEPI’s style now have another high-yield competitor to consider — the NEOS S&P 500 High Income ETF (BATS:SPYI), which also pays on a monthly basis and yields 10.7%. Let’s take a closer look at this intriguing new option for high-yield investors. What is SPYI ETF’s Strategy? Launched in August of 2022, SPYI is still a
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Berkshire Hathaway historically reports its quarterly financial results on weekends, and CEO Warren Buffet has a simple reason why. Berkshire (ticker: BRK.A, BRK.B) reported second-quarter earnings Saturday morning. Many other public companies, however, release their earnings results during the trading week, either before the market opens or after the closing bell.
The market rally is at an infection point after notable losses. Here's what to do. Warren Buffett's Berkshire earnings rose.
Is there a point at which I should stop reinvesting stock dividends and invest the money or save the cash? -Anonymous Many financial experts recommend that you reinvest dividends most of the time – and I'm inclined to agree. The … Continue reading → The post Ask an Advisor: Should I Stop Reinvesting Dividends? appeared first on SmartAsset Blog.
There are many different approaches and strategies for retirement investing that might appeal to you. But how do you tell if a certain strategy works for your situation? When evaluating different approaches, consider how each strategy is put together and … Continue reading → The post Here's How Much to Keep in Stocks, Bonds and Cash in Retirement appeared first on SmartAsset Blog.
The week ahead will feature a crucial inflation report and earnings out of Disney, UPS, and Alibaba as second quarter earnings season winds down.
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AustralianSuper, one of the world’s largest pensions, halved its Apple stock investment and sold Microsoft stock, while buying shares of Tesla and Nvidia.
One in 6 asset and wealth management companies will be bought or shut down in the next five years, according to a PwC survey of asset managers and institutional investors.
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Warren Buffett's Berkshire Hathaway operating profit rose by 10%. BRKB stock is just out of buy range.
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Dubbed the Oracle of Omaha, Warren Buffett is renowned for his simple and frugal lifestyle. Despite being the sixth richest person globally, with a net worth estimated at $117.9 billion, Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500. Adjusted for inflation, that amount today would be approximately $328,990.80, a mere 0.000279% of his total net worth. Buffett has consistently ranked the purchase of his home as the third-best investment he ha
As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=b5ef17a7eb112ff505bfd0116d4b953f93c106e38f28d5fe5240fca573ddf259 | Buy semiconductors between now and February, before it bottoms in spring, says Evercore's Muse | C.J. Muse, Evercore ISI, joins 'Closing Bell' to offer his playbook for the semiconductor sector. | 2022-12-15T08:01:27 | CNBC | Credit Cards
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https://finnhub.io/api/news?id=869b471fff6f35874697b36473ec02ee69b83af1ce5e81d57ad2267cad2b5cb0 | Nvidia's CEO Just Gave Investors 1 Million Reasons to Sell or Buy | In this video, I talk about Nvidia (NASDAQ: NVDA), some new price targets from analysts, CEO Jensen Huang triggering employee stock options, and a little revisit of Nvidia's Q3 numbers. For the full insights, watch the video, consider subscribing, and click the special offer link below. | 2022-12-15T07:30:00 | Yahoo | Nvidia's CEO Just Gave Investors 1 Million Reasons to Sell or Buy
In this video, I talk about Nvidia (NASDAQ: NVDA), some new price targets from analysts, CEO Jensen Huang triggering employee stock options, and a little revisit of Nvidia's Q3 numbers. For the full insights, watch the video, consider subscribing, and click the special offer link below. | NVDA |
https://finnhub.io/api/news?id=89c17b19a609441e0f928ab010f20c71c416a5d22276d4570b705b11c79b33c5 | This stock could be biggest winner as 'fundamental bottom' nears for chips, analyst says | Nvidia Corp. leads top picks for semiconductor stocks heading into 2023 for one noted analyst Thursday | 2022-12-15T06:16:00 | MarketWatch | After a semiconductor shortage flipped into a glut in 2022, chip stocks are headed for a strong entry point and will lead the broader market in the new year, with Nvidia Corp. the best pick among them, an analyst wrote Thursday.
Evercore ISI analyst C.J. Muse said he expects the beleaguered chip sector to turn around with a soft landing, having bottomed out in mid-October, when the SOX index hit 2,162, its lowest level since mid-September 2020. A “fundamental bottom,” however, should play out over the next three to six months, he wrote, “with a clear path to soft-landing in sight and 1-2 more cuts.”
Muse said historically, the best time to selectively buy into the SOX index is about two months before that fundamental bottom. Muse wrote that his top pick for 2023 was graphics-chip maker Nvidia
NVDA,
Semiconductor stocks, however, lagged behind the broader market on a rough day Thursday, as the PHLX Semiconductor Index
SOX,
Year to date, the SOX index is down 32.6%, while the S&P 500 is down 18.3% and the Nasdaq is off 30.9%.
Read: AMD, Nike, Zillow among UBS stock picks with the ‘highest conviction’ for 2023
Chip stocks are under-owned, Muse contended, and he expects inventory corrections across the sector to be complete by the first half of 2023.
“Tactically,” Muse also likes chip-equipment makers Applied Materials Inc.
AMAT,
Among Muse’s top investment themes for 2023, the analyst expects AI to remain “a bright spot” among the crowded product cycle road map, and a slow recovery in the PC and smartphone space. Also, Muse said he will be keeping a close eye on neutral-rated Intel Corp.’s
INTC,
Elsewhere, Advanced Micro Devices Inc.
AMD, | NVDA |
https://finnhub.io/api/news?id=25a16b387b4f7c747faf1fbbc4228a5dca192a347b5249294e254bf29f576c46 | 10 Stocks Under $5 With High Potential | In this article, we discuss the 10 stocks under $5 with high potential. If you want to read about some more high potential stocks, go directly to 5 Stocks Under $5 With High Potential. The US stock market is the biggest equity trading market in the world. The biggest and most valuable companies trade on […] | 2022-12-15T05:22:29 | Yahoo | 10 Stocks Under $5 With High Potential
In this article, we discuss the 10 stocks under $5 with high potential. If you want to read about some more high potential stocks, go directly to 5 Stocks Under $5 With High Potential.
The US stock market is the biggest equity trading market in the world. The biggest and most valuable companies trade on exchanges in the US. However, given the bias towards growth in the past few years, the stocks of these big firms, like NVIDIA Corporation (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD) and Freeport-McMoRan Inc. (NYSE:FCX), have become out of reach for the common investors. For those not willing to break the bank for investments in stocks, there are many cheaper options available that offer high potential.
Smart traders know that there are deals to be had when markets swoon and stock prices drop across the board. But picking the right stock to buy is tough because of multiple reasons. Buying the dip is not as simple a trading strategy as it might seem and should be cautiously approached. Some of the potential indicators to look for when investing in small firms are growth in revenues and earnings per share, as well as projected figures for these across the next five years. In addition, the price-to-earnings ratios should also be monitored.
Stocks that are trading at a discount to all-time highs generally offer room for growth. In addition, as the markets recover from the macro slowdown, analysts are expecting average annual EPS growth of more than 20% over the next five years, a clear indicator that it might be a very good time to invest in the stock market, especially in cheaper firms that offer explosive growth potential. There is reason for investors to be cautious when trading in cheap stocks too, as recent research suggests that these trades are loaded with risk.
Generally, stocks priced under $5 per share are known as penny stocks. Trades in penny stocks have increased as more retail investors enter the market. This increase is surprising since historical data shows that these trades rarely make money. Calculations by Sihan Zhang, a doctoral student at the University of Alberta, reveal that between July 2011 and October 2020, the average annualized return of Over the Counter (OTC) shares in the US, mostly penny firms, was 44% in the red.
Another important factor to consider when trading in penny stocks is that many of them lie outside the US. Of the 11,500 firms listed on the OTC, nearly three quarters are based outside the US. The influence of retail investors in penny trades can also be understood when viewed in context of a Morgan Stanley report from last June that outlined that these traders accounted for nearly 10% of the daily trading volume on the Russell 3000, the broadest stock index in the US. This number has gone up since last year.
However, there are also many positives to consider when trading in penny stocks. Nikolaos Panigirtzoglou, a global markets strategist at JPMorgan, has highlighted how a list of stocks popular with retail traders in the US outperformed the benchmark S&P 500 this year. The analysis highlights a market shift towards growth companies that trade on the cheap. As the market recovers from a slow year, the volume of penny stock trades has started picking up as well.
Our Methodology
The companies that have upcoming growth catalysts and were priced under $5 per share, as of December 14, were selected for the list. Special importance was assigned to outlining the basic business fundamentals and analyst ratings for each firm to provide readers with some context so they can make more informed investment choices. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by Kaleidico on Unsplash
Stocks Under $5 With High Potential
10. Tempo Automation Holdings, Inc. (NASDAQ:TMPO)
Number of Hedge Fund Holders: N/A
Share Price as of December 14: $2.01
Tempo Automation Holdings, Inc. (NASDAQ:TMPO) manufactures electronic products. The shares of the firm have invited a lot of investor interest since debuting on the market last year. In late December, the company entered into an agreement with White Lion Capital. Under the deal, the latter committed to purchase up to an aggregate of $100 million in the post-closing combined company’s common shares from time to time.
Among the hedge funds being tracked by Insider Monkey, London-based firm LMR Partners is a leading shareholder in Tempo Automation Holdings, Inc. (NASDAQ:TMPO) with 250,000 shares worth more than $2.6 million.
Unlike NVIDIA Corporation (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Freeport-McMoRan Inc. (NYSE:FCX), Tempo Automation Holdings, Inc. (NASDAQ:TMPO) is one of the more affordable stocks with high potential.
9. Mesoblast Limited (NASDAQ:MESO)
Number of Hedge Fund Holders: 2
Share Price as of December 14: $3.33
Mesoblast Limited (NASDAQ:MESO) engages in the development of regenerative medicine products in Australia, the United States, Singapore, the United Kingdom, and Switzerland. On November 23, the firm posted earnings for the first fiscal quarter, reporting losses per share of $0.0243, beating analyst estimates by $0.14. The revenue over the period was $1.5 million, down 58.3% compared to the revenue over the same period last year and missing market estimates by $1.82 million. The firm has several promising drug pipelines in fields such as cardiovascular, spine orthopedic disorder, oncology, hematology, and immune-mediated and inflammatory diseases.
At the end of the third quarter of 2022, 2 hedge funds in the database of Insider Monkey held stakes worth $534,000 in Mesoblast Limited (NASDAQ:MESO), compared to 1 in the preceding quarter worth $95,000.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Mesoblast Limited (NASDAQ:MESO) with 401,500 shares worth more than $1 million.
8. Vasta Platform Limited (NASDAQ:VSTA)
Number of Hedge Fund Holders: 2
Share Price as of December 14: $3.93
Vasta Platform Limited (NASDAQ:VSTA) is an education company that provides educational printed and digital solutions to private schools operating in the K-12 education sector in Brazil. On June 3, Vasta Platform Limited revealed that it is executing a minority investment agreement by its wholly-owned subsidiary, Somos Sistemas de Ensino S.A, which establishes the terms and conditions for the issuance and the payment of new shares on Educ Bank Gestão de Pagamentos Educacionais S.A. In earnings for the third quarter of 2022, the firm posted a 48% year-on-year increase in revenue.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Ronit Capital is a leading shareholder in Vasta Platform Limited (NASDAQ:VSTA) with 980,471 shares worth more than $5.2 million.
At the end of the third quarter of 2022, 2 hedge funds in the database of Insider Monkey held stakes worth $5.2 million in Vasta Platform Limited (NASDAQ:VSTA), compared to 1 in the preceding quarter worth $103,000.
7. Good Times Restaurants Inc. (NASDAQ:GTIM)
Number of Hedge Fund Holders: 6
Share Price as of December 14: $2.72
Good Times Restaurants Inc. (NASDAQ:GTIM) engages in the restaurant business in the United States. Amid inflation, restaurant stocks have declined, offering investors a good entry-point to own a company that is trading at a very fair value, only 3 times earnings. In earnings for the third quarter of 2022, reported in mid-August, the company posted a revenue of more than $36 million, up over 7% compared to the revenue over the same period last year. The earnings per share were $0.04. The firm has no long-term debt and looks set for healthy growth in the future.
At the end of the third quarter of 2022, 6 hedge funds in the database of Insider Monkey held stakes worth $1.9 million in Good Times Restaurants Inc. (NASDAQ:GTIM), compared to 5 in the preceding quarter worth $2.7 million.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Good Times Restaurants Inc. (NASDAQ:GTIM) with 31,897 shares worth more than $69,000.
6. Telefónica, S.A. (NYSE:TEF)
Number of Hedge Fund Holders: 7
Share Price as of December 14: $3.44
Telefónica, S.A. (NYSE:TEF) provides telecommunications services in Europe and Latin America. On December 12, Telefonica unveiled that Telefónica Germany and Nokia have aggregated sub-6 GHz spectrum frequencies in an industry-first two-component carrier uplink Carrier Aggregation trial on 5G Standalone. On December 12, the firm declared a semi-annual dividend of $0.1553 per share. It is rare for a stock this cheap to offer dividend payments, making it a top play in the under $5 share market.
On November 17, Credit Suisse analyst Pilar Vico maintained a Neutral rating on Telefónica, S.A. (NYSE:TEF) stock and raised the price target to EUR 4.20 from EUR 4.10.
At the end of the third quarter of 2022, 7 hedge funds in the database of Insider Monkey held stakes worth $42.5 million in Telefónica, S.A. (NYSE:TEF), compared to 7 in the previous quarter worth $59.9 million.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Telefónica, S.A. (NYSE:TEF) with 1 million shares worth more than $3.3 million.
In contrast to NVIDIA Corporation (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Freeport-McMoRan Inc. (NYSE:FCX), Telefónica, S.A. (NYSE:TEF) is one of the more affordable stocks with high potential.
Click to continue reading and see 5 Stocks Under $5 With High Potential.
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Disclosure. None. 10 Stocks Under $5 With High Potential is originally published on Insider Monkey. | NVDA |
https://finnhub.io/api/news?id=353df21d537bbf2a01cd0e2d733b1fee4ca7d6df534f226c3cc90fd53992c406 | Nasdaq Bear Market: 2 Top Growth Stocks to Buy in a Once-in-a-Decade Opportunity | High inflation and rising interest rates have eroded confidence in the economy, triggering a sweeping downturn in the stock market. In fact, the Nasdaq Composite has suffered its worst sell-off in the last 10 years, sending the tech-heavy index deep into bear market territory. The current situation represents a once-in-a-decade buying opportunity, and excellent stocks like Nvidia (NASDAQ: NVDA) and Atlassian (NASDAQ: TEAM) are trading at a fraction of their historical valuations. | 2022-12-15T03:01:00 | Yahoo | Nasdaq Bear Market: 2 Top Growth Stocks to Buy in a Once-in-a-Decade Opportunity
High inflation and rising interest rates have eroded confidence in the economy, triggering a sweeping downturn in the stock market. In fact, the Nasdaq Composite has suffered its worst sell-off in the last 10 years, sending the tech-heavy index deep into bear market territory. The current situation represents a once-in-a-decade buying opportunity, and excellent stocks like Nvidia (NASDAQ: NVDA) and Atlassian (NASDAQ: TEAM) are trading at a fraction of their historical valuations. | NVDA |
https://finnhub.io/api/news?id=d376211e57c7b54ff2e73b48d2698e571c6c0e0739ace7a6fdea6b9669f54a7c | NVIDIA Corporation's (NASDAQ:NVDA) Popularity With Investors Is Clear | With a price-to-earnings (or "P/E") ratio of 73x NVIDIA Corporation ( NASDAQ:NVDA ) may be sending very bearish signals... | 2022-12-15T03:00:39 | Yahoo | NVIDIA Corporation's (NASDAQ:NVDA) Popularity With Investors Is Clear
With a price-to-earnings (or "P/E") ratio of 73x NVIDIA Corporation (NASDAQ:NVDA) may be sending very bearish signals at the moment, given that almost half of all companies in the United States have P/E ratios under 14x and even P/E's lower than 8x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so lofty.
While the market has experienced earnings growth lately, NVIDIA's earnings have gone into reverse gear, which is not great. One possibility is that the P/E is high because investors think this poor earnings performance will turn the corner. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
Check out our latest analysis for NVIDIA
If you'd like to see what analysts are forecasting going forward, you should check out our free report on NVIDIA.
How Is NVIDIA's Growth Trending?
The only time you'd be truly comfortable seeing a P/E as steep as NVIDIA's is when the company's growth is on track to outshine the market decidedly.
Retrospectively, the last year delivered a frustrating 28% decrease to the company's bottom line. Still, the latest three year period has seen an excellent 144% overall rise in EPS, in spite of its unsatisfying short-term performance. Accordingly, while they would have preferred to keep the run going, shareholders would probably welcome the medium-term rates of earnings growth.
Turning to the outlook, the next three years should generate growth of 19% per year as estimated by the analysts watching the company. That's shaping up to be materially higher than the 9.1% per year growth forecast for the broader market.
With this information, we can see why NVIDIA is trading at such a high P/E compared to the market. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
The Final Word
While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.
We've established that NVIDIA maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. Unless these conditions change, they will continue to provide strong support to the share price.
It is also worth noting that we have found 3 warning signs for NVIDIA that you need to take into consideration.
Of course, you might also be able to find a better stock than NVIDIA. So you may wish to see this free collection of other companies that sit on P/E's below 20x and have grown earnings strongly.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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https://finnhub.io/api/news?id=18884f5a33710e84a95c1cb2685df18001aad663e9640e2dc9591f51f7636fcd | Ethereum leads way as most big cryptocurrencies post decreases | Most of the largest cryptocurrencies were down during morning trading on Thursday, with Ethereum seeing the biggest change, declining 3.18% to $1,269.16.... | 2022-12-15T02:00:00 | MarketWatch | Most of the largest cryptocurrencies were down during morning trading on Thursday, with Ethereum ETHUSD seeing the biggest change, declining 3.18% to $1,269.16.
Seven additional currencies posted drops Thursday. Litecoin LTCUSD shed 2.40% to $73.71, and Bitcoin BTCUSD fell 2.19% to $17,426.98.
Dogecoin DOGEUSD shed 2.19% to 9 cents, while... | NVDA |
https://finnhub.io/api/news?id=abcffbf84c345c440b4f0546f1aeb9773c2cdb47dc60aa8789857cf8b6e6e0c7 | The 7 Most Promising Breakthrough-Technology Stocks to Buy in February | Although the will-it-or-won’t-it debate regarding the probabilities of the economy falling into recession dominates business headlines, investors may still want to look ahead with breakthrough technology stocks to buy. These enterprises undergird some of the most groundbreaking innovations of our time, facilitating potentially permanent relevance. Fundamentally, technology stocks to buy benefit from the natural forward progress of human societies. After all, whether a recession materializes or n | 2023-02-02T11:51:53 | Yahoo | The 7 Most Promising Breakthrough-Technology Stocks to Buy in February
Although the will-it-or-won’t-it debate regarding the probabilities of the economy falling into recession dominates business headlines, investors may still want to look ahead with breakthrough technology stocks to buy. These enterprises undergird some of the most groundbreaking innovations of our time, facilitating potentially permanent relevance.
Fundamentally, technology stocks to buy benefit from the natural forward progress of human societies. After all, whether a recession materializes or not, enterprises will continue striving for bigger and better. In some ways, then, specific tech plays may be safer than you might initially believe.
On the technical front, several breakthrough technology stocks to buy incurred steep losses last year. While red ink presents near-term challenges, over the long haul, acquiring deflated tech plays now could yield tremendous gains later. If you’re willing to ride out some turbulence, below are some of the best innovative companies available.
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
$690.85
Nvidia
$214.86
Microsoft
$261.92
Intuitive Surgical
$259.72
Intuit
$449.28
Rockwell Automation
$290.54
NuScale Power
$10.88
ASML (ASML)
Source: Ralf Liebhold / Shutterstock
The backstop of most semiconductor-related breakthrough technology stocks to buy, ASML (NASDAQ:ASML) might not be a household name. However, it plays an invaluable role in the broader innovation sphere. Specifically, the company specializes in extreme ultraviolet (EUV) lithography, building machines that print designs on silicon wafers. ASML enjoys a monopoly in this regard, making it irreplaceable.
To be fair, prospective investors at this moment won’t get a brilliant deal on ASML shares. Per Gurufocus.com’s proprietary calculations for fair market value (FMV), the business rates as fairly valued. That said, the company enjoys a stable balance sheet and strong operational attributes.
For instance, its three-year revenue growth rate of 23.8% beats out nearly 80% of its peers. On the bottom line, ASML features a net margin of 25.91%. This stat ranks above 87% of industry players. Perhaps best of all, Wall Street analysts assess ASML as a consensus and unanimous strong buy. With sentiment among hedge funds pinging as very positive, ASML easily represents one of the technology stocks to buy.
Nvidia (NVDA)
Source: Michael Vi / Shutterstock.com
Although perhaps best known for its video gaming and blockchain-centric graphics processing units, Nvidia (NASDAQ:NVDA) flexes its muscles across several relevant sectors. One of them centers on autonomous driving. Through its research and development in advanced sensors and artificial intelligence and machine learning protocols, Nvidia is slowly making autonomous mobility a reality.
According to Strategic Market Research, the global autonomous vehicle market carried a valuation of $25.14 billion in 2021. By 2030, experts there predict that this segment will hit $196.97 billion, representing a compound annual growth rate (CAGR) of 25.7%. Per Gurufocus.com’s proprietary FMV calculation, it estimates NVDA as a modestly undervalued investment. Objectively, the company’s Altman Z-Score of 17.09 indicates tremendous resilience in the balance sheet. As well, Nvidia benefits from excellent revenue and profitability metrics.
Currently, Wall Street analysts rate NVDA as a consensus strong buy. Even better, hedge fund sentiment ranks as very positive, making it one of the top breakthrough technology stocks to buy.
Microsoft (MSFT)
Source: Asif Islam / Shutterstock.com
A steady hand in the innovation sphere, Microsoft (NASDAQ:MSFT) ranks among the breakthrough technology stocks to buy under almost any context. However, the software (and hardware) giant has been flexing its muscles recently. Specifically, Microsoft generated headlines for its deep investments into OpenAI, the company responsible for the chatbot platform ChatGPT.
Fears sparked about ChatGPT disrupting search engine-related enterprises, along with anything involving online tutoring services. I’m not mentioning names here but you can follow the aforementioned link for more information. Anyways, it’s possible that Microsoft can finally become relevant in the broader internet search ecosystem, which makes its competitors leery.
Another factor boosting MSFT centers on its overall value proposition. Featuring a strong balance sheet, consistent growth, and an extremely profitable enterprise, Microsoft makes for a compelling idea among technology stocks to buy. Presently, Wall Street analysts rate MSFT as a consensus strong buy. As well, sentiment among hedge funds pings as very positive.
Intuitive Surgical (ISRG)
Source: Peshkova / Shutterstock
Easily one of the most innovative technology stocks to buy in the broader healthcare sector, Intuitive Surgical (NASDAQ:ISRG) garnered worldwide fame for its da Vinci robotic surgical system. Offering myriad opportunities for superior patient outcomes, Intuitive facilitates greater accuracy in medical procedures. As well, its minimally invasive approach may yield fewer hospital stays, resulting in cost savings.
According to Grand View Research, the global medical robotic systems market size reached a valuation of $16.1 billion in 2021. Experts project that the segment will expand at a double-digit CAGR to reach annual revenue of $76.4 billion. Given that ISRG stock slipped over 14% in the trailing year, the volatility might offer a long-term discounted opportunity.
Per Gurufocus.com’s proprietary FMV calculations, ISRG rates as modestly undervalued. Objectively, the company offers a holistic value proposition. First, it features zero debt in its books, affording it incredible flexibility. Second, it enjoys outstanding operational stats, such as double-digit revenue growth and sector-busting profitability metrics.
Not surprisingly, ISRG carries a consensus strong buy. And that’s because, for the long haul, you’re not going to find too many superior technology stocks to buy.
Intuit (INTU)
Source: Shutterstock
On the surface level, tax, and accounting software provider, Intuit (NASDAQ:INTU) does not sound like one of the innovative technology stocks to buy. However, I’ve been pounding the table on INTU because of its implications for the gig economy.
Essentially, people’s expectations for work changed due to the remote work pivot during the coronavirus pandemic. However, major enterprises started to recall their workers, putting an end to the work-from-home experiment. Of course, the worker bees at large won’t like that. Personally, I believe most will fall in line because the gig worker lifestyle is haphazard unless one is truly talented.
Still, many will trade in their suits and ties for whatever work they can find. However, gig workers (better known as independent contractors) must file “business” taxes. Long story short, they’re much more complicated than taxes that employees file. Therefore, Intuit can help, making it quite relevant. Also, a big bonus is that Wall Street analysts rate INTU as a consensus strong buy. You already know my opinion. It’s easily one of the best technology stocks to buy.
Rockwell Automation (ROK)
Source: shutterstock.com/whiteMocca
From the unintuitive technology stocks to buy to the easily discernible, Rockwell Automation (NYSE:ROK) deserves extra consideration. As its name suggests, Rockwell specializes in industrial automation solutions. While extraordinarily relevant, ROK suffered some pitfalls last year. However, so far this year, ROK gained over 8%.
It’s quite possible that it can rise higher in the charts. According to Grand View Research, the global industrial automation and control systems market size reached a valuation of $172.26 billion. Experts there project that the segment will expand at a 10.5% CAGR to hit revenue of $377.25 billion by 2030. Naturally, Rockwell stands to be a major beneficiary, making it one of the technology stocks to buy.
To be fair, it’s not the most discounted trade. However, investors should find encouragement from its decent balance sheet and growth metrics. As well, Rockwell features a net margin of 13.6%, ranking better than most of its peers. Finally, hedge fund sentiment for ROK rates as positive, suggesting you should keep it on your radar.
NuScale Power (SMR)
Source: T. Schneider / Shutterstock.com
Concluding this list of technology stocks to buy stands one of my favorite subjects to discuss, NuScale Power (NYSE:SMR). A nuclear energy solutions provider, NuScale specializes in small modular reactors (SMRs). While not a brand-new innovation per se, NuScale effectively pioneered the platform’s commercial viability in the U.S. Given the energy crisis that we’re struggling with, SMR will likely rise higher over the next several years.
Now, SMRs compel because they essentially represent a decentralized network of small-footprint nuclear facilities. This framework enables NuScale to build nuclear power facilities closer to sources of energy demand. Moreover, SMRs incorporate advanced safety protocols, providing operational assurances to nearby residents.
As an aspirational firm, NuScale doesn’t enjoy robust financials. That said, the company has no debt on its books, a rarity for newly public enterprises.
While analysts generally carried a leaning-optimistic view of SMR, per TipRanks, no Wall Street expert weighed in on shares in the past three months. However, that might be a good thing for those who prefer under-the-radar technology stocks to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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https://finnhub.io/api/news?id=5e30cae3913eabe97105c5cf635c25a909e280c635f143d33ed65850a1268700 | AMD: Growth Story Finished | Excluding the Xilinx division, Advanced Micro Devices is headed for about 27% organic revenue decline. Find out why I'm bearish on AMD stock. | 2023-02-01T23:00:00 | SeekingAlpha | AMD: Growth Story Finished
Summary
- Excluding the inorganic Xilinx component, Advanced Micro Devices, Inc. is headed for around a 27% organic revenue decline going into Q1. The growth story is finally finished.
- As estimates are inevitably reduced, the rich valuation will only become richer.
- While AMD may be more diversified than competitor Intel, the ease with which investors are ignoring the PC bloodbath is too convenient.
- With a rich valuation and the end of the multi-year growth story, it is time for AMD investors to bail.
Investment Thesis
Advanced Micro Devices, Inc. (NASDAQ:AMD) stock moved up after the release of the Q4 earnings report. However, there was actually nothing in the report to support such a reaction. The results were in line with guidance, but the Q1 guide was below estimates, which likely will have to be reduced going forward along with those for the remainder of the year.
This means the P/E valuation will only further increase despite there being little to no growth on the horizon. As such, I am reiterating my thesis that the AMD turnaround growth story is finally finished. This means in the best-case the returns going forward are likely going to fall far below the record market cap gains from the last few years.
Background
Nearly a year ago at $111, I cautioned investors that AMD’s days of (high) revenue and EPS growth were likely over. Notably, the Xilinx merger was artificially inflating actual organic growth, in combination with the stock dilatation that it also caused: "Advanced Micro Devices Stock: Advanced Micro Delusion."
As argued, at some point, AMD will run into a brick wall in all of its segments. (…) Since the AMD thesis is played out, investors may be advised or contemplated to look for a new investment opportunity. For example, as one such proposal, when it comes to turnarounds, there is one such option nearby competing in AMD's very same markets: Intel.
Q4 earnings
AMD revenue of $5.6B compares to $4.8B in Q4’21, up 16% YoY. However, this included $1.4B of Xilinx revenue, without which the $4.2B report would have made for a 13% decline.
Considering the downside guidance from Nvidia Corporation (NVDA) in the back half of last year, AMD’s gaming segment revenue of $1.6B held up relatively well, marking a decline of just 7%, mainly due to the strength in semi-custom sales.
However, the client CPU segment, which could be seen as the legacy AMD business, performed yet again horrendously, with a 51% decline in revenue to $0.9B. While the argument could be made that, to AMD’s credit, the company is more diversified than Intel Corporation (INTC), reducing the impact, taking this result in isolation shows frankly atrocious performance. It does confirm Intel’s narrative of a massive ongoing PC inventory correction (as this statement has been echoed by AMD).
Lastly, data center revenue was $1.7B, up 42% YoY or by around $500M. While, again, credit may be where it’s due for AMD actually posting (strong) growth in the first place, it should nevertheless be noted that Intel in Q4 saw a $2B reduction in data center revenue. This means that only 25% of the revenue which Intel lost went to AMD. This puts the AMD share gain thesis in some perspective.
Q1 guidance
Prior to the earnings release, the estimates were for roughly flat sequential performance, and in fact for AMD to return to all-time high revenue by the end of the year.
However, in the wake of Intel’s report, it was clear this was too optimistic, and indeed the Q1 guide calls for a 10% revenue decline to $5.3B at the midpoint. Q1’22 revenue was $5.9B, including $0.6B Xilinx revenue.
This implies that, excluding Xilinx, revenue will drop from $5.3B in Q1'22 to $3.9B in Q1'23 (assuming flat Xilinx revenue of $1.4B from Q4 to Q1), marking a non-insignificant 27% organic revenue contraction, led yet again by a weak PC segment.
To put this in perspective, AMD was and likely still is seen by most investors as a growth company (and indeed AMD's official guidance is for over 20% multi-year annual growth). Yet here it is: AMD going forward will be posting significant YoY organic revenue declines, only partly held up by relative strength from its Xilinx merger.
Longer-term outlook
Investors could argue that, similar to Intel, the PC inventory correction is just temporary, and the roughly billion dollars in quarterly PC revenue that it has seen disappear could easily return.
Nevertheless, this won't be enough to make AMD a compelling investment for the eventual upcycle, as the same arguments made a year ago will remain valid, which is that AMD has become a mature company operating in mostly mature markets.
While there could be some further growth over time, for example in the data center, this will likely only be sufficient to grow into its existing valuation (rather than to expand its valuation).
In addition, investors will have to accept that a large part of AMD's comeback was made possible on the back of Intel's multi-year stumbles, which is a benefit that at best won't be true anymore going forward, and at worst could turn against it as Intel instead regains technology leadership.
Investor Takeaway
With a roughly 27% revenue drop looming in Q1 in the legacy AMD business, the AMD growth story is officially over, if it wasn’t already when AMD first warned of its massive revenue and earnings miss in October.
Nevertheless, it seems some or even many investors are not realizing this yet, as evidenced by the stock reaction (which went up), as well by the top comment on Seeking Alpha, which stated: “Very impressive results. AMD should head to $100 this year if not higher.”
I would argue there was nothing impressive about its results. While gaming continued to hold up reasonably, the PC space has been a train wreck since Q3, far more so than Intel. Given Intel’s resurgence in the PC space since Alder Lake, there is no evidence anymore of AMD’s ability to gain market share, as indeed Intel claimed the reverse, that it actually gained share instead. Even in the data center, AMD only captured a small minority of the revenue Intel lost.
In any case, AMD missed overly optimistic estimates for Q1 (which had obviously become untenable in the wake of Intel's report), and the estimates for the remainder of the year (as they stood going into the release) will likely also prove to have been too high. In other words, the downward revisions as a result of the trends discussed (i.e., the end of the growth story) will inflate its valuation.
As such, as has been my thesis since a year ago, the only component that has continued to prop up AMD’s results is the inorganic Xilinx contribution. Hence, given the very rich valuation, Advanced Micro Devices, Inc. investors should bail from the stock before this inorganic piece disappears in Q2, leaving a company with an ever-richer valuation as estimates need to be reduced into this downturn.
This article was written by
Analyst’s Disclosure: I/we have a beneficial long position in the shares of INTC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Comments (223)
CCG -22.8%
DCAI -15.4%AMD +43.6% (15.8% excluding XLNX/Persando)
Client -10%
DC +63.6% (52.1% excluding XLNX/Persando)Those are decent AMD numbers even though they started under shipping, over 50% less, client CPU/GPU in Q3 which resulted in the drastic drop in Client revenue for Q3/Q4 last year. AMD is expecting Q1 to be its last under shipping quarter so there should be modest growth for Q2 and a more normalized Q3/Q4. Q1 will be the start of Intel’s pain in dealing with inventory glut as they were still over shipping as of Q4. 2022 revenue growth was mostly XLNX/Persando accretion with a decent organic growth of its traditional business.. XLNX +27.8% accretion
AMD +15.8% (traditional business)XLNX’s YoY growth is accelerating nicely since joining AMD for 2022. AMD is obviously shifting wafers and resources away from its traditional products toward XLNX, hence the CPU/GPU under shipping we’re hearing about. It’s allowing AMD to maintain its gross margin above 50% during this tough PC downturn. XLNX YoY growth prior to joining AMD:
2017 +5.8%
2018 +17.3%
2019 +12.8%
2020 -5.6%
2021 +20.4%
2022 +37.7% (merged with AMD)And no, AMD's growth story isn't finished by a long shot.
Mercury Research out today
Q4 quarter over quarter growth was 1/10th of 1% for data center
Q4 quarter over quarter 0.7% for PC.
AMD growth back to desktop and console.
I anticipate a doubling of Data Center revenue in 2023. I also expect AMD to moderate Gaming and Client production volume through first half building again into early summer for PC processor and GPU fabrication sustaining availability into q3 and q4.Nvidia I will address soon, is riding the Intel Raptor desktop and mobile ramp. I anticipate record consumer GPU mobile volume exceeding desktop 2023, and with commercial products, a record 2023 GPU production volume year.Mike Bruzzone, Camp Marketing.
" It not only trounced Intel’s Alder Lake mobile, but it’s also 90% faster than the flagship Zen 3 mobile CPU."
AI designs have to work around standing patents.
AI can write a Stephen King novel but not sell it with his name on it.
Which VR goggles are you wearing?
I would like to wear it to have money flowing to my account through AI : )
"none of the analysts pointed it out."
Now what would the reason be for that.
ZEN4 is selling now. Min 1:04:00www.youtube.com/...
Kadori and ARC no more lying. Min 44:45
P:E calculations have never even come close to AMD actual price from P:E 178 to 34 you will get no place trying to tie P:E ratio to any future real price.
www.macrotrends.net/...
i) Interest rate: 0% to 4.5%
ii) Growth: AMD was showing over 40% growth back then versus no growth (projected) in 2023.
Does this explain things to you?
Intel: Rear Mirror Missing, Can't See AMD
www.youtube.com/...
www.youtube.com/...
The reason so many AMD bulls are reacting negatively to this article is it's finally dawning on them that Su has been hiding the decline in AMD's legacy businesses behind the Xilinx merger by zeroing out Xilinx's prior year revenues. That begins to end this quarter since in Q1 2022 a bit more than half of Xilinx's revenues were consolidated, and in Q2 2022 they were fully consolidated. So unless Su comes up with another merger of the size of Xilinx that she can close within the next 60 days, she's going to be reporting negative revenue growth and that has them rattled to the core.
INTC troubles will drown out anything AMD has to say.
The Intel cash cow is at the slaughter house.
Intel: Simply Finished
"Disclosure: I/we have a beneficial long position in the shares of INTC ..."
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=769bf94f40775297869ff2e3494b7e62678125719d2dcac59d1cd2054a393ccb | NVIDIA Corp. stock rises Thursday, outperforms market | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T20:15:00 | MarketWatch | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=ad6506bb4fe9e648dc07febfb468cf4c26a0b72a9c8e8e4e0af426b91f1c5fb7 | 7 Sorry Semiconductor Stocks to Sell in February Before It`s Too Late | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T18:40:00 | InvestorPlace | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=4d95782c8f19059a519f09d1c746556661d239f9b52ca1fffe3941396cc30ce3 | Why Legendary Investor Brad Gerstner Is Betting on Nvidia (NVDA) Stock | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T18:30:00 | InvestorPlace | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=b6ed1d11a65b819c898e21fd50b32d2025031609743439b1063b60610d787e09 | AMD, Nvidia lead chips higher as investors continue to move back into sector | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T17:06:00 | Seeking Alpha | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=d22718d0576668ef6f5a19b80b0c34497176c8bb0e7cb6f3646c806b066dea69 | Quest Global Teams with NVIDIA to Build Next-Gen Omniverse Digital Twin Solutions for Manufacturing Industry | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T16:00:00 | PR Newswire | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=16f50e399afaf04805af1a78939080581db5480400725f6308af3d149e09ee6b | NVIDIA Sets Conference Call for Fourth-Quarter Financial Results | CFO Commentary to Be Provided in Writing Ahead of CallSANTA CLARA, Calif., Feb. 01, 2023 (GLOBE NEWSWIRE) -- NVIDIA will host a conference call on Wednesday, February 22, at 2 p.m. PT (5 p.m. ET) to discuss its financial results for the fourth quarter and fiscal year 2023, which ended January 29, 2023. The call will be webcast live (in listen-only mode) on investor.nvidia.com. The company’s prepared remarks will be followed by a question-and-answer session, which will be limited to questions fro | 2023-02-01T14:00:00 | Yahoo | NVIDIA Sets Conference Call for Fourth-Quarter Financial Results
CFO Commentary to Be Provided in Writing Ahead of Call
SANTA CLARA, Calif., Feb. 01, 2023 (GLOBE NEWSWIRE) -- NVIDIA will host a conference call on Wednesday, February 22, at 2 p.m. PT (5 p.m. ET) to discuss its financial results for the fourth quarter and fiscal year 2023, which ended January 29, 2023.
The call will be webcast live (in listen-only mode) on investor.nvidia.com. The company’s prepared remarks will be followed by a question-and-answer session, which will be limited to questions from financial analysts and institutional investors.
Ahead of the call, NVIDIA will provide written commentary on its fourth-quarter results from its CFO. This material will be posted to investor.nvidia.com immediately after the company’s results are publicly announced at approximately 1:20 p.m. PT.
The webcast will be recorded and available for replay until the company’s conference call to discuss financial results for its first quarter of fiscal year 2024.
About NVIDIA
Since its founding in 1993, NVIDIA (NASDAQ: NVDA) has been a pioneer in accelerated computing. The company’s invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined computer graphics, ignited the era of modern AI and is fueling the creation of the metaverse. NVIDIA is now a full-stack computing company with data-center-scale offerings that are reshaping industry. More information at https://nvidianews.nvidia.com/.
For further information, contact:
Simona Jankowski
Robert Sherbin
Investor Relations
Corporate Communications
NVIDIA Corporation
NVIDIA Corporation
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https://finnhub.io/api/news?id=786de70a7f9fd53b71ba9680a68e2b0cc9f338ccf0228caf808a6cee2afa9945 | 13 Top Performing Bitcoin Stocks in January | In this article, we will take a look at the 13 top performing bitcoin stocks in January. To see more such companies, go directly to 5 Top Performing Bitcoin Stocks in January. Cryptocurrencies and tech stocks are back in action as investors grow hopeful that the Federal Reserve would slow down and eventually halt interest […] | 2023-02-01T13:15:14 | Yahoo | 13 Top Performing Bitcoin Stocks in January
In this article, we will take a look at the 13 top performing bitcoin stocks in January. To see more such companies, go directly to 5 Top Performing Bitcoin Stocks in January.
Cryptocurrencies and tech stocks are back in action as investors grow hopeful that the Federal Reserve would slow down and eventually halt interest rate hikes this year. S&P 500 had its best January since 2019. The Nasdaq Composite also added 10% in the month. Growth stock investors also had a banner month in January. ARK Innovation ETF, headed by Cathie Wood, gained about 27% in January. The rally in the ETF was helped by big gains posted by companies like Roku, Netflix and Tesla.
ARK Invest in its latest Big Ideas 2023 report reiterated its prediction that Bitcoin price will hit $1 million by 2023. ARK Invest had mentioned the same price target for Bitcoin in its 2022 Big Ideas report. This shows that the Cathie Wood-led firm has a long-term outlook on the crypto markets which remained unchanged despite the tough market conditions and huge losses seen last year.
In the short term Cathie Wood has reportedly said at several occasions that in the next three years Bitcoin price could touch $500,000.
The latest market rally has caused a stir on social media and in investment circles. Some believe the rally is short-lived. Famous investor Michael Burry tweeted “Sell,” in his trademark mysterious style. On the other hand, Jim Cramer has said we are now in a bull market and the latest dip presents an opportunity to buy stocks.
Some analysts believe the latest rally in the crypto markets has more room to run as retail traders, who were holding back on any activity amid a broader lull in the markets, will start buying, driven by FOMO, or fear of missing out. According to a Bloomberg report, Noelle Acheson of “Crypto Is Macro Now” newsletter said that FOMO is expected to “play a role in how the market evolves from here.” The Bloomberg report also quoted researcher Kaiko who said on Twitter that average size of trades indicate that “whales” are driving the rally.
Bitcoin and crypto ETFs also had a remarkable month in January. These ETFs were languishing for a long time amid a bearish trend in the market. The Valkyrie Bitcoin Miners ETF (NASDAQ:WGMI) gained about 94% in January. Some of the notable holdings of the ETF include Bitfarms (BITF), Hut 8 Mining Corp. (NASDAQ:HUT), CleanSpark (CLSK), Riot Platforms (NASDAQ:RIOT) and others. Some of these names are mentioned in our article and we have mentioned their stock performance and latest updates around their crypto business.
jason-briscoe-Gw_sFen8VhU-unsplash
Our Methodology
For this article we first listed all the small and large companies operating in the crypto markets using stock screeners. These companies are either directly or indirectly involved in Bitcoin mining, Bitcoin trading and broader crypto trading. Some of these companies have huge investments in Bitcoin, while others provide a platform for crypto trading. From this long list of stocks we selected 13 companies whose shares posted strong gains in January. The list is ranked in ascending order of stock performance in January 2023.
13 Top Performing Bitcoin Stocks in January
13. Paypal Holdings, Inc. (NASDAQ:PYPL)
Stock Performance in January: +9%
Payments giant Paypal Holdings, Inc. (NASDAQ:PYPL) had announced major plans for crypto back in 2021 when the market was at its peak. However, Paypal Holdings, Inc. (NASDAQ:PYPL) has been quiet about the market over the past few months. Nevertheless, crypto markets welcomed the company’s decision in the summer of 2022 when the company rolled out a feature that will allow Paypal Holdings, Inc. (NASDAQ:PYPL) users to transfer cryptocurrency from their wallets to other exchanges and platforms.
Paypal Holdings, Inc. (NASDAQ:PYPL) shares gained 9% in January. Despite overall market downturn, Paypal Holdings, Inc. (NASDAQ:PYPL) is one of the most favorite stocks of hedge funds. As of the end of the third quarter of 2022, 126 hedge funds reported having stakes in Paypal Holdings, Inc. (NASDAQ:PYPL). At the end of the second quarter, 97 funds had stakes in the firm.
Here is what Wedgewood Partners has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q3 2022 investor letter:
“PayPal detracted from performance during the quarter and for most of the year. During the most recent quarter the Company reported +14% growth in currency-adjusted total payment value (TPV) which helped drive +12% revenue growth. Management gave a cautious outlook for the holiday season as its core e-commerce addressable market continues to normalize post-Pandemic. With most of the disruptions related to eBay and also Pandemic normalization largely complete, PayPal can resume its margin expansion efforts in the new year as its payment’s platform remains highly scalable. Meanwhile, disruption in capital markets should hamper its unprofitable competitors in the payments space and allow for more opportunities related to M&A.”
12. Block, Inc. (NYSE:SQ)
Stock Performance in January: +24%
Payments company Block, Inc. (NYSE:SQ) makes it to our list of top performing Bitcoin stocks in January because the company has significant exposure to various cryptocurrencies, including Bitcoin. Block, Inc. (NYSE:SQ)'s cofounder Jack Dorsey, who also cofounded Twitter, has repeatedly outlined his bullish view on cryptocurrencies. In December 2022, it was reported that Block, Inc. (NYSE:SQ) was one of the companies that took part in a funding round for Gridless, a crypto startup that harnesses small-scale renewable energy grids in rural Africa.
A total of 75 hedge funds tracked by Insider Monkey reported having stakes in Block, Inc. (NYSE:SQ) as of the end of the third quarter of 2022. The total worth of these stakes was $3.4 billion.
11. Robinhood Markets, Inc. (NASDAQ:HOOD)
Stock Performance in January: +28%
Robinhood Markets, Inc. (NASDAQ:HOOD) makes it to our list of the top performing Bitcoin stocks in January because the investment platform for retail traders benefits whenever the crypto and overall growth stock market is in the green. Robinhood Markets, Inc. (NASDAQ:HOOD) is one of the notable crypto brokerage platforms and it allows beginners to buy, hold and trade various cryptocurrencies.
In December, Bank of America analyst Craig Siegenthaler gave bearish comments on Robinhood, citing the SEC’s proposal to overhaul the equity market structure. The analyst said that the proposal is a “net negative” for Robinhood.
As of the end of the third quarter of 2022, 24 hedge funds had stakes in Robinhood Markets, Inc. (NASDAQ:HOOD). The total value of these stakes was $740 million. The biggest stakeholder of Robinhood Markets, Inc. (NASDAQ:HOOD) was Catherine D. Wood’s ARK Investment Management, with a $332 million stake.
10. NVIDIA Corporation (NASDAQ:NVDA)
Stock Performance in January: +36%
NVIDIA Corporation (NASDAQ:NVDA) is one of the biggest beneficiaries of the crypto market rally as the company’s GPUs are heavily used in the mining of digital currencies. NVIDIA Corporation (NASDAQ:NVDA) shares gained about 36% in January. In mid-January, NVIDIA Corporation (NASDAQ:NVDA) shares gained without any specific catalyst. However, earlier in the month, the stock had slipped despite getting a positive rating from KeyBanc analyst John Vinh. Later in the month, NVIDIA Corporation (NASDAQ:NVDA) slipped amid a broader downturn in chip stocks after Intel posted weak quarterly results.
As of the end of the third quarter of 2022, 89 hedge funds reported having stakes in NVIDIA Corporation (NASDAQ:NVDA). The total value of these stakes was about $4.3 billion.
O’keefe Stevens Advisory made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2022 investor letter:
“The market and our portfolios had a challenging year as interest rates rose, and deteriorating fundamentals cut our largest position, NVIDIA Corporation (NASDAQ:NVDA), in half. Since our initial purchase in 2013, NVDA has seen its stock decline 50% one other time, back in 2018. The best-performing businesses and stocks do not go up and to the right. Mr. Market gets moody, and even one of the highest quality companies in the world is not immune. Drawdowns of this magnitude are challenging to stomach, even though the stock is up 50x in less than ten years. While we consider ourselves old school value investors, we continue to hold this fantastic company even though, optically, it does not appear cheap. Our confidence in Jensen remains, and while gaming is no longer in hyper-growth mode, the Data Center segment continues to grow. AI, Automotive, and other small but rapidly growing industries are the next leg of the story. Chris Mayer discusses the position in greater detail with commentary from our CIO, Peter O’Keefe. Click here to read the article.”
9. Tesla, Inc. (NASDAQ:TSLA)
Stock Performance in January: +60%
Tesla, Inc. (NASDAQ:TSLA) stock roared back in January and crushed skeptics and doubters. Tesla, Inc. (NASDAQ:TSLA) is added to this list of best-performing Bitcoin stocks in January 2023 because the company has significant Bitcoin investments and its chief Elon Musk has been one of the most notable crypto bulls in the market.
Latest data shows that Tesla, Inc. (NASDAQ:TSLA) kept its Bitcoin assets unchanged in the fourth quarter of 2022. Tesla, Inc. (NASDAQ:TSLA)’s digital assets’ total worth at the end of the quarter was $184 million, down from $218 million at the end of the third quarter. The decline came as Tesla, Inc. (NASDAQ:TSLA) suffered an impairment loss. Tesla, Inc. (NASDAQ:TSLA) suffered a $204 million impairment loss in 2022 on its Bitcoin holdings.
Tesla, Inc. (NASDAQ:TSLA) saw an increased interest from hedge funds in the third quarter. At the end of the quarter, 88 hedge funds reported having stakes in Tesla, Inc. (NASDAQ:TSLA), up from 73 funds in the previous quarter. The total value of these stakes was $7.4 billion.
Here is what Distillate Capital has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q3 2022 investor letter:
“The fund’s relative outperformance occurred despite a nearly 2.5% headwind from being underweight the energy and utilities sectors where cash flow instability and leverage tend to limit our holdings domestically. By individual stock, the largest contributors to relative outperformance were unowned positions in Amazon and Tesla, Inc. (NASDAQ:TSLA) which declined around 50% and 65% during the year, respectively.”
8. Canaan Inc. (NASDAQ:CAN)
Stock Performance in January: +61%
China-based Canaan Inc. (NASDAQ:CAN) makes microprocessors used in Bitcoin mining and the company is also operating in the blockchain servers space. In November, Canaan Inc. (NASDAQ:CAN) posted its third-quarter results. Canaan Inc. (NASDAQ:CAN)’s Q3 GAAP EPADS came in at $0.05, missing estimates by $0.05. Revenue in the quarter fell 32.8% on a YoY basis to total $137.5 million. Canaan Inc. (NASDAQ:CAN) said total computing power sold in the period came in at 3.5 million Thash/s, a 37.1% decline from from 5.5 million Thash/s in the second quarter of 2022.
7. MicroStrategy Incorporated (NASDAQ:MSTR)
Stock Performance in January: +73%
Michael Saylor’s MicroStrategy Incorporated (NASDAQ:MSTR) made a strong comeback in January as the company shares gained about 73% in the period. Despite tough market conditions, Saylor has time and again reiterated that he remains bullish on Bitcoin. Latest data shows that the company, through one of its subsidiaries, bought 2,395 Bitcoins for $42.8 million between Nov. 1 and Dec. 21.
A total of 15 hedge funds tracked by Insider Monkey as of the end of the third quarter of 2022 had stakes in MicroStrategy Incorporated (NASDAQ:MSTR), compared to 18 funds having stakes in the firm at the end of the second quarter of the same year.
Here is what Bireme Capital specifically said about MicroStrategy Incorporated (NASDAQ:MSTR):
“We also remain short MicroStrategy, a middling business analytics software company that turned itself into a gigantic levered bet on Bitcoin at the height of the hype cycle – losing over a billion dollars in the process. Now, the company will need all the cash flow from the business just to pay off the interest payments on the enormous debt load, leaving no earnings for equity holders. Despite shares down over 60% for the year, the company continues to trade at a material premium to the value of its assets. For more detail on our thesis, please see our blog post here, as well as the Forbes and Fortune write-ups that feature our short position.”
6. Coinbase Global, Inc. (NASDAQ:COIN)
Stock Performance in January: +74%
Coinbase Global, Inc. (NASDAQ:COIN) is perhaps one of the most famous crypto exchange platforms. Coinbase Global, Inc. (NASDAQ:COIN) was one of the top performing Bitcoin stocks in January, having gained about 74% in value in the month. However, recently, investment firm Mizuho Securities gave bearish comments on Coinbase Global, Inc. (NASDAQ:COIN) and reiterated its Underperform rating.
Click to continue reading and see 5 Top Performing Bitcoin Stocks in January.
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Disclosure: None. 13 Top Performing Bitcoin Stocks in January is originally published on Insider Monkey. | NVDA |
https://finnhub.io/api/news?id=8a526dcf85aa01e925334a28ad6a40c3e3ed1e8bc4a409433c4632c00691afc2 | Powell Folds At The River: Meme Stocks Soar, Yields And Dollar Tank | The Fed raised rates by 0.25% annually this week and indicated further rate increases may be appropriate. Read more on the market reaction with the latest decision. | 2023-02-01T11:55:14 | SeekingAlpha | Powell Folds At The River: Meme Stocks Soar, Yields And Dollar Tank
Summary
- The Fed raised rates by 0.25% annually at its meeting this week and indicated that further rate increases will be appropriate.
- But when the first question in the press conference (to paraphrase) was whether Powell was concerned whether the huge rally this year would fuel more inflation, Powell said he wasn't.
- Be careful what you wish for! This led to a ~40% rally in Carvana and a rapid ~4% rally in the Nasdaq.
- The US dollar and bond yields tanked immediately in the aftermath.
- By folding to the market's bluff and allowing financial conditions to ease, Powell risks leading the market on. The worst-case reasonable scenario? The stock market is likely to crash if inflation comes roaring back this spring.
Meme Traders 1, The Federal Reserve 0
At its meeting this week, the Federal Reserve raised interest rates as expected by 0.25% annually to 4.50%-4.75%. The Fed press release appeared carefully written to dismiss market expectations of an imminent pivot, which markets had been clamoring for. Markets were down modestly going into the press conference, but everything changed with one question.
When asked (to paraphrase) whether Powell was concerned over the rapid easing in financial conditions since October, the Fed chair said he wasn't. So what does Powell get when says he doesn't care if financial conditions ease? Real-time financial conditions sharply eased even before anyone could even pass the mic for the next question! The furious rally was led by Carvana (CVNA), Tesla (TSLA), Nvidia (NVDA), AMC (AMC), and altcoins. This played right into the hands of market speculators who bought short-term call options going into the Fed meeting, hoping that a squeeze would develop.
You can timestamp this turning point at the bottom of the graph, shortly after 2:30 PM Eastern. By the closing bell, the S&P 500 (SPY) pushed from near the 4000 level to over 4100, while the NASDAQ (QQQ) rallied twice as hard. The Dow (DIA) was near flat on the day.
Powell had a prime opportunity to push back on massive bets that the Fed will soon pivot and restart quantitative easing to bail out stock market speculators. He didn't call the market's bluff, instead choosing to fold his cards and let the rally accelerate. Even more troubling, the market rallied further when Powell responded cryptically to whether the Fed would monetize the US federal debt if Congress refused to raise the debt ceiling. This fueled a powerful selloff in the US dollar and a drop in Treasury yields. Dollar selloffs aren't unusual from dovish Fed meetings, but this one seemed to be fueled by traders that are beginning to lose confidence in the US dollar after pumping tons of money in after the war in Europe broke out last year.
The Fed Needs To Care About Easing Financial Conditions
Powell didn't call the market's bluff, and it may seem like no big deal, but the reaction from the stock market was immediate and powerful. Higher stock prices (especially in meme stocks) fuel a wealth effect among consumers, causing spending to rise. Lower bond yields encourage more borrowing. A weaker dollar works to push up import prices like clockwork. The risk here is that the Fed has been consistently wrong in forecasting inflation, so if they're wrong again on the low side, then their credibility is totally shattered, just as it was in the 1970s.
There are some well-known factors that will push inflation down, mainly the decrease in home prices and used cars and an expectation that rents have peaked. But there also are some factors pushing it back up. The declining value of the dollar is a huge factor pushing prices back up, but there are also other factors including annual pay raises and yearly COLA adjustments from government programs like Social Security. The decrease in used car prices appears to have stopped while core services inflation has not yet shown any signs of slowing.
And don't look now, but core inflation accelerated month-over-month in Spain and Italy. Core inflation for Tokyo also surprised traders for January. These were not tiny surprises to the upside either, with Spain's core coming in 0.9% above estimates and Italy coming around a similar amount. What should we make of these? I don't know for sure, but there's no way I look at these and think they're good news. There's unfortunately a long history of policymakers trying and failing with half measures on inflation, only to be forced to double down later when inflation doesn't go away.
These are all reasons that the Fed should absolutely have called the market's bluff and pushed back on trader bets of a Fed pivot. Personally, I would focus less on the rate hikes, which are being repeatedly brushed off by traders, and more on the Fed's balance sheet, particularly on its portfolio of mortgage-backed securities. That would have sent a clear message to traders intent on a Fed pivot.
The Market Won By Bluffing With Bad Cards
The S&P 500 is priced near 2021 bubble highs, particularly the tech sector, which was the biggest gainer today after the Fed meeting. Every stock in every market isn't overvalued, but cash pays 0.25% more per year this month than it did last month, while the compensation you get from stocks has shrunk, because you're paying about 108 cents for every dollar of stocks you could buy four weeks ago.
Why Powell didn't call the market's bluff and what the Fed is thinking internally is anyone's guess. The Fed can brush off the speculative 2021 bubble in stocks as just another mania, no different than the tech bubble in the late 1990s when monetary policy was tight. But the Fed owns the pandemic housing bubble lock, stock, and barrel. They own it literally and figuratively since they own something like 30% of all outstanding mortgages. And they allowed workers to get completely crushed by pandemic money printing while using QE to drive up assets of the 0.01%. It would have been so trivial for Powell to say that the Fed was concerned by market speculation and might hike rates more to stop it, but he didn't, at least not at this time.
You don't have to participate in the casino if you don't want to. Stocks could go to all-time highs on pivot mania and then crash later, and you'd still get about a 5% return on cash over the next year.
The problem going forward is that the Fed has put the market on a pedestal. If US inflation follows some early indicators abroad and surprises to the upside when the market has priced the fastest disinflation in history, then stocks will pay a steep price later despite successfully bluffing the Fed now. The word crash may be a little extreme, but past CPI shocks to the market have resulted in one-day index declines nearing 5%, and monthly declines nearing 10%. This may not catch the market this month or even next, but the combination of high valuations, rock-bottom consumer savings rates, malinvestment in the economy, and hundreds of zombie companies propped up by low interest rates are guaranteed to cause problems at some point.
Michael Burry shared just one word of advice for investors. "Sell."
This article was written by
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Comments (209)
And I've noticed a lot more PM article activity on SA.
As always, when it takes off it will be explosive.
Disc; long/overweight AEM, AGI, HL, PAAS, WDOFF, RRDMF
Sure, a sector weighting that, like cash was last year, trash right up until it isn't. And it is a hedge that inflation is above trend way longer than anyone expects.
FYI, excepting down days like you picked, the whole lot is running at about even as I've built the position and adjusted last year.
If he raises the interest rates - it will harm the already stressed consumer.
If he doesn't raise rates (or even lowers them), he is doing the bidding of Wall St.I see his problem, as essentialy, he is attempting to walk behind the Legislature, attempting to clean up the mess that they are leaving. But has there been a broom that has ever been made, that CAN clean up, the Legislatures mess?Faced with insurmountable debt, inflation that may actually be in the double digits, they are forwarding a 100bil to Ukraine and showering tax breaks, endlessly spending money into the future for all sorts of nonsense, when they should be acting as if this is an financial emergency. Thanks! @Logan Kane
The "hawk" manicured his talons.
You should revisit your PSLDX call last year - if interest rates are finally stabilizing, the fund can do quite well. I'd much prefer other investments but it should get some traction.
www.youtube.com/... | NVDA |
https://finnhub.io/api/news?id=46eeda16f64ea23e7da6ee1cab9c199cd87637a58ca42ea239a84953f98bc78a | Top 25 Smartest Companies To Buy According To Hedge Funds | In this piece, we will take a look at the top 25 smartest companies to buy according to hedge funds. For more companies, head on over to Top 5 Smartest Companies To Buy According To Hedge Funds. Surviving in the modern day corporate world is not for the faint of heart. Business is a ruthless […] | 2023-02-01T07:16:19 | Yahoo | Top 25 Smartest Companies To Buy According To Hedge Funds
In this piece, we will take a look at the top 25 smartest companies to buy according to hedge funds. For more companies, head on over to Top 5 Smartest Companies To Buy According To Hedge Funds.
Surviving in the modern day corporate world is not for the faint of heart. Business is a ruthless endeavor, and shareholder and investor interest reign supreme for each company. The companies that have survived, and have turned into modern day giants and/or disrupted industries are ones that have beaten the competition by introducing unique products and services and capturing consumer attention through marketing campaigns. America, which has the largest and most developed corporate sector in the world (even the universe maybe, unless NASA finds aliens), is full of companies that disrupted industries and become corporate giants — even closing in on the African continent's GDP when it comes to market capitalization. Africa's nominal GDP is slated to be $3.14 trillion by 2023 according to the International Monetary Fund (IMF), while the two most valuable American firms — Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) — have a combined market capitalization of $4.16 trillion.
Both have led the charge and transformed entire industries. For Apple, its biggest strength is the manufacturing supply chain that enables it to pump out millions of iPhones each year. For Microsoft, it has been the ability to target the highest growing industries and become a dominant player in them. The best example of this is the Azure cloud computing and data center platform, which grew 40% on a YoY basis in the second quarter of 2022.
Marcin Balcerzak/Shutterstock.com
Our Methodology
The Massachusetts Institute of Technology (MIT) has taken a wager at trying to identify the smartest companies in the world. Its list identifies the top fifty companies that are the 'smartest' in MIT's opinion. These companies are identified through the assumption that not only are they the leading players in their industry right now, but ones that the university believes will also dominate in the future.
We sifted through the MIT list and picked the top 25 companies that have the highest number of hedge fund investors. The hedge fund data comes courtesy of Insider Monkey's Q3 2022 survey of 920 hedge funds. The list is ranked in ascending order of the number of hedge funds having stakes in these companies.
Top 25 Smartest Companies To Buy According To Hedge Funds
25. Desktop Metal, Inc. (NYSE:DM)
Hedge Fund Investors as of Q3 2022: 11
Desktop Metal, Inc. (NYSE:DM) is an American company that was set up in 2015 and is headquartered in Burlington, Massachusetts. The firm is one of the leading players in the 3D printing industry, and has operations all over the world, including Europe, the Middle East, and Asia.
By the end of last year's third quarter, 11 out of the 920 hedge funds polled by Insider Monkey had held a stake in Desktop Metal, Inc. (NYSE:DM).
Desktop Metal, Inc. (NYSE:DM) joins Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) in our list of the smartest companies to invest in.
24. 23andMe Holding Co. (NASDAQ:ME)
Hedge Fund Investors as of Q3 2022: 11
23andMe Holding Co. (NASDAQ:ME) is a gene testing and drug development firm. It allows customers to test themselves for rare genetic diseases and determine their ancestry and response to medications. Additionally, the company also develops treatments for cancer and heart problems.
11 out of the 920 hedge funds polled by Insider Monkey during Q3 2022 had held a stake in 23andMe Holding Co. (NASDAQ:ME). The firm made headlines in January 2022 when it let a woman reunite with her family after being abducted 50 years ago.
23andMe Holding Co. (NASDAQ:ME)'s largest hedge fund investor is Jim Simons' family office Euclidean Capital which owns 10 million shares that are worth $29 million.
23. Rigetti Computing, Inc. (NASDAQ:RGTI)
Hedge Fund Investors as of Q3 2022: 16
Rigetti Computing, Inc. (NASDAQ:RGTI) is an American computer hardware firm headquartered in Berkeley, California. The firm is one of the few companies in the world that builds super-computing quantum processors and quantum computers. Naturally, this makes it one of the smartest companies in the world.
Insider Monkey studied 920 hedge funds for their September quarter of 2022 investments to discover that 16 had held a stake in Rigetti Computing, Inc. (NASDAQ:RGTI).
Rigetti Computing, Inc. (NASDAQ:RGTI)'s biggest investor is Ben Levine, Andrew Manuel, and Stefan Renold's LMR Partners which owns 1.3 million shares that are worth $2.6 million.
22. bluebird bio, Inc. (NASDAQ:BLUE)
Hedge Fund Investors as of Q3 2022: 22
bluebird bio, Inc. (NASDAQ:BLUE) is a biotechnology company that focuses on developing genetic treatments for serious and severe diseases such as thalassemia, sickle cell disease, and brain diseases. The firm is based in Cambridge, Massachusetts - MIT's hometown.
By the end of 2022's September quarter, 22 out of the 920 hedge funds surveyed by Insider Monkey had invested in bluebird bio, Inc. (NASDAQ:BLUE).
Kevin C. Tang's Tang Capital Management is bluebird bio, Inc. (NASDAQ:BLUE)'s largest investor. It owns 6.3 million shares that are worth $40 million.
21. Ionis Pharmaceuticals, Inc. (NASDAQ:IONS)
Hedge Fund Investors as of Q3 2022: 32
Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) is a biotechnology company that develops treatments for several diseases such as sclerosis, eye diseases, kidney problems, and cancer.
Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) is hoping to operate this year on a strong note, in the form of regulatory approvals for its ALS and neuropathy treatments. 32 of the 920 hedge funds polled by Insider Monkey during Q3 2022 had invested in the company.
Ionis Pharmaceuticals, Inc. (NASDAQ:IONS)'s largest investor in our database is Catherine D. Wood's ARK Investment Management which owns 3.7 million shares that are worth $164 million.
20. International Business Machines Corporation (NYSE:IBM)
Hedge Fund Investors as of Q3 2022: 40
International Business Machines Corporation (NYSE:IBM) is one of the oldest computing companies in the world. Despite this, it's on the MIT's smartest companies list because it is currently one of the handful of companies that is capable of designing its own chips, developing quantum computing systems, and operating in the highly lucrative cloud computing market.
As part of their third quarter of 2022 investments, 40 of the 920 hedge funds polled by Insider Monkey had held a stake in International Business Machines Corporation (NYSE:IBM).
International Business Machines Corporation (NYSE:IBM)'s largest shareholder is Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital which owns 4.3 million shares worth $515 million.
19. Snap Inc. (NYSE:SNAP)
Hedge Fund Investors as of Q3 2022: 42
Snap Inc. (NYSE:SNAP) is a social media company that is known for its Snapchat platform. This application lets users share short videos and images with their followers.
Insider Monkey studied 920 hedge fund holdings for last year's third quarter to determine that 42 had owned a stake in Snap Inc. (NYSE:SNAP).
Out of these, John Overdeck and David Siegel's Two Sigma Advisors is Snap Inc. (NYSE:SNAP)'s largest investor with a $215 million stake that comes via 21 million shares.
18. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Hedge Fund Investors as of Q3 2022: 43
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a biotechnology firm that develops treatments for a wide variety of diseases such as macular degeneration, neuropathy, edema, cancer, and liver problems. The firm is based in Tarrytown, New York.
By the end of Q3 2022, 43 out of the 920 hedge funds polled by Insider Monkey had invested in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN).
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)'s largest shareholder is Cliff Asness' AQR Capital Management which owns 430,301 shares that are worth $296 million.
17. First Solar, Inc. (NASDAQ:FSLR)
Hedge Fund Investors as of Q3 2022: 45
First Solar, Inc. (NASDAQ:FSLR) is a solar panel company that sells its products to power companies, utilities, commercial entities, and others. The firm was set up in 1999 and is headquartered in Tempe, Arizona.
First Solar, Inc. (NASDAQ:FSLR) is one of the few companies that has withstood the stock market bloodbath of 2022, as its shares are up by a whopping 144% over the past 12 months. Looks like the market also thinks it's one of the smartest companies around, and so do 45 of the 920 hedge funds polled by Insider Monkey in Q3 2022.
First Solar, Inc. (NASDAQ:FSLR)'s biggest hedge fund investor is D.E. Shaw's D E Shaw which owns 899,979 shares that are worth $119 million.
16. Illumina, Inc. (NASDAQ:ILMN)
Hedge Fund Investors as of Q3 2022: 49
Illumina, Inc. (NASDAQ:ILMN) is a healthcare company based in San Diego, California. It has a host of different products and services, such as those that cover genetic testing, cancer testing, genomic research, and drug development.
Of the 920 hedge funds part of Insider Monkey's September quarter of 2022 survey, 49 had bought Illumina, Inc. (NASDAQ:ILMN)s shares.
Illumina, Inc. (NASDAQ:ILMN)'s largest investor is Robert Joseph Caruso's Select Equity Group which owns 1.5 million shares that are worth $297 million.
15. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)
Hedge Fund Investors as of Q3 2022: 50
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is a software company. Its products allow customers to manage their financial markets operations such as securities accounting, reconciliation, clearing, and tax reporting. The firm also serves the needs of the healthcare industry.
By the end of Q3 2022, 50 of the 920 hedge funds surveyed by Insider Monkey had bought SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)'s shares.
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)'s largest hedge fund shareholder is Richard S. Pzena's Pzena Investment Management which owns 10.6 million shares that are worth $510 million.
14. General Electric Company (NYSE:GE)
Hedge Fund Investors as of Q3 2022: 53
General Electric Company (NYSE:GE) is an iconic American firm that traces its roots back to 1892 and was set up by Thomas Edison. Despite this, the firm is still operating today and provides some of the most important products in the world such as gas and steam turbines.
53 of the 920 hedge funds polled by Insider Monkey during Q3 2022 had bought General Electric Company (NYSE:GE)'s shares.
General Electric Company (NYSE:GE)'s largest investor is Richard S. Pzena's Pzena Investment Management which owns 13.7 million shares that are worth $851 million.
13. Gilead Sciences, Inc. (NASDAQ:GILD)
Hedge Fund Investors as of Q3 2022: 56
Gilead Sciences, Inc. (NASDAQ:GILD) is a drug manufacturer headquartered in Foster City, California. The firm makes and sells treatments for HIV, angina, liver diseases, and the coronavirus.
By the end of last year's third quarter, 56 of the 920 hedge funds polled by Insider Monkey had bought Gilead Sciences, Inc. (NASDAQ:GILD)'s shares.
Gilead Sciences, Inc. (NASDAQ:GILD)'s largest investor is Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital which owns 12 million shares that are worth $732 million.
12. Intel Corporation (NASDAQ:INTC)
Hedge Fund Investors as of Q3 2022: 69
Intel Corporation (NASDAQ:INTC) is the largest chip manufacturing firm in the world. It makes and sells products for personal computing, data center, and other markets. The firm is based in Santa Clara, California.
Intel Corporation (NASDAQ:INTC) is facing a tough macroeconomic environment these days, which is further complicated by the firm's cost cutting measures and its need to invest in growth to regain chipmaking leadership. 69 of the 920 hedge funds surveyed by Insider Monkey during Q3 2022 had bought its shares.
John Overdeck and David Siegel's Two Sigma Advisors is Intel Corporation (NASDAQ:INTC)'s largest investor. It owns 15 million shares that are worth $390 million.
11. MercadoLibre, Inc. (NASDAQ:MELI)
Hedge Fund Investors as of Q3 2022: 81
MercadoLibre, Inc. (NASDAQ:MELI) is an internet retail company with a presence in Latin America. The firm's online marketplace lets users transfer money and make online purchases.
By the end of 2022's September quarter, 81 of the 920 hedge funds surveyed by Insider Monkey had held a stake in MercadoLibre, Inc. (NASDAQ:MELI).
MercadoLibre, Inc. (NASDAQ:MELI)'s largest hedge fund shareholder in our database is David Blood and Al Gore's Generation Investment Management which owns 683,206 shares that are worth $565 million.
10. Merck & Co., Inc. (NYSE:MRK)
Hedge Fund Investors as of Q3 2022: 82
Merck & Co., Inc. (NYSE:MRK) is a pharmaceutical giant. Its also one of the smartest companies in the world, as evidenced by the fact that it makes and sells treatments for some of the most complex diseases in the world such as cancer and neurological disorders.
Insider Monkey analyzed 920 hedge fund portfolios for their third quarter of 2022 shareholdings and discovered that 82 had bought Merck & Co., Inc. (NYSE:MRK)'s shares.
Ken Fisher's Fisher Asset Management is the largest hedge fund that has invested in Merck & Co., Inc. (NYSE:MRK). It owns 12 million shares worth $1 billion.
9. Tesla, Inc. (NASDAQ:TSLA)
Hedge Fund Investors as of Q3 2022: 88
Tesla, Inc. (NASDAQ:TSLA) is the world's leading electric vehicle manufacturer. It has manufacturing facilities all over the world, including lucrative regions such as China and Germany. The company also sells powerpack and other products.
Tesla, Inc. (NASDAQ:TSLA) has been in the news lately as its chief Mr. Elon Musk is being accused by investors of paying too little time to the firm. 88 of the 920 hedge funds polled by Insider Monkey had invested in Tesla, Inc. (NASDAQ:TSLA) as part of their Q3 2022 investments.
Tesla, Inc. (NASDAQ:TSLA)'s largest hedge fund shareholder is Catherine D. Wood's ARK Investment Management which owns four million shares that are worth $1 billion.
8. NVIDIA Corporation (NASDAQ:NVDA)
Hedge Fund Investors as of Q3 2022: 89
NVIDIA Corporation (NASDAQ:NVDA) is the world's leading graphics processing unit (GPU) designer. These products are used across a wide variety of applications, such as gaming, data center computing, and rendering.
As part of their third quarter of 2022 investments, 89 of the 920 hedge funds polled by Insider Monkey had bought NVIDIA Corporation (NASDAQ:NVDA)'s shares.
NVIDIA Corporation (NASDAQ:NVDA)'s largest investor is Ken Fisher's Fisher Asset Management which owns 12 million shares that are worth $1.4 billion.
7. Alibaba Group Holding Limited (NYSE:BABA)
Hedge Fund Investors as of Q3 2022: 105
Alibaba Group Holding Limited (NYSE:BABA) is one of the largest retailers in the world, which also has a presence in other lucrative industries such as cloud computing and content delivery.
Insider Monkey studied 920 hedge fund holdings for Q3 2022 to discover that 105 had invested in Alibaba Group Holding Limited (NYSE:BABA).
Out of these, David Blood and Al Gore's Generation Investment Management is Alibaba Group Holding Limited (NYSE:BABA)'s largest investor. It owns 4.5 million shares that are worth $360 million.
6. Salesforce, Inc. (NYSE:CRM)
Hedge Fund Investors as of Q3 2022: 117
Salesforce, Inc. (NYSE:CRM) is a software company headquartered in San Francisco, California. The firm lets its customers manage customer relationships and run big data analytics on their workflow and sales data.
By the end of 2022's third quarter, 117 of the 920 hedge funds polled by Insider Monkey had bought Salesforce, Inc. (NYSE:CRM)'s shares.
Salesforce, Inc. (NYSE:CRM)'s largest investor is Ken Fisher's Fisher Asset Management which owns 12 million shares that are worth $1.8 billion.
Salesforce, Inc. (NYSE:CRM), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN) are some of the smartest companies out there.
Click to continue reading and see Top 5 Smartest Companies To Buy According To Hedge Funds.
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Disclosure: None. Top 25 Smartest Companies To Buy According To Hedge Funds is originally published on Insider Monkey. | NVDA |
https://finnhub.io/api/news?id=19fd80c83256ea233cf534e1d57db7b6057145473748c07e3b039afdd8cc45ad | Stocks: The biggest S&P 500 gainers in January | Yahoo Finance Live’s Brad Smith breaks down January’s biggest S&P 500 gainers. | 2023-02-01T06:48:08 | Yahoo | Stocks: The biggest S&P 500 gainers in January
Yahoo Finance Live’s Brad Smith breaks down January’s biggest S&P 500 gainers.
Video Transcript
- And if we take a look at futures here this morning, a little bit lower as investors await today's big decision by the Fed. Here are three things you need to know this morning. A bullish or bearish message for the markets, Federal Reserve Chair Jerome Powell will speak at 2:00 PM today after the FOMC makes its decision, expected to make its smallest rate hike in nearly a year of 25 basis points.
- And Snap's market value is vanishing. Following another brutal earnings report, the company's weak outlook casting fresh doubts on the social media plays future.
- And Advanced Micro Devices or AMD topped earnings expectations for the fourth quarter despite slowing demand for PCs. We're going to dive into those earnings in just a minute. But first, let's take a look back at what some investors are calling big Jan out there in the markets as we start a new trading month here in February.
You've got one friend of the show Carson Group Chief Market Strategist Ryan Detrick calling this the bullish slingshot and saying it is here. And here's why because after a big January, like the one that we did see in the markets, the average full year gain is 29% for the S&P 500. And that's coming after-- that's when we have that big January, after a down year, which is exactly what we see. Now, in terms of some of the sector performers over the course of January, you had the out-sized move to the upside in consumer discretionary. Also communications services that moved higher by about 15% as well.
And in addition, some of the other largest decliners in 2022 where the biggest or out-sized move to the upside in the beginning of 2023. Technology and real estate, both of those up more than 9%. Let's also take a look at some of those individual movers. And for some of the mega-cap tech stocks, that's where you actually saw the biggest rebound here. Take a look at Tesla. That moved higher in January by about 40% there. NVIDIA also moved up by about 33%, 34%. Amazon, also a big move there. So that just kind of continues the theme for some of the bigger decliners, the largest decliners, that we saw getting a little bit of a rebound coming into the start of this year. But again, it's all still relative here as well.
- Yeah, exactly. And really, the question is, will the Federal Reserve come in here and want to smack down the advances that we have seen in the market? That's the big question. We have seen that happen before, right? With past meetings where the Federal Reserve and its participants felt that the action we were seeing in the markets did not fully reflect the outlook for rates. So then that raises the question of, are we going to get different rhetoric here today from the Federal Reserve?
- Yeah, and it's to be determined. I'm looking at this good note from Goldman Sachs. I love their research. But this is the vibe coming into this Fed meeting. Goldman notes this, how many rate hikes will be needed to stay on this path is less clear. They expect to additional 25 basis point hikes in March and May, but fewer might be needed if a weak business confidence depresses hiring investment. Or more might be needed if the economy really accelerates. So it's just absolute confusion, I would say, into this meeting. And that ultimately falls on Jay Powell to come out here and just, I think, provide clearer market, clearer guidance to a market to Brad's point that just had a big Jan.
- Yeah, and so within that big Jan, what you had the absence of, as we've been discussing, was the Federal Reserve here? And of course, that meeting, that FOMC meeting kicking off on the 31st. And now, we'll get a decision here today on the 1st of February. One huge thing to continue to keep in mind going forward is, of course, not just how much of an out-sized impact any type of pause or pivot could have on the markets and the reaction that they may have in celebration. But then to the other side, what if the Fed goes against what that expectation is and actually is still remaining more aggressive almost kind of heeding the advice of the IMF?
- I mean, I think, I feel like that is kind of-- that is kind of the expectation at this point. I mean, it feels like the market is leaning a little bit more on hawkish expectation than dovish expectation. At this point, yes, we've seen the big January rally. But then over the past couple of days, we've seen a little bit of shakiness to that rally. So I do wonder if investors are sort of bracing themselves rather than thinking the Fed's going to-- I think, there's little chance that the Fed is going to signal an all clear here.
And I think execs are waiting too. And I know I'm guilty of this too. I always view that execs don't pay as much to the Federal Reserve as we here do in the business news community. But, you know, I spoke to Otis' CEO Judy Marks and she was she's paying very careful attention. They reported earnings this morning they beat, but they have very careful attention to the outlook for rates this year. And she made a good point that if rates continue to go up, it might impact their backlog and their business plans later this year in terms of new development. Not just here in the US, but Europe and certainly China.
- Well, that's kind of the sentiment that you heard even from the conversations you guys were having at Davos because from what the execs were somewhat signaling is that we can't really do anything about what the Fed is going to do. They're going to act as they feel necessary for the economy, but at the same time, we can be as proactive. And in some cases, they've been extremely reactive. But as proactive as we can in this instance, which means drumming up new business deals, which means some of the cost restructuring within our own company and corporation. And I think at this point too for what they're listening for from the Fed, it's more about how the demand environment can impact them if they continue to be hawkish or aggressive from the Fed. How that impacts their own consumers that they're going after right now too.
- Yeah. | NVDA |
https://finnhub.io/api/news?id=3efc5d0a2427137d2b03ad6eab774a84cc49166c068f27aea207506b5629c809 | These 3 Stocks Are Ending the Nasdaq Bear Market | Despite its stumble to start the current trading week, the Nasdaq Composite (NASDAQINDEX: ^IXIC) is up 12% from the low point it reached near the end of last year, and it reached a four-month high on Friday. This is the best stretch we've seen from the index since 2021, before the recent bear market took shape. If this is the shape of things to come, that bear market may well be ending. | 2023-02-01T05:38:20 | Yahoo | These 3 Stocks Are Ending the Nasdaq Bear Market
Despite its stumble to start the current trading week, the Nasdaq Composite (NASDAQINDEX: ^IXIC) is up 12% from the low point it reached near the end of last year, and it reached a four-month high on Friday. This is the best stretch we've seen from the index since 2021, before the recent bear market took shape. If this is the shape of things to come, that bear market may well be ending. | NVDA |
https://finnhub.io/api/news?id=95ecf872bf0519182ce22d415c3ee5f37e8c990f67e9917f24e56c13eabf9f46 | Dow Jones Futures Fall After Market Rallies Into Fed Rate Hike; AMD, Snap Are Key Movers | Stocks rallied into the Fed rate hike decision, amid big earnings and other news. AMD, Snap were key movers late. | 2023-02-01T05:22:43 | Yahoo | Dow Jones Futures Fall After Market Rallies Into Fed Rate Hike; AMD, Snap Are Key Movers
Stocks rallied into the Fed rate hike decision, amid big earnings and other news. AMD, Snap were key movers late.
Stocks rallied into the Fed rate hike decision, amid big earnings and other news. AMD, Snap were key movers late.
Mark Spitznagel and Nassim Taleb have been watching for black swans for decades. "We’ve never seen anything like this level of total debt and leverage in the system," he tells Fortune. "It's an experiment."
Warren Buffett is undeniably the most famous and influential investor in modern history, based on his extraordinary performance record. Not surprisingly, the investment portfolio of Berkshire Hathaway Inc. (BRK.A), the holding company employing the Oracle of Omaha as chairman and CEO, receives wide media attention and scrutiny, even though Buffett is no longer making every investment decision. Despite his unparalleled success, Buffett's investment model has long been transparent, straightforward, and consistent.
Stocks have blown past expectations for 2023 – but some analysts are bracing for a sell-off as the market approaches record highs.
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Just because you retire doesn't mean you have to stop working. And when work is an option rather than a requirement, it's possible to select a low-stress job that multiplies fulfillment without adding anxiety - but still provides a bit … Continue reading → The post 12 Low-Stress Jobs You Can Do in Retirement appeared first on SmartAsset Blog.
Berkshire Hathaway historically reports its quarterly financial results on weekends, and CEO Warren Buffet has a simple reason why. Berkshire (ticker: BRK.A, BRK.B) reported second-quarter earnings Saturday morning. Many other public companies, however, release their earnings results during the trading week, either before the market opens or after the closing bell.
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The week ahead will feature a crucial inflation report and earnings out of Disney, UPS, and Alibaba as second quarter earnings season winds down.
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Dubbed the Oracle of Omaha, Warren Buffett is renowned for his simple and frugal lifestyle. Despite being the sixth richest person globally, with a net worth estimated at $117.9 billion, Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500. Adjusted for inflation, that amount today would be approximately $328,990.80, a mere 0.000279% of his total net worth. Buffett has consistently ranked the purchase of his home as the third-best investment he ha
As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=49cf774d53e4a58733c54f97cf8f4ed44ee96fb57c7a1b3d1fb3c6a3ce037fe5 | Samsung unveils Galaxy S23 smartphone with 200MP camera, Galaxy Book PCs | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T04:37:00 | Seeking Alpha | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=08062c10daec93eb05d6d7dd2d58c9c69617ec41c0a719472658d756035df170 | Top 5 4th Quarter Trades of DekaBank Deutsche Girozentrale | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T04:01:00 | GuruFocus | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=688c0d6dd142fe071e9bd51e5ca6c05079f8b9950dde57101b5a35492dc662e9 | NVIDIA Corporation (NASDAQ:NVDA) is favoured by institutional owners who hold 65% of the company | If you want to know who really controls NVIDIA Corporation ( NASDAQ:NVDA ), then you'll have to look at the makeup of... | 2023-02-01T04:00:45 | Yahoo | NVIDIA Corporation (NASDAQ:NVDA) is favoured by institutional owners who hold 65% of the company
If you want to know who really controls NVIDIA Corporation (NASDAQ:NVDA), then you'll have to look at the makeup of its share registry. With 65% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let's delve deeper into each type of owner of NVIDIA, beginning with the chart below.
Check out our latest analysis for NVIDIA
What Does The Institutional Ownership Tell Us About NVIDIA?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that NVIDIA does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at NVIDIA's earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. NVIDIA is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 8.3% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.2% and 5.5%, of the shares outstanding, respectively. In addition, we found that Jen-Hsun Huang, the CEO has 3.5% of the shares allocated to their name.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of NVIDIA
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
We can see that insiders own shares in NVIDIA Corporation. Insiders own US$19b worth of shares (at current prices). It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over NVIDIA. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for NVIDIA you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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https://finnhub.io/api/news?id=d6f074104ef720df60ba3e0bc0a5e4e6fadfc6629fe043cc947e620c333be08d | Most Active Equity Options For Midday - Wednesday, Feb. 1 | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T03:30:00 | TalkMarkets | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=87a3a4fd110e013d39ddeccfe22bb57c77063b27efd183eb815768fbb2ce30a9 | Interesting NVDA Put And Call Options For July 21st | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T02:27:00 | Stock Options Channel | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
Visit Performance Disclosure for information about the performance numbers displayed above.
Visit www.zacksdata.com to get our data and content for your mobile app or website.
Real time prices by BATS. Delayed quotes by FIS.
NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. | NVDA |
https://finnhub.io/api/news?id=78277ae68624a228cc735fbf1f11be22c6b7dba57043dd4354e171ad6219bc2f | Bargain Shopping in 2023? These Growth Stocks Could Set You Up for Life | History shows that buying and holding growth stocks is one of the best ways to build wealth for retirement. Two of the best tech stocks to buy right now are Nvidia (NASDAQ: NVDA) and Meta Platforms (NASDAQ: META). One reason to consider buying the stock on the dip is Nvidia's leading position in one very important market to the global economy. | 2023-02-01T02:25:00 | Yahoo | Bargain Shopping in 2023? These Growth Stocks Could Set You Up for Life
History shows that buying and holding growth stocks is one of the best ways to build wealth for retirement. Two of the best tech stocks to buy right now are Nvidia (NASDAQ: NVDA) and Meta Platforms (NASDAQ: META). One reason to consider buying the stock on the dip is Nvidia's leading position in one very important market to the global economy. | NVDA |
https://finnhub.io/api/news?id=11157b297c682c9e29dd889cf225e46e5cd2e6a29d7a45597ecd6cc646e75dd3 | Can Intel`s Stock Bounce Back After 4th-Quarter Miss? | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-02-01T02:08:00 | GuruFocus | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=75a64e2685901705d78459455508464478a432d4f79a044eddb6d17cd77a211e | AMD: Simply The Best | Advanced Micro Devices beat estimates on both lines for Q4 2022. Click here for my full earnings review and a look at AMD's prospects. | 2023-02-01T01:53:03 | SeekingAlpha | AMD: Simply The Best
Summary
- Advanced Micro Devices, Inc. beat estimates on both lines for Q4 2022.
- The performance in the data center market was great.
- Q1 may not be as good as Q4, but AMD still is the leader in its peer group.
- I do much more than just articles at Cash Flow Club: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »
Article Thesis
"Simply The Best" is not only a Tina Turner song but also what one could call Advanced Micro Devices, Inc. (NASDAQ:AMD) -- at least relative to its two most important peers, Intel Corporation (INTC) and NVIDIA Corporation (NVDA). The company's most recent quarterly results, reported on Tuesday afternoon, underline AMD's many strengths. Shares are more attractive than those of its two core peers.
What Happened?
AMD reported its fourth-quarter earnings results on Tuesday afternoon. The headline numbers looked like this:
A 16% revenue gain was a strong showing in absolute terms, and also outperformed versus what the analyst community had expected. On top of that, AMD managed to beat earnings per share estimates, which naturally is a good thing for shareholders as well. Let's take a look at the important factors for that and why I believe that AMD is a better pick than its peers.
AMD: Many Positives
AMD is not the largest semiconductor company in the world, neither by market capitalization, nor by revenues. Still, it's a major player in its business areas -- data center and PC CPUs and GPUs. AMD's chips are, on average, some of the most efficient chips in terms of power consumption relative to performance. That has always been an advantage, but it has become an even more important advantage in the recent past. A global energy crisis has made electricity more expensive in many markets, which is why going for an efficient chip results in larger cost savings relative to the past, when electricity was cheaper. At the same time, worries about an economic slowdown make many customers focus more on cost reduction efforts to better prepare themselves for a potential recession. The combination of these factors -- savings by switching to efficient chips are more meaningful due to higher electricity costs, and at the same time, savings are more important -- is highly beneficial for AMD.
But there are other positives at play on top of that. Growth in the data center market allows AMD to sell to more and more customers. Macro trends such as autonomous driving, artificial intelligence, the Internet of Things ("IoT"), and so on will require more and more computing power, and more and more of that will be processed via cloud offerings, i.e., in major data centers. With its data center product lineup, AMD is well-positioned: The 3rd Generation EPYC processors, for example, are the best-performing data center chips in the market for overall workload, and new introductions such as AMD's 3D V-Cache improve the EPYC series' performance in more specialized tasks such as technical computing.
At the same time, one of AMD's biggest competitors, Intel, is having major problems -- Intel fails timelines regularly and is not bringing products to the market at the time it planned to do, allowing AMD to gain market share. It is thus not surprising to see that AMD's and Intel's performance in the data center space was very different: While Intel saw its data center revenue drop by a horrendous 33% year over year in Q4, AMD's experience was very different -- the company was able to grow its data center revenue by an extremely attractive 42% year over year. Data centers will remain a growth market for many years, I believe, as major players such as Alphabet (GOOG, GOOGL), Amazon (AMZN), Meta Platforms (META), and so on will continue to invest heavily to process growing data streams stemming from the aforementioned macro trends. At least Meta should also be investing heavily to build out processing power for its Metaverse unit. With AMD having top-tier technology in a growth market, where its important competitor Intel continues to fall behind, there is a good chance that AMD will generate compelling growth for years to come in this area, I believe.
Not everything was rosy in the fourth quarter, however. While AMD's data center business performed exceptionally well, some other units generated meager results. Gaming, for example, hasn't done too well. This is easily explained by the fact that consumers are spending less on discretionary purchases in a high-inflation world, where they have to focus their spending on necessities such as food, shelter, energy, gasoline, and so on. Gaming revenue benefitted a lot from the pandemic with its stimulus payments and lockdowns that made spending "outside" harder. But with consumers now being less eager to make discretionary purchases, and with more "outside" options being available (travel, concerts, and so on), the market for gaming products has become harsher.
This was visible in AMD's results, as the company's gaming revenue declined by 7% year over year. That's far from a disaster, but still an underperformance versus what we saw during the pandemic and what we are seeing in areas such as data centers right now. I believe that this will be a temporary issues, however. Eventually, inflation will come back down to earth, and consumers will become more eager to spend on discretionary products again. At the same time, gaming remains a growth industry in the long run, as a growing portion of consumers enjoy the hobby and as a fast-growing middle class in countries such as China will allow more and more consumers to spend heavily on gaming equipment such as the products sold by AMD.
While the gaming business suffers from consumers being tight with money, the same holds true for AMD's client business. Consumers are buying fewer PCs, which is why the unit saw revenues pull back during the fourth quarter. The same trends are expected to remain in place during the current quarter, Q1, which is why AMD is forecasting that revenues will dip this quarter. The company's revenue guidance of $5.3 billion (midpoint) implies a 10% decline year over year -- with the ongoing gaming and PC slowdown being the major drivers. An expected revenue decline is not great, of course, but it's still pretty clear that AMD will outperform its peers: Intel has forecasted a 40% revenue decline for the current quarter, and NVIDIA is forecasted to experience a 21% revenue decline during the current quarter, according to the Wall Street consensus.
The current environment isn't good for semiconductor companies, but AMD clearly is the best performer during these tough times, I believe -- it has not only easily outperformed its two major peers in the recent past, but forecasts imply that this will also hold true for the near term.
AMD: The Best In Its Peer Group
At the same time, AMD also looks more attractive than Intel and NVIDIA due to additional factors. It does not only have the best recent and near-term revenue outlook, but also the best combination of profitability and valuation. Intel experiences massive profitability and cash flow headwinds and might have to cut its dividend. The company has seen its profits fall by almost 90% in the most recent quarter, and will generate a net loss during the current quarter. Intel has also burned through ~$10 billion of cash last year. NVIDIA is forecasted to see its profit fall by 26% this year, while the analyst community is forecasting a profit increase for AMD, as Q1 should be the nadir and since business growth should pick up again as the year progresses, e.g. due to stockpiles of GPUs declining.
And yet, AMD is the cheapest among its peer group by far:
AMD trades at 21x this year's expected net profit. That's not an especially low valuation in absolute terms, but considering AMD's long-term growth potential, that does not seem unreasonable at all. Its two peers are trading at a 50+ earnings multiple. In Intel's case, that's due to EPS estimates being pretty low for the current year due to the company's many problems, but that doesn't really mean that these valuations are justified. With AMD outperforming when it comes to product offerings, when it comes to business growth, when it comes to profitability, and with AMD still being the cheapest among these three by far, I believe it's fair to say that AMD is simply the best.
Timing And Risks To Consider
From a pure timing perspective, AMD is not the great buy it was a couple of months ago -- shares have risen 26% since my last bullish article three months ago. One could thus argue that waiting for a more opportune buying opportunity might make sense. But for someone looking to deploy money today, AMD looks like the best choice among its peers by far, both from a fundamental perspective and from a valuation perspective. Its upside potential is the largest while its downside risk is the smallest, I believe, relative to pricey INTC and NVDA.
Still, despite the fact that AMD looks better than its two core peers from a valuation and business performance perspective, it's not risk-free. Higher-than-expected inflation could result in more Fed tightening, for example, and growth stocks including AMD could see their shares pull back if that happens. A more severe recession, relative to what the market is seeing right now, could also result in share price declines, as profits would not be as high as currently forecasted by Wall Street in such a scenario -- a deep recession could hurt both the consumer-facing businesses (PC and gaming) as well as the data center business, in case major players such as AMZN decide to cut back their capital expenditures.
I do not see a deep recession as very likely, but it's a risk investors should consider. Last but not least, AMD's dependence on contract manufacturers such as Taiwan Semiconductor Manufacturing Company Limited (TSM) makes AMD vulnerable versus a potential escalation of the Taiwan conflict. If that were to happen, most chip stocks would be hit hard, but companies with their own fabs, such as Intel, would likely outperform versus AMD, NVIDIA, etc. that are operating with a fabless business model.
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Comments (25)
Lisa Su: Simply The Best
I invest in the "dependable" CEO Lisa Su leading the "tech-rich" AMD and managing the details and numbers for me, so I just need to monitor the product offering and enjoy my margarita and music, so far so good and sleeping well.
www.youtube.com/...
www.youtube.com/...
But the Data Center growth is slowing, and AMD did not fully take advantage of the opportunity, as shown by the growth of new ARM-based processors.
In a couple of years, AMD will have to compete with RISC-V too. | NVDA |
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https://finnhub.io/api/news?id=a6e2fc92520eafb41b8e675e8bf037d5d54f4e83d93eb5cde3c5c563bd944098 | Nvidia: ChatGPT Driving This Year`s Hype Train (Rating Downgrade) | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-01-31T23:04:00 | Seeking Alpha | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=272e511c448c0580dbcf403754c799bc58531b1d90ae7673a192f903c0099221 | NVIDIA Corp. stock rises Wednesday, outperforms market | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-01-31T20:15:00 | MarketWatch | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
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https://finnhub.io/api/news?id=f4bc0ce470a056f3176d4e6fa34d1b5cef64e5dd857a27ace92b9c4a55f7c1a4 | AMD Pushes the Chip Sector To New Highs | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-01-31T19:17:00 | TipRanks | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=761d7a023a80852781227d369a52140f4d04608f4a81bb13e8a98f41c2a90700 | Dow Jones Futures: Market Rallies Into Fed Rate Hike; AMD, Snap Are Key Movers Late | Stocks rallied into the Fed rate hike decision, amid big earnings and other news. AMD, Snap were key movers late. | 2023-01-31T16:30:43 | Yahoo | Dow Jones Futures Fall After Market Rallies Into Fed Rate Hike; AMD, Snap Are Key Movers
Stocks rallied into the Fed rate hike decision, amid big earnings and other news. AMD, Snap were key movers late.
Stocks rallied into the Fed rate hike decision, amid big earnings and other news. AMD, Snap were key movers late.
Mark Spitznagel and Nassim Taleb have been watching for black swans for decades. "We’ve never seen anything like this level of total debt and leverage in the system," he tells Fortune. "It's an experiment."
Warren Buffett is undeniably the most famous and influential investor in modern history, based on his extraordinary performance record. Not surprisingly, the investment portfolio of Berkshire Hathaway Inc. (BRK.A), the holding company employing the Oracle of Omaha as chairman and CEO, receives wide media attention and scrutiny, even though Buffett is no longer making every investment decision. Despite his unparalleled success, Buffett's investment model has long been transparent, straightforward, and consistent.
Stocks have blown past expectations for 2023 – but some analysts are bracing for a sell-off as the market approaches record highs.
The JPMorgan Equity Premium Income ETF’s (NYSEARCA:JEPI) combination of high yield and monthly payments has quickly made it one of the market’s most popular ETFs. Investors who like JEPI’s style now have another high-yield competitor to consider — the NEOS S&P 500 High Income ETF (BATS:SPYI), which also pays on a monthly basis and yields 10.7%. Let’s take a closer look at this intriguing new option for high-yield investors. What is SPYI ETF’s Strategy? Launched in August of 2022, SPYI is still a
Just because you retire doesn't mean you have to stop working. And when work is an option rather than a requirement, it's possible to select a low-stress job that multiplies fulfillment without adding anxiety - but still provides a bit … Continue reading → The post 12 Low-Stress Jobs You Can Do in Retirement appeared first on SmartAsset Blog.
Berkshire Hathaway historically reports its quarterly financial results on weekends, and CEO Warren Buffet has a simple reason why. Berkshire (ticker: BRK.A, BRK.B) reported second-quarter earnings Saturday morning. Many other public companies, however, release their earnings results during the trading week, either before the market opens or after the closing bell.
The market rally is at an infection point after notable losses. Here's what to do. Warren Buffett's Berkshire earnings rose.
Is there a point at which I should stop reinvesting stock dividends and invest the money or save the cash? -Anonymous Many financial experts recommend that you reinvest dividends most of the time – and I'm inclined to agree. The … Continue reading → The post Ask an Advisor: Should I Stop Reinvesting Dividends? appeared first on SmartAsset Blog.
There are many different approaches and strategies for retirement investing that might appeal to you. But how do you tell if a certain strategy works for your situation? When evaluating different approaches, consider how each strategy is put together and … Continue reading → The post Here's How Much to Keep in Stocks, Bonds and Cash in Retirement appeared first on SmartAsset Blog.
The week ahead will feature a crucial inflation report and earnings out of Disney, UPS, and Alibaba as second quarter earnings season winds down.
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AustralianSuper, one of the world’s largest pensions, halved its Apple stock investment and sold Microsoft stock, while buying shares of Tesla and Nvidia.
One in 6 asset and wealth management companies will be bought or shut down in the next five years, according to a PwC survey of asset managers and institutional investors.
Warren Buffett's Berkshire Hathaway operating profit rose by 10%. BRKB stock is just out of buy range.
Travel scams are on the rise. Don't be a victim.
VZ stock provides a dividend but a buyback has been shelved amid 5G wireless investments. When will revenue growth reaccelerate?
Will generative artificial intelligence boost Palantir stock in the commercial market amid slowing revenue growth for the company?
Retirement account withdrawals not only help you cover basic living expenses, but they also can fund the lifestyle you've always envisioned in your golden years. That money, however, can have unintended tax consequences. Required minimum distributions (RMDs) and other withdrawals … Continue reading → The post Social Security Taxes Can Hit You Hard in Retirement. Here's How to Lower Them appeared first on SmartAsset Blog.
Dubbed the Oracle of Omaha, Warren Buffett is renowned for his simple and frugal lifestyle. Despite being the sixth richest person globally, with a net worth estimated at $117.9 billion, Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500. Adjusted for inflation, that amount today would be approximately $328,990.80, a mere 0.000279% of his total net worth. Buffett has consistently ranked the purchase of his home as the third-best investment he ha
As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=3d48684b6cad8773abedd55f88fcd79a80e056ae652f49f746bd461ca70f9534 | Nvidia (NVDA) Outpaces Stock Market Gains: What You Should Know | Nvidia (NVDA) closed the most recent trading day at $195.39, moving +1.97% from the previous trading session. | 2023-01-31T14:45:10 | Yahoo | Nvidia (NVDA) Outpaces Stock Market Gains: What You Should Know
Nvidia (NVDA) closed the most recent trading day at $195.39, moving +1.97% from the previous trading session. The stock outpaced the S&P 500's daily gain of 1.46%. Elsewhere, the Dow gained 1.09%, while the tech-heavy Nasdaq added 6.63%.
Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had gained 31.12% over the past month. This has outpaced the Computer and Technology sector's gain of 9.6% and the S&P 500's gain of 4.75% in that time.
Investors will be hoping for strength from Nvidia as it approaches its next earnings release, which is expected to be February 22, 2023. In that report, analysts expect Nvidia to post earnings of $0.81 per share. This would mark a year-over-year decline of 38.64%. Meanwhile, our latest consensus estimate is calling for revenue of $6.01 billion, down 21.31% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.26 per share and revenue of $26.94 billion. These totals would mark changes of -26.58% and +0.09%, respectively, from last year.
Any recent changes to analyst estimates for Nvidia should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.01% lower. Nvidia is currently a Zacks Rank #4 (Sell).
Valuation is also important, so investors should note that Nvidia has a Forward P/E ratio of 58.71 right now. For comparison, its industry has an average Forward P/E of 21.4, which means Nvidia is trading at a premium to the group.
Meanwhile, NVDA's PEG ratio is currently 4.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Semiconductor - General stocks are, on average, holding a PEG ratio of 3.65 based on yesterday's closing prices.
The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 102, putting it in the top 41% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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https://finnhub.io/api/news?id=7c3f4dfe3500da414ca7f4239d0456973f401753249e18832bef802f071bff99 | AMD Q4 earnings beat expectations, despite slowing PC sales | Chip maker AMD (AMD) reported its Q4 2022 earnings after the bell on Tuesday, beating analysts' expectations. The report comes just days after rival Intel (INTC) announced disappointing earnings and guidance. | 2023-01-31T13:19:24 | Yahoo | AMD Q4 earnings beat expectations, despite slowing PC sales
Chip maker AMD (AMD) reported its Q4 2022 earnings after the bell on Tuesday, beating analysts' expectations. The report comes just days after rival Intel (INTC) announced disappointing earnings and guidance.
Here are the most important numbers from the report compared to what Wall Street was expecting from the company, as compiled by Bloomberg.
Revenue: $5.6 billion versus $5.5 billion expected
Adjusted EPS: $0.69 versus $0.67 expected
Data Center: $1.7 billion versus $1.6 billion expected
Client: $903 million versus $995 million expected
Gaming: $1.6 billion versus $1.5 billion expected
Embedded: $1.4 billion versus $1.3 billion expected
Shares of AMD were up 2.7% immediately following the announcement.
"2022 was a strong year for AMD as we delivered best-in-class growth and record revenue despite the weak PC environment in the second half of the year," AMD CEO Dr. Lisa Su said in a statement. "Although the demand environment is mixed, we are confident in our ability to gain market share in 2023 and deliver long-term growth based on our differentiated product portfolio.”
Despite the positive Q4 report, AMD warned that it will see a 10% decline in revenue in Q1. That looks to be largely the result of an expected drop in its Client and Gaming segments' revenue.
AMD’s earnings come as the broader PC industry deals with a massive slowdown in computer sales following the explosive growth the sector saw during the pandemic. The company reported a 51% year-over-year decline in processor shipments, and an operating loss for its Client segment of $152 million, compared to income of $530 million just last year.
According to Gartner, Q4 worldwide PC shipments declined a stunning 28.5%, the biggest decline since the firm started following shipments in the mid-1990s. Intel saw similarly poor performance in its Client Computing business revenue falling 36% year-over-year to $6.6 billion from $10.1 billion in Q4 2021.
Microsoft (MSFT), meanwhile, saw its Windows OEM business, which supplies Windows licenses to third-party customers, fall 39% year-over-year in its most recent quarter.
Still, AMD reported 42% year-over-year grown in its Data Center business on revenue of $1.7 billion. Intel’s Data Center and AI business revenue, meanwhile, fell 33% year-over-year.
AMD’s graphics rival Nvidia (NVDA) for its part will report its earnings on Feb. 22.
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https://finnhub.io/api/news?id=bb7a36a67328a5b63093095e07b53949fbb328db846e3aa9845e545bb8e66abd | AMD Q4 2022 Quick Take: The Moment Of Truth | Advanced Micro Devices, Inc. finished the Q4 strong with a double beat, despite headwinds from the PC slump. Click here to read our take on AMD earnings. | 2023-01-31T10:43:58 | SeekingAlpha | AMD Q4 2022 Quick Take: The Moment Of Truth
Summary
- Advanced Micro Devices, Inc. finished the fourth quarter strong with a double beat, despite challenging headwinds from the PC slump.
- Data center sales have remained resilient thanks to continued momentum from AI verticals, as well as AMD's technology advantage which allowed capitalization on said opportunities.
- Integration of new acquisitions are also progressing positively, especially on Xilinx.
- Looking for more investing ideas like this one? Get them exclusively at Livy Investment Research. Learn More »
The momentum in semiconductor stocks in recent weeks marks a stark shift from last year’s landslide losses. Investors have largely been celebrating the improving prospects of a “less hawkish” Fed ahead of upcoming rate decisions as inflationary pressures continue to ebb. Not only has this lifted pressure from the discounting factor on tech stocks that have much of their valuation outlooks pinned on future cash flows, but also signal a potential “soft landing” that could tame inflation without stifling growth.
Yet, the recent run of mediocre earnings forecasts and warnings of a worsening slowdown across industry constituents continue to underscore that impact from the weakening consumer is only just beginning with potential for further deterioration ahead. This is corroborated by not only the slowdown in processor demand across consumer end-markets like PC and smartphone applications, but also in the previously more resilient enterprise end-markets, as the impact of the deteriorating macroeconomy spread upstream to impact IT investments.
And this is exactly the case being observed at Advanced Micro Devices, Inc. (NASDAQ:AMD) coming out of its latest earnings release. Consistent with our previous coverage on the stock, AMD’s data center sales – a relative bright spot – remain vulnerable to faltering hyperscaler demand as industry monikers warn of macro-driven moderation ahead. For instance, Microsoft Corporation (MSFT) warned of deceleration in its Azure cloud-computing business in the months ahead as demand normalizes on the back of growing enterprise calls for “cloud optimization” – a quest to enhance “applications, performance, and business needs in the cloud while eliminating costs and inefficiencies.” This is consistent with market leader Amazon Web Services’ (AMZN) deceleration observed in the third quarter, marking a largely expected feat given its sprawling share of the industry. Server chip market leader Intel (INTC) has also recently confirmed that the “overall consumption TAM [in the server market] has [grown] modestly in calendar year 2022, albeit at diminishing rates as the year progressed.”
Despite being one of the hardest hit cohorts in 2022, the semiconductor sector is likely far from ripe for a rebound from current levels, as industry and market headwinds stiffen. And as bad as it sounds, the current market climate has created potential opportunities to buy-in cheaper on stocks that continue to exhibit a sustainable trajectory of longer-term upside potential. Considering AMD’s continued fundamental outperformance – marked by consistent market share gains, a resilient bottom-line (despite one-time amortization costs pertaining to Xilinx acquisition that weighed on fourth quarter margins), and ongoing commitment to innovation – the stock’s vulnerability to persistent market volatility in the coming months creates a compelling opportunity to partake in its run as a potential gainer from key longer-term growth trends ahead.
AMD Remains a Victim to the Slowing Consumer
Despite mounting macroeconomic uncertainties still, spanning persistent inflation that runs well above the Fed’s liking, an ongoing rate hike cycle, and a worsening consumer slowdown that is heralding an impending downturn, investors have been eager in “scooping up tech stocks” this year. Specifically, the tech-heavy Nasdaq 100 has been on a roll in reversing some of last year’s disheartening downtrend, with year-to-date gains of as much as 12%. Growing optimism in recent weeks that the Fed may be nearing the end of the aggressive rate hike cycle that started last year, paired with AMD’s fourth quarter double beat has also spurred the stock’s post-earnings rally in late market trading, despite management’s conservatism on the company’s near-term forward outlook with expectations for a revenue decline in the current quarter due to continued “weakness in the PC and gaming segments.”
But the “hope for better days” likely remains premature, as the earnings season so far has been marked by a repeating theme of grim forecasts from management in hopes of tempering investors’ expectations in response to low market visibility ahead. This is consistent with the flurry of earnings estimate reductions over the fourth quarter, which averaged -6.5% compared to historical trends of -2.5% over the past five years. Full year earnings estimates for the next 12 months have also been slashed by -4.4% on average, worsening from historical trends of -0.2% over the past five years as deteriorating macroeconomic conditions sow a “challenging environment for corporations to grow profits.” And a deeper dive into each of AMD’s core segments would be explicable of management’s conservatism as the broader industry inches further into an uncertain macro backdrop:
Data Center (Enterprise)
AMD’s data center sales have been critical to its bottom-line in recent quarters given the segment’s higher margin nature. Yet, the segment’s slight deceleration in the fourth quarter underscores its vulnerability to a materializing hyperscale slowdown over the near-term, a headwind to its market-leading margins (despite Intel’s leading market share in server processors, AMD beats its rival to the curb on margins by at least 10 points), and inadvertently, the stock’s near-term outlook, potentially erasing recent gains.
Specifically, Microsoft – a customer of AMD’s EPYC server processors – has recently warned of deceleration in its Azure cloud-computing business, as the enterprise sector “hits the brakes on spending”:
“During the pandemic there was rapid acceleration. I think we’re going to go through a phase today where there is some amount of normalization in demand,” [CEO Satya Nadella] said in an interview at the World Economic Forum in Davos, Switzerland, earlier this month. “We will have to do more with less — we will have to show our own productivity gains with our own technology.”
Source: Bloomberg News.
This is also consistent with AWS’ recent warnings of an “uptick in customers focused on controlling costs” in response to ongoing macroeconomic uncertainties. While both, alongside other tech giants, remain committed to maintaining investments towards the expansion of data center capacity that “deliver cloud services” over the longer-term, the near-term industry conservatism remains an overhang for the demand outlook on AMD’s server processors. This is further corroborated by rival and industry leader Intel’s recent observation for deceleration in data center processor demand that will likely worsen over the coming months as industry digests excess capacity built over previous years in response to the looming economic downturn:
We expect Q1 server consumption TAM to decline both sequentially and year-over-year at an accelerated rate with first half 2023 server consumption TAM down year-on-year before returning to growth in the second half.
Source: Intel 4Q22 Earnings Call Transcript.
But despite the anticipated near-term contraction in server processor demand, AMD’s share continues to show signs of gradual increase. Notwithstanding the near-term slowdown in cloud-computing demand due to both market-driven uncertainty in IT budgets and a general shift in corporate preference for cloud optimization, which could further impact AMD’s near-term data center sales, the appetite from high-performance computing (“HPC”) remains resilient and could be a potential offset, which is in line with AMD’s expectation for continued growth in the segment. The 4th Gen EPYC processors have already started shipping, counting key hyperscalers like Azure, Google Cloud Platform (GOOG, GOOGL) and Oracle Cloud as key customers. The EPYC server processors can now also be found in “101 supercomputers in the latest Top500 list of the most powerful supercomputers in the world,” up from 73 in the prior year.
Specially, AMD’s newest generation of EPYC sever processors continue to hold a technology advantage over equivalents made but key rival Intel. The 4th Gen EPYC processors – a line-up marked by Genoa, Bergamo, Genoa-X, and Siena variations optimized for different applications – are manufactured on TSMC’s (TSM) 5 nm process. Not only do the latest generation of EPYC server processors boast 25% more performance-per-watt and 35% better performance overall compared to the preceding 3rd Gen Milan EPYC processors, they also outperform Intel’s equivalent – the fourth generation Sapphire Rapids Xeon server processors – which are still being manufactured on the 7nm process. As discussed in a previous coverage, smaller nm processors are more powerful because it reduces the space between the high volume of transistors within a single chip, and effectively lowers the “distance travelled by electronics to perform work,” thus enhancing energy efficiency while enabling faster computing. Although AMD has only recently started to ship the 4th Gen line-up of EPYC processors to customers, the company is already said to be working on the 5th Gen, codenamed “Turin,” which will likely be manufactured on TSMC’s 4nm and 3nm processes to unlock greater performance capabilities that will further leave rival offerings behind by wide margins, and bolster continued market share gains as secular growth trends in HPC persist.
In addition to data center CPUs, AMD’s growing prowess in data center GPUs also underscores its reach into growth opportunities stemming from burgeoning AI momentum. As discussed in a previous coverage on the stock, AMD’s latest Instinct MI200 series accelerators operates at more than double the performance of rival Nvidia’s (NVDA) “Ampere 100” data center GPU. This accordingly makes it an attractive solution for “complex computing tasks needed to power AI applications”, such as large language models (“LLMs”) backing the recent ChatGPT frenzy:
More notably, the AMD Instinct accelerators are known for their integration alongside the EPYC server processors in more than 100 supercomputers in the most recent Top500 list, up from 73 in the prior year. The achievement underscores its performance competency in supporting complex workloads spanning "climate, biology, and medicine, new energies and materials", inclusive of application-specific LLMs, to accelerate discovery.
And in the latest development, AMD has introduced the next-generation MI300 series accelerators – its “first integrated data center CPU and GPU” that combines the power of 4th Gen EPYC server processors and CDNA 3 architecture-based GPUs – which is scheduled to start shipping by the second of the current year to further take advantage of opportunities in the “exascale AI era.” Continued integration of Xilinx’s “differentiated AI engine” across AMD’s CPU product portfolio is also expected to further the company’s “industry-leading inference capabilities,” with one of the first joint products – the XDNA Architecture – optimized for complex workloads such as AI and signal processing scheduled for launch in 2023. Meanwhile, AMD recently introduced Versal SoCs to deliver AI-enabled “high-quality, low-latency imaging” capabilities in healthcare, as well as aerospace application.
Based on preliminary Wall Street projections over the nascent AI opportunity pertaining to the use of LLM applications like OpenAI’s ChatGPT alone could drive annual sales of $3 billion to $11 billion in the current year. Although AMD’s presence in the market for data center GPUs remains in miniscule when compared to industry leader Nvidia, which commands more than a 90% share, its technological competence continues to bolster its presence in the ongoing AI arms race still, despite the transitory macro-driven setback expected over the coming months.
Gaming and Client (Consumer-Centric)
Just when market thought the adverse impact from slowing consumer end-markets have already been priced into the broader semiconductor sector following an aggressive valuation correction in 2022 that outpaced the broader market, results from the recent earnings season proved otherwise. Memory chipmakers – the corner of the broader semiconductor sector that is most prone to consumer weakness – is expected to incur a collective loss of more than $5 billion this year. The extent of turmoil is further echoed by Samsung (OTCPK: SSNLF / OTCPK: SSNNF) – the global leader in contracted memory chip manufacturing – which suffered from its worst profit decline in more than 10 years, while foundry giant TSMC also warned of a potential drop in current quarter sales for the first time in four years.
Even chipmakers counting AMD and rival Intel have not been spared, given the accelerating decline in PC shipments. Specifically, global PC shipments accelerated a decline to -28.5% in the fourth quarter from -19.5% in the third quarter, -12.6% in the second quarter, and -6.8% in the first quarter; full year 2022 PC shipments dropped 16.2% y/y, the steepest level from data dating back to the mid-1990s, underscoring the weight of worsening consumer weakness. The slowdown is further corroborated by AMD’s fourth quarter revenue declines observed in its consumer-centric gaming (-7% y/y; +0.8% q/q) and client segments (-51% y/y; -12% q/q).
And the challenge remains prevalent, which is consistent with management’s conservative sentiment over its consumer-facing segments. The U.S. economy is expected to contract in the second and third quarter by an annualized rate of 0.6% and 0.3%, respectively, despite its latest outperformance. Much of the anticipated downturn will likely be driven by buckling consumer resilience. Specifically, American household savings have come down significantly from the pandemic era, when bank accounts were buffered with unspent stimulus cheques due to COVID-related mobility restrictions, hovering near record-low levels in the low 2% range. Meanwhile, credit card debt has steadily racked up beyond pre-pandemic levels, with accumulated revolving credit outstanding reaching $1.2 trillion.
The threatening combination of declining savings and increasing consumer debt underscores the growing burden of inflation and surging interest rates. With the Fed likely laying its eyes on slowing the relatively resilient labor market next – unemployment remains at a historical low rate of 3.5% – to impede a wage-induced price spiral, related uncertainty is likely to persuade consumers to tighten their belts further within the near-term. Taken together with broader weakness in the global economy, which the World Bank expects to “decelerate sharply” with an added warning that “the world faces a tough year [that will be] tougher than the year we leave behind,” AMD management’s continued caution over its consumer-facing segments’ near-term vulnerability to weakness almost seems prudent, rather than conservative. Tempering any premature optimism among investors, while taking into serious consideration the near-term uncertainties over the gaming and client segments’ demand environment and broader market climate, could help AMD mitigate risks of a bigger setback ahead of a potential continuation in underperformance.
Embedded
AMD’s acquisition of Xilinx – a market leader in FPGAs and SoCs – last year marked a critical step in expanding its foray in applications across aerospace, automotive, cloud-computing and communications infrastructure. AMD’s embedded segment sales during the fourth quarter underscores continued resilience against the broader industry slowdown. Embedded sales grew 7% q/q to $1.4 billion in the fourth quarter, which is in line with resilience observed at rival Intel’s “programmable solutions group” that houses its sales of similar programmable semiconductor products.
The results corroborate consistent positive progress in AMD’s integration of Xilinx following the transaction’s completion last year, as evidenced by the quick introduction and roll-out of several products in recent months that rely on the latter’s technologies. These include the Versal SoCs as discussed in the earlier section, as well as the AMD Xilinx Automotive (XA) Zync UltraScale+ MPSoC platform designed for autonomous mobility applications. The development follows AMD’s confirmation of extended support for “all [Xilinx] 7 series FPGAs and adaptive SoCs through at least 2035.” And previously expected synergies are already materializing, as observed by AMD’s recent extension of collaborations with 5G mobile network provider Viettel High Tech on the deployment and application of the Zynq UltraScale+ MPSoC devices, as well as with mobility supplier DENSO Corporation (OTCPK: DNZOF / OTCPK: DNZOY) on the application of XA Zync UltraScale+ MPSoCs into its “next-generation LiDAR platform.”
Nonetheless, the segment is not immune to near-term macro headwinds. In addition, we also view AMD’s anticipated ramp-up of Xilinx integration risking exposure to a partial cyclical downturn as yearslong 5G network infrastructure investment cycles draw close to an end. Specifically, American telco giants including Verizon (VZ), AT&T (T), and T-Mobile (TMUS) are gearing up for a transition away from its 5G-heavy investment cycle in past years towards greater focus on monetization, as they wrap up the last of their respective network build-out efforts later this year. But demand for 5G solutions provided by Xilinx remain resilient among network servers providers, which is consistent with its recently extended collaboration with Viettel, as they remain critical to supporting the next-generation network infrastructure’s functions. And on the auto front, although easing supply chain constraints and key component shortages are buoying a recovery in sector, near-term consumer weakness as explained in the earlier section also risks a swift reversal. This could pose a potential near-term risk to AMD’s extended foray into related growth opportunities enabled by Xilinx on auto-specific products such as the recently introduced XA Zync UltraScale+ MPSoCs (see more here for our analysis on the near-term autonomous mobility outlook).
Meanwhile, AMD’s adaptive compute acceleration platform (“ACAP”) products enabled by Xilinx will likely remain a bright spot, considering burgeoning AI momentum as discussed in the earlier section. Specifically, Xilinx’s proprietary “AI Engine” (“AIE”) technology, which is built on its programmable Versal ACAP architecture to accommodate a wide range of use cases and workloads, will be key to driving the next-generation XDNA Architecture. The XDNA Architecture will integrate Xilinx’s AI expertise across AMD’s existing processor line-up, starting with the Ryzen desktop CPUs this year. Specifically, the recently introduced AMD Alveo V70 AI Accelerator is built based on the newest XDNA architecture, enabling “industry-leading performance and energy efficiency for multiple AI inference workloads.”
We view this development to have come at an opportune time, as AI-enabled applications gain momentum following the recent release of ChatGPT, which has garnered attention to advances made in HPC in recent years and applicability of said developments in day-to-day settings. With close to a third of recently surveyed American professionals indicating they have used “ChatGPT or another artificial intelligence program in their work,” continued integration of Xilinx’s AI technology – such as the latest Alveo V70 AI Accelerator, which can facilitate wide-ranging applications including natural language processing and LLMs – into AMD’s product portfolio will likely grow into a key competitive advantage over the longer-term. The hardware development will be further complemented by Xilinx’s AI software expertise, with planned future integration across the EYPC line-up expected to further embolden AMD’s position in HPC.
The Bottom Line
The semiconductor sector is likely not yet entirely out of the woods, despite what the recent rally might suggest. Consumer end-markets in particular are likely to deteriorate further, with spill over risks into enterprise segments that is already taking shape. This will continue to elevate vulnerability of previously more resilient corners of the industry – like data center demand – to near-term macro-driven deterioration.
Although persistent fragility in market sentiment in response to mounting macroeconomic uncertainties on the horizon still will likely to continue to dictate the Advanced Micro Devices, Inc. stock’s near-term performance, its longer-term growth trajectory remains well sustained and intact. Its recent engagement in key industry consolidations have also been met with positive integration progress. In addition to Xilinx, continued progress made in materializing on synergies with the Pensando acquisition is likely also taking shape, considering robust performance in the data center segment which houses sales of its data processing units (“DPUs”), likely driven by resilience from the cybersecurity vertical.
For now, Advanced Micro Devices, Inc. stock likely remains victim to a deteriorating market backdrop. A recent pulse survey shows that most investors expect further market declines to come as they anticipate a greater impact to corporate earnings ahead of tightening financial conditions. Most do not expect a structural market recovery until at least later in the year, implying that the stock’s recent rally likely faces greater hurdles to come. This continues to create an opportunity for potential pullbacks in AMD shares’ performance in the near-term, in tandem with anticipated market response to the dire macro backdrop. AMD currently trades at 24x estimated earnings, outperforming the Nasdaq 100’s 21x – and reasonably so given the underlying business’ relative resilience to peers, sustainable growth outlook, and robust free cash flows.
With the tech-heavy index currently outperforming its 10-year average P/E ratio of 20.5x, and the continuation of near-term earnings corrections discussed earlier likely to drive the multiple higher, thus increasing its vulnerability to a further correction ahead of the looming downturn, the ensuing drag could potentially setback the AMD stock’s performance over the coming months as well. This would create a compelling opportunity for investors to better partake in the underlying AMD business’ longer-term upside potential.
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Comments (42)
Data center 22Q4 revenues,
That's quite a market CPU share expansion considering AMD's is pretty much CPU sales only while Intel has other revenues as well.
Not about beating top or bottom line but whether investing in a dependable CEO leading the company or a lipship CEO leading the investment community.
"with the recession being kicked down the road"
Life goes on, unless you are surely good at timing the market.
AMD Q4 2022 Quick Take: Invest In Lisa Su Leading AMD
Share holders hire the "dependable" CEO to manage the details and numbers for them, so I just need to monitor the product offering and enjoy my margarita and music.
www.youtube.com/...
www.youtube.com/...
This company has some great opportunities ahead. These have increased with the acquisition of Xilinx and Pensando. They are smartly diversifying from the PC market, pursuing the data center, embedded and AI aggressively. Smart mgt, great future. Long AMD.
Are you born and educated in China or Russia where a 7404 gate is missing? : ) | NVDA |
https://finnhub.io/api/news?id=d22e8aa06c76e406cb57a94e8520762efb307263c9cd121cdddc67d9b1561f1e | AI Stocks To Buy Right Now? 2 To Watch | Two top artificial intelligence (AI) stocks to watch in the stock market today. | 2023-01-31T07:55:30 | StockMarket | Artificial Intelligence (AI) has rapidly become one of the most transformative technologies of the 21st century. It has quickly changed the way we live, work, and interact. AI has been integrated into many industries. This includes healthcare, finance, retail, and entertainment, and its impact on society and business has been substantial. With the growth of AI, it is not surprising that AI stocks have become popular among investors.
Investing in AI stocks is a way for investors to gain exposure to the growth of the AI industry. As well as tap into the significant potential of this transformative technology. AI stocks come in different forms, including technology companies that develop AI algorithms and software. Or hardware companies provide the computing power needed for AI applications.
As well as companies that use AI to improve their operations and offer new products and services. Now, whether you are a seasoned investor or a beginner, AI stocks offer an opportunity to invest in a high-growth, innovative industry. While potentially achieving attractive returns over the long term. Accordingly, here are two large-cap AI stocks to watch in the stock market today.
AI Stocks To Buy [Or Avoid] Today
- Nvidia Corporation (NASDAQ: NVDA)
- Amazon.com Inc. (NASDAQ: AMZN)
Nvidia (NVDA Stock)
Firstly, NVIDIA Corporation (NVDA) is a technology company specializing in graphics processing units (GPUs) and artificial intelligence (AI). In fact, NVIDIA has been at the forefront of the AI revolution, developing GPUs and software tools that power cutting-edge AI applications in areas such as autonomous vehicles, healthcare, and gaming.
NVDA Recent Stock News
In November 2022, NVIDIA announced a multi-year collaboration with Microsoft to build one of the largest AI supercomputers in the world using Microsoft Azure’s advanced infrastructure and NVIDIA’s GPUs, networking, and full stack of AI software.
Azure’s cloud-based AI supercomputer includes thousands of NVIDIA A100 and H100 GPUs, NVIDIA Quantum-2 400Gb/s InfiniBand networking, and the NVIDIA AI Enterprise software suite. As part of the collaboration, NVIDIA and Microsoft will work together to research and advance generative AI and optimize Microsoft’s DeepSpeed deep learning optimization software.
NVDA Stock Chart
Year-to-date, shares of Nvidia stock have surged by 35.52%. What’s more, during Tuesday’s mid-morning trading session, NVDA stock opened higher by 1.24% on the day, trading at $193.99 a share.
[Read More] 3 Natural Gas Stocks To Watch Today
Amazon.com (AMZN Stock)
Next, Amazon.com, Inc. (AMZN) is a multinational technology company with a focus on e-commerce, cloud computing, and artificial intelligence. Also, the company’s AI technologies include machine learning, computer vision, and natural language processing. Amazon’s AI-powered services such as Alexa, and Amazon Web Services (AWS).
AMZN Recent Stock News
On Tuesday, Amazon announced that in 2022, the company increased its renewable energy capacity by 8.3 gigawatts through 133 new projects in 11 countries. This brings its total portfolio to over 20 gigawatts, enough to power 5.3 million homes in the US. With these investments, Amazon set a new corporate record for the most renewable energy announced in a year and remains the largest corporate buyer of renewable energy.
Also, the purchases bring Amazon closer to its goal of powering its operations with 100% renewable energy by 2025, five years ahead of its original 2030 target. additionally, the investments in renewable energy will accelerate growth in new regions through innovative deal structures, technologies, and cloud solutions.
AMZN Stock Chart
Meanwhile, since the start of 2023, Amazon stock has jumped by 20.07% year-to-date. Evidently, during Tuesday’s mid-morning trading session, shares of AMZN stock are green by 2.50% trading at $103.07 per share.
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https://finnhub.io/api/news?id=0a9f7051c4efdf9f036dd604762ea93e6c8803555e61c30239a1fbe9677e664f | Intel Just Sounded a Warning Bell. Here's What It Means for Nvidia and AMD Stocks. | The company's results were a harbinger of what could be coming for other semiconductor businesses. | 2023-01-31T07:10:00 | Yahoo | Intel Just Sounded a Warning Bell. Here's What It Means for Nvidia and AMD Stocks.
The company's results were a harbinger of what could be coming for other semiconductor businesses.
The company's results were a harbinger of what could be coming for other semiconductor businesses.
Mark Spitznagel and Nassim Taleb have been watching for black swans for decades. "We’ve never seen anything like this level of total debt and leverage in the system," he tells Fortune. "It's an experiment."
Warren Buffett is undeniably the most famous and influential investor in modern history, based on his extraordinary performance record. Not surprisingly, the investment portfolio of Berkshire Hathaway Inc. (BRK.A), the holding company employing the Oracle of Omaha as chairman and CEO, receives wide media attention and scrutiny, even though Buffett is no longer making every investment decision. Despite his unparalleled success, Buffett's investment model has long been transparent, straightforward, and consistent.
Stocks have blown past expectations for 2023 – but some analysts are bracing for a sell-off as the market approaches record highs.
The JPMorgan Equity Premium Income ETF’s (NYSEARCA:JEPI) combination of high yield and monthly payments has quickly made it one of the market’s most popular ETFs. Investors who like JEPI’s style now have another high-yield competitor to consider — the NEOS S&P 500 High Income ETF (BATS:SPYI), which also pays on a monthly basis and yields 10.7%. Let’s take a closer look at this intriguing new option for high-yield investors. What is SPYI ETF’s Strategy? Launched in August of 2022, SPYI is still a
Just because you retire doesn't mean you have to stop working. And when work is an option rather than a requirement, it's possible to select a low-stress job that multiplies fulfillment without adding anxiety - but still provides a bit … Continue reading → The post 12 Low-Stress Jobs You Can Do in Retirement appeared first on SmartAsset Blog.
Berkshire Hathaway historically reports its quarterly financial results on weekends, and CEO Warren Buffet has a simple reason why. Berkshire (ticker: BRK.A, BRK.B) reported second-quarter earnings Saturday morning. Many other public companies, however, release their earnings results during the trading week, either before the market opens or after the closing bell.
The market rally is at an infection point after notable losses. Here's what to do. Warren Buffett's Berkshire earnings rose.
Is there a point at which I should stop reinvesting stock dividends and invest the money or save the cash? -Anonymous Many financial experts recommend that you reinvest dividends most of the time – and I'm inclined to agree. The … Continue reading → The post Ask an Advisor: Should I Stop Reinvesting Dividends? appeared first on SmartAsset Blog.
There are many different approaches and strategies for retirement investing that might appeal to you. But how do you tell if a certain strategy works for your situation? When evaluating different approaches, consider how each strategy is put together and … Continue reading → The post Here's How Much to Keep in Stocks, Bonds and Cash in Retirement appeared first on SmartAsset Blog.
The week ahead will feature a crucial inflation report and earnings out of Disney, UPS, and Alibaba as second quarter earnings season winds down.
(Bloomberg) -- Dan Loeb is hardly the first Wall Street titan to lament how meme stock traders have made short selling a perilous endeavor. But that Loeb, who runs the hedge fund Third Point LLC, did so now is what’s interesting.Most Read from BloombergTexas Power Prices to Surge 800% on Sunday Amid Searing HeatNetanyahu Seeks to Change How Judges Are Named, Then Stop RevampChina Embassy Rips ‘Brutal’ Russia Border Incident in Rare MoveThe Most Dangerous Job for Lawyers Is Being on Trump’s Legal
AustralianSuper, one of the world’s largest pensions, halved its Apple stock investment and sold Microsoft stock, while buying shares of Tesla and Nvidia.
One in 6 asset and wealth management companies will be bought or shut down in the next five years, according to a PwC survey of asset managers and institutional investors.
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Retirement account withdrawals not only help you cover basic living expenses, but they also can fund the lifestyle you've always envisioned in your golden years. That money, however, can have unintended tax consequences. Required minimum distributions (RMDs) and other withdrawals … Continue reading → The post Social Security Taxes Can Hit You Hard in Retirement. Here's How to Lower Them appeared first on SmartAsset Blog.
Dubbed the Oracle of Omaha, Warren Buffett is renowned for his simple and frugal lifestyle. Despite being the sixth richest person globally, with a net worth estimated at $117.9 billion, Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500. Adjusted for inflation, that amount today would be approximately $328,990.80, a mere 0.000279% of his total net worth. Buffett has consistently ranked the purchase of his home as the third-best investment he ha
As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=864b82654c51e8d15286d096eac00f0bd28acec7a55b171435fdc899c59df0d7 | NVIDIA Corporation (NVDA) Is a Trending Stock: Facts to Know Before Betting on It | Zacks.com users have recently been watching Nvidia (NVDA) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects. | 2023-01-31T06:00:02 | Yahoo | NVIDIA Corporation (NVDA) Is a Trending Stock: Facts to Know Before Betting on It
Nvidia (NVDA) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this maker of graphics chips for gaming and artificial intelligence have returned +31.1% over the past month versus the Zacks S&P 500 composite's +4.8% change. The Zacks Semiconductor - General industry, to which Nvidia belongs, has gained 21.1% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate Revisions
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Nvidia is expected to post earnings of $0.81 per share, indicating a change of -38.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.2% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $3.26 points to a change of -26.6% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $4.38 indicates a change of +34.2% from what Nvidia is expected to report a year ago. Over the past month, the estimate has changed -0.1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Nvidia is rated Zacks Rank #4 (Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth Forecast
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Nvidia, the consensus sales estimate of $6.01 billion for the current quarter points to a year-over-year change of -21.3%. The $26.94 billion and $29.3 billion estimates for the current and next fiscal years indicate changes of +0.1% and +8.8%, respectively.
Last Reported Results and Surprise History
Nvidia reported revenues of $5.93 billion in the last reported quarter, representing a year-over-year change of -16.5%. EPS of $0.58 for the same period compares with $1.17 a year ago.
Compared to the Zacks Consensus Estimate of $5.93 billion, the reported revenues represent a surprise of +0.02%. The EPS surprise was -17.14%.
Over the last four quarters, Nvidia surpassed consensus EPS estimates two times. The company topped consensus revenue estimates each time over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Nvidia is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom Line
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Nvidia. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
To read this article on Zacks.com click here. | NVDA |
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An ugly end to 2022, and even uglier start to 2023, doesn't bode well for this once-great semiconductor company.
An ugly end to 2022, and even uglier start to 2023, doesn't bode well for this once-great semiconductor company.
Mark Spitznagel and Nassim Taleb have been watching for black swans for decades. "We’ve never seen anything like this level of total debt and leverage in the system," he tells Fortune. "It's an experiment."
Warren Buffett is undeniably the most famous and influential investor in modern history, based on his extraordinary performance record. Not surprisingly, the investment portfolio of Berkshire Hathaway Inc. (BRK.A), the holding company employing the Oracle of Omaha as chairman and CEO, receives wide media attention and scrutiny, even though Buffett is no longer making every investment decision. Despite his unparalleled success, Buffett's investment model has long been transparent, straightforward, and consistent.
Stocks have blown past expectations for 2023 – but some analysts are bracing for a sell-off as the market approaches record highs.
The JPMorgan Equity Premium Income ETF’s (NYSEARCA:JEPI) combination of high yield and monthly payments has quickly made it one of the market’s most popular ETFs. Investors who like JEPI’s style now have another high-yield competitor to consider — the NEOS S&P 500 High Income ETF (BATS:SPYI), which also pays on a monthly basis and yields 10.7%. Let’s take a closer look at this intriguing new option for high-yield investors. What is SPYI ETF’s Strategy? Launched in August of 2022, SPYI is still a
Just because you retire doesn't mean you have to stop working. And when work is an option rather than a requirement, it's possible to select a low-stress job that multiplies fulfillment without adding anxiety - but still provides a bit … Continue reading → The post 12 Low-Stress Jobs You Can Do in Retirement appeared first on SmartAsset Blog.
Berkshire Hathaway historically reports its quarterly financial results on weekends, and CEO Warren Buffet has a simple reason why. Berkshire (ticker: BRK.A, BRK.B) reported second-quarter earnings Saturday morning. Many other public companies, however, release their earnings results during the trading week, either before the market opens or after the closing bell.
The market rally is at an infection point after notable losses. Here's what to do. Warren Buffett's Berkshire earnings rose.
Is there a point at which I should stop reinvesting stock dividends and invest the money or save the cash? -Anonymous Many financial experts recommend that you reinvest dividends most of the time – and I'm inclined to agree. The … Continue reading → The post Ask an Advisor: Should I Stop Reinvesting Dividends? appeared first on SmartAsset Blog.
There are many different approaches and strategies for retirement investing that might appeal to you. But how do you tell if a certain strategy works for your situation? When evaluating different approaches, consider how each strategy is put together and … Continue reading → The post Here's How Much to Keep in Stocks, Bonds and Cash in Retirement appeared first on SmartAsset Blog.
The week ahead will feature a crucial inflation report and earnings out of Disney, UPS, and Alibaba as second quarter earnings season winds down.
(Bloomberg) -- Dan Loeb is hardly the first Wall Street titan to lament how meme stock traders have made short selling a perilous endeavor. But that Loeb, who runs the hedge fund Third Point LLC, did so now is what’s interesting.Most Read from BloombergTexas Power Prices to Surge 800% on Sunday Amid Searing HeatNetanyahu Seeks to Change How Judges Are Named, Then Stop RevampChina Embassy Rips ‘Brutal’ Russia Border Incident in Rare MoveThe Most Dangerous Job for Lawyers Is Being on Trump’s Legal
AustralianSuper, one of the world’s largest pensions, halved its Apple stock investment and sold Microsoft stock, while buying shares of Tesla and Nvidia.
One in 6 asset and wealth management companies will be bought or shut down in the next five years, according to a PwC survey of asset managers and institutional investors.
Travel scams are on the rise. Don't be a victim.
Warren Buffett's Berkshire Hathaway operating profit rose by 10%. BRKB stock is just out of buy range.
VZ stock provides a dividend but a buyback has been shelved amid 5G wireless investments. When will revenue growth reaccelerate?
Will generative artificial intelligence boost Palantir stock in the commercial market amid slowing revenue growth for the company?
Retirement account withdrawals not only help you cover basic living expenses, but they also can fund the lifestyle you've always envisioned in your golden years. That money, however, can have unintended tax consequences. Required minimum distributions (RMDs) and other withdrawals … Continue reading → The post Social Security Taxes Can Hit You Hard in Retirement. Here's How to Lower Them appeared first on SmartAsset Blog.
Dubbed the Oracle of Omaha, Warren Buffett is renowned for his simple and frugal lifestyle. Despite being the sixth richest person globally, with a net worth estimated at $117.9 billion, Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500. Adjusted for inflation, that amount today would be approximately $328,990.80, a mere 0.000279% of his total net worth. Buffett has consistently ranked the purchase of his home as the third-best investment he ha
As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=5372d1e16427188230ff9ddaf1307bde080fbc109aa9ca6c1f65153719721dd1 | What AMD and Nvidia Investors Should Know About Recent Updates | Today's video focuses on recent news impacting Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA). The consumer market continues to be a massive headwind for these semiconductor giants, but is there some good news for the chip industry? Check out the short video to learn more, consider subscribing, and click the special offer link below. | 2023-01-31T03:30:00 | Yahoo | What AMD and Nvidia Investors Should Know About Recent Updates
Today's video focuses on recent news impacting Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA). The consumer market continues to be a massive headwind for these semiconductor giants, but is there some good news for the chip industry? Check out the short video to learn more, consider subscribing, and click the special offer link below. | NVDA |
https://finnhub.io/api/news?id=62ea82c8bf34392cfbdd9396e9a10c50f32c82c622ab33afb818943f59f0f35d | These 20 stocks led the January rally | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-01-31T03:04:00 | MarketWatch | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=51f4c18817ca6cfd1dd7b84a23377683255eb66caae0e61b217097f179e03a97 | Yong Rong (HK) Asset Management Ltd Buys 2, Sells 3 in 4th Quarter | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-01-31T02:01:00 | GuruFocus | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
Visit Performance Disclosure for information about the performance numbers displayed above.
Visit www.zacksdata.com to get our data and content for your mobile app or website.
Real time prices by BATS. Delayed quotes by FIS.
NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. | NVDA |
https://finnhub.io/api/news?id=3a2d4fcbb0e05061018ce073dfe2e8f133cb6313ac1438a3b0e375fd388663de | Top 5 4th Quarter Trades of Curated Wealth Partners LLC | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-01-31T02:01:00 | GuruFocus | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
Visit Performance Disclosure for information about the performance numbers displayed above.
Visit www.zacksdata.com to get our data and content for your mobile app or website.
Real time prices by BATS. Delayed quotes by FIS.
NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. | NVDA |
https://finnhub.io/api/news?id=f1c4227e7729570a989eb4110d8aa1de79c4279bd6c52d10a3b6e2194aa0df81 | Progressive Investment Management Corp Buys 3, Sells 2 in 4th Quarter | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-01-31T02:01:00 | GuruFocus | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
Visit Performance Disclosure for information about the performance numbers displayed above.
Visit www.zacksdata.com to get our data and content for your mobile app or website.
Real time prices by BATS. Delayed quotes by FIS.
NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. | NVDA |
https://finnhub.io/api/news?id=bb80cf121d6f768051807d4e198e47b5fa91bd501b32190c5d256c7964926e20 | Who Is The King Of 'Boring' Chips? Texas Instruments Vs. Analog Devices | The Analog semiconductor market is often overlooked but Texas Instruments and Analog Devices are the market leaders and high-quality businesses. Click here to read more. | 2023-01-31T01:30:00 | SeekingAlpha | Who Is The King Of 'Boring' Chips? Texas Instruments Vs. Analog Devices
Summary
- The Analog semiconductor market is often overlooked.
- Texas Instruments and Analog Devices are the market leaders and high-quality businesses.
- The two companies have differing strategies in some aspects.
- Both companies identify similar, attractive end markets.
Texas Instruments (NASDAQ:TXN) and Analog Devices (NASDAQ:ADI) are two leading companies in the semiconductor industry, known for their expertise in designing and manufacturing analog and mixed-signal integrated circuits. Both companies offer a wide range of products for various applications, from consumer electronics to industrial and automotive systems. In this article, we will compare TI and ADI, focusing on their portfolio, manufacturing and fundamentals to help you understand the similarities and differences between these two companies.
Throughout this article, I'll primarily refer to Texas Instruments as TI.
Analog - an overlooked market
If people talk about semiconductors, the first association most often is with the big, expensive and cutting-edge digital chips used to power the brains of our computers and smartphones. Names like Nvidia (NVDA), Intel (INTC) and AMD (AMD) are often the first named acting in this fast and exciting industry. On the other hand, investors often neglect a subsector hidden in devices without their logos plastered over our electronic devices. When was the last time you saw a "Texas Instruments Inside" sticker on a new laptop? I went over the advantages of analog chips in a recent article, but let me quickly summarize it:
Analog chips can be thought of as the sensory organs of digital chips. For an autonomous car to steer the road successfully, it first needs to receive inputs from sensors about the speed, its surroundings and other external factors. All of these things can't be gathered by the digital chip. This means that analog chips have to follow the growth of digital chips. Due to structural differences, the design of these chips isn't as fast-lived and Moore's law doesn't apply to it. This means there is no arms race for the smallest nodes and fabs can often be used for decades. This limited capital intensity makes it a great candidate for a shareholder-friendly capital return policy. Let's compare these analog market leaders.
Attractive end markets
Even though the analog industry seems 'boring', it does have parts of it with significant growth rates. On ASML's (ASML) latest investor day, the company said that mature nodes are one of the driving forces behind investment in wafer capacity. Based on 300mm wafers(a lot of the analog industry still uses 200mm wafer capacity), Wafers for mature nodes are expected to grow at a 6% CAGR, far behind the 12% CAGR for digital chips, but faster than NAND and DRAM demand (Slide 19). The company also sees accelerated growth in Mature nodes, especially Analog (see the picture below).
Let's look at the portfolios of both companies:
|Expected 2030 CAGR||TI % of revenue||ADI % of revenue|
|Industrial||12%||41%||50%|
|Automotive||14%||21%||21%|
|Personal Electronics/Consumer||3-9%||24%||14%|
|Communications equipment||~7%(midpoint between Smartphone and wireless)||6%||15%|
|Enterprise Systems||No data found||6%||0%|
Below we can see another excerpt from ASML's Investor Day, showing the expected CAGR through 2030 for various semiconductor end markets. We can see that Industrial and Automotive are amongst the best end markets to be in, together with Datacenters. TI and ADI have done a great job developing divesting businesses in end markets without a great future and investing in growth markets. The table above shows that Industrial and Automotive make up 62% of TI's and 71% of ADI's revenue. The rest of the revenue is split between Personal electronics, Consumer and Communications Equipment, which don't have as strong of a growth expectation. Due to their excellent positioning, we can conclude that both companies are well prepared to reap these rewards in the coming years.
A tale of two Manufacturing approaches
While end markets are very similar for the two contenders, they vary greatly in their approach to manufacturing and reinvestment in the business: Texas Instruments has a significant focus on internal manufacturing and currently manufactures around 80% of its Wafers internally in its fabs, 40% of those internal wafers are 300mm, and 60% of Assembly is internal as well. Throughout this decade, TI aims to increase this to 90%, with 75% of wafers being 300mm and 85% of assembly done internally. On the other hand, Analog Devices outsources a lot of its manufacturing to contract manufacturers like Taiwan Semiconductor Manufacturing (TSM) or GlobalFoundries (GFS). 45% of the manufacturing is internal, while 80% of Testing and 20% of Assembly is done internally, according to their Investor Day. This is a stark difference between the two approaches. While outsourcing makes ADI more capital-light and allows for easier utilization, it also decreases its ability to optimize its business. Another difference is the customer relationship: While ADI uses many different sales channels, TI focuses on direct customer relationships (up to 64% of revenue in 2021, from just 35% in 2019). This gives TI better data and insights into their customer's demand and allows for additional margin improvements. This can also be observed in the margins. While both companies have a stellar track record of improving margins, TI does keep a lot more of its bottom line. ADI suffers from acquisition-related charges, which flow down to the net income margin, so we need to keep that in mind, which leads us to the next point of comparison.
Reinvestment strategy
In the chart below, we can see that historically both companies used to be roughly equally capital-intensive. This changed in 2021 when TI announced its accelerated CapEx plan to double its internal manufacturing capacity with new 300mm fabs. This will further allow the company to improve the control of its supply chain and reap more efficiency in the business. Additionally, we can see that TI has had very stable R&D, while ADI's is increasing. This can be explained by the way the strategy differs: Both companies have extensive portfolios of products with tens of thousands of different products, but ADI focuses more on custom parts for single customers than TI, who can sell 75% of its products to multiple customers in varying end markets. Lastly, ADI is an acquisitive business, making several large acquisitions over the years, like the $17 billion deal with Maxim (MXIM) in 2020. On the other hand, TI hasn't acquired a full company since the aftermath of the GFC. They acquired some assets from Micron Technology (MU) in 2020.
A shared capital return goal
As a result of a relatively capital-light business model, which supports high margins, both companies are run very shareholder-friendly: Both aim to return 100% of Free Cash Flow to shareholders. In the chart below, both companies take part in share buybacks, pay out a decent dividend and don't load up excessively on debt. The major difference again leads us to acquisitions: As previously mentioned, ADI spends a lot of cash on acquisitions but also pays with stock. This can be seen by its increase in shares outstanding by 68% over the last decade, despite regular repurchases. TI, on the other hand, reduced shares outstanding by 18% simultaneously. The deals ultimately worked out well for ADI if we view its superior FCF per share growth over the last decade.
What price are we paying?
We established that both are great companies, but even the best company needs to trade at a reasonable valuation to be a good investment. We can see that both companies held up much better than the overall semiconductor space, measured with the SOXX index. Both companies currently trade below their historical EV/EBITDA and FCF multiples. TI trades above its median PE ratio, while ADI is slightly below. This may not seem very appealing, but I believe that the forward estimates have too much pessimism priced in and that we might be in for a surprise. The structural tailwinds are in place and both companies are in great positions to benefit from future demand.
To crown a king
I went into this comparison with the expectation of a blow-out victory for Texas Instruments, who I have been a shareholder of for over two years, but I was very pleasantly surprised by Analog Devices. I always knew that it was a good company, but it seems to be a great one. Both companies have an excellent positioning in attractive end markets with strong business and capable leadership, resulting in a high-margin business. I did not manage to come up with a clear winner; both companies won this competition. I personally prefer Texas Instruments' approach to internal manufacturing excellence, but Analog Devices has a great strategy as well. It wasn't enough to push me over the edge.
I hope you found value in this comparison. Who do you think won? Let's continue the discussion in the comments below.
This article was written by
Analyst’s Disclosure: I/we have a beneficial long position in the shares of TXN, ASML either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
This is not financial advice.
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Comments (40)
Way too often do people analyse a buisness based on internal projections.
Like, yeah, every buisness is going to sugar coat its own future, why wouldnt they.
But being able to see that analog chips have a good growth trajectory ahead of them from companies you'd typically associate with logic chips that are also generally regarded as pillars of the space gives a lot of confidence.
Texas instruments is my personal winner as well but I'll probably maintain a good ADI position too.
Still nibbling on $TXN.
ADI: +273%
TXN: +414%The current dividend yield and 10-year dividend growth rates (DGR) are:
ADI: 1.8% yield, 9.7% DGR
TXN: 2.9% yield, 20.2% DGRThese data show that TXN was a much better investment than ADI over the past 10 years. As we all know, past performance is no guarantee of future performance, especially since TXN had the same CEO (Rich Templeton) for all but 3 months from 2004 through 1Q2023 and the company will have a new CEO starting in 2Q2023. It will be prudent to watch for potential changes in the business. Looking at the last 3 CEOs, which covers the ~34-year period from 1988 to 2Q2023, the business was drastically different under each of them.
Definitely a point I could have addressed, but I thought the article has a nice length to it. The CEO transition will be interesting, but from the interview I heard Haviv do at Credit Suisse Technology Conference he does sound an awful lot like Rich Templeton! Same kind of management DNA. I'm looking forward to the capital management presentation in two days for potential inputs into the transition. | NVDA |
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https://finnhub.io/api/news?id=dc7aec9b7356f6bf7f8d006734da77c2a0495c4b073a3674c3c1869a2db7e72d | How C3 AI was ‘the life of the party’ this past earnings season | Yahoo Finance’s Josh Schafer highlights how C3 AI took center stage this earnings season as artificial intelligence trends overtook investment priorities. | 2023-03-10T13:37:26 | Yahoo | How C3 AI was ‘the life of the party’ this past earnings season
Yahoo Finance’s Josh Schafer highlights how C3 AI took center stage this earnings season as artificial intelligence trends overtook investment priorities.
Video Transcript
DAVE BRIGGS: All right. As part of our look back at the quarter, Yahoo Finance's Josh Schafer is here with some superlatives to hand out. Josh, what's up first, my friend?
JOSH SCHAFER: All right, Dave, so we're going yearbook-style today. We're going to do a couple of different superlatives. We're going to start with, I think, my personal favorite, Life of the Party, right? Everyone wants to get Life of the Party.
DAVE BRIGGS: Was that you?
JOSH SCHAFER: It's pretty fun. I did not get Life of the Party.
DAVE BRIGGS: Oh.
JOSH SCHAFER: But I just think it's a fun one, right? So we got C3 AI as Life of the Party and, really, more broadly speaking, AI as a whole, right? AI was mentioned over a hundred times on a combination of earnings calls looking at Microsoft, Google, Meta, Nvidia. And really, it's been interesting to see, guys, how the market has reacted to how different companies-- when they mention AI.
So different companies, as they've mentioned AI, they then sort of spike up. And it's been interesting to sort of see that stock market reaction from those companies. Now, one thing I did want to ask you guys, too, as far as AI goes, we're talking Life of the Party, something fun. I like Einstein, Salesforce's Einstein. What's your favorite AI name so far? We've got ChatGPT from OpenAI. Where are you guys leaning?
SEANA SMITH: I like ChatGPT. I don't know if it's just because I've said it so much that it just rolls off the tongue at this point, but ChatGPT makes a lot of sense to me in terms of its applications and what it's used for.
DAVE BRIGGS: It's the only one I've used, ChatGPT, and I think it's an incredible tool. Einstein, however, takes the prize there.
JOSH SCHAFER: I stumble too much on ChatGPT every time.
DAVE BRIGGS: Yeah, it doesn't roll.
SEANA SMITH: EinsteinGPT doesn't roll either. We need something a little bit more-- I guess Bard from Google is not bad, but I think you're just confused with what it is.
DAVE BRIGGS: Yeah, I don't like Bard.
SEANA SMITH: BardGPT, maybe. That also--
JOSH SCHAFER: All right, I do want to take a quick look at the stocks, as I was mentioning here. So you can see Nvidia, the way it sort of popped right here, that was after they mentioned AI a lot of times, on their earnings call, over 70 times. Investors seem to like it.
And then we'll take a quick look here, too. I want to show you what C3 AI has been up to this year. C3 AI had earnings on March-- in early March here, March 2. You can see that. That was an over 25% jump. And then you can really see how interested people have been just in the name as a whole.
This is a company that has-- is projecting profitability out in 2024, yet the stock is up 90% year-to-date, really sort of showing the excitement for AI. Not a lot of companies right now at a growth stage, growing this much with this much investor sentiment sort of piling into the name. | NVDA |
https://finnhub.io/api/news?id=558252820c1b7b72c6f28f6939bbcf6636ae7253a224df313ed9c45725d04a50 | Top Analyst Reports for NVIDIA, McDonald's & Intuit | Today's Research Daily features new research reports on 16 major stocks, including NVIDIA Corporation (NVDA), McDonald's Corporation (MCD) and Intuit Inc. (INTU). | 2023-03-10T10:09:06 | Yahoo | Top Analyst Reports for NVIDIA, McDonald's & Intuit
Friday, March 10, 2023
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including NVIDIA Corporation (NVDA), McDonald's Corporation (MCD) and Intuit Inc. (INTU). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Shares of NVIDIA have outperformed the Zacks Semiconductor - General industry over the past year (+6.0% vs. -4.6%). The company is gaining from strong growth of artificial intelligence, high-performance computing and accelerated computing, which is boosting its Compute & Networking revenues. A surge in Hyperscale demand and a solid uptake of artificial intelligence-based smart cockpit infotainment solutions are acting as tailwinds.
Collaboration with Mercedes-Benz and Audi is likely to advance its presence in autonomous vehicles and other automotive electronics space. The Zacks analyst expects its Automotive segment’s revenue to grow at a CAGR of 50% through fiscal 2023-2025.
However, NVDA’s near-term prospects look gloomy due to weakening demand for chips used in gaming and data center end markets. While macroeconomic headwinds are impacting gaming and data center chip demand, higher channel inventory levels are hurting chip prices.
(You can read the full research report on NVIDIA here >>>)
McDonald's shares have outperformed the Zacks Retail - Restaurants industry over the past year (+15.3% vs. +12.9%). Sales at company-operated restaurants grew 7% year over year. The growth was fueled by strategic menu prices, strong operating performance, marketing campaigns and loyalty programs.
McDonald’s increased focus on menu innovation is commendable. The company is also undertaking every effort to drive growth in international markets. Robust digitalization is likely to help the company to drive long-term growth.
However, the inflationary pressure and persisting COVID-related risks are concerns.
(You can read the full research report on McDonald’s here >>>)
Shares of Intuit have underperformed the Zacks Computer - Software industry over the past year (-7.9% vs. -7.5%). The company is facing macroeconomic and geopolitical headwinds which might significantly hurt small businesses operations, thereby posing risks for Intuit’s top-line growth. Additionally, higher costs and expenses due to increased investments in marketing and engineering teams are likely to continue impacting bottom-line results in the near term.
However, Intuit is benefiting from strong momentum in online ecosystem revenues and solid professional tax revenues. The TurboTax Live offering is also driving growth in the Consumer tax business. Solid momentum in the company’s lending product, QuickBooks Capital, remains a positive.
Moreover, the company’s strategy of shifting its business to cloud-based subscription model will help generate stable revenues over the long run.
(You can read the full research report on Intuit here >>>)
Other noteworthy reports we are featuring today include AT&T Inc. (T), International Business Machines Corporation (IBM) and Regeneron Pharmaceuticals, Inc. (REGN).
Director of Research
Sheraz Mian
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
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NVIDIA (NVDA) Benefits From Increasing Automotive Deal Wins
Loyalty Program Aids McDonald's (MCD), China Comps Woes Stay
Intuit (INTU) Rides on Product Refresh, Higher Subscriptions
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AT&T (T) Rides on Accelerated 5G Rollout, Fiber Densification
Per the Zacks analyst, AT&T is likely to benefit from continued 5G rollout and fiber densification backed by a customer-centric business model, lower churn rate and higher-tier unlimited plans.
IBM Remains Buoyed by Solid Hybrid Cloud & AI Demand Trends
Per the Zacks analyst, IBM is poised to benefit from a strong demand for hybrid cloud and AI technologies driven by a better business mix and improving operating leverage through productivity gains.
Dupixent Profits Fuels Regeneron (REGN), Eylea Decline A Woe
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Buyouts, Diversification Aid Moody's (MCO), High Costs Ails
Per the Zacks analyst, synergies from buyouts and efforts to diversify revenues will aid Moody's. Mounting costs, tough operating backdrop and pricing pressure due to stiff competition are concerns.
End-Market Demand Aids Emerson (EMR) Amid Supply Chain Woes
Per the Zacks analyst, healthy demand across end-markets bodes well for Emerson's growth. However, supply chain disruptions continue to plague the company.
Global Payments (GPN) Ride High on Buyouts, Solid Cash Flows
Per the Zacks Analyst, buyouts and tie-ups added capabilities to the company's portfolio, which in turn, boosted revenues. Also, strong cash flows drive investments in business.
APA Corporation (APA) to Gain from Suriname Portfolio
The Zacks analyst believes that APA's significant drilling success in Suriname points to significant cash flow potential but is worried about the oil explorer's high debt burden.
New Upgrades
Kroger's (KR) Product Freshness, Digital Efforts to Lift Sales
Per the Zacks analyst, Kroger has been making investments to enhance product freshness and quality as well as expand digital capabilities. Digital sales grew 12% during fourth-quarter fiscal 2022.
Ryanair (RYAAY) Prospects Solid on Upbeat Air Travel Demand
Upbeat air-travel demand is driving Ryanair's top line. The Zacks analyst also finds the company's fleet-modernization initiatives very encouraging.
Henry Schein's (HSIC) Recent Buyout Aid, Medical Sales Up
The Zacks analyst is optimistic about Henry Schein's buyout of Midway Dental, Condor Dental, expanding its reach into underpenetrated areas. Medical equipment and pharmaceutical sales remain strong.
New Downgrades
Rising Capex Needs and High Debt to Ail American Axle (AXL)
High R&D costs and capital outlay to support new programs and electrification are set to dent American Axle's 2023 cash flow. Elevated leverage of 82% also concerns the Zacks analyst.
Zumiez (ZUMZ) Grapples With High Inflation & Other Woes
Per the Zacks analyst, Zumiez's performance has been hurt by the higher inflationary pressures, a promotional landscape, tight labor market, increased operating costs and adverse currency headwinds.
Charles River (CRL) Ailed by NHP Shipment Issue, FX Woes
The Zacks analyst is worried about Charles River on an ongoing investigation related to shipments of NHP received from its Cambodian supplier. Currency headwind continues to mar growth.
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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
AT&T Inc. (T) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
McDonald's Corporation (MCD) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Intuit Inc. (INTU) : Free Stock Analysis Report
To read this article on Zacks.com click here. | NVDA |
https://finnhub.io/api/news?id=3be136a13ac0316d53f5728b29f52962de451fee901e4edb15ca673394798639 | NVIDIA Corp. stock falls Friday, underperforms market | Shares of NVIDIA Corp. slipped 2.01% to $229.65 Friday, on what proved to be an all-around poor trading session for the stock market, with the S&P 500 Index... | 2023-03-10T09:13:00 | MarketWatch | Shares of NVIDIA Corp.
NVDA,
+0.37%
slipped 2.01% to $229.65 Friday, on what proved to be an all-around poor trading session for the stock market, with the S&P 500 Index
SPX,
-0.53%
falling 1.45% to 3,861.59 and Dow Jones Industrial Average
DJIA,
-0.43%
falling 1.07% to 31,909.64. This was the stock's second consecutive day of losses. NVIDIA Corp. closed $59.81 short of its 52-week high ($289.46), which the company achieved on March 29th.
Trading volume (47.4 M) remained 1.7 million below its 50-day average volume of 49.1 M.
Editor's Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use. | NVDA |
https://finnhub.io/api/news?id=53e144d579856062c169a8cc2c3b19f87c57dd3b975e8aaa75f2d48629c41d3d | What AMD, Intel, and Nvidia Stock Investors Should Know About Recent Updates | AI servers' growth is a massive tailwind for Nvidia and Advanced Micro Devices. Unfortunately, there are some recent headwinds semiconductor investors should know about. | 2023-03-10T07:22:09 | Yahoo | What AMD, Intel, and Nvidia Stock Investors Should Know About Recent Updates
AI servers' growth is a massive tailwind for Nvidia and Advanced Micro Devices. Unfortunately, there are some recent headwinds semiconductor investors should know about.
AI servers' growth is a massive tailwind for Nvidia and Advanced Micro Devices. Unfortunately, there are some recent headwinds semiconductor investors should know about.
Mark Spitznagel and Nassim Taleb have been watching for black swans for decades. "We’ve never seen anything like this level of total debt and leverage in the system," he tells Fortune. "It's an experiment."
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Stocks have blown past expectations for 2023 – but some analysts are bracing for a sell-off as the market approaches record highs.
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Dubbed the Oracle of Omaha, Warren Buffett is renowned for his simple and frugal lifestyle. Despite being the sixth richest person globally, with a net worth estimated at $117.9 billion, Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500. Adjusted for inflation, that amount today would be approximately $328,990.80, a mere 0.000279% of his total net worth. Buffett has consistently ranked the purchase of his home as the third-best investment he ha
As a pandemic-inspired boom ends, entrepreneurs and giant corporations alike are counting on customers to keep accumulating more stuff than they can squeeze into their homes. | NVDA |
https://finnhub.io/api/news?id=12db5b800c440942117cd760056f6b7bf90e4ceb46be3c84e0a92698ef1d9932 | NVIDIA Corporation (NVDA) Is a Trending Stock: Facts to Know Before Betting on It | Nvidia (NVDA) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock. | 2023-03-10T06:00:02 | Yahoo | NVIDIA Corporation (NVDA) Is a Trending Stock: Facts to Know Before Betting on It
Nvidia (NVDA) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this maker of graphics chips for gaming and artificial intelligence have returned +4.9% over the past month versus the Zacks S&P 500 composite's -3.8% change. The Zacks Semiconductor - General industry, to which Nvidia belongs, has gained 2.3% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate Revisions
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Nvidia is expected to post earnings of $0.92 per share for the current quarter, representing a year-over-year change of -32.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.1%.
For the current fiscal year, the consensus earnings estimate of $4.48 points to a change of +34.1% from the prior year. Over the last 30 days, this estimate has changed +4.1%.
For the next fiscal year, the consensus earnings estimate of $5.98 indicates a change of +33.4% from what Nvidia is expected to report a year ago. Over the past month, the estimate has changed +1.6%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Nvidia is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Nvidia, the consensus sales estimate for the current quarter of $6.51 billion indicates a year-over-year change of -21.4%. For the current and next fiscal years, $29.78 billion and $36.83 billion estimates indicate +10.4% and +23.7% changes, respectively.
Last Reported Results and Surprise History
Nvidia reported revenues of $6.05 billion in the last reported quarter, representing a year-over-year change of -20.8%. EPS of $0.88 for the same period compares with $1.32 a year ago.
Compared to the Zacks Consensus Estimate of $6.01 billion, the reported revenues represent a surprise of +0.61%. The EPS surprise was +8.64%.
Over the last four quarters, Nvidia surpassed consensus EPS estimates two times. The company topped consensus revenue estimates each time over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Nvidia is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Nvidia. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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https://finnhub.io/api/news?id=f39335b75a8382d60d62ec6f0bf11106a74db27f2be1093a1266de86aca4ffd9 | Here's How Nvidia Is Becoming an AI Powerhouse | Nvidia's (NASDAQ: NVDA) graphics processing units are becoming the go-to source for powering the intense computational needs of large language models like ChatGPT. This video will highlight how Nvidia's management is strategizing for success in AI. | 2023-03-10T04:15:00 | Yahoo | Here's How Nvidia Is Becoming an AI Powerhouse
Nvidia's (NASDAQ: NVDA) graphics processing units are becoming the go-to source for powering the intense computational needs of large language models like ChatGPT. This video will highlight how Nvidia's management is strategizing for success in AI. | NVDA |
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https://finnhub.io/api/news?id=64ded2cb4fcc7bd283fd12b7fa066a46056cf65e05ad5954e91dca598285476c | TQQQ: Still Waiting And Watching | TQQQ is a leveraged ETF that has been on my watchlist. Read why I don't think the valuations for most of the largest stocks in the index are attractive today. | 2023-03-10T03:30:04 | SeekingAlpha | TQQQ: Still Waiting And Watching
Summary
- TQQQ is a leveraged ETF that has been on my watchlist, but I don't think the valuations for most of the largest stocks in the index are attractive today.
- I talk a bit about inflation and how I think commodities, energy, and real assets will outperform the tech sector.
- Of the top 10, I only find Amazon and Broadcom attractive today, and I actually bought a put option on Tesla after its massive share price run to start 2023.
While I typically avoid ETFs due to the fees, an ETF that has been on my watchlist for more than a year is the ProShares UltraPro QQQ ETF (NASDAQ:TQQQ). I have seen comments asking when I plan to buy, or if I bought any steep declines like the one last fall. I want to talk briefly about some of the characteristics of TQQQ (and other leveraged ETFs) before getting into the largest holdings.
My plan for potentially buying a tiny position of TQQQ would probably have a one to six-month timeframe, basically a short- to medium-term strategy. I would probably be looking for another 20% decline (or more) in the major indices before buying TQQQ. If we see that, combined with a potential return of the Federal Reserve money gun, TQQQ could be an interesting short-term trade.
TQQQ offers more speculative upside than QQQ on a smaller position size, and I would rather buy TQQQ than use leverage to buy QQQ. You pay the ETF management fees, but I think it's more attractive than borrowing to buy QQQ at current margin rates.
Disclaimer
The risks with TQQQ include beta slippage, but also short-term volatility that can be stomach-turning. For example, a big market decline can cut an investment in TQQQ by 20% or 30% in a week, so investors should go into an investment in TQQQ with eyes wide open to those risks. Investors that are unfamiliar with the potential risks might want to spend a couple of minutes to read what the SEC has to say about leveraged ETFs.
ProShares UltraPro QQQ® (the "Fund") seeks daily investment results, before fees and expenses, that correspond to three times (3x) the return of the Nasdaq-100® Index (the "Index") for a single day, not for any other period. A "single day" is measured from the time the Fund calculates its net asset value ("NAV") to the time of the Fund's next NAV calculation.
The return of the Fund for periods longer than a single day will be the result of its return for each day compounded over the period. The Fund's returns for periods longer than a single day will very likely differ in amount, and possibly even direction, from the Fund's stated multiple (3x) times the return of the Index for the same period. For periods longer than a single day, the Fund will lose money if the Index's performance is flat, and it is possible that the Fund will lose money even if the level of the Index rises.
Longer holding periods, higher Index volatility, and greater leveraged exposure each exacerbate the impact of compounding on an investor's returns. During periods of higher Index volatility, the volatility of the Index may affect the Fund's return as much as or more than the return of the Index.
The Fund presents different risks than other types of funds. The Fund uses leverage and is riskier than similarly benchmarked funds that do not use leverage. The Fund may not be suitable for all investors and should be used only by knowledgeable investors who understand the consequences of seeking daily leveraged (3x) investment results of the Index, including the impact of compounding on Fund performance. Investors in the Fund should actively manage and monitor their investments, as frequently as daily. An investor in the Fund could potentially lose the full value of their investment within a single day.
Inflation & The Next Decade
The biggest problem I see with TQQQ is the concentration in the large tech companies, which is also a problem for Invesco QQQ ETF (QQQ), which TQQQ follows. While that worked great for investors until late 2021, I think markets have begun to shift over the last couple of years. I'm of the opinion that commodities, energy, and companies with real assets will outperform over the next decade. I was watching for inflation starting in 2020 for several reasons, but I think the idea that inflation will come down to where it was over the last decade is wishful thinking.
That doesn't mean I'm predicting hyperinflation or anything drastic like that, but I think we will see inflation stop and start for years, and I think inflation will probably be 5% or higher for years. That's just CPI, and if you want to go down the rabbit hole on inflation, you should check out shadowstats.com. Their website tracks inflation using old measurements, which shows how understated CPI is compared to actual inflation. I will do brief overviews of each company in the top 10, but on the whole, I don't think the largest parts of TQQQ represent attractive risk/reward prospects today.
Apple & Microsoft
Like any market cap weighted index or ETF, Apple (AAPL) and Microsoft (MSFT) will make up a large portion of the fund. While this is true for S&P 500 indices like (SPY) or (VOO), these two companies have an even larger weighting in TQQQ. Both have well over 10% weightings, but I'm not going to go into too much detail because I wrote articles on both in the last couple of months (here and here). Apple has a market cap of $2.4T, while Microsoft has a market cap of $1.9T, which will probably be a drag on forward returns. I don't find either attractive simply due to the valuations, which I talked about in those articles, and I have my doubts on how much either can grow from here. Another thing that I'm not a huge fan of is how both companies continue to buy back large amounts of stock regardless of the valuation.
Amazon
Amazon (AMZN) and its $972B market cap account for another 6% of the ETF. I have been bullish on Amazon because of AWS, but I have been wondering if it might be worth selling my small position in Amazon to buy something else. I still think the company is in a good position with their core businesses, especially AWS, but if the right opportunity comes along, I might part ways with my Amazon shares. Of the largest components of TQQQ, I think Amazon is still the most attractive today.
The Ad Giants - Google & Meta
These two are companies I'm not really interested in owning for several reasons, but I don't think the coming years are going to be a great environment for advertising businesses like Google (GOOG) (GOOGL) and Meta (META). Google has a P/E of 20.5x and a market cap of $1.2T, and accounts for about 7.5% of TQQQ. I'm curious to see how ChatGPT and other developments, including smaller video platform competitors for YouTube, impact Google's search engine monopoly, but I don't think the next decade will be as good for their business as the last one was.
Meta has had a massive run since the beginning of November, and shares now trade at an earnings multiple of 21x. This puts the market cap at $480B and is 2.5% of TQQQ. I have my doubts about the Metaverse strategy, and I have been critical of the company's buybacks a couple of years ago as the CEO was dumping a huge number of shares. Like Google, I think the next decade will not be like the last one for Meta.
Pie In The Sky Valuations - Nvidia & Tesla
Both these companies have had massive runs to start 2023, and I think the valuation is so rich that I would honestly rather be short these two than own them. I actually bought a put option on Tesla (TSLA) when shares were around $205, so we will see if that pays off. The contract expires near the end of April with a strike of $150. I don't gamble much, but I watched the absurd move Tesla made to start the year, and it looked like short-covering and speculative buying instead of an actual fundamental improvement in the business. If shares keep dropping, I will probably look to exit the trade in the next couple of weeks.
Nvidia (NVDA) also had its own massive move, including a large jump after earnings. They can talk all they want about AI in their earnings calls, but I don't see how investors owning Nvidia today generate attractive forward returns. I could be wrong, but unless Nvidia can grow rapidly through the next couple of cycles for the semiconductor industry, buying at the current valuation is not attractive in my opinion. Between the two companies, they account for about 6% of TQQQ, which means there is another sizable chunk of the ETF that find unattractive.
Rounding Out The Top 10 - Pepsi & Broadcom
Pepsi (PEP) is the only non-tech company in the top 10, with a 2.3% weight. While I don't think the downside is as big as some of the other stocks in the top 10, it's not a business I would pay over 25x earnings for, despite a 2.7% dividend. It's a slow-growth business, and I don't find their business mix to be all that attractive. It's basically just a mix of different junk foods and drinks, and I think people will start to pay more attention to their diet and health in the coming years.
Broadcom (AVGO) would probably be my first choice to buy in the top 10 today, but it only accounts for just over 2% of the ETF. The company has a P/E of just over 16x and a dividend yield of 2.9%, and a history of being a very successful operator in the semiconductor industry. They operate in a different part of the industry than Nvidia, but the valuation is much more attractive. The market cap is $264B, so they might not grow as fast as the last decade, but Broadcom is a solid dividend growth stock.
Conclusion
I'm sure some commenters will talk about their trades in TQQQ (which I love to hear about, by the way), but I'm just not at a point where I'm comfortable buying the ETF today. TQQQ has a different risk profile than QQQ, including potential systemic issues and massive volatility with leveraged ETFs, but if your timing is good, you get a lot more bang for your buck buying the leveraged TQQQ ETF. I have said in the past that I'm looking for capitulation and panic, but I will still look elsewhere as long as the valuations for the largest stocks in the index stay rich. There are only a couple of stocks in the top 10 I find attractive today, but TQQQ could still have a huge run if the market takes off. While TQQQ is still on my watchlist, it is staying on the backburner while I focus on other sectors that I find more attractive today.
This article was written by
Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Also short TSLA via put options.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Comments (18)
TQQQ is great macro play setup right now. Interest rate hikes will be done shortly. Pause on deck and with slowing growth and weak GDP on deck that means they will then start to lower rates maybe as early as the end of this year, or 2024 for sure.
Will be fun to revisit articles and comments when the end of 2023 rolls around.
The announcement of just a pause from Powell could send TQQQ up substantially in a very short time.
21.02 +0.14 (+0.67%) After hours: 05:09PM ESTManaged to buy right into this bear action yesterday @ 22.85.
Made .41 cents selling calls.
Been waiting months for the 'coming recession'.
Not sure if it's happening now.I'll be selling more calls next week. | NVDA |
https://finnhub.io/api/news?id=e7bc00a25fbe347dbc794f7362ce6109437db4e068707be3e449dee80f11f225 | Got $500? 2 Top Growth Stocks to Buy Now. | Let's explore why Nvidia (NASDAQ: NVDA) and Luckin Coffee (OTC: LKNC.Y) could make excellent long-term choices. Founded in 1993, Nvidia has since risen to become a leader in graphics processing units (GPUs), a type of computer chip crucial for 3D renderings and other demanding programs. While Nvidia's graphics processors are mainly used for video gaming and data centers, the emergence of ChatGPT and other advanced AI platforms could unlock an entirely new growth driver. | 2023-03-10T03:05:00 | Yahoo | Got $500? 2 Top Growth Stocks to Buy Now.
Let's explore why Nvidia (NASDAQ: NVDA) and Luckin Coffee (OTC: LKNC.Y) could make excellent long-term choices. Founded in 1993, Nvidia has since risen to become a leader in graphics processing units (GPUs), a type of computer chip crucial for 3D renderings and other demanding programs. While Nvidia's graphics processors are mainly used for video gaming and data centers, the emergence of ChatGPT and other advanced AI platforms could unlock an entirely new growth driver. | NVDA |
https://finnhub.io/api/news?id=d5a49b60d23583d62c09d668dfc281c237c4e0875f2b6931106ffc8e12779ee8 | ChatGPT Says These 5 Tech Stocks Can Make You Rich in 5 Years | Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results. | 2023-03-10T03:04:00 | InvestorPlace | This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.26% per year. These returns cover a period from January 1, 1988 through July 3, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
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https://finnhub.io/api/news?id=fae64f64e0531e94f2b22829a9988fb59b8bb7cd08de4d4364708f2a322ce715 | AI Focus Makes Nvidia Stock Interesting in 2023 | You might know Nvidia (NASDAQ:NVDA) mainly as a maker of graphics cards for video game consoles. However, Nvidia is becoming a power player in the artificial intelligence market. NVDA stock could move higher over the coming quarters as machine learning is a major theme of 2023, and Nvidia’s chief executive clearly wants the company to be an AI leader. This doesn’t mean you have to invest right now. Nvidia shares get a “B” rating rather than an “A” because there may be valuation concerns. Indeed, | 2023-03-10T03:00:40 | Yahoo | AI Focus Makes Nvidia Stock Interesting in 2023
You might know Nvidia (NASDAQ:NVDA) mainly as a maker of graphics cards for video game consoles. However, Nvidia is becoming a power player in the artificial intelligence market. NVDA stock could move higher over the coming quarters as machine learning is a major theme of 2023, and Nvidia’s chief executive clearly wants the company to be an AI leader.
This doesn’t mean you have to invest right now. Nvidia shares get a “B” rating rather than an “A” because there may be valuation concerns. Indeed, Nvidia’s price-to-earnings (P/E) ratio of 130.3x, price-to-book (P/B) ratio of 34.78x and price-to-sales (P/S) ratio of 25.15x might be off-putting to some value-focused investors.
On the other hand, a seemingly pricey stock can still climb higher and NVDA stock could reach its prior peak of around $330. Considering Nvidia’s Street beats and focus on machine learning, it shouldn’t be too surprising if the company’s shares gain value in the near future.
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Nvidia
$238.25
Nvidia’s Inflection Point for AI
So, let’s start with the raw data. For 2022’s fourth quarter, Nvidia’s revenue of $6.05 billion was down 21% on a year-over-year (YOY) basis. However, due to rising inflation, hardly anyone should expect a tech business to have fared better in 2022 than in 2021.
What’s important is that Nvidia’s quarterly revenue beat Wall Street’s expectation of $6.02 billion. Additionally, Nvidia’s adjusted earnings per share (EPS) of 88 cents exceeded the analyst community’s forecast of 81 cents.
What really caught investors’ attention, however, were some statements made by Nvidia CEO Jensen Huang. He boldly declared, “AI is at an inflection point, setting up for broad adoption reaching into every industry.”
Huang assured that his company is “set to help customers take advantage of breakthroughs in generative AI and large language models.”
In addition, the CEO touted Nvidia’s “new AI supercomputer, with H100 and its Transformer Engine and Quantum-2 networking fabric,” reporting that it “is in full production.”
Analysts Raise Their Price Targets on NVDA Stock
By now, you should be getting a clear message that Nvidia is fully committed to the machine-learning market. Nvidia specifically stated that it is “partnering with leading cloud service providers to offer AI-as-a-service that provides enterprises access to the company’s AI platform.”
The combination of Nvidia’s earnings beats and machine-learning focus prompted some analysts to re-evaluate NVDA stock. For example, Piper Sandler analysts hiked their price target from $225 to $275. They view Nvidia as “the only legitimate way to play generative model training and inference today.”
Analysts with Citi, meanwhile, see Nvidia shares as “the best pure play on generative AI adoption.” Thus, the Citia analysts increased their price target from $210 to $245.
Meanwhile, Needham analysts lifted their price target on NVDA stock from $230 to $270. Also, BMO Research analyst Ambrish Srivastava issued a price-target raise from $240 to $255 on Nvidia shares. Notably, both the Needham analysts and Srivastava cited Nvidia’s involvement with AI.
What You Can Do Now
Certainly, Nvidia isn’t the only publicly tradable company with a machine-learning angle. Nevertheless, the company’s chief executive is clearly committed to pushing the boundaries of AI.
Perhaps you agree with Huang that AI is an at “inflection point.” If you’re not too concerned about Nvidia’s valuation, then a small position NVDA stock might be warranted. It’s a way to get exposure to the machine-learning industry, and to a generally solid technology company, in 2023.
On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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The post AI Focus Makes Nvidia Stock Interesting in 2023 appeared first on InvestorPlace. | NVDA |
https://finnhub.io/api/news?id=237e221032a1726ce28e5dab85ef40cbe8ba319933d81ee0268b9839c57e0481 | Cardano leads increases as largest cryptocurrencies start mixed | The largest cryptocurrencies were mixed during morning trading on Friday, with Litecoin seeing the biggest move, falling 7.41% to $69.89. Cardano lead the... | 2023-03-10T02:00:00 | MarketWatch | The largest cryptocurrencies were mixed during morning trading on Friday, with Litecoin LTCUSD seeing the biggest move, falling 7.41% to $69.89.
Cardano ADAUSD lead the increases with a 1.62% climb to 31 cents.
Five other currencies posted decreases Friday. Uniswap UNIUSD fell 2.29% to $5.54, and Ethereum ETHUSD dropped 2.16% to $1,401.94.
Bitcoin BTCUSD shed 2.06% to $19,821.30, and Ripple XRPUSD sank 0.37% to 37 cents.
Bitcoin Cash BCHUSD recorded the smallest decline, tumbling 0.09% to $107.98.
In addition to Cardano, two other cryptocurrencies saw increases. Polkadot DOTUSD rose 1.34% to $5.43, and Dogecoin DOGEUSD rose 0.46% to 6 cents.
In crypto-related company news, shares of Coinbase Global Inc. COIN shed 7.06% to $53.99, while MicroStrategy Inc. MSTR fell 5.93% to $198.32. Riot Platforms Inc. RIOT shares declined 2.89% to $5.37, and shares of Marathon Digital Holdings Inc. MARA dropped 1.63% to $5.42.
Overstock.com Inc. OSTK declined 3.37% to $17.49, while Block Inc. SQ declined 4.40% to $70.55 and Tesla Inc. TSLA climbed 0.37% to $173.56.
PayPal Holdings Inc. PYPL dropped 1.88% to $74.50, and Ebang International Holdings Inc. EBON shares rose 0.93% to $6.07. NVIDIA Corp. NVDA fell 1.44% to $230.98, and Advanced Micro Devices Inc. AMD fell 1.21% to $83.02.
In the fund space, blockchain-focused Amplify Transformational Data Sharing ETF BLOK declined 2.20% to $16.45. The Bitwise Crypto Industry Innovators ETF BITQ, which is focused on pure-play crypto companies, fell 3.13% to $4.34. Grayscale Bitcoin Trust GBTC, which tracks the Bitcoin market price, fell 2.77% to $11.47.
Editor's Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use. | NVDA |
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