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EasyJet and Wizz Air cancel flights to Tel Aviv after Iran attack on Israel 2024-04-15 16:03:00+00:00 - International airlines have cancelled and redirected flights to Israel after Iran’s missile and drone attack on Saturday. EasyJet has stopped flights to and from Tel Aviv until Sunday, while Wizz Air has said it will resume on Tuesday after cancelling services from Saturday to Monday. Iran fired 360 missiles and drones at Israeli territory in retaliation for an attack two weeks ago on the Iranian embassy in Syria – widely believed to have been carried out by Israeli jets – which killed a number of senior Iranian commanders. EasyJet said: “Due to the evolving situation in Israel, easyJet has taken the decision to temporarily pause operations to and from Tel Aviv until 21 April. The safety and security of our passengers and crew is always easyJet’s highest priority.” Wizz Air said passengers may experience schedule changes when flights resumed on Tuesday, adding that it was monitoring the situation. A number of other international carriers including Air Canada, Delta, Iberia and Lufthansa also suspended flights to Tel Aviv on Sunday and Monday. Wizz Air and easyJet had recently restarted flights to Israel, having paused them after the attacks by Hamas on 7 October. On Sunday the European Commission and the European Union Aviation Safety Agency advised carriers to exercise caution when flying in Israeli and Iranian airspace, while recommending not to conduct flights below a certain altitude above Iraq and Syria. British Airways confirmed it had run a service to Tel Aviv on Monday morning but said it was keeping the situation under review. The airline restarted flights to Tel Aviv this month but had reduced the service to only four flights a week, with crew changes at Larnaca in Cyprus, so staff did not have to spend the night in Israel. Virgin Atlantic had suspended flights to Tel Aviv until September before the latest attacks, but the carrier said it had since changed some of its routes to avoid Iranian and Israeli airspace. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion It said: “We are not currently overflying Iraq, Iran or Israel, but we continue to monitor the situation for any potential impact on our operations. The safety and security of our customers and people is paramount and always will be. We apologise for any inconvenience caused to customers by slightly longer flight times.” Qatar Airways said it had resumed flights to Iran, namely Tehran, Mashhad, Shiraz and Isfahan. “The safety and security of our passengers remains our top priority,” it added. Lufthansa has suspended flights to Beirut and Tehran until at least Thursday.
Vertex Pharma scientist talks about the long road to developing non-addictive painkillers 2024-04-15 16:00:42+00:00 - WASHINGTON (AP) — For decades, patients seeking medication for pain have had two choices: over-the-counter drugs like aspirin or powerful prescription opioids like oxycodone. Opioid prescriptions have plummeted over the last decade as doctors have become more attuned to the risks of addiction and misuse during the country’s ongoing drug epidemic. Vertex Pharmaceuticals recently reported positive results for a non-opioid painkiller, one of several medications the Boston-based drugmaker has been developing for various forms of pain. Patients taking the drug after surgery experienced more pain relief than those getting a placebo, although the drug didn’t meet a secondary goal of outperforming treatment with an opioid. The Associated Press spoke with Vertex’s chief scientist Dr. David Altshuler about the company’s research and development plans. The interview has been edited for length and clarity. Q: Why is Vertex interested in new drugs for treating pain? There is a great need for additional medicines to help people manage pain. There are medicines like Tylenol that are modestly effective but they’re very well tolerated. And there’s medicines such as opioids that are very effective but unfortunately have side effects, as well as addictive potential. Identifying additional medicines that could be used for people who need more pain relief but don’t want to take the risks of opioids would be helpful for society. Q: How did you develop these drugs? Vertex has been working on this for 20 years, and the insight that led to the medicines actually came from studies of people who had a rare condition where they are insensitive to pain. They can feel things, sense temperature, but do not feel pain. This was actually identified in a family of fire walkers who could walk on hot coals. So scientists figured out that that condition was due to inherited differences in a particular protein that has a role in pain signaling— so if you lack this function you don’t feel pain. So we and many others have worked for decades to make a medicine that could recapitulate that naturally-occurring phenomenon. Q: Why wouldn’t these drugs carry the same addictive properties as opioids? Addictive medicines typically work in the brain and they have side effects that aren’t really separable from the reduction in pain, because they’re the same thing. That’s their mechanism of action. In our case, our goal is to make medicines that act in the periphery, not in the brain, so they wouldn’t have the same potential risk. Q: Tell me about the recent data you’ve reported? We’ve reported three studies in people with acute pain — things like surgery or an injury — all three studies were positive, all three studies showed substantial reduction of pain of about 50%. One of the secondary endpoints was superiority to the opioid and the drugs were not superior to the opioid that was used for comparison, they were similar in magnitude. But because opioids have so many safety and tolerability issues, a medicine that could have similar efficacy but does not have those challenges might be of interest to people in pain. Q: Are you testing this approach in patients with long-term pain? We also did a study of diabetic peripheral neuropathy, which is long-term pain caused when people with diabetes have damaged nerves. That was also a positive study that showed clinically meaningful reduction in pain. So based on that study, a phase 2 study, we’re now planning for a phase 3 study. Q: What comes next? For acute pain we’re preparing to file for FDA approval based on our data. For the longer-term pain, what’s called neuropathic pain, it’s earlier in the development stage but the data is encouraging so far. So we’re continuing studies to determine if it’s possible to apply for approval there.
The Charles Schwab Company Can Hit New Highs 2024-04-15 15:48:00+00:00 - Key Points The Charles Schwab Company had a decent quarter and is expected to return to growth soon. Margins are widening sequentially and point to robust cash flow and capital returns. Analysts provide a tailwind for the market, which may strengthen now that results are in. 5 stocks we like better than Charles Schwab The Charles Schwab Company NYSE: SCHW can hit new highs, not just a new weekly or monthly high but a new multi-year high with the potential for a new all-time high. The last year was challenging for the business and investors with the banking crisis, shaken investor sentiment, and tightened fiscal policy to impact results. The takeaway is that the company gained leverage while weathering the storm and is set for an accelerated recovery over the next two years. The forecast indicates a return to growth this year and double-digit top-line growth in F2025, which Q1 results suggest is cautious. Because earnings are expected to grow at double the top-line pace, investors might expect another robust year of dividends, dividend increases, and share repurchases. Get Charles Schwab alerts: Sign Up The Charles Schwab Corporation Had a Good First Quarter The Charles Schwab Corporation reported another YOY decline in revenue and earnings, but the metrics are good. The YOY decline is shrinking, sequential growth is improving, and the margin is widening. The $4.74 billion in net revenue outpaced the consensus estimate by a slim margin but supported by all operating segments. The company reports a $96 billion increase in net new client assets, or up 20%; fee-based revenue tied to premium services is also up 20%. Total client assets topped $9.1 trillion to reach a record level as new clients and new money flocked to the platform. The margin news is among the best details of the report. The company’s pretax profit margin improved by 500 basis points to 37.9%, 40.9% adjusted, and gains are expected to stick. Margin gains are due to client leverage and operating efficiencies that should aid improvement as the year progresses; the March data shows client in-flows accelerating. The bottom line result is $0.74 in adjusted earnings, a penny better than expected. The balance sheet remains healthy, and the company's cash is growing. The tier 1 capital ratio is solid at 8.8%, and the cash flow is robust. Cash flow allowed for dividends and share repurchases, which reduced the diluted count by about 6% compared to last year. The dividend aligns with the broad market average but is much safer because the payout ratio is less than 35%. Schwab doesn’t make regular distribution increases but tends to increase over time. There is sufficient room in the numbers, so another increase could come this year. Analysts Provide a Tailwind for Charles Schwab Stock Analysts cut their ratings and trimmed their targets for SCHW stock last year, but the trend changed in 2024, and there is a tailwind in place. The revisions leading to the report's release include numerous upgrades and price target increases. They have sentiment firming to near Moderate Buy, and the stock trades above the broader consensus. The consensus assumes the market is fairly valued at current levels, but the fresh targets suggest that up to 20% upside is ahead. If the analysts continue to revise sentiment and price targets positively, the market should have no trouble moving to the $80 to $85 region. Institutions also support this market. Their activity has been net-positive for the market in the last two quarters, aligning with the updraft in price action. The Charles Schwab Company stock surged 5% following the release and may move to a new high soon. However, resistance is present at current levels and my cap gains. The critical line is near $72.50; a move above could lead this market to the $80 level. Assuming the company continues to build leverage and deliver the expected results, analysts should continue lifting the market, possibly leading it to a new high. The risk for SCHW investors is the Fed. The Fed will likely keep interest rates higher than the market is pricing in and may lengthen the time until full recovery. Before you consider Charles Schwab, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Charles Schwab wasn't on the list. While Charles Schwab currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Costco vs. Walmart: Revenue Comparison of Two Retail Giants 2024-04-15 15:39:00+00:00 - Key Points Walmart and Costco are the largest and 3rd largest retailers in the world Costco has a club membership system and offers selected bulk goods Walmart has a wider ranger of product lines and services a larger customer base 5 stocks we like better than Walmart Upgrade Now This premium article is available to MarketBeat All Access subscribers only. Log in to your account or sign up below. Upgrade Now See Benefits Already have an account? Log in here. Before you consider Walmart, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Walmart wasn't on the list. While Walmart currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
A.I. Has a Measurement Problem 2024-04-15 15:14:09+00:00 - There’s a problem with leading artificial intelligence tools like ChatGPT, Gemini and Claude: We don’t really know how smart they are. That’s because, unlike companies that make cars or drugs or baby formula, A.I. companies aren’t required to submit their products for testing before releasing them to the public. There’s no Good Housekeeping seal for A.I. chatbots, and few independent groups are putting these tools through their paces in a rigorous way. Instead, we’re left to rely on the claims of A.I. companies, which often use vague, fuzzy phrases like “improved capabilities” to describe how their models differ from one version to the next. And while there are some standard tests given to A.I. models to assess how good they are at, say, math or logical reasoning, many experts have doubts about how reliable those tests really are. This might sound like a petty gripe. But I’ve become convinced that a lack of good measurement and evaluation for A.I. systems is a major problem.
German chancellor urges Chinese industry bosses to play fair in EU market 2024-04-15 15:12:00+00:00 - The chancellor of Germany has urged industry bosses in China to play fair by not overproducing cheap goods or infringing copyright rules. Speaking on a three-day visit to China, where he is travelling with leading business representatives and three government ministers, Olaf Scholz said he, in turn, would encourage the European Union not to be driven by self-interested protectionism, in which governments restrict international trade to help domestic companies. Scholz was seen to be treading a careful path, driven by European concerns that Chinese goods are being dumped on the continent’s large market in ever-increasing amounts. Dumping involves selling products at artificially low prices in international markets to the extent that local businesses cannot compete. With a focus on the automotive industry, Scholz said he expected Chinese cars to be widely available in Europe but argued that European cars should have equal access to the Chinese market. “The only thing that always needs to be clear is that the competition is fair,” he said during a discussion with students at Tongji University in Shanghai. “That means there can be no dumping, no overproduction and that intellectual property rights are not violated,” he said. He also appealed to Chinese authorities not to hamper companies trying to set up manufacturing capabilities with burdensome bureaucratic processes, despite this often being a complaint of foreign companies wanting to set up shop in Germany. “We of course want our companies to not have to face any restrictions, but equally, we will behave in a similar way,” he said. His visit was the first since his government launched a “de-risking” strategy last July, aimed at ensuring Germany does not become too dependent on China’s economy, the world’s second largest. The move was in part a reaction to the experience during the pandemic, when Germany – just like the rest of Europe – was shown to be heavily dependent on China for medical resources, including masks, PPE, and coronavirus test equipment. It also comes at a time when the German economy is more dependent upon China for manufactured goods than ever before. Under scrutiny in particular are solar panels and wind turbines, the markets for which in Europe have become increasingly flooded with Chinese products, often stifling domestic production and causing companies to go bankrupt. Chinese cars are the latest product to be seen as a threat to European producers. In addition, e-commerce companies such as Temu and the fast-fashion brand Shein are increasingly making their mark in Europe and beyond with rock-bottom-priced goods produced in China, often, according to ongoing investigations, by forced labourers, including imprisoned Uyghur people. Scholz is under pressure to talk about the ethical, environmental and economic consequences of this, along with other human rights issues, with his Chinese counterparts, when he meets President Xi Jinping on Tuesday. Also on the agenda is China’s increasing support for Russia in particular over its delivery of military-related supplies to Moscow, as well as concern over China’s conflict with Taiwan. He was cautious though, when pushed to go further and back calls by the EU Commission president, Ursula von der Leyen, for the bloc to introduce measures preventing Chinese products from flooding the market. Scholz said arguing for fair competition “must be done from a position of self-confident competitiveness and not from protectionist motives”. He recalled how the entry of Japanese and South Korean cars on to the European market had been a cause for concern, just as Chinese cars were now. “But that’s rubbish. Now there are Japanese cars in Germany and German cars in Japan,” he said. “And the same applies to China and Germany.” Von der Leyen, in a recent interview with German media, talked about a “dramatic overproduction of electric vehicles in China, coupled with massive state subsidies”. The US, Mexico, Brazil and Turkey have recently taken measures to protect their markets against the import of Chinese cars.
Trump Media shares plunge after company files to issue additional DJT stock 2024-04-15 15:05:00+00:00 - Shares of Trump Media plunged more than 13% on Monday after the company filed to issue millions of additional shares of stock. Trump Media’s dramatic slide came as Donald Trump headed to a Manhattan court to begin jury selection for his criminal trial on hush money-related charges. Trump is the majority stakeholder in the company. Trump Media, which created the Truth Social app and trades under the stock ticker DJT on the Nasdaq, fell nearly 20% last week. The company’s intent to issue more common stock was made public Monday morning in a “preliminary prospectus” filed to the Securities and Exchange Commission. The shares cannot be issued until a registration statement with the SEC goes into effect. The filing describes a plan to offer more than 21.4 million shares of common stock, issuable “upon the exercise of warrants,” the filing shows. Stock warrants give their holder the ability to buy shares at a predetermined price within a certain time frame. Trump Media predicted in the filing that it will receive “up to an aggregate of approximately $247.1 million from the exercise of the Warrants.” The closing price of Trump Media’s warrants was $13.69 as of Friday, according to the filing. The warrants are being traded on the Nasdaq under the ticker “DJTWW.” That ticker was down more than 8% before the market opened Monday. The company also seeks to offer the resale of up to 146.1 million shares of stock from “selling securityholders,” 114.8 million of which are held by Trump himself. Trump owns 78.8 million shares of the company, and stands to obtain 36 million “earnout shares” if the stock stays above a certain price for enough trading days. Trump’s current stake in the company was worth more than $2.2 billion at Monday morning’s share price. Trump is not allowed to sell his shares until a monthslong lockup period expires. Trump, whose social media following was massively diminished after he switched to Truth Social following his suspension from Twitter and Facebook in 2021, has tried to encourage his followers to flock to the fledgling app. But it is unclear if they have heeded Trump’s call. The company has not publicly released key performance indicators, including the number of active Truth Social users.
Apple loses top phonemaker spot to Samsung as iPhone shipments drop, research company says 2024-04-15 14:29:00+00:00 - Apple’s smartphone shipments dropped about 10% in the first quarter of 2024, hurt by intensifying competition by Android smartphone makers aiming for the top spot, data from research firm IDC showed on Sunday. Global smartphone shipments increased 7.8% to 289.4 million units during January-March, with Samsung, at 20.8% market share, clinching the top phonemaker spot from Apple. The iPhone-maker’s steep sales decline comes after its strong performance in the December quarter when it overtook Samsung as the world’s No.1 phone maker. It’s back to the second spot, with 17.3% market share, as Chinese brands such as Huawei gain market share. Xiaomi, one of China’s top smartphone makers, occupied the third position with a market share of 14.1% during the first quarter. South Korea’s Samsung, which launched its latest flagship smartphone lineup — Galaxy S24 series — in the beginning of the year, shipped more than 60 million phones during the period. Global sales of Galaxy S24 smartphones jumped 8%, compared to last year’s Galaxy S23 series during their first three weeks of availability, data provider Counterpoint previously said. In the first quarter, Apple shipped 50.1 million iPhones, down from 55.4 million units it shipped same period last year, according to IDC. Apple’s smartphone shipments in China shrank 2.1% in the final quarter of 2023 from a year earlier. The drop underscores the challenges facing the U.S. firm in its third biggest market, as some Chinese companies and government agencies limit employees’ use of Apple devices, a measure that mirrors U.S. government restrictions on Chinese apps on security grounds. The Cupertino, California-based company in June will hold its Worldwide Developers Conference (WWDC), where it will highlight updates to the software powering iPhones, iPads, and other Apple devices. Investors are closely watching for updates on artificial intelligence development at Apple, which has so far spoken little about incorporating the AI technology into its devices. The company earlier this year lost the crown as the world’s most valuable company to Microsoft.
3 Energy Plays for Cash Flow: Buy 1 or Buy Them All 2024-04-15 14:16:00+00:00 - Key Points Kinder Morgan is a hub in the natural gas market and well-positioned for long-term growth and capital returns. Occidental Petroleum is a Buffett pick moving higher, supported by debt reduction and capital returns. Atlas Energy Solutions is an ancillary business with robust cash flow and a substantial dividend. 5 stocks we like better than Occidental Petroleum Cash and capital returns are flowing in the energy sector. Volatility in oil prices aside, oil prices range above long-term averages, driving revenue, margin, and cash flow for energy companies. Uncertain outlook or not, the outlook for energy consumption supports the idea of higher prices. The world’s population is growing, modernizing, and industrializing, and the amount of oil left in the ground is finite. Worldometer estimates the amount of oil reserves to last less than 50 years and falling, leading to more than just higher oil prices. Today’s takeaway is that energy companies are investable again. They pay healthy dividends, most repurchase shares, and the long-term share price gains forecast is robust. Get Occidental Petroleum alerts: Sign Up Kinder Morgan Invests in the Future of Energy: Natural Gas Kinder Morgan NYSE: KMI owns and operates a large and growing network of natural gas pipelines and storage facilities, which puts it in a good position for today’s markets. Natural gas demand growth is sluggish but positive and supported by the shift to greener energy. Natural gas isn’t green energy, but it is the greenest carbon-based energy and is central to decarbonization efforts globally. Today’s headwind is natural gas prices, which are low due to ample supply. The offsetting factor is Kinder Morgan’s position as a middleman, which provides a more stable revenue stream tied to fees for volume and storage. Kinder Morgan had a tough time in 2023 due to the deleveraging of natural gas prices but could sustain infrastructure growth and cash flow to pay the dividend. This year, the company forecasts a return to growth supported by price stabilization, expansion efforts, and demand growth. The dividend yields more than 6%, with the stock trading near the middle of a multi-year range. The payout ratio relative to earnings is high but irrelevant because of the MLP status. In this case, the distributable cash flow matters and the payout ratio relative to that figure is a sustainable 55%. Analysts sentiment has been steady for over twelve months. They see this stock trading above $20, outside its trading range, and 10% above current action. Occidental Petroleum is a Buffett-Buy That is Paying Off Occidental Petroleum’s NYSE: OXY share price rebounded from the bottom of its trading range in late December 2023. The rebound was sparked by another purchase by Berkshire Hathaway that was compounded by a solid report that included ample cash flow and improved shareholder value. Occidental isn’t paying a substantial dividend now; instead, it uses its cash flow to pay down debt, reposition the balance sheet in favor of shareholders, and free up cash flow. Cash flow aims to grow the business, positioning for long-term sustainability and shareholder returns. The dividend is healthy at less than 20% of earnings. The yield is about 1.25%, with shares near a fresh high, and the distribution can be expected to grow. Since reinstating the payment, the company made two regular increases, which were large, double-digit increases; another significant increase is likely at the end of the current fiscal year. Analysts have lifted the consensus sentiment for this stock to Moderate Buy from Hold and the price target back to $72. That implies a 5% upside, but the new high target of $90 is among the freshest revisions. It implies a 33% upside. Atlas Energy Solutions an Emergent High-Quality Dividend Atlas Energy Solutions NYSE: AESI quietly IPOd last year and has seen its share price advance 50% off the post-IPO low. The gains are driven by its position in the Texas oilfields and cash flow, allowing for a substantial dividend. Its position is that of a proppant provider. Proppant is sand used in fracking, and they use plenty of it. The dividend is worth 2.75%, with shares near record highs, and it is a safe payment. The payout ratio is less than 25%, and earnings are expected to grow more than 50% on a 15% increase in revenue in F2025. Six analysts rate this stock as a Buy and see it trading at $25. $25 is only 6% above the current action but a new all-time high that could lead to a sustained rally in this stock. It trades at only 10X this year and 6X next year’s earnings, which is a deep value. Before you consider Occidental Petroleum, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Occidental Petroleum wasn't on the list. While Occidental Petroleum currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Tesla will lay off more than 10% of global workforce: Read the Elon Musk memo 2024-04-15 13:48:00+00:00 - Tesla will lay off more than 10% of its global workforce, according to a memo sent to employees by CEO Elon Musk. The company’s shares were down 3% on Monday morning. “As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk said in the memo obtained by CNBC. “As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally,” the memo said. The memo was first reported by Electrek. Tesla had 140,473 employees as of December 2023. Tesla shares have taken a bruising in recent months, falling 31% year to date. While electric vehicle sales are still gaining popularity worldwide, their sales growth rate has slowed especially for Tesla. The company now faces more competition than ever. To end 2023, China’s BYD temporarily dethroned Tesla as the world’s top EV maker. Chinese smartphone company Xiaomi in March said it would sell its first electric car for far less than Tesla’s Model 3. Musk has previously recognized that China, home to a large Tesla factory, may also house the company’s strongest competition. “There’s a lot of people who are out there who think that the top 10 car companies are going to be Tesla followed by nine Chinese car companies. I think they might not be wrong,” Musk said in November. Some would-be Tesla customers are now skipping the brand owing to Musk’s incendiary rhetoric on the year to 386,810 in the first quarter, with output down 1.7% from a year earlier and 12.5% sequentially despite discounts and incentives offered to customers throughout the quarter. Earlier this month, Tesla reported its first annual decline in vehicle deliveries since 2020, when the Covid-19 pandemic disrupted production extraneous of demand — first-quarter deliveries fell by 8.5% on the year to 386,810 in the first quarter, with output down 1.7% from a year earlier and 12.5% sequentially despite discounts and incentives offered to customers throughout the quarter. More recently, Tesla trimmed the subscription price of its premium driver assistance system, marketed as its Full Self-Driving or FSD option, for U.S. customers. The move was sharply at odds with Musk’s previous pledges that the FSD fee would only bulk up as Tesla added features and functionality to the system. Despite the brand name, the system does not make Tesla vehicles self-driving and requires a driver attentive to the road, ready to steer or brake at any time. But the squeeze on the company’s operating margin — which came in at 8.2% in the fourth quarter, down from 16% a year earlier — remains, and Tesla has warned investors to brace that vehicle volume growth this year “may be notably lower” than the rate logged in 2023, saying it is “currently between two major growth waves.” Logistical challenges exacerbated Tesla’s problems this year. The company’s component supply was a casualty of disruptions caused by Yemeni Houthi maritime attacks in the Red Sea, while the automaker’s gigafactory near Berlin was forced to briefly suspend production due to suspected arson at a nearby electricity substation. Tesla is scheduled to report first-quarter financial results on April 23. Here’s the full memo from Musk (transcribed by CNBC): Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity. As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle. I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye. For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artifiical intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there. Thanks, Elon
When Will the Next Bull Market Be? 2024-04-15 13:25:00+00:00 - Key Points A bull market is an optimistic financial period characterized by rising prices, investor confidence and overall economic growth. Predicting the onset of bull markets involves monitoring economic indicators, understanding investor psychology and assessing global events' impacts. While technology, specifically AI, is powerful, it is not infallible and requires human oversight. Many investors find themselves asking, "When will the next bull market be?" Economic fluctuations can be dizzying, but understanding the science behind bull markets can help demystify them and help you make informed decisions. So, if you are seeking clarity amid financial uncertainty, keep reading as we delve into the heart of bull markets, shedding light on what triggers them. By the end of this article, you'll understand the key economic indicators and global events that experts use to assess when the next bull market might charge. Get stock market news alerts: Sign Up Understanding Bull Markets A bull market is a period in the financial sector when prices are rising or expected to rise, investor confidence is strong, and economic optimism prevails. It typically occurs when a particular sector or the entire economy experiences rapid growth or recovery. A bull market is the opposite of a bear market, where asset prices are in a sustained decline, pessimism is widespread, and investor sentiment is negative. However, the length and intensity of a bull market can vary. From the tech-driven bull market of the late '90s to the post-Great Recession recovery, each one has unique characteristics defining its rise and fall. But, in general, a bull market is often characterized by improved investor confidence, decreased unemployment rates and steady GDP growth. These periods usually come with a rise in various asset classes such as stocks, currencies, real estate and commodities. Historically, bull markets have lasted from several months to several years, with the longest one lasting over a decade. So, let's discuss how you can identify when a bull market is on the horizon. Signs of an Approaching Bull Market Bull markets can be challenging to predict, but monitoring the following data will provide insights into the overall health of the economy and can help you identify underlying trends that affect market movements. Stock Market Trends: Consistent upward movements in stock indices may suggest an impending bull market A bull market is typically characterized by a 20% increase or more from recent lows. Consistent upward movements in stock indices may suggest an impending bull market A bull market is typically characterized by a 20% increase or more from recent lows. Strong Industrial Production: An increase in industrial production generally means that demand is high, businesses are producing more, and the economy is thriving. This often correlates with a rise in stock prices and the onset of a bull market. An increase in industrial production generally means that demand is high, businesses are producing more, and the economy is thriving. This often correlates with a rise in stock prices and the onset of a bull market. Trade Balance: A favorable trade balance, where exports exceed imports, can also trigger a surge in the market as it means that domestic products are in demand worldwide and the economy is robust. A favorable trade balance, where exports exceed imports, can also trigger a surge in the market as it means that domestic products are in demand worldwide and the economy is robust. Retail Sales: A surge in retail sales often suggests that consumers are confident about their income and are willing to spend. Higher consumer spending drives economic growth, which can lead to a bull market. A surge in retail sales often suggests that consumers are confident about their income and are willing to spend. Higher consumer spending drives economic growth, which can lead to a bull market. Housing Market: Rising home prices and increased home sales may indicate that people are confident in the economy and willing to make major purchases. Rising home prices and increased home sales may indicate that people are confident in the economy and willing to make major purchases. Central Bank Policies: Whenever the Whenever the Fed lowers interest rates or injects liquidity into the market, it can boost investment and spending, setting the stage for a bull market. Political Stability: A stable political environment typically improves investor confidence and suggests consistent economic policies that are conducive to business growth, both of which can hint at the onset of a bull market. Economic Indicators to Watch There are also several economic indicators that experts monitor to forecast the onset of a bull market, such as: Inflation Rates: Low inflation rates can often suggest an upcoming bull market. This indicates a healthy economy where the purchasing power of consumers isn't eroding, and businesses can forecast costs and revenues with more accuracy. Low inflation rates can often suggest an upcoming bull market. This indicates a healthy economy where the purchasing power of consumers isn't eroding, and businesses can forecast costs and revenues with more accuracy. Interest Rates: Low borrowing costs or declining interest rates are typically good for investments as they make it cheaper for businesses to borrow for expansion or for consumers to spend on credit. This increased spending and investment often fuel economic growth, leading to a bull market. Low borrowing costs or declining interest rates are typically good for investments as they make it cheaper for businesses to borrow for expansion or for consumers to spend on credit. This increased spending and investment often fuel economic growth, leading to a bull market. GDP Growth: A consistently increasing Gross Domestic Product (GDP) suggests that the economy is growing, which can induce a bull market. Economists consider GDP growth a lagging indicator since it confirms market trends after they occur, but it can still provide insight into the health of the economy. A consistently increasing Gross Domestic Product (GDP) suggests that the economy is growing, which can induce a bull market. Economists consider GDP growth a lagging indicator since it confirms market trends after they occur, but it can still provide insight into the health of the economy. Unemployment Rates: A declining unemployment rate signifies that more people are getting jobs and thus have more disposable income. This increased spending boosts economic growth and can trigger a bull market. A declining unemployment rate signifies that more people are getting jobs and thus have more disposable income. This increased spending boosts economic growth and can trigger a bull market. Consumer Sentiment: This measures how optimistic consumers are about the economy. Positive consumer sentiment may mean the beginning of a bull market, as consumers are more likely to spend and invest when they feel confident about their financial future. This measures how optimistic consumers are about the economy. Positive consumer sentiment may mean the beginning of a bull market, as consumers are more likely to spend and invest when they feel confident about their financial future. Earnings Reports: Healthy corporate earnings reports can signal the onset of a bull market. When companies report increasing profits, it means businesses are thriving, which can lead to job creation, increased consumer spending and overall economic growth. Healthy corporate earnings reports can signal the onset of a bull market. When companies report increasing profits, it means businesses are thriving, which can lead to job creation, increased consumer spending and overall economic growth. Currency Strength: A strong domestic currency suggests a robust economy. Analyst Predictions and Market Sentiment Because they are influenced by a variety of factors, the strength and timing of bull markets are not governed by rigid rules. Predictions about bull markets are formed through a combination of quantitative models and qualitative assessments. Analysts might use econometric models to predict future market conditions based on current economic data or rely on technical analysis to interpret market signals and trends. Understanding investor optimism and the broader psychology behind market movements is also important as they can significantly influence market trends. Sentiment analysis, which gauges the mood of the market based on news flows, social media trends and investment patterns, is a critical tool used by analysts. Positive sentiment can often precede bull markets as it leads to increased buying activity and rising prices. Market sentiment plays a pivotal role in financial markets, significantly influencing the timing and strength of bull markets. Investor optimism can drive market rallies, while pessimism can lead to sell-offs. Analysts assess the market's mood through various sentiment indicators, such as the Bull/Bear Ratio, which measures the bullish to bearish sentiment ratio. Behavioral finance studies how emotions and psychology affect investors' decisions, impacting market movements. While these methods provide valuable insights, they are not infallible. The reliability of predictions can vary due to the complex interplay of global events, economic shifts and unanticipated factors affecting the markets. Therefore, while expert analysis can guide investors, it should always be complemented by a comprehensive understanding of market risks and personal investment goals. Global Events and Shaping the Markets Beyond the realm of hard data and calculations, the dynamics of global events also play a role in shaping markets. Geopolitical tensions, trade agreements and pandemics are prime examples of catalysts that can drive markets profoundly and sometimes even accelerate bull markets. Consider the impact of geopolitical tensions. Global wars or political unrest can initially cause market volatility and decline. However, they can also lead to bull markets. For instance, post-World War II, the U.S. stock market entered a long bull market fueled by economic expansion and industrial growth, and The Cold War era saw technology stocks soar as countries entered the space race. Another example is how the trade war between the United States and China initially caused turbulence but eventually led to a boom in certain sectors as businesses adapted and investors seized opportunities created by shifting supply chains. When the Phase One trade deal was signed in 2020, it marked a significant de-escalation between the two countries and led to significant market rallies, reflecting optimism about reduced trade tensions and better economic prospects. In early 2020, the market experienced a sharp crash due to the COVID-19 pandemic, which caused widespread uncertainty and economic shutdowns. However, the vaccine rollout and swift monetary policy response contributed to a surprisingly quick recovery and a new bull market driven by tech stocks and renewed investor confidence. Using Technology for Bull Market Predictions As data analytics and artificial intelligence (AI) become increasingly more powerful, technology has revolutionized the ability to predict market trends, particularly the onset of bull markets. Financial analysts use sophisticated algorithms and machine learning models to sift through vast amounts of data. They analyze patterns, incorporate real-time data, evaluate bull market indicators and run simulations to predict potential outcomes. These technologies offer a more comprehensive and nuanced view of the market, allowing analysts to make predictions with more accuracy. But it has also led to a surge in algorithmic trading, where decisions are made automatically based on predefined criteria. As these models learn from data, they constantly refine and adapt their predictions as the market changes, often identifying opportunities and risks that may elude human analysts. In a world where reliance on technology grows more daily, it's crucial to remember that utilizing trading technology is only as effective as the people building and managing it. The design of algorithms and the interpretation of their outputs require expert knowledge and critical human oversight. Biases in data or model errors can lead to inaccurate predictions, which could lead to substantial financial consequences. Therefore, while AI and analytics are powerful tools, they complement rather than replace a live person's nuanced knowledge and involvement. Determining When the Next Bull Market Is The onset of bull markets is influenced by a variety of factors: spending and consumer behavior, political stability and pro-business policies, currency strength and the overall market sentiment. Global events like geopolitical tensions, trade agreements, and pandemics have historically triggered drastic shifts and sparked the onset of a bull market. And when considering the crucial role technology plays in predicting the onset of a bull market, we need to remember its effectiveness still depends on the human element. Predicting bull markets involves both rigorous analysis and educated guesswork. The key is to stay informed, understand the influencing factors and rely on trusted experts to help you make sound decisions. Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list. They believe these five stocks are the five best companies for investors to buy now... See The Five Stocks Here
Kraft Heinz Stock Comprehensive Analysis for 2024 2024-04-15 12:00:00+00:00 - Key Points Kraft Heinz is a deep-value and high-yield for investors. Analysts are raising their targets and lifting sentiment. 2024 will be a pivotal year leading to accelerating growth and wider margins. 5 stocks we like better than Kraft Heinz Upgrade Now This premium article is available to MarketBeat All Access subscribers only. Log in to your account or sign up below. Upgrade Now See Benefits Already have an account? Log in here. Before you consider Kraft Heinz, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Kraft Heinz wasn't on the list. While Kraft Heinz currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
NVIDIA Stock Analysis: Insights and Predictions for Investors 2024-04-15 11:57:00+00:00 - Key Points NVIDIA boasts a massive market capitalization, reflecting its dominant position within the tech industry. The company's recent earnings report demonstrates impressive revenue growth, high profitability, and strong EPS figures. NVIDIA's commitment to innovation and growth in AI and data centers suggests potential for continued success. 5 stocks we like better than NVIDIA Upgrade Now This premium article is available to MarketBeat All Access subscribers only. Log in to your account or sign up below. Upgrade Now See Benefits Already have an account? Log in here. Before you consider NVIDIA, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NVIDIA wasn't on the list. While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
5 Small-Cap Energy Stocks Surged in Price and Volume on Friday 2024-04-15 11:50:00+00:00 - Key Points WTI Crude Oil surges over 20% YTD, driven by Middle East tensions, the war between Ukraine and Russia, and economic uncertainties. On Friday, several small-cap energy stocks experienced significant price and volume surges. Investors should approach small-cap energy stocks cautiously, considering their speculative nature and historical volatility despite short-term gains. 5 stocks we like better than Indonesia Energy WTI Crude Oil has continued its rise as tensions escalate in the Middle East due to ongoing developments and significant uncertainties. Year-to-date, Crude Oil futures have risen over 20%, climbing from almost $70 to just over $85 at Friday's close. While the overall market, namely the SPDR S&P 500 ETF Trust NYSEARCA: SPY, has pulled back almost 3% from its record high and 52-week high near $524, commodities have surged higher amidst economic and geopolitical concerns. Gold and silver have surged, with the price of gold reaching new all-time highs. Get Indonesia Energy alerts: Sign Up As oil prices continue to rise and consolidate near recent highs, and the situation continues to develop in the Middle East, several small-cap energy sector stocks experienced significant price and volume surges on Friday. Could these stocks be under-the-radar gems set to benefit from higher oil prices, or are they merely benefitting from hype and be avoided as investment altogether? Let's take a closer look. 5 Small Cap Energy Stocks Catching a Bid 1. Indonesia Energy Corp. Indonesia Energy NYSE: INDO is a micro-cap oil and gas exploration and production company. The stock has a $50 million market capitalization and an average volume of 140,393 shares. That light volume and small float make the stock extremely susceptible to heightened volatility. The stock experienced a notable surge in volume and price on Friday, with almost 60 million shares trading and surging just over 80%. Despite the recent surge, its relative strength index (RSI) is already in overbought territory at 80.38, suggesting the stock is overvalued. The stock also has limited institutional ownership, just 0.51%, and a history of extreme declines following rapid price surges. 2. Houston American Energy Corp. Houston American Energy NYSE: HUSA is an independent oil and gas company that explores, develops, and produces natural gas, crude oil, and condensate. HUAS has a $23 million market capitalization and an average volume of only 338,429 shares. Along with INDO, HUSA surged 35% on Friday on elevated volume. However, over a longer timeframe, the stock has a history of trending lower and failing to maintain a base higher. HUSA has a 12.18% institutional ownership and limited free float of just 9.2 million shares, making the stock an extremely speculative and heightened risk option. 3. Trio Petroleum Corp. Trio Petroleum NYSE: TPET has experienced a remarkable surge in both volume and price lately, with the stock soaring over 300% on the month. Based in the United States, TPET operates as an oil and gas exploration and development company. The company has a micro-cap of $19 million and just 36 million shares outstanding, making the small-cap energy name largely speculative. Despite the recent surge, the stock remains in a higher timeframe downtrend, down significantly from its 52-week high. 4. Imperial Petroleum Inc. Imperial Petroleum NASDAQ: IMPP has a market capitalization of $61 million and operates as an international seaborne transportation service to oil producers, refineries and commodities traders. The stock has a history of surging higher with other small-cap energy stocks when a broader theme has been present. Despite experiencing an uptick in volume on Friday, IMPP failed to match the performance of the names mentioned above and closed the day down 4%. However, unlike the above stocks, IMPP holds significant institutional ownership, with a 94.44% ownership percentage. 5. CN Energy Group Inc. CN Energy Group NASDAQ: CNEY also experienced an uptick in volume on Friday, with the stock trading over 3 million shares compared to its average volume of just 67,751. However, the stock closed the day only up around 12%. The company, which primarily manufactures and supplies wood-based activated carbon in China, has only 2.3 million shares outstanding and a market capitalization of only $2.7 million, making it an extremely speculative and risky option. Should You Invest in Small Cap Energy Stocks? Although several small-cap energy names have caught a bid in the short term due to rising crude oil prices and the ongoing situation in the Middle East, investors should understand these companies' risky nature and profile, as well as their history of performance and extreme volatility before making any investment decisions. Before you consider Indonesia Energy, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Indonesia Energy wasn't on the list. While Indonesia Energy currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
QUOTES-Likely market reaction after Iran attacks Israel 2024-04-15 06:04:00+00:00 - (Adds quote) April 14 (Reuters) - Iran warned Israel and the United States on Sunday of a "much larger response" if there is any retaliation for its mass drone and missile attack on Israeli territory on Saturday, as Israel said "the campaign is not over yet". Iran launched explosive drones and missiles at Israel in retaliation for a suspected Israeli attack on its consulate in Syria on April 1, a first direct attack on Israeli territory that has stoked fears of a wider regional conflict. Below are analysts' quotes on how financial markets are likely to react to developments. JANE FOLEY, HEAD OF FX STRATEGY, RABOBANK, LONDON "Outside of gold and oil prices, asset prices have been pre-disposed to play down geopolitical news in recent months. This suggests that Israel’s success in repelling Iranian missiles will be taken as a reason to reduce risk aversion at the start of the trading week." "That said, there has been a clear increase in geopolitical risks connected with the Middle East meaning plenty of scope for volatility in the coming weeks and months." MICHAEL PURVES, HEAD OF TALLBACKEN CAPITAL ADVISORS “If oil keeps going higher from here, it actually makes U.S. bond fundamentals a bit worse by keeping inflation higher for longer and making the Fed’s propensity to cut rates even less.” “An offsetting factor is that whatever happens, there’s going to be nervousness and that’s going to keep bonds from selling off too much more.” “We’ve had a lot priced into the U.S. equity market already. On the one-hand, there was a risk-on condition going into the year and risks will ultimately get bought. “But ultimately, why not book some profits when the newsflow is so uncertain?” SAMY CHAAR, CHIEF ECONOMIST LOMBARD ODIER, GENEVA “The newsflow is about Iran and Israel, so that is going to be most of (what people will be discussing Monday), but we are still in an environment where we haven’t yet digested the U.S. inflation news and what that means for the Fed, and will they be able to cut rates. Story continues “We came into this weekend of geopolitical stress in the aftermath of the CPI report. It is a fragile market environment in the short term, but after a fantastic period, so it is only fair that there’s a bit of vulnerability." TINA FORDHAM, FOUNDER AND GEOPOLITICAL STRATEGIST, FORDHAM GLOBAL FORESIGHT, LONDON "The scale of Iran's attack on Israel and the launch from inside Iran as well as via proxies is significant. In terms of the market reaction, we started to see commodity prices moving higher on Friday. "Over the next few days, we are waiting for Israel's response -- this is the biggest attack on Israel in decades. The risk of a regional war has increased meaningfully. The question becomes does Israel seek to broaden the conflict? That is the wild card. "I think oil will open higher. Also signs that Iran wants to enact a soft blockade of the Strait of Hormuz is a concern, as this means there are potential both supply chain disruptions and higher oil prices. We have entered a dangerous period ahead of the U.S. elections." NICK FERRES, CHIEF INVESTMENT OFFICER, VANTAGE POINT ASSET MANAGEMENT, SINGAPORE "I am not going to be an “armchair general” and pretend that I have an edge on how the escalation will play out. From our perch, the more important news for markets last week was the trend re-acceleration in consumer price inflation and the implication for the path of future short term interest rates. "Moreover, disappointment in the detail of the results from JPM and Wells on Friday. In that context, as we have noted for some time, risk compensation in equities is poor in outright terms and relative to Treasuries. We had already reduced our net long equity exposure ahead of this over the past two weeks.” BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MILWAUKEE, WISCONSIN "The key is whether Iran will consider this retaliation a measured and final response, unless Israel decides to escalate. In 2020, Iran considered its response to the U.S.’s killing of General Soleimani a measured and equitable response. If it stays tit-for-tat instead of escalating, then we will likely see a sigh of relief across equities even if oil prices, gold, the dollar and bonds all embed a risk premium to reflect the conflict." (Reporting by Tom Westbrook, Alun John, Dhara Ranasinghe and Megan Davies; Editing by Susan Fenton)
Billionaire Dan Loeb Sold Amazon and Microsoft but Bought This "Magnificent Seven" Stock 2024-04-15 02:50:00+00:00 - Dan Loeb is known as a mover and a shaker in the investing world. He founded the New York-based hedge fund Third Point in 1995. It now has roughly $11.5 billion in assets under management. Loeb's net worth stands at $3.3 billion, according to Forbes. The activist investor did some moving and shaking in his hedge fund's portfolio in the fourth quarter of 2023. Loeb reduced his stakes in Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT). However, the billionaire investor bought another "Magnificent Seven" stock. Taking profits Loeb sold 210,000 shares of Microsoft in Q4. While this reduced Third Point's stake in the tech giant by over 9.4%, Microsoft remains the second-largest holding in the hedge fund's portfolio. The billionaire investor has owned Microsoft off and on since 2006. He most recently initiated a new position in the fourth quarter of 2022, just in time to ride the generative AI wave started by OpenAI's launch of ChatGPT. Microsoft was a major beneficiary of this wave thanks to its partnership with OpenAI. Third Point first owned Amazon in late 2019 and held the stock through the second quarter of 2022. Loeb didn't stay on the sidelines long with the e-commerce and cloud services leader. He initiated a new position in Amazon in the second quarter of 2023. Although he reduced Third Point's stake in the stock by nearly 10.3% in Q4 2023, Amazon still ranks as the hedge fund's third-largest holding. Why did Loeb trim his positions in Amazon and Microsoft? The most likely reason is he wanted to take some profits. Both stocks delivered impressive gains last year. A bigger bet on Meta Although Loeb cooled somewhat on two Magnificent Seven stocks, he placed a bigger bet on Meta Platforms (NASDAQ: META). The hedge fund manager increased Third Point's stake in Meta by nearly 5.5% in Q4 2023. The $410.6 million value of the position made Meta the sixth-largest holding for Third Point at the end of 2023. Story continues Loeb's history with Meta goes back to the second quarter of 2016 when he first bought the stock. He owned shares of the social media company for a little over two years before exiting the position. The activist investor again bought Meta stock in the second quarter of 2020 and maintained a position through 2021 Q4. Loeb went back to the well in the third quarter of 2023 with another new stake in Meta. Like Amazon and Microsoft, Meta enjoyed a generative AI tailwind last year. However, I suspect that wasn't Loeb's primary reason for adding to his position in the stock. Instead, my hunch is that Loeb liked Meta's moves to increase its profitability. Those efforts are paying off. Meta's earnings more than tripled year over year in 2023 Q4. Full-year profits jumped 69%. Did Loeb make the right moves? In one sense, Loeb went one for three with these Magnificent Seven transactions. Loeb's decision to increase Third Point's stake in Meta is already paying off. Meta stock has skyrocketed over 45% since the end of 2023. However, Amazon and Microsoft are also up by double-digit percentages year to date. Loeb could have made more money by holding his shares in both companies. However, trimming the positions in Amazon and Microsoft could still have been the right call for Loeb. Both stocks make up significant percentages of Third Point's portfolio. You can't blame any investor for wanting to ensure their holdings aren't overly concentrated in a handful of stocks. Over the long term, I think that Loeb -- and other investors -- will be well served by owning all three of these stocks. Amazon's and Microsoft's cloud businesses should continue to grow robustly thanks largely to AI. I like Meta's focus on business messaging and smart glasses with embedded AI assistants. I predict Amazon, Microsoft, and Meta will remain magnificent for a long time to come. Should you invest $1,000 in Meta Platforms right now? Before you buy stock in Meta Platforms, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Meta Platforms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*. See the 10 stocks *Stock Advisor returns as of April 8, 2024 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keith Speights has positions in Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Billionaire Dan Loeb Sold Amazon and Microsoft but Bought This "Magnificent Seven" Stock was originally published by The Motley Fool
Nvidia Is Not in a Bubble: You Should Be Buying This Artificial Intelligence (AI) Stock Hand Over Fist Before It Soars 2024-04-15 02:17:00+00:00 - Nvidia's (NASDAQ: NVDA) stunning artificial intelligence (AI) surge has left investors and analysts in awe. Shares of the chipmaker, which originally made its name as a manufacturer of graphics cards for personal computers (PCs), have jumped nearly sixfold since the beginning of 2023. However, this big jump has created doubts in certain corners of Wall Street that Nvidia stock may be in a bubble. From comparisons with the dot-com bubble of 1999 to a potential decline in AI-related demand for its chips, to its expensive valuation, there are multiple reasons why some believe that Nvidia is a bubble waiting to burst. But a closer look at the AI market in general and Nvidia in particular will illustrate why the company is far from being in a bubble. Why it isn't right to call Nvidia, and AI, a bubble A stock market bubble is a "significant run-up in stock prices without a corresponding increase in the value of the businesses they represent." In a bubble, the valuation of a company is based on speculation instead of the actual fundamentals. However, if you take a closer look at how AI is driving productivity gains across multiple industries, it will become easier to understand that the adoption of this technology should ideally continue gaining momentum. For instance, Meta Platforms says that the integration of AI tools has led to an impressive jump of 32% in returns delivered by ad campaigns. Meanwhile, customer service associates are reportedly witnessing a 14% increase in productivity thanks to AI. Factories, on the other hand, are expected to witness a 30% to 50% jump in productivity in the future by integrating AI, according to Bain & Company. Investment bank UBS believes that AI could drive productivity growth of 2.5% this year, ahead of the Federal Reserve's estimate of 1.5%. Over the next three years, UBS is expecting AI to deliver 17% of productivity gains. Nvidia's chips are going to play a central role in driving these productivity gains across different industries. That's because AI models need to be trained using millions and billions of parameters before they can be deployed in the real world. These models are known as large language models (LLMs), and they are being deployed across multiple verticals from manufacturing to automotive to cloud computing. Story continues Training these LLMs requires massive computing power, which Nvidia's GPUs provide. This explains why companies have been queuing up to get their hands on Nvidia's flagship H100 processor, giving the chipmaker a monopoly-like position in the AI chip market with an estimated share of over 90%. The H100 sells for $25,000 to $30,000, and Nvidia reportedly makes a 1,000% profit on these cards as per Raymond James. This explains the outstanding growth in Nvidia's revenue and earnings. NVDA Revenue (Quarterly) Chart So, the sharp jump in Nvidia's stock price is not based on speculation or euphoria, but it is backed by the eye-popping growth in the company's revenue and earnings. The good part is that Nvidia seems capable of sustaining its outstanding growth over the long run, and the U.S. government is likely to play a key role in helping it remain the dominant force in the AI chip market. A new grant by the U.S. government could help Nvidia maintain its AI supremacy Nvidia's H100 processor, based on the Hopper architecture, commands solid pricing power, and that's not surprising given that it has been the go-to chip for customers looking to train AI models. As it turns out, the demand for this chip was so strong at one point that customers had to wait for as long as a year to get their hands on it. Nvidia is now set to bring a new chip architecture to the market, known as Blackwell. The B200 Blackwell graphics card, which will be the successor to the H100 once it is launched later this year, is reportedly going to deliver performance gains of 7x to 30x over the H100. Nvidia also claims that it will reduce energy consumption by up to 25x. This performance gain isn't surprising as Blackwell is reportedly going to be manufactured using a custom 4-nanometer (nm) node from Taiwan Semiconductor Manufacturing, popularly known as TSMC. For comparison, the Hopper-based H100 was manufactured using a custom 5nm process from TSMC. By shrinking the size of the process node, TSMC has allowed Nvidia to pack 208 billion transistors as compared to 80 billion transistors in the H100. These transistors are now packed more closely together on the chip, and as a result they deliver more computing power and generate less heat, thereby reducing electricity consumption. And now, TSMC has received a $6.6 billion grant from the U.S. government, along with a $5 billion low-cost loan facility, to build a third chip plant in Arizona. TSMC is expected to use these funds to build a 2nm chip plant. Given that Nvidia is expected to be one of the customers for TSMC's 2nm chips, which are expected to go into mass production in 2025, it won't be surprising to see the graphics specialist coming out with even more powerful AI graphics cards. This explains why analysts are expecting Nvidia's data center revenue to multiply nicely in the coming years. What's more, Nvidia's earnings are expected to increase at an annual rate of 35% for the next five years, as per consensus estimates. Based on the company's fiscal 2024 earnings of $12.96 per share, its bottom line could jump to $58.11 per share after five years. Nvidia has a five-year average forward earnings multiple of 39, which is slightly higher than its forward earnings multiple of 36. But even if Nvidia trades at a discounted 27 times forward earnings after five years (in line with the Nasdaq-100's forward earnings multiple, as a proxy for tech stocks), its stock price could jump to $1,569. That would be an 85% increase from current levels. However, don't be surprised to see this AI stock delivering stronger gains. Nvidia can outpace Wall Street's earnings growth expectations and the market could continue rewarding it with a premium valuation as its product development moves should ideally help it remain the top player in the lucrative AI chip market. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $540,321!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of April 8, 2024 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. Nvidia Is Not in a Bubble: You Should Be Buying This Artificial Intelligence (AI) Stock Hand Over Fist Before It Soars was originally published by The Motley Fool
1 Stock That Turned $1,000 Into $30 Million 2024-04-15 01:00:00+00:00 - Investing in the stock market is one of the best ways that people can grow their wealth. Over many decades, the results that the S&P 500 can produce can be truly extraordinary. But there is one business in particular that has absolutely crushed it for investors, much more than the overall market. Since its initial public offering in 1981, this top retail stock has generated a total return of 3,000,000%, which would have turned a $1,000 investment into an astonishing $30 million today. That's an incredible gain. Continue reading to learn what company I'm talking about, its ascent over the years, and whether it's a smart investment to make today. Dominating the industry Investors should understand that it's not a technology or internet enterprise that has been such a huge winner. The business operates in the boring home-improvement sector. It's Home Depot (NYSE: HD), the industry heavyweight. This business hasn't changed much since the early days. Home Depot sells various supplies and tools to DIY and professional customers to help them handle renovation projects. Its current scale is truly remarkable. As of Feb. 20, there were 2,335 stores in total, which are on average over 100,000 square feet in size. What's even more impressive is that there is a Home Depot location within 10 miles of 90% of the U.S. population, demonstrating its wide reach. It wasn't always this way, though. About 30 years ago, the company only had 264 stores open. And in fiscal 1993, Home Depot registered $9 billion in revenue, a fraction of the roughly $153 billion it posted last fiscal year. The early executive team made the correct call that the best strategy was to rapidly expand the store footprint across the U.S. Over the decades that followed, Home Depot continued growing its sales base and profitability, which undoubtedly helped drive those outstanding shareholder returns. Home Depot has become such a financial success story that it is now able to return incredible amounts of capital back to investors. Making $21 billion in operating cash flow in fiscal 2023 allowed management to pay $8 billion in dividends and to repurchase $8 billion worth of outstanding stock. These capital allocation decisions are a usual occurrence these days. Story continues Should you buy Home Depot shares today? Buying stocks based on their historical performance isn't necessarily a sound strategy. Businesses mature, and their opportunities for growth start to diminish. I think this is definitely the case with Home Depot. To be fair, though, the stock has doubled in the past five years, including dividends, which is a solid gain. But shares are 16% off their all-time high. At its current size, it's reasonable to assume slower sales gains going forward. That's only a natural progression. The struggles have been real in recent times, too. Revenue fell last year, and it is projected to rise by just 1% in fiscal 2024. Demand from consumers to tackle bigger renovation projects just isn't as robust in the current uncertain macro backdrop, one characterized by higher interest rates and inflationary pressures. But I still believe Home Depot is a worthy investment candidate for those who can look out over the next five years. The business has competitive advantages working in its favor, namely its scale and brand recognition. Even smaller rival Lowe's can't match Home Depot in this area. It also operates in a massive industry, giving it the opportunity to steal share from smaller shops in the fragmented market. Investors who can look past near-term headwinds should consider buying shares. Home Depot's returns won't resemble the past, but they could provide a boost to your portfolio. Should you invest $1,000 in Home Depot right now? Before you buy stock in Home Depot, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Home Depot wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*. See the 10 stocks *Stock Advisor returns as of April 8, 2024 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool recommends Lowe's Companies. The Motley Fool has a disclosure policy. 1 Stock That Turned $1,000 Into $30 Million was originally published by The Motley Fool
Where Will Amazon Stock Be in 5 Years? 2024-04-15 01:00:00+00:00 - The last few months have been delightful for shareholders of Amazon (NASDAQ: AMZN). The stock is up 45% in the last six months and 22% year to date. With a market cap of $1.93 trillion, shares recently surpassed all-time highs set in 2021 as investors become increasingly optimistic about profitability in its e-commerce operations and resurgent growth in cloud computing due to the recent boom in artificial intelligence (AI). Amazon stock is now up 100% in the last five years. But what do the next five years look like? Can it repeat this stellar performance and double yet again? Let's take a look. E-commerce profit inflection, more growth ahead Even though the online store is now closing in on 30 years of operations, Amazon's e-commerce and global retail operations are still growing quickly. North American sales increased 12% in 2023 to $353 billion, with international operations growing 11% to $131.2 billion. Even though Amazon's platform is so dominant within the e-commerce sector, online shopping makes up only an estimated 15.6% of retail sales in the United States today. If that number can consistently rise over the next 10 to 20 years and Amazon can maintain its market share, there are still many years left to increase sales. The best part about this growth at Amazon's e-commerce division is where it is coming from. Third-party seller services were up by 19% year over year last quarter, and advertising services increased 26%. These high-margin segments can drive overall profit margins higher if they keep growing quickly. And that is exactly what we are seeing today. North American operating margins hit 6.1% in the fourth quarter of 2023, expanding for each of the last six quarters and reversing from negative 0.3% in the fourth quarter of 2022. In 2024, investors should expect e-commerce profit margins to continue climbing higher. A cloud computing rebound The most profitable segment at the company is its cloud computing division, Amazon Web Services (AWS). In 2023, it generated over $90 billion in sales and $24.6 billion in operating income, giving it a profit margin of 27.1%. Story continues However, back in late 2022 and early 2023, there were major concerns about a slowdown at AWS. Revenue growth fell from 28% in the 2022 third quarter to 12% in the 2023 second quarter as the company helped its software customers save on costs after the height of the pandemic. Today, these concerns have proved to be too pessimistic. AWS revenue accelerated in the fourth quarter to 13% growth, which has sent the stock higher. And 2024 and 2025 revenue looks promising with the rapid rise in AI services. These new products use a ton of cloud computing to operate, and AWS is looking to be one of the leaders in this space along with Alphabet's Google Cloud and Microsoft Azure. For example, the company has signed an extensive agreement in the space with fast-growing start-up Anthropic. Over the next decade and beyond, analysts expect cloud computing to continue its ascent, increasing at a double-digit annual rate. If Amazon can maintain its market share lead as it has in e-commerce, AWS should have many years of growth left ahead. AMZN Chart Where will Amazon stock be in five years? To estimate where the stock will be five years from now, we need to make some profit estimates for both e-commerce and AWS. Let's assume that e-commerce -- excluding the unprofitable international segment -- can grow sales by 12% annually over the next five years and expand profit margins to 10%. That would put 2028 North American retail profits at $62 billion. Doing the same for AWS, let's assume five years of 12% growth and profit margins that remain at 27%. In 2028, that would equate to $43 billion in AWS profits. Add both numbers together and you get $105 billion in earnings from Amazon in 2028, and that excludes any upside from other divisions such as international e-commerce or satellite internet services. Now comes the hardest part: What earnings multiple will Amazon trade at in 2028? An exact answer is impossible, but with a wide competitive advantage in both cloud computing and e-commerce, I think the stock deserves to trade at an above-market multiple of 30 times earnings, otherwise known as a price-to-earnings ratio (P/E). Multiply $105 billion by 30 and you get a market cap of $3.15 trillion, or a 66% boost from today's price. While not a doubling, it looks like Amazon still has upside for shareholders who remain for the long haul. Should you invest $1,000 in Amazon right now? Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $540,321!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of April 8, 2024 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Brett Schafer has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Where Will Amazon Stock Be in 5 Years? was originally published by The Motley Fool
Watch CNBC's Sunday livestream on the Iran-Israel conflict, jumping oil prices and market selloff 2024-04-14 22:02:00+00:00 - [The stream is slated to start at 6:00 p.m. ET. Please refresh the page if you do not see a player above at that time.] CNBC's Sunday evening special livestream will prepare investors for the big week ahead amid a stock market selloff, an escalating Iran-Israel conflict and spiking oil prices. Subscribe to CNBC on YouTube.