We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon
Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Market sold off on weak employment growth numbers.
SP500 selling off on above normal volume. Today is the 4 th day down on the impulse. Expect an attempted rebound, counter rally on Monday or Tuesday.
DOW also sold off but because of the Wednesday counter rally the DOW is only on day 2 of the downward impluse.
DOW transports also on day 2 of the current impulse down. There are at least 1 to 2 more down day possible before a counter rally.
DOW utilities seeing some profit taking. Too soon to say if doubt is creeping on on the size of the cut.
TLT showing an above average volatile day with more range than normal but it finished where it closed so sellers balanced buyers. Traders are unsure of what is next.
USD needs to set a local higher high to negate the deadcat bounce.
COMPQ on day 1 of the current down impulse within a short term downtrend. Tech remains on the defensive.
Semiconductors follow the COMPQ trend but watch the 200 level. A break of the level triggers a key stop loss for a lot of traders.
Russell 2000 on day 3 on the downward impulse. Look for the counter rally on Monday or Tuesday.
Financials seeing some profit taking. Only day 2 of the downward impulse. There may be some more weakness early next week. Too early to tell but weakness in the economy starting to be priced in.
xxxxxx
Technical analysis for shorts & longs | Stock Discussion ForumsShare
No matter the era, the way technology plays out is similar It is fun to see the parallels to such old tech as tractors. AI are today's tractors of the 20th century. Industrial usages and everyone in the farming business needed to have one.
Technical analysis for shorts & longs | Stock Discussion ForumsShare
InvestingTelecom sector poised to shed assets amid slower growth and more competition By Sammy Hudes, The Canadian Press September 09, 2024 at 8:28AM EDT
Aravinda Galappatthige, managing director and institutional equity researcher at Canaccord Genuity, joins BNN Bloomberg to discuss the outlook of Canadian telcos. When Bell Canada announced in June it was selling Northwestel Inc. to a consortium of northern Indigenous communities, the telecom giant hailed the $1-billion deal as a milestone in advancing Indigenous self-determination.
Bell said Northwestel, which provides phone, internet and television services in Canada’s north, would benefit from commitments by its new owner, known as Sixty North Unity, to double fibre internet speeds and expand high-speed availability.
ADVERTISEMENT
But the deal also signalled a shift for Bell’s owner, BCE Inc., which appeared focused on “unlocking value from its business and monetizing standalone assets,” said CIBC analyst Stephanie Price in a recent research note.
That is to say, it was time to sell off parts of the company it no longer made sense to keep.
As Canada’s telecommunications sector copes with challenges such as slower growth and fierce competition, the dominant players are poised to continue shedding assets to reduce costs, industry watchers say.
Bell is not alone in that approach, Price added.
Rogers Communications Inc. has said it intends to sell off certain assets, including nearly $1 billion in real estate. That comes after Rogers divested its stake in Cogeco in December 2023 for $829 million.
Analysts say the so-called Big 3 — Rogers, BCE and Telus Corp. — along with Quebecor Inc. and Cogeco, have an opportunity to pursue a range of divestiture options.
Canada’s largest telecommunications companies are behemoths, with wide-ranging divisions besides their phone and internet offerings. Those span from media to sports and entertainment, along with health products and services.
“The Canadian telecom environment has become more competitive recently, with pricing wars leading to slower top-line growth and a focus on restructuring,” Price said in her note last month.
“In this type of environment, we believe that the telecom providers are seeking efficiencies, with divestitures on the radar as leverage remains elevated and interest rates continue to fluctuate.”
Dave Heger, senior equity analyst at Edward Jones, said Canada’s telecom sector reached a “turning point” last year, when Rogers closed its $26-billion purchase of Shaw Communications Inc., which also saw Shaw’s Freedom Mobile spun off in a sale to Quebecor.
With a more competitive wireless market, the big companies have been reporting slight drops in their average revenue per user.
“The pricing side of things has gotten tougher in a four-player environment,” said Heger.
He added companies took on debt in recent years as they built out their 5G networks with the promise of faster speeds and more reliable connections. Meanwhile, BCE and Telus have been “aggressively” building out their fibre internet networks across Canada.
But the global rollout of 5G technology hasn’t been as “disruptive or revolutionary as expected,” said Erik Bohlin, chair in telecommunication economics, policy and regulation at the Ivey School of Business.
Bohlin said there were expectations a decade ago that 5G could be more lucrative for telecom carriers. Those hopes were pinned to anticipated growth associated with Internet of Things applications, as well as network slicing — a technology that creates multiple virtual networks for wireless traffic to reserve capacity for individual users.
“5G is incrementally adding, of course, better capacity and also better latency and also perhaps providing platforms for selective Internet of Things applications ... but I think the expectations that the growth will be just around the corner hasn’t really come to pass,” he said.
“It really hasn’t happened, so it’s still business as usual in a certain sense.”
Cell towers, media and sports assets are among the potential targets for continued divestments, according to analysts.
Despite a longstanding reluctance to give up towers, “the timing is as good as it can be” for such transactions, said Scotiabank analyst Maher Yaghi in a recent report.
With infrastructure investors keen to buy tower assets, he said Telus and BCE — which already share towers across Canada — stand to make between $3 billion and $4 billion in sales, while Rogers could get as much as $6 billion.
“We believe the economics supporting a sale are attractive; however, none of the three incumbents wants to be the first to sell for fear of losing a competitive advantage,” he said.
U.S. giants such as AT&T and Verizon have also shed media assets in recent years, Price noted. However, such sales in Canada are considered less likely “given the Canadian regulatory environment and the limited pool of potential Canadian buyers.”
Instead, Canadian telecoms could be looking to punt their sports assets.
Rogers and BCE each own a 37.5 per cent stake in Maple Leaf Sports and Entertainment, which owns the Toronto Maple Leafs and Raptors, as well as the city’s CFL and MLS teams. Rogers also owns the Toronto Blue Jays, while Bell has a 20 per cent stake in the Montreal Canadiens.
Price estimated a value of $6.7 billion for Rogers’ sports assets and $4.5 billion for that of BCE, which could be “potentially a more motivated seller than Rogers.”
But either company could be tempted to at least consider selling a portion of their sports team ownership, said Heger, who pointed out demand is strong among potential buyers.
“When you look at sports assets, probably the market value of those assets relative to the financial impact, there’s in my mind kind of a disconnect,” he said.
“It just seems like valuations of sports teams keep going up and for Rogers or BCE ... it wouldn’t have that big of an impact on their reported numbers relative to the potential cash value they could get selling some of that ownership.”
In May, Rogers CEO Tony Staffieri poured cold water on the possibility, calling sports teams key to Rogers’ core business and saying the company would continue to hold onto those “valuable assets.”
“We’re a communications and an entertainment company and so we think about sports ownership as one of the fastest growing entertainment vehicles frankly,” Staffieri said at a luncheon hosted by the Canadian Club Toronto.
“Sporting events are still the most watched events, particularly live, and so it’s a good asset to own.”
This report by The Canadian Press was first published Sept. 8, 2024.
BNN Bloomberg is owned by Bell Media, which is a division of BCE.
The Canadian telcom story highlight what everyone has seen, 5G by itself is not a growth driver. Virtual reality and augment reality is no a thing yet and AI is not a key driver either.
The industry needs data hunger appplications to drive demand.
Technical analysis for shorts & longs | Stock Discussion ForumsShare
Larry Ellison, chairman and co-founder of Oracle Corp., speaks during the Oracle OpenWorld 2017 conference in San Francisco on Oct. 1, 2017. David Paul Morris | Bloomberg | Getty Images
shares rose 9% in extended trading on Monday after the database software vendor reported fiscal first-quarter results that topped Wall Street estimates.
Here’s how the company did in comparison with LSEG consensus:
Earnings per share: $1.39 adjusted vs. $1.32 expected
Revenue: $13.31 billion vs. $13.23 billion expected
Oracle’s revenue increased 8% from $12.45 billion a year ago, according to a statement. Net income rose to $2.93 billion, or $1.03 per share, from $2.42 billion, or 86 cents per share, in the same quarter a year ago.
At its after hours price of about $153, Oracle is on pace to reach a record on Tuesday. The stock’s highest close to date was $145.03 in July. Prior to the report, Oracle was about 34% so far this year, compared to the S&P 500's 15% gain.
The company said its cloud services and license support business generated $10.52 billion in revenue. That was up 10% from a year earlier and higher than the StreetAccount consensus of $10.47 billion.
Oracle’s cloud and on-premises license segment had $870 million in revenue, up 7% and more than StreetAccount’s $757.6 billion consensus.
Revenue from cloud infrastructure came to $2.2 billion, up 45%. That’s an acceleration from the prior quarter, during which the revenue went up 42%.
“Demand continued to outstrip supply” of consumption-based cloud infrastructure, CEO Safra Catz said on a conference call with analysts.
During the quarter, Oracle announced the opening of a second cloud region in Saudi Arabia and said its database software will be available through Google’s
public cloud.
In a separate statement on Monday, Oracle said it would partner with cloud infrastructure market leader Amazon
Web Services to enable its database services on dedicated hardware.
Executives will issue guidance and discuss the results with analysts on a conference call starting at 5 p.m. ET.
New AI Chip Beats Nvidia, AMD and Intel by a Mile with 20x Faster Speeds and Over 4 Trillion Transistors Caleb Naysmith -Barchart - Mon Sep 9, 1:16PM CDT
AI (artificial intelligence) - Close- up of computer chip with AI sign by YAKOBCHUK V via Shutterstock
A seismic shift is occurring in the artificial intelligence hardware market driven by a new contender: Cerebras Systems. Recently, the California-based startup announced the launch of Cerebras Inference, a groundbreaking solution claimed to be 20 times faster than Nvidia (NVDA)'s GPUs.
Cerebras has developed what it calls the Wafer Scale Engine, the third generation of which powers the new Cerebras Inference. This massive chip integrates 44GB of SRAM and eliminates the need for external memory, which has been a significant bottleneck in traditional GPU setups. By resolving the memory bandwidth issue, Cerebras Inference can deliver a whopping 1,800 tokens per second for Llama3.1 8B and 450 tokens for Llama3.1 70B, setting new industry standards for speed.
For investors and tech enthusiasts alike, the comparison between Cerebras and leading chip manufacturers like Nvidia, AMD (AMD), and Intel (INTC) becomes increasingly relevant. While Nvidia has long dominated the AI and deep learning sectors with its robust GPU solutions, Cerebras' entry with a distinct and potentially superior technology could disrupt market dynamics. Moreover, AMD and Intel, both significant players in the chip industry, may also feel the pressure as Cerebras chips begin to carve out a niche in high-performance AI tasks.
Comparing Cerebras Chips to Nvidia Comparing Cerebras chips to Nvidia's GPUs involves looking at several key dimensions of hardware performance, architectural design, application suitability, and market impact.
Architectural Design
Cerebras: Cerebras' claim to fame is its Wafer Scale Engine, which, as the name suggests, is built on a single, massive wafer. The latest wafer-scale engine features approximately 4 trillion transistors and integrates 44GB of SRAM directly on-chip. This design eliminates the need for external memory, thus removing the memory bandwidth bottleneck that hampers traditional chip architectures. Cerebras focuses on creating the largest and most powerful chip that can store and process enormous AI models directly on the wafer, which dramatically reduces the latency involved in AI computations.
Nvidia: Nvidia's architecture is based on a multi-die approach where several GPU dies are connected via high-speed interlinks like NVLink. This setup, seen in their latest offerings like the DGX B200 server, allows for a modular and scalable approach but involves complex orchestration between multiple chips and memory pools. Nvidia's chips, like the B200, pack a substantial punch with billions of transistors and are optimized for both AI training and inference tasks, leveraging their advanced GPU architecture that has been refined over the years.
Performance
Cerebras: The performance of Cerebras chips is groundbreaking in specific scenarios, particularly AI inference, where the chip can process inputs at speeds reportedly 20 times faster than Nvidia's solutions. This is due to the direct integration of memory and processing power, which allows for faster data retrieval and processing without the inter-chip data transfer delays.
Nvidia: While Nvidia may lag behind Cerebras in raw inference speed per chip, its GPUs are extremely versatile and are considered industry-standard in various applications ranging from gaming to complex AI training tasks. Nvidia's strength lies in its ecosystem and software stack, which is robust and widely adopted, making its GPUs highly effective for a broad range of AI tasks.
Application Suitability
Cerebras: Cerebras chips are particularly suited for enterprises that require extremely fast processing of large AI models, such as those used in natural language processing and deep learning inference tasks. Their system is ideal for organizations looking to reduce latency to the bare minimum and who require the processing of large volumes of data in real-time.
Nvidia: Nvidia's GPUs are more versatile and can handle a range of tasks, from rendering graphics in video games to training complex AI models and running simulations. This flexibility makes Nvidia a go-to choice for many sectors, not just those focused on AI.
Conclusion
While Cerebras offers superior performance in specific high-end AI tasks, Nvidia provides versatility and a strong ecosystem. The choice between Cerebras and Nvidia would depend on specific use cases and requirements. For organizations dealing with extremely large AI models where inference speed is critical, Cerebras could be the better choice. Meanwhile, Nvidia remains a strong contender across a wide range of applications, providing flexibility and reliability with a comprehensive software support ecosystem.
Technical analysis for shorts & longs | Stock Discussion ForumsShare
Is It Time to Buy These 3 Stocks Down 33% to 61%? Sneha Nahata -Barchart - Mon Sep 9, 12:12PM CDT
Charts, tickers, traders - 3d illustration inflation and deflation graph by Deepadesigns via Shutterstock
Large-cap stocks Intel (INTC), Lululemon (LULU), and Etsy (ETSY) have underperformed significantly in 2024, with each losing a considerable amount of value over the last eight months. So far this year, these companies have lost 33-61% of their value, notably trailing behind the broader market indices.
While such losses might look alarming, they can also present potential buying opportunities for investors with long-term outlooks. With this backdrop, let's explore factors to decide whether it makes sense to buy into these beaten-down stocks at their current price levels.
#1. EtsyShares of Etsy (ETSY), an online marketplace, have fallen by more than 33% since the start of the year. This steep decline is mainly due to broader economic challenges, as inflation and other factors have impacted consumers’ willingness to spend on non-essential items. As a result, Etsy has seen a slowdown in its gross merchandise sales (GMS), and its overall growth has taken a hit. Most recently, S&P announced that ETSY stock will be replaced in the benchmark S&P 500 Index($SPX).
www.barchart.comIn the second quarter of 2024, Etsy reported a consolidated GMS of $2.9 billion, marking a 2.1% year-over-year decline. While the consistent drop may seem concerning, the company did experience a slight improvement in GMS from the first quarter, showing signs of recovery. Further, Etsy has been actively working on initiatives to spark growth, combining product enhancements with marketing strategies. Additionally, GMS per active buyer — a key measure of consumer activity on the platform — has shown some stability, which is a positive sign.
However, the broader picture remains uncertain. Volatility in consumer spending, particularly on non-essential products like those sold on Etsy, continues to pose a challenge. During its second-quarter earnings call, Etsy's management warned that the challenging economic environment is likely to persist, and they expect GMS to decline by low single digits on a year-over-year basis in the third quarter.
Despite the company's efforts, Etsy’s underlying business fundamentals haven't shown significant improvement, suggesting that macro headwinds and competition are expected to weigh on the company’s performance in the medium term. Given these factors, most analysts have taken a cautious stance on Etsy stock.
ETSY has a consensus rating of “Hold.” However, its average price target of $66.61 indicates a potential upside of around 23.7%.
www.barchart.com#2. LululemonLululemon (LULU), known for its high-end athletic apparel and accessories, is under pressure. Its stock has dropped about 50% in 2024, primarily due to weaker performance in the U.S. market. Additionally, product issues and uncertainty in sales projections for 2024 are adding pressure, alongside tough competition, which could impact its near-term performance.
www.barchart.comHowever, looking ahead to 2025, there are reasons for optimism. Lululemon is speeding up the launch of new styles, particularly in performance shorts, tops, and tracksuits. These fresh additions should improve the company's product lineup and attract more customers in the coming months.
Lululemon’s store performance remains strong, with solid sales per square foot. The success of its new stores and the results of its optimization efforts suggest that these factors will continue to drive growth.
While the company has acknowledged the uncertainty surrounding the shorter holiday shopping season and the U.S. election later in 2024, its outlook for 2025 is brighter. The second half of 2024 is expected to see improvements, and the brand is aiming to restore its innovation pipeline to historic levels of product freshness.
Lululemon is also staying committed to its long-term goals. It plans to double its revenue to $12.5 billion by 2026 from $6.25 billion in 2021. Moreover, despite the challenges, the company is ahead of schedule with a compound annual growth rate (CAGR) of 19% over the past three years — above the 15% initially planned.
The company’s new leadership structure, along with its ongoing focus on innovation, is likely to support future growth. Management is optimistic about revitalizing the U.S. women's business while continuing to see strong results in the men's and international markets.
Wall Street remains cautiously optimistic, with a consensus rating of "Moderate Buy" on Lululemon stock. Analysts have an average price target of $318.57, suggesting a potential 25.3% upside from current levels.
www.barchart.com#3. IntelIntel (INTC) stock has lost a staggering 61% of its value so far this year. This sharp decline stems from competitive pressures and loss of market share. Compounding its struggles, Intel has been slow to capitalize on the booming demand for artificial intelligence (AI) technologies, lagging behind its rivals in this fast-growing market.
www.barchart.comLooking ahead to the second half of 2024, Intel itself predicts tougher times, with further challenges to its profit margins and competitive positioning. These hurdles raise concerns about the company’s future direction.
Nonetheless, to stabilize its financial position, Intel has introduced cost-cutting measures. While this might help in the short term, doubts remain about whether these initiatives will be enough to reaccelerate growth.
Though the stock’s sharp decline could be seen as a potential buying opportunity, Intel’s ongoing struggles suggest it may be premature to go long on the stock. Analysts have maintained a “Hold” rating on INTC stock, with an average price target of $29.19 — indicating a potential upside of about 51.6%.
www.barchart.comThe Bottom LineDespite some efforts toward recovery, all three stocks face challenges ahead, and are likely to remain volatile. However, Lululemon stands out as the most compelling buy for long-term investors. While there is still some uncertainty in the short term, its growth strategy, commitment to innovation, and long-term outlook make it attractive.
Intel offers the highest potential upside, but also carries higher risk due to its competitive struggles. Moreover, Etsy stock might not be a buy now, given its weaker business fundamentals and broader macroeconomic pressures.
On the date of publication, Sneha Nahata did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
Technical analysis for shorts & longs | Stock Discussion ForumsShare
Dividends - Savings money growing over time by Nattanan23 via Pixabay
An entire investment sub-industry has sprung up around covered call ETFs. They have boomed in popularity in recent years, with assets under management growing from about $18 billion in early 2022 to roughly $80 billion as of July, according to Morningstar data.
Inflows into these ETFs have been driven by the prospect of stock-like price gains combined with bond-style income and low volatility. JPMorgan’s popular Equity Premium Income ETF (JEPI), the largest actively managed ETF in the U.S., says the fund’s aim is to provide “a significant portion of the returns associated with the S&P 500 index with less volatility,” according to its marketing material.
There are even entire investment newsletters devoted to the subject. That very fact has me wondering whether they are a good place for the average investor to put some of their money. First though, let’s cover the basics of covered calls and covered call ETFs.
Covered CallsIt all starts simply - a covered call is where you write (sell) an option for an underlying stock that you own. When you sell the option, you collect the premium from the option buyer, but are at risk of being forced to sell your stock.
When the expiration date hits, two things could happen:
If the stock price is below the strike price, the option expires out of the money, and as an options writer, you no longer have any obligation to sell the stock and can pocket the cash from the option premium you sold.
But if the stock price is above the strike price, the option expires in the money and your stock will be called away by the buyer.
In effect, this strategy limits your potential upside from holding a stock. But it provides a guaranteed income in the form of the option premium. You’ll also still have the downside risk from holding the stock.
Nevertheless, the idea of additional income is very appealing, and so many investors turn to ETFs that use this strategy.
Covered Call ETFsA covered call ETF is an exchange-traded fund (ETF) that holds stocks and also writes call options against these stocks. Other names applied to this type of ETF include “buy-write,” “option income,” and “premium income.”
Like traditional ETFs, these funds provide exposure to the stock market via an index, such as the S&P 500 Index ($SPX). What makes them different is that they also write (sell) call options on their underlying portfolios. Most write options that expire monthly, but a few write options that expire each day.
The pay-off of a covered call ETF is roughly the same as for the covered call strategy discussed above. The difference is that you pay fees to the fund manager to execute the strategy. The fees are higher than for a standard index ETF and eat into your return.
The main advantage of covered call ETF is that it’s all done for you. You don’t have to pick expiration dates and strike prices or spend time selling new options after the previous ones expired. Also, these ETFs could also increase the diversification of your portfolio.
Now, let’s look at their performance and whether they’re a good idea for the typical investor.
Not-So-Hot PerformanceFrom time to time, the market reminds investors that there's no such thing as a free lunch, and strategies that appear to serve up tasty returns turn out to be not so tasty.
In general, covered-call ETFs have performed well in flat to moderately bullish markets.
However, when markets rise quickly, covered call ETFs typically underperform traditional, long-only ETFs that haven't sold options. That's because it's likely that the call options they've sold will be exercised, and the stocks will either be "called away" (delivered to the buyer of the call contract), or the fund will close its position by buying back the call option at a loss.
On the other hand, when the market drops a lot - as it did recently - covered call ETFs offer little protection from the downside. The relatively small income generated by selling options is not enough to offset the decline in the underlying shares. In fact, covered call ETFs end up underperforming the index.
Just look at the performances so far in 2024. Year-to-date, the S&P 500 Index is still up 14.5%. But the Cboe’s S&P 500 Buywrite Index ($BXM) is lagging, up only 10.6%. And JEPI is up just under 6%.
www.barchart.comPopular covered call funds tied to the Nasdaq-100 Index ($IUXX) have also underperformed. The Nasdaq-100 is up 10.6% year-to-date. Meanwhile, the Global X Nasdaq-100 Covered Call ETF (QYLD) is up less than 1% year-to-date.
Look Elsewhere for IncomeWhy the difference?
While covered call ETFs use what is called an “income strategy,” in reality, these ETFs are just selling volatility. That can work great for long periods of time, but can get hammered when the market tanks and volatility spikes.
In other words, covered call ETFs do NOT like volatility.
That’s why I maintain that, for a long-term investor, it’s not a buy-and-hold investment. You’re giving up a lot of upside, and compounded over the long term, that’s not smart.
I’d rather stick with dividend-paying stocks, or ETFs focused on such stocks, for the long-term.
On the date of publication, Tony Daltorio did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
Technical analysis for shorts & longs | Stock Discussion ForumsShare
Government - Jerome Powell by Domenico Fornas vis Shutterstock
After navigating a period marked by intense macroeconomic challenges and policy tightening, the U.S. central bank is set to make a significant policy shift on Sept. 17-18, with expectations running high for the Fed's first interest rate cuts since the pandemic's peak.
As investors eagerly await this pivotal rate decision, Cantor Fitzgerald has initiated coverage on 22 global internet stocks, highlighting a select few as Top Picks that are well-positioned to capitalize on both the Fed’s anticipated policy shift and the rapid advancement of artificial intelligence (AI).
Despite robust performance over the past 18 months, the brokerage firm highlighted that internet stock valuations remain attractive and stand to benefit from anticipated rate cuts, even as top-line growth slows and cost-cutting benefits wane. In this context, let’s take a closer look at three standout internet stocks that have earned their place on Cantor’s Top Picks list.
Stock #1: Meta Platforms With a massive market cap of $1.26 trillion, California-based Meta Platforms, Inc. (META) is the global leader in social media. Since Facebook's revolutionary debut in 2004, Meta has transformed global communication, extending its influence through platforms such as Messenger, Instagram, and WhatsApp and broadening its reach on a global scale. After reshaping the social media landscape, Meta is now leading the way in the next phase of social technology by creating immersive experiences in augmented and virtual reality.
Shares of this mega-cap stock have rallied 69.4% over the past 52 weeks, easily outpacing the broader S&P 500 Index’s ($SPX)22.5% gain during this period. Plus, in 2024, the stock is up 42.5%, soaring beyond the SPX’s 14.4% return on a YTD basis.
www.barchart.com Despite Meta’s strong price action, the stock is trading at 23.4 times forward earnings, which is right in line with its own five-year average. On Sept. 5, the social media giant announced a quarterly dividend of $0.50 per share, set to be distributed to its shareholders on Sep. 26. The company’s annualized dividend of $2.00 per share offers a 0.40% yield.
After releasing its Q2 earnings results on July 31, which exceeded Wall Street's expectations on both the top and bottom lines, shares of Meta soared more than 4% in the next trading session. The company reported revenue of $39.1 billion, marking an impressive 22% year-over-year increase and slightly surpassing estimates. Additionally, EPS reached $5.16, up a remarkable 73.2% annually to beat projections by 9.8%.
The company ended the quarter with approximately $58.1 billion in cash, cash equivalents, and marketable securities, as well as a solid free cash flow of $10.9 billion.
For Q3, management projects total revenue to range between $38.5 billion and $41 billion. Looking ahead to fiscal 2024, the company has raised its capital expenditure forecast to a range of $37 billion to $40 billion, up from the previous estimate of $35 billion to $40 billion. While detailed guidance for fiscal 2025 will be provided in Q4, Meta expects a notable increase in infrastructure costs next year, driven by depreciation and operational expenses from its expanded infrastructure.
Additionally, capital expenditures are expected to rise significantly in 2025, fueled by investments in AI research and product development. Analysts tracking Meta project the company’s profit to increase 43.6% year over year to $21.36 per share in fiscal 2024, and jump another 12.7% to $24.07 per share in fiscal 2025.
Cantor Fitzgerald has assigned an “Overweight” rating to META stock. The brokerage firm sees Meta having "plenty of levers" to drive market share growth, predicting that AI advancements will fuel increased engagement, monetization, and revenue growth over the next two to three years.
META stock has a consensus “Strong Buy” rating overall. Out of the 44 analysts covering the stock, 38 suggest a “Strong Buy,” one advises a “Moderate Buy,” three recommend a “Hold,” and two have a “Strong Sell” rating.
www.barchart.com The average analyst price target of $575.36 indicates a potential upside of 14% from the current price levels. However, the Street-high price target of $660 suggests that META could rally as much as 30.8%.
Stock #2: MercadoLibre Uruguay-based MercadoLibre, Inc. (MELI) is Latin America's largest online commerce ecosystem and a leading fintech platform, operating across 18 countries. The company enables e-commerce and digital financial services through advanced technology. Its e-commerce platform is a robust and secure online marketplace that has garnered comparisons to eBay (EBAY) and Amazon (AMZN), while its fintech arm, MercadoPago, provides a comprehensive range of financial solutions both within and beyond the e-commerce platform, tackling the unique challenges of the Latin American market.
Valued at $100.7 billion by market cap, shares of this online retailer have climbed 41.2% over the past year and 28.3% on a YTD basis, outperforming the broader SPX during both these time frames.
www.barchart.com From a valuation standpoint, MELI stock is priced at 4.92 times forward sales, which is significantly lower than its own five-year average, suggesting a potentially attractive entry point for investors relative to historical norms.
Following the company’s Q2 earnings results on Aug. 1, which shattered Wall Street's top and bottom line forecasts, shares of MercadoLibre jumped by a notable 10.6% in the subsequent trading session. The company’s total revenue of $5.1 billion soared 41.5% year over year and topped estimates by 8.3%, while earnings of $10.48 per share demonstrated a remarkable 110.3% annual improvement and crushed projections by an impressive 20.2% margin.
During the quarter, MercadoLibre’s adjusted free cash flow surged to $678 million, up from just $145 million recorded in Q2 of fiscal 2023, despite increased capital expenditures and credit portfolio funding. This impressive cash flow performance and the recent reduction in leverage ratios prompted S&P to revise its credit rating outlook on MercadoLibre to "Positive" in June.
While the company didn’t offer formal guidance, analysts tracking MercadoLibre projected the company’s bottom line to hit $35.22 per share in fiscal 2024, marking a notable 81% year-over-year increase. Looking forward to fiscal 2025, profit is forecast to rise another 31.3% annually to $46.23 per share.
MercadoLibre has earned an “Overweight” rating and a spot on Cantor Fitzgerald’s Top Picks list thanks to its strong fundamentals in both fintech and e-commerce. Cantor highlights the company's potential to expand margins through its advertising, credit, and financing offerings.
Overall, Wall Street is bullish, with a consensus “Strong Buy” rating for MELI stock. Of the 14 analysts covering the stock, 12 advise a “Strong Buy,” and the remaining two recommend a “Hold.”
www.barchart.com The average analyst price target of $2,179.28 indicates an 8.2% potential upside from the current price levels. However, the Street-high price target of $2,530 suggests that MELI could rally as much as 25.6% from here.
Stock #3: DoorDash San Francisco-based DoorDash, Inc. (DASH) is a global technology company connecting consumers with local businesses in over 30 countries. Since its 2013 founding, DoorDash has expanded well beyond delivering restaurant carryout orders to consumers, and now provides local delivery services including liquor, pet supplies, groceries, flowers, and more.
Valued at a market cap of roughly $50.5 billion, shares of DoorDash have outperformed the broader market, with gains of nearly 51.3% over the past year and almost 26% on a YTD basis.
www.barchart.com After the company revealed its Q2 earnings results on Aug. 1, shares of DoorDash took off more than 8% the next day. Total revenue of $2.6 billion was up 23% year-over-year and topped Wall Street’s forecasts by 3.6%. The company trimmed its loss to $0.38 per share compared to $0.44 per share in the year-ago quarter, and adjusted EBITDA rose by 54% to a record high of $430 million.
During the quarter, DoorDash achieved remarkable growth, with Total Orders jumping 19% year-over-year to 635 million and Marketplace gross order value (GOV) rising 20% annually to $19.7 billion. This surge was driven by an expanding customer base and increased engagement. In Q2, DASH set new highs in Total Orders, Marketplace GOV, and revenue.
Looking ahead to Q3, management forecasts Marketplace GOV to range between $19.4 billion and $19.8 billion, with adjusted EBITDA anticipated to range from $470 million to $540 million.
Cantor Fitzgerald forecasts a "decent possibility" of positive GOV and EBITDA revisions in the near future, which should continue to bolster the stock’s performance. Supported by these positive factors, the firm has assigned an “Overweight” rating to DASH stock.
DASH stock has a consensus “Moderate Buy” rating overall. Of the 36 analysts in coverage, 20 suggest a “Strong Buy,” two recommend a “Moderate Buy,” and the remaining 14 have a “Strong Sell” rating.
On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
Stock market today: Wall Street rallies to claw back some of last week's sharp loss Stan Choe - AP - 10 minutes ago
Financial Markets Wall Street
NEW YORK (AP) — U.S. stocks climbed Monday to claw back some of the losses from their worst week in nearly a year and a half.
Technical analysis for shorts & longs | Stock Discussion ForumsShare