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20100.0 | 2022-07-25 00:00:00 UTC | CANADA STOCKS-TSX rises on energy rally ahead of earnings, Fed | AAPL | https://www.nasdaq.com/articles/canada-stocks-tsx-rises-on-energy-rally-ahead-of-earnings-fed | nan | nan | By Susan Mathew and Johann M Cherian
July 25 (Reuters) - A rally in oil stocks helped Canada's main stock index shake-off initial sluggishness to rise on Monday, while investors braced for a slew of earnings updates as well as another big interest rate hike from the U.S. Federal Reserve this week.
At 10:30 a.m. ET (1430 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 40.58 points, or 0.21%, at 19,023.5, after marking its best week in nearly 18 months on Friday.
The energy sector .SPTTEN climbed 2.3% as crude CLc1 prices LCOc1 rose with investors trying to balance supply fears with expectations that a rise in U.S. interest rates would weaken fuel demand. O/R
After delivering a 75 basis points hike in June, the Fed is seen hiking by the same magnitude at its meeting on Wednesday.
In resources-heavy Canada, investors will be looking for results from some miners and energy companies this week.
Mega-cap U.S. firms such as Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O are scheduled to post earnings this week, and could shed light into global growth.
Investors have been worried that rising prices and central banks' attempt to control it could squeeze growth as economies reel from the fallout of the Russia-Ukraine war. Canada's main index has lost around 10% so far this year.
"Higher oil price has been a big positive for Canada, but we can see that the U.S. is likely gone into a recession and other countries are struggling as well," said Colin Cieszynski, chief market strategist, SIA Wealth Management.
Cieszynski added that he will be scouring earnings updates to see how companies are trying to manage rising costs.
Rogers Communications Inc RCIb.TO rose 0.3%. The company on Sunday announced plans to invest C$10 billion ($7.74 billion) in artificial intelligence (AI), and more testing and oversight, just weeks after the company reported network issues that caused widespread disruptions across the country.
(Reporting by Susan Mathew in Bengaluru; Editing by Maju Samuel)
((susan.mathew@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Mega-cap U.S. firms such as Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O are scheduled to post earnings this week, and could shed light into global growth. The energy sector .SPTTEN climbed 2.3% as crude CLc1 prices LCOc1 rose with investors trying to balance supply fears with expectations that a rise in U.S. interest rates would weaken fuel demand. "Higher oil price has been a big positive for Canada, but we can see that the U.S. is likely gone into a recession and other countries are struggling as well," said Colin Cieszynski, chief market strategist, SIA Wealth Management. | Mega-cap U.S. firms such as Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O are scheduled to post earnings this week, and could shed light into global growth. By Susan Mathew and Johann M Cherian July 25 (Reuters) - A rally in oil stocks helped Canada's main stock index shake-off initial sluggishness to rise on Monday, while investors braced for a slew of earnings updates as well as another big interest rate hike from the U.S. Federal Reserve this week. Canada's main index has lost around 10% so far this year. | Mega-cap U.S. firms such as Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O are scheduled to post earnings this week, and could shed light into global growth. By Susan Mathew and Johann M Cherian July 25 (Reuters) - A rally in oil stocks helped Canada's main stock index shake-off initial sluggishness to rise on Monday, while investors braced for a slew of earnings updates as well as another big interest rate hike from the U.S. Federal Reserve this week. The energy sector .SPTTEN climbed 2.3% as crude CLc1 prices LCOc1 rose with investors trying to balance supply fears with expectations that a rise in U.S. interest rates would weaken fuel demand. | Mega-cap U.S. firms such as Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O are scheduled to post earnings this week, and could shed light into global growth. By Susan Mathew and Johann M Cherian July 25 (Reuters) - A rally in oil stocks helped Canada's main stock index shake-off initial sluggishness to rise on Monday, while investors braced for a slew of earnings updates as well as another big interest rate hike from the U.S. Federal Reserve this week. The energy sector .SPTTEN climbed 2.3% as crude CLc1 prices LCOc1 rose with investors trying to balance supply fears with expectations that a rise in U.S. interest rates would weaken fuel demand. |
20101.0 | 2022-07-25 00:00:00 UTC | US STOCKS-Futures edge higher at start of big week for earnings, Fed meet | AAPL | https://www.nasdaq.com/articles/us-stocks-futures-edge-higher-at-start-of-big-week-for-earnings-fed-meet | nan | nan | For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Futures up: Dow 0.47%, S&P 0.44%, Nasdaq 0.41%
July 25 (Reuters) - U.S. stock index futures edged higher on Monday as markets braced for a Federal Reserve policy meeting during the week and earning reports from some of the biggest companies to gauge the impact of a strong dollar and soaring inflation.
Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Meta Platforms Inc META.O and Coca-Cola Co KO.N are scheduled to post results this week.
The dollar .DXY, trading near 20-year highs following an aggressive tightening cycle by the Fed, is expected be a headwind for U.S. companies, especially those with a big global presence.
Shares of the high-growth companies rose between 0.5% and 1.2% in premarket trading.
Early gains on Monday were broad-based, with cyclical stocks also rising. Financial stocks, including American Express Co AXP.N and Citigroup Inc C.N, advanced more than 1% each. Industrial shares such as Boeing Co BA.N and 3M Co MMM.N, set to report this week, gained 0.8% each.
All of the three major indexes closed higher last week. The tech heavy Nasdaq .IXIC added 3.3%, the S&P 500 .SPX 2.4% and the Dow .DJI gained 2%.
The Fed is widely expected to deliver another super-sized 75 basis-point rate hike at the end of its two-day monetary policy meeting on Wednesday, effectively ending pandemic-era support for the U.S. economy.
Meanwhile, the GDP advance data on Thursday is likely to be negative again for the second quarter.
At 7:02 a.m. ET, Dow e-minis 1YMcv1 were up 149 points, or 0.47%, S&P 500 e-minis EScv1 were up 17.5 points, or 0.44%, and Nasdaq 100 e-minis NQcv1 were up 51 points, or 0.41%.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Meta Platforms Inc META.O and Coca-Cola Co KO.N are scheduled to post results this week. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window. Futures up: Dow 0.47%, S&P 0.44%, Nasdaq 0.41% July 25 (Reuters) - U.S. stock index futures edged higher on Monday as markets braced for a Federal Reserve policy meeting during the week and earning reports from some of the biggest companies to gauge the impact of a strong dollar and soaring inflation. | Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Meta Platforms Inc META.O and Coca-Cola Co KO.N are scheduled to post results this week. Futures up: Dow 0.47%, S&P 0.44%, Nasdaq 0.41% July 25 (Reuters) - U.S. stock index futures edged higher on Monday as markets braced for a Federal Reserve policy meeting during the week and earning reports from some of the biggest companies to gauge the impact of a strong dollar and soaring inflation. ET, Dow e-minis 1YMcv1 were up 149 points, or 0.47%, S&P 500 e-minis EScv1 were up 17.5 points, or 0.44%, and Nasdaq 100 e-minis NQcv1 were up 51 points, or 0.41%. | Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Meta Platforms Inc META.O and Coca-Cola Co KO.N are scheduled to post results this week. Futures up: Dow 0.47%, S&P 0.44%, Nasdaq 0.41% July 25 (Reuters) - U.S. stock index futures edged higher on Monday as markets braced for a Federal Reserve policy meeting during the week and earning reports from some of the biggest companies to gauge the impact of a strong dollar and soaring inflation. ET, Dow e-minis 1YMcv1 were up 149 points, or 0.47%, S&P 500 e-minis EScv1 were up 17.5 points, or 0.44%, and Nasdaq 100 e-minis NQcv1 were up 51 points, or 0.41%. | Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Meta Platforms Inc META.O and Coca-Cola Co KO.N are scheduled to post results this week. Futures up: Dow 0.47%, S&P 0.44%, Nasdaq 0.41% July 25 (Reuters) - U.S. stock index futures edged higher on Monday as markets braced for a Federal Reserve policy meeting during the week and earning reports from some of the biggest companies to gauge the impact of a strong dollar and soaring inflation. Shares of the high-growth companies rose between 0.5% and 1.2% in premarket trading. |
20102.0 | 2022-07-25 00:00:00 UTC | 2 Reasons to Buy Stock Splits (And 1 Reason Not To) | AAPL | https://www.nasdaq.com/articles/2-reasons-to-buy-stock-splits-and-1-reason-not-to | nan | nan | Have you noticed that Apple's (NASDAQ: AAPL) stock is almost always priced somewhere between $100 and $500, and yet the company has consistently delivered tremendous returns for its shareholders over the years?
Why isn't the stock price higher?
This is because Apple has repeatedly split its stock whenever the price ran up beyond a certain price. In a stock split, a company divides existing shares in order to lower the price per share. Imagine a pizza that has been cut into six slices. If you were to cut each slice in half to make 12 slices, the pizza itself wouldn't get any bigger; you'd just have two smaller slices for each original slice.
That's how stock splits work.
The main reason a company would want to split its stock is to make the share price more affordable to everyday investors and, in turn, boost liquidity.
But since we know the stock split itself doesn't change the size of the pizza (i.e., the market capitalization of the company), should you consider buying companies after a recent split?
Image source: Getty Images.
Here are two reasons to buy stocks after a split and one reason not to.
1. You liked the company before the split was announced
The main reason to consider buying a stock after a split is announced is because you already liked the company prior to the split. A stock split is not an investment thesis.
It could, however, be perceived as an indication of a strong company since businesses don't typically split their stock when the share price has been crashing.
But overall, the stock split itself should not be the motivation for the purchase because it doesn't impact the intrinsic value of the company.
For example, if you're considering buying Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) after its recent 20-for-1 stock split, the reasoning should be that the company has a nearly impenetrable moat due to its strong network effects and dominant brand recognition, or something similar.
You shouldn't buy the stock because you believe the split will somehow make the company stronger in any material way.
There is data to suggest splits can move the stock price upward over the short term, but for long-term investors, this shouldn't be viewed as a reason for buying.
2. You've done your research
The main issue with using stock splits as a catalyst for buying is it may lead you to buy a stock you've done little to no research on.
Stock research ought to be the foundation of your conviction, so if you're considering buying a stock after a split announcement, be sure you've done your homework.
For example, investors may be tempted to buy GameStop (NYSE: GME) after its recent 4-for-1 split. But if you're basing your purchase on the split alone, you'd be buying a wildly unprofitable company that has seen its stock completely disconnect from the underlying business due to its reputation as a meme stock.
In simpler terms, if you're buying GameStop because of the recent stock split, you'd be buying an extremely risky asset that appears to be moving mostly on speculation rather than business execution.
The dividing up of shares does not magically improve the prospects of the business, so if you're buying a stock split, make sure you've done adequate research, which has led you to believe the company is a quality business trading at a reasonable price.
Don't buy the stock thinking the split will add long-term value
Let's all say this together: Stock splits have zero impact on the underlying business.
Splits neither improve nor deteriorate the long-term potential returns of stocks. They might drive a short-term movement in the price, but they do not have any material influence over the long term.
Therefore, you should never buy a stock solely because the company announced a split. If you're considering buying a stock before or after a split, make sure you've done your research and developed a solid thesis for why you believe the business will outperform.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Have you noticed that Apple's (NASDAQ: AAPL) stock is almost always priced somewhere between $100 and $500, and yet the company has consistently delivered tremendous returns for its shareholders over the years? The main reason a company would want to split its stock is to make the share price more affordable to everyday investors and, in turn, boost liquidity. There is data to suggest splits can move the stock price upward over the short term, but for long-term investors, this shouldn't be viewed as a reason for buying. | Have you noticed that Apple's (NASDAQ: AAPL) stock is almost always priced somewhere between $100 and $500, and yet the company has consistently delivered tremendous returns for its shareholders over the years? There is data to suggest splits can move the stock price upward over the short term, but for long-term investors, this shouldn't be viewed as a reason for buying. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), and Apple. | Have you noticed that Apple's (NASDAQ: AAPL) stock is almost always priced somewhere between $100 and $500, and yet the company has consistently delivered tremendous returns for its shareholders over the years? But since we know the stock split itself doesn't change the size of the pizza (i.e., the market capitalization of the company), should you consider buying companies after a recent split? You liked the company before the split was announced The main reason to consider buying a stock after a split is announced is because you already liked the company prior to the split. | Have you noticed that Apple's (NASDAQ: AAPL) stock is almost always priced somewhere between $100 and $500, and yet the company has consistently delivered tremendous returns for its shareholders over the years? There is data to suggest splits can move the stock price upward over the short term, but for long-term investors, this shouldn't be viewed as a reason for buying. That's right -- they think these 10 stocks are even better buys. |
20103.0 | 2022-07-25 00:00:00 UTC | Is iShares ESG Aware MSCI USA ETF (ESGU) a Strong ETF Right Now? | AAPL | https://www.nasdaq.com/articles/is-ishares-esg-aware-msci-usa-etf-esgu-a-strong-etf-right-now-2 | nan | nan | Launched on 12/01/2016, the iShares ESG Aware MSCI USA ETF (ESGU) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $22.25 billion, which makes it the largest ETF in the Style Box - All Cap Growth. ESGU seeks to match the performance of the MSCI USA ESG Focus Index before fees and expenses.
The MSCI USA Extended ESG Focus Index comprises of U.S. companies that have positive environmental, social and governance characteristics while exhibiting risk and return characteristics similar to those of the parent index.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.15% for this ETF, which makes it one of the cheaper products in the space.
ESGU's 12-month trailing dividend yield is 1.39%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For ESGU, it has heaviest allocation in the Information Technology sector --about 29.50% of the portfolio --while Healthcare and Financials round out the top three.
When you look at individual holdings, Apple Inc (AAPL) accounts for about 6.58% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 25.85% of total assets under management.
Performance and Risk
The ETF has lost about -18.22% so far this year and is down about -10.79% in the last one year (as of 07/25/2022). In the past 52-week period, it has traded between $81.27 and $108.46.
ESGU has a beta of 1.01 and standard deviation of 24.44% for the trailing three-year period. With about 311 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares ESG Aware MSCI USA ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI EAFE ETF (ESGD) tracks MSCI EAFE ESG Focus Index. Vanguard ESG U.S. Stock ETF has $5.74 billion in assets, iShares ESG Aware MSCI EAFE ETF has $6.56 billion. ESGV has an expense ratio of 0.09% and ESGD charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth.
Bottom Line
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 6.58% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 12/01/2016, the iShares ESG Aware MSCI USA ETF (ESGU) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 6.58% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 12/01/2016, the iShares ESG Aware MSCI USA ETF (ESGU) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 6.58% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI EAFE ETF (ESGD) tracks MSCI EAFE ESG Focus Index. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 6.58% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 12/01/2016, the iShares ESG Aware MSCI USA ETF (ESGU) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market. |
20104.0 | 2022-07-25 00:00:00 UTC | Prime Day Was Huge for This Amazon Segment | AAPL | https://www.nasdaq.com/articles/prime-day-was-huge-for-this-amazon-segment | nan | nan | Amazon (NASDAQ: AMZN) says it just had the biggest Prime Day ever, with shoppers purchasing more than 300 million items. And while Amazon may have set new records for its retail business, it may have benefited much more with its advertising business both immediately and long term. Here's the big takeaway from Prime Day trends.
Where are the deals?
Many consumers were disappointed with the discounts available on Amazon for Prime Day. Despite Amazon's claim that customers "saved" a record $1.7 billion on Prime Day, most merchants decided not to offer the steep price discounts they've offered in the past.
But that didn't slow down sales. Amazon highlighted that small businesses sold $3 billion worth of items on its marketplace.
With millions of Prime members flocking to Amazon's marketplace on Prime Day, those businesses saw a great return on investment on Amazon ads.
Instead of offering steep discounts, brands spent heavily on Amazon ads, according to a report from Bloomberg. What wasn't featured in Amazon's press release is how effective those ads were for third-party merchants and how much revenue they generated for Amazon.
Investors should consider an ad sale as worth a lot more to Amazon than a retail sale. Gross margin is higher, fulfillment is easier, and it's extremely scalable. Advertising revenue grew 25% in the first quarter on top of 76% in the year-ago period. That's actually the slowest growth Amazon's ever recorded for the segment, which it previously lumped in with its other revenue. That number ought to reaccelerate in the second half of the year as it laps tougher comparables and gets a boost from Prime Day.
The long-term benefits of Prime Day
Every click, search term, and item added to someone's cart is valuable data for Amazon. The purchases and the variety of those purchases can help Amazon develop a unique profile of who each of its shoppers is.
Prime Day gave Amazon a lot of data, regardless of whether customers actually bought anything. Even if someone just searches for an item or category of items, and clicks on a few results, maybe adds an item to his or her cart, but abandons it, it tells Amazon a lot about that customer. Those data can be used for it to target advertisements and generate better conversion rates in the future.
First-party data is especially valuable in a post-iOS 14 world. The Apple (NASDAQ: AAPL) operating system update instituted privacy changes that prevent companies from tracking users across apps on their devices. That's made it more difficult to track ad conversions and target ads on some platforms. Social media companies, in particular, have been hard hit. But Amazon can benefit as it keeps users on its website or app and can track sales directly.
So, while Amazon reported record retail sales for Prime Day, even the sales it didn't make could benefit its ad business long term. And if advertisers on Prime Day saw good returns, they may shift more of their budgets to the platform and away from other digital advertising companies as targeting and measurement elsewhere proves difficult.
Investors might not see the impact of Prime Day on the advertising business until at least the third quarter earnings report, but the more big sales events Amazon holds, the more likely it is to see the ad business benefit.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The Apple (NASDAQ: AAPL) operating system update instituted privacy changes that prevent companies from tracking users across apps on their devices. The long-term benefits of Prime Day Every click, search term, and item added to someone's cart is valuable data for Amazon. *Stock Advisor returns as of June 2, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. | The Apple (NASDAQ: AAPL) operating system update instituted privacy changes that prevent companies from tracking users across apps on their devices. The long-term benefits of Prime Day Every click, search term, and item added to someone's cart is valuable data for Amazon. So, while Amazon reported record retail sales for Prime Day, even the sales it didn't make could benefit its ad business long term. | The Apple (NASDAQ: AAPL) operating system update instituted privacy changes that prevent companies from tracking users across apps on their devices. With millions of Prime members flocking to Amazon's marketplace on Prime Day, those businesses saw a great return on investment on Amazon ads. So, while Amazon reported record retail sales for Prime Day, even the sales it didn't make could benefit its ad business long term. | The Apple (NASDAQ: AAPL) operating system update instituted privacy changes that prevent companies from tracking users across apps on their devices. With millions of Prime members flocking to Amazon's marketplace on Prime Day, those businesses saw a great return on investment on Amazon ads. The long-term benefits of Prime Day Every click, search term, and item added to someone's cart is valuable data for Amazon. |
20105.0 | 2022-07-25 00:00:00 UTC | Zacks Investment Ideas feature highlights: Apple, Adobe and Advanced Micro Devices | AAPL | https://www.nasdaq.com/articles/zacks-investment-ideas-feature-highlights%3A-apple-adobe-and-advanced-micro-devices | nan | nan | For Immediate Release
Chicago, IL – July 25, 2022 – Today, Zacks Investment Ideas feature highlights Apple AAPL, Adobe ADBE and Advanced Micro Devices AMD.
3 Stocks That Will Send Bears Back into Hibernation
It's been a stellar week in the market. The S&P 500 is on track to record its third weekly close in the green out of the last six, undoubtedly a development that investors can celebrate amid a brutal first half.
Coming out of a once-in-a-lifetime pandemic has landed us in a highly unique economic spot. Soaring inflation paired with ongoing tensions in Ukraine have weighed heavily on stocks year-to-date.
Now that we're finally seeing some green in beaten-down areas, a few companies that stand to lead the market's rebound include some heavy-hitters, such as Apple, Adobe and Advanced Micro Devices.
As we can see, it's been a brutal stretch for all three in 2022. However, things aren't as bad as they look.
Over the last month, shares of all three companies have rallied hard, signaling that buyers have finally arrived and have started to push bears back into hibernation.
Let's get into why these three stocks would be excellent adds amid a rebounding market.
Advanced Micro Devices
Advanced Micro Devices' share performance over the last decade is far more than stellar, up more than 2050% with an average annualized return of a mind-boggling 36%. Shares lagged the S&P 500 from 2013 to late 2016 but have since exploded.
AMD has been on a blazing hot earnings streak, impressively chaining together eight consecutive EPS beats. The company recorded a solid 25% double-digit bottom-line beat in its latest quarterly release.
Top-line results have been just as remarkable – the company has recorded ten consecutive quarterly revenue beats.
As displayed by top and bottom-line estimates, AMD is forecasted to grow at a breakneck pace.
The Zacks Consensus EPS Estimate for the current fiscal year (FY22) resides at $4.35, good enough for a sizable 56% double-digit expansion in the bottom-line year-over-year. The earnings growth doesn't stop there – AMD's bottom-line is projected to tack on an additional 12% in FY23.
In addition, AMD is projected to rake in $26.3 billion in revenue for FY22, representing a stellar 60% uptick in annual sales year-over-year. Undoubtedly impressive, annual revenue is projected to grow by an additional 13% in FY23.
Apple
Apple shares have been one of the best places for investors to park their cash over the last decade, up more than 750%. The company has absolutely revolutionized the mobile phone landscape.
In addition, the tech titan has repeatedly reported bottom-line results above expectations, exceeding the Zacks Consensus EPS Estimate in 18 of its previous 20 quarters. In the company's latest quarter, it posted a solid 6.3% bottom-line beat in the face of harsh business conditions.
Top-line results have also been stellar; over Apple's previous 20 quarters, the company has recorded 19 bottom-line beats.
Apple's still growing at a rock-solid pace. For the current fiscal year (FY22), the Zacks Consensus EPS Estimate of $6.09 pencils in a notable 8.5% uptick in earnings year-over-year. Impressively, earnings are expected to tack on an additional 8% in FY23.
Apple is projected to generate a mighty $393 billion revenue in FY22, notching a solid 7.4% expansion of the top-line year-over-year. In addition, annual revenue is projected to grow a further 6% in FY23.
Adobe
Adobe shares are up a quad-digit 1160% over the last decade, with an average annualized return of an impressive 30%. The company is one of the largest software companies in the world.
The company has been the definition of consistency in its bottom-line results, exceeding the Zacks Consensus EPS Estimate in 19 of its 20 previous quarters. In Adobe's latest quarter, it recorded a 1.5% EPS beat.
Quarterly sales results have been just as robust, with Adobe recording 19 top-line beats over its previous 20 quarters.
Top and bottom-line projections allude to rock-solid growth. For the current fiscal year (FY22), the Zacks Consensus EPS Estimate resides at $13.51, notching an 8% growth in the bottom-line year-over-year. In addition, the bottom-line is expected to expand a further double-digit 16% in FY23.
Pivoting to the top line, the annual revenue estimate of $17.7 billion reflects a substantial 12% uptick in revenue year-over-year. In FY23, the top-line is projected to tack on an additional 14%.
Bottom Line
While 2022 has undoubtedly been a rough time in the market, it's given us an opportunity to buy high-quality companies at a discount. In addition, it seems that the bears are tiring out – all three companies' shares above have rallied hard over the last month.
All three companies have had stellar long-term returns in the market, have serious growth potential, and are the definition of consistency within their quarterly results.
All three stocks would be excellent choices for investors looking to reap the rewards of a rebounding market.
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5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For Immediate Release Chicago, IL – July 25, 2022 – Today, Zacks Investment Ideas feature highlights Apple AAPL, Adobe ADBE and Advanced Micro Devices AMD. Apple Inc. (AAPL): Free Stock Analysis Report Now that we're finally seeing some green in beaten-down areas, a few companies that stand to lead the market's rebound include some heavy-hitters, such as Apple, Adobe and Advanced Micro Devices. | For Immediate Release Chicago, IL – July 25, 2022 – Today, Zacks Investment Ideas feature highlights Apple AAPL, Adobe ADBE and Advanced Micro Devices AMD. Apple Inc. (AAPL): Free Stock Analysis Report For the current fiscal year (FY22), the Zacks Consensus EPS Estimate resides at $13.51, notching an 8% growth in the bottom-line year-over-year. | For Immediate Release Chicago, IL – July 25, 2022 – Today, Zacks Investment Ideas feature highlights Apple AAPL, Adobe ADBE and Advanced Micro Devices AMD. Apple Inc. (AAPL): Free Stock Analysis Report In addition, the tech titan has repeatedly reported bottom-line results above expectations, exceeding the Zacks Consensus EPS Estimate in 18 of its previous 20 quarters. | For Immediate Release Chicago, IL – July 25, 2022 – Today, Zacks Investment Ideas feature highlights Apple AAPL, Adobe ADBE and Advanced Micro Devices AMD. Apple Inc. (AAPL): Free Stock Analysis Report Undoubtedly impressive, annual revenue is projected to grow by an additional 13% in FY23. |
20106.0 | 2022-07-25 00:00:00 UTC | Illegal Brazil gold tied to Italian refiner and Big Tech customers -documents | AAPL | https://www.nasdaq.com/articles/illegal-brazil-gold-tied-to-italian-refiner-and-big-tech-customers-documents | nan | nan | By Jake Spring
SAO PAULO, July 25 (Reuters) - Brazilian police allege an Italian refiner purchased gold from a trader sourcing it illegally in the Amazon rainforest region, according to police documents, and corporate disclosures show that refiner has supplied the precious metal to four of the world's largest tech companies.
Public filings by Amazon.com AMZN.O, Apple AAPL.O, Microsoft MSFT.O and Google-parent Alphabet GOOGL.O name the private Italian firm Chimet as a source of some gold used in their products. Tech companies often use small amounts of the metal in circuit boards for consumer electronics.
According to police documents obtained by investigative journalism outfit Reporter Brasil and reviewed by Reuters, Brazilian federal police have accused Chimet of buying millions of dollars in gold from trader CHM do Brasil, which allegedly acquired the precious metal illegally from wildcat miners.
CHM do Brasil, responding to questions via a lawyer, said all its gold was legally acquired with proper documentation.
Illegal mining has surged in Brazil since right-wing President Jair Bolsonaro took office in 2019, advocating for wildcatters and seeking to legalize mining on indigenous land.
Unregulated mines have destroyed rainforest land in the Amazon while polluting rivers with deadly mercury. Miners have clashed violently with indigenous tribes protecting their land, leaving a trail of death, disease and intimidation.
Brazilian sustainability think tank Instituto Escolhas estimated that the country produced 84 tonnes of illegal gold in Bolsonaro's first two years in office, up 23% from the two years before and equivalent to nearly half of Brazil's total gold output.
"A company that is buying gold from Brazil already knows there is a huge risk it is buying irregular gold - Amazon blood gold," said Larissa Rodrigues, an author of the Escolhas report.
A Chimet representative said the company cut off relations with CHM upon learning of the allegations in October 2021, when police conducted raids in nine Brazilian states and the federal district targeting CHM and others allegedly involved in the illegal gold trade.
A police document summarizing the investigation dated August 2021 states that Chimet allegedly bought 2.1 billion reais ($385 million) worth of gold from CHM between 2015 and 2020.
A federal police spokesperson in Para state declined to comment on the investigation because it is ongoing and remains under seal. Indictments will likely be announced when the probe concludes later this year, he said.
Federal prosecutors would then have to decide whether to press charges, he added.
The four U.S. tech firms listed Chimet among more than 100 gold refiners in their supply chains during the investigation's five-year timeframe and in the most recent 2021 disclosures.
Chimet does not have a direct relationship with the four tech majors but sells gold to banks that can resell it for a variety of uses, company representative Giovanni Prelazzi said in a statement to Reuters. He did not name the banks.
Apple did not specifically address Chimet but said in a statement that its policies prohibit use of illegally mined minerals. Companies that cannot comply are removed from its supply chain, the iPhone maker said.
Amazon, Alphabet and Microsoft declined to comment.
Chimet said that, after learning of the CHM investigation in Brazil, it contracted accounting firm Deloitte to conduct an audit of its other suppliers and in April 2022 it was again certified by bullion market association LBMA as meeting responsible gold sourcing standards.
An LBMA representative told Reuters that Chimet's actions showed similar problems did not exist with other suppliers and that verification methods were being strengthened.
NOT REGISTERED
The police documents allege that CHM was not registered with Brazil's central bank as an entity legally authorized to buy and sell gold, known as DTVMs.
CHM does not appear in the central bank's online directory of registered DTVMs. It is illegal for anyone other than miners and their associations to buy and sell gold in Brazil without such a registration.
CHM said it did not buy gold as a financial instrument and that registration is not required to buy gold as a commodity.
The central bank said it did not regulate "operations with gold classified as a commodity."
A 2020 analysis of relevant laws by federal prosecutors found that such registration is required for anyone other than miners to buy and sell gold, regardless of its usage.
Financial records of bank transfers show CHM bought gold from both the cooperative and directly from several individuals in the southern part of Para state, which forms part of the Brazilian Amazon.
The cooperative COOPEROURI has a permit to mine in an area next to the protected Kayapo indigenous reserve, but police found both CHM and the coop bought from independent miners without permits, according to the investigation documents.
COOPEROURI could not be reached for comment.
The police report said the cooperative and individual miners are believed to be extracting ore illegally in the indigenous reserve, although did not state the basis for that allegation.
In the police report, satellite images of the Kayapo reserve - a region larger than Belgium - show vast swathes of muddy mining pools and clandestine airstrips to access them.
($1 = 5.45 reais)
(Reporting by Jake Spring Editing by Brad Haynes, Daniel Flynn and David Gregorio)
((jake.spring@thomsonreuters.com; +55 61 99653-2429; Reuters Messaging: jake.spring.thomsonreuters.com@reuters.net / Twitter: https://twitter.com/jakespring))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Public filings by Amazon.com AMZN.O, Apple AAPL.O, Microsoft MSFT.O and Google-parent Alphabet GOOGL.O name the private Italian firm Chimet as a source of some gold used in their products. A police document summarizing the investigation dated August 2021 states that Chimet allegedly bought 2.1 billion reais ($385 million) worth of gold from CHM between 2015 and 2020. Chimet said that, after learning of the CHM investigation in Brazil, it contracted accounting firm Deloitte to conduct an audit of its other suppliers and in April 2022 it was again certified by bullion market association LBMA as meeting responsible gold sourcing standards. | Public filings by Amazon.com AMZN.O, Apple AAPL.O, Microsoft MSFT.O and Google-parent Alphabet GOOGL.O name the private Italian firm Chimet as a source of some gold used in their products. By Jake Spring SAO PAULO, July 25 (Reuters) - Brazilian police allege an Italian refiner purchased gold from a trader sourcing it illegally in the Amazon rainforest region, according to police documents, and corporate disclosures show that refiner has supplied the precious metal to four of the world's largest tech companies. According to police documents obtained by investigative journalism outfit Reporter Brasil and reviewed by Reuters, Brazilian federal police have accused Chimet of buying millions of dollars in gold from trader CHM do Brasil, which allegedly acquired the precious metal illegally from wildcat miners. | Public filings by Amazon.com AMZN.O, Apple AAPL.O, Microsoft MSFT.O and Google-parent Alphabet GOOGL.O name the private Italian firm Chimet as a source of some gold used in their products. By Jake Spring SAO PAULO, July 25 (Reuters) - Brazilian police allege an Italian refiner purchased gold from a trader sourcing it illegally in the Amazon rainforest region, according to police documents, and corporate disclosures show that refiner has supplied the precious metal to four of the world's largest tech companies. According to police documents obtained by investigative journalism outfit Reporter Brasil and reviewed by Reuters, Brazilian federal police have accused Chimet of buying millions of dollars in gold from trader CHM do Brasil, which allegedly acquired the precious metal illegally from wildcat miners. | Public filings by Amazon.com AMZN.O, Apple AAPL.O, Microsoft MSFT.O and Google-parent Alphabet GOOGL.O name the private Italian firm Chimet as a source of some gold used in their products. The police documents allege that CHM was not registered with Brazil's central bank as an entity legally authorized to buy and sell gold, known as DTVMs. It is illegal for anyone other than miners and their associations to buy and sell gold in Brazil without such a registration. |
20107.0 | 2022-07-25 00:00:00 UTC | GRAPHIC-Take Five: It's a Fed hot summer | AAPL | https://www.nasdaq.com/articles/graphic-take-five%3A-its-a-fed-hot-summer-0 | nan | nan | Repeats story published on Friday, no changes to text
July 22 - A likely second straight 75 basis point rate hike from the U.S. Federal Reserve will keep markets on their toes in the week ahead, just as investors digest a wave of earnings from corporate America and Europe.
The prospect of early elections in Italy after the collapse of the government means there's plenty of political drama too, and Australia's latest inflation numbers may add to pressure on the country's central bank to get ahead of the curve.
Here's your week ahead in markets from Ira Iosebashvili in New York, Kevin Buckland in Tokyo, and Sujata Rao, Dhara Ranasinghe and Vincent Flasseur in London.
1/ FED HOT
Fed officials have poured cold water over expectations for a 100 basis point rate hike in July but Wednesday's meeting will still have drama aplenty.
A 75 bps interest rate hike is priced in, and coming on top of 150 bps worth of tightening so far in this cycle, that is sure to bite consumers and businesses.
Investors will be looking at whether the Fed thinks inflation is peaking and how it views the U.S. economy, as they try to gauge the scope of a September rate move.
Hanging in the balance are nascent rallies in U.S. stocks and bonds. The S&P 500 is up almost 10% from its mid-June low .SPX, 10-year Treasury yields are down 60 bps US10YT=RR.
2/ EARNINGS: PART I
Earnings from Google-parent Alphabet, Microsoft, Coca Cola, Apple and others will show how well corporate America is coping with soaring inflation and a strong dollar.
This year's 17% decline in the S&P 500 has lowered the index's forward price-to-earnings ratio to around 17.3 from 21.7 at the start of 2022, closer to the market's historic average of 15.5, according to Refinitiv Datastream.
While there have been several notable beats this season, it's early days and many worry that earnings estimates may not hold up in the face of the highest inflation in four decades and tightening financial conditions.
Also clouding the picture is the burgeoning dollar, which makes U.S. exports less competitive and hurts firms earning much of their money abroad. Alphabet, Microsoft and Coca Cola report on July 26, Apple and Amazon on July 28.
3/ EARNINGS: PART II
One-sixth of Europe's STOXX 600 equity index reports second-quarter results July 25-29, and Refinitiv I/B/E/S forecasts earnings to have grown 22% year-on-year.
That headline figure masks disparities; earnings growth at energy firms basking in the glow of $100-a-barrel oil is seen at 185%, while real estate businesses will show a 70% drop, Refinitiv predicts.
Statements from retailers, heavy industry and hospitality firms may show how much pain is being inflicted by energy shortages and high inflation. The likes of Airbus, Volkswagen and Mercedes will cast light on the state of European exporters.
Bank earnings, expected to have slowed around 16%, include numbers from UBS, Credit Suisse, Deutsche, Barclays and BNP Paribas.
The Q2 season will show if European shares are correctly valued around 11.5 times forward earnings, versus their 14% long-term average, or need to cheapen further.
4/ MAMMA MIA
A political crisis couldn't come at a worse moment for Italy. The ECB has just jacked up rates for the first time since 2011, inflation is soaring and the country has been hit hard by its exposure to Russian gas .
The collapse of Mario Draghi's government ends months of stability, unnerving markets that had cheered when the ex-ECB chief became prime minister in 2021. They now worry about the prospect of new elections and Rome's ability to pass policies.
It also leaves the ECB, with its new tool to contain stress in bond markets, in an awkward position of determining which part of government bond spread widening is "unwarranted" - or giving up buying Italy's bonds altogether.
5/ CREDIBILITY ISSUE
Reserve Bank of Australia (RBA) boss Philip Lowe is pledging a steady policy-tightening campaign to at least double interest rates from current levels to "chart a credible path" back to the RBA's 2-3% inflation target.
Quarterly inflation numbers due Wednesday could show a further acceleration in price growth, which at 5.1% is already at its highest in two decades.
The rate-rise pledges are ironic coming from Lowe, who just months ago pushed back against markets, saying he didn't see rates rising throughout 2022, but has since lifted them three times since May.
Criticism of the RBA's inflation policy has led to an independent inquiry of its operations.
Fed set to hike rate by 75 bpshttps://tmsnrt.rs/3cvRuYl
STOXX 600 earnings growth by sector STOXX 600 earnings growth by sectorhttps://tmsnrt.rs/3PoX5OX
S&P 500 earnings growth by sector S&P 500 earnings growth by sectorhttps://tmsnrt.rs/3zmjgiZ
Political crisis weighs on Italian bond spread Political crisis weighs on Italian bond spreadhttps://tmsnrt.rs/3PpaAyd
RBA looks for a path back to inflation target RBA looks for a path back to inflation targethttps://tmsnrt.rs/3RQ3PqJ
(Compiled by Dhara Ranasinghe; Graphics by Vincent Flasseur; Editing by Gareth Jones)
((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Repeats story published on Friday, no changes to text July 22 - A likely second straight 75 basis point rate hike from the U.S. Federal Reserve will keep markets on their toes in the week ahead, just as investors digest a wave of earnings from corporate America and Europe. The prospect of early elections in Italy after the collapse of the government means there's plenty of political drama too, and Australia's latest inflation numbers may add to pressure on the country's central bank to get ahead of the curve. That headline figure masks disparities; earnings growth at energy firms basking in the glow of $100-a-barrel oil is seen at 185%, while real estate businesses will show a 70% drop, Refinitiv predicts. | Earnings from Google-parent Alphabet, Microsoft, Coca Cola, Apple and others will show how well corporate America is coping with soaring inflation and a strong dollar. Alphabet, Microsoft and Coca Cola report on July 26, Apple and Amazon on July 28. Fed set to hike rate by 75 bpshttps://tmsnrt.rs/3cvRuYl STOXX 600 earnings growth by sector STOXX 600 earnings growth by sectorhttps://tmsnrt.rs/3PoX5OX S&P 500 earnings growth by sector S&P 500 earnings growth by sectorhttps://tmsnrt.rs/3zmjgiZ Political crisis weighs on Italian bond spread Political crisis weighs on Italian bond spreadhttps://tmsnrt.rs/3PpaAyd RBA looks for a path back to inflation target RBA looks for a path back to inflation targethttps://tmsnrt.rs/3RQ3PqJ (Compiled by Dhara Ranasinghe; Graphics by Vincent Flasseur; Editing by Gareth Jones) ((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Repeats story published on Friday, no changes to text July 22 - A likely second straight 75 basis point rate hike from the U.S. Federal Reserve will keep markets on their toes in the week ahead, just as investors digest a wave of earnings from corporate America and Europe. Reserve Bank of Australia (RBA) boss Philip Lowe is pledging a steady policy-tightening campaign to at least double interest rates from current levels to "chart a credible path" back to the RBA's 2-3% inflation target. Fed set to hike rate by 75 bpshttps://tmsnrt.rs/3cvRuYl STOXX 600 earnings growth by sector STOXX 600 earnings growth by sectorhttps://tmsnrt.rs/3PoX5OX S&P 500 earnings growth by sector S&P 500 earnings growth by sectorhttps://tmsnrt.rs/3zmjgiZ Political crisis weighs on Italian bond spread Political crisis weighs on Italian bond spreadhttps://tmsnrt.rs/3PpaAyd RBA looks for a path back to inflation target RBA looks for a path back to inflation targethttps://tmsnrt.rs/3RQ3PqJ (Compiled by Dhara Ranasinghe; Graphics by Vincent Flasseur; Editing by Gareth Jones) ((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Repeats story published on Friday, no changes to text July 22 - A likely second straight 75 basis point rate hike from the U.S. Federal Reserve will keep markets on their toes in the week ahead, just as investors digest a wave of earnings from corporate America and Europe. This year's 17% decline in the S&P 500 has lowered the index's forward price-to-earnings ratio to around 17.3 from 21.7 at the start of 2022, closer to the market's historic average of 15.5, according to Refinitiv Datastream. Fed set to hike rate by 75 bpshttps://tmsnrt.rs/3cvRuYl STOXX 600 earnings growth by sector STOXX 600 earnings growth by sectorhttps://tmsnrt.rs/3PoX5OX S&P 500 earnings growth by sector S&P 500 earnings growth by sectorhttps://tmsnrt.rs/3zmjgiZ Political crisis weighs on Italian bond spread Political crisis weighs on Italian bond spreadhttps://tmsnrt.rs/3PpaAyd RBA looks for a path back to inflation target RBA looks for a path back to inflation targethttps://tmsnrt.rs/3RQ3PqJ (Compiled by Dhara Ranasinghe; Graphics by Vincent Flasseur; Editing by Gareth Jones) ((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. |
20108.0 | 2022-07-25 00:00:00 UTC | GLOBAL MARKETS-Asian stocks slip with bond yields on recession fears before Fed | AAPL | https://www.nasdaq.com/articles/global-markets-asian-stocks-slip-with-bond-yields-on-recession-fears-before-fed | nan | nan | By Kevin Buckland
TOKYO, July 25 (Reuters) - Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped investors' risk appetite.
Bond yields eased amid bets that an expected U.S. recession would slow the Federal Reserve's aggressive tightening campaign, with markets looking for policy clues from its two-day Federal Open Market Committee meeting which begins on Tuesday.
At the same time, the dollar built on its recovery from a 2-1/2-week low against major peers, supported by demand for the U.S. currency as a safe haven.
"Risk markets are obviously priced for some kind of slowdown, but are they priced for an outright recession? I would argue no," said Ray Attrill, head of currency strategy at National Australia Bank.
"In that sense, it's hard to say we've reached a bottom as far as risk sentiment is concerned."
Japan's Nikkei .N225 retreated 0.75%, while Chinese blue chips .CSI300 lost 0.82%.
Hong Kong's Hang Seng .HSI slid 0.75%, with its tech index .HSTECH tumbling 1.96%.
MSCI's broadest index of Asia-Pacific shares .MIAP00000PUS lost 0.54% to 158.80, after touching the highest since June 29 at 160.03 on Friday.
U.S. S&P 500 emini futures EXcv1 slipped 0.08%, pointing to an extension of the benchmark's .SPX 0.93% slump on Friday, when a survey showed business activity contracting for the first time in nearly two years amid persistently heated inflation and rapidly rising interest rates.
Earlier that day, data also showed euro zone business activity unexpectedly shrank.
Nasdaq futures NQc1 were about flat, following a 1.77% tumble for the tech-heavy stock index, as the bottom dropped out from under Snap Inc SNAP.N after the Snapchat owner posted its weakest-ever sales growth. .N
Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others.
In Europe, EURO STOXX 50 index futures STXEc1 pointed 0.61% lower, and FTSE futures FFIc1 slid 0.52%.
The dollar index - which measures the safe-haven currency against six major peers - was little changed at 106.64, after climbing off a 2-1/2-week low of 106.10 reached Friday.
The greenback added 0.11% to 136.235 yen JPY=EBS, while the euro EUR=EBS slipped 0.04% to $1.02075.
The 10-year U.S. Treasury yield US10YT=RR was little changed at 2.785% after sliding from as high as 3.083% over the previous two sessions.
Equivalent Japanese government bond yields JP10YTN=JBTC dropped to the lowest since March 10 at 0.18%, and Australian yields AU10YT=RR dipped to the lowest since May 31 at 3.285%.
The Fed concludes a two-day meeting on Wednesday and markets are priced for a 75 basis-point rate hike, with about a 9% chance of a full one percentage-point increase. FEDWATCH
Crude oil fell on concern that higher U.S. rates would limit fuel demand growth.
Brent crude LCOc1 futures for September settlement dropped 48 cents, or 0.5%, to $102.72 a barrel and U.S. West Texas Intermediate (WTI) crude CLc1 futures for September delivery fell 65 cents, or 0.7%, to $94.05 a barrel, both down for a fourth day.
Gold XAU= was steady at $1,725.17 per ounce, getting support from lower bond yields.
Bullion could push through resistance at around $1,770 if the Fed delivers a "dovish hike" on Wednesday, meaning forward guidance for a slowing in the pace of hikes for the remainder of the year, Chris Weston, head of research at brokerage Pepperstone, wrote in a client note.
"The yellow rock works in this backdrop where traders are questioning if the USD is our default hedge against equity drawdown," Weston said.
"I am warming to gold."
World FX rates YTDhttp://tmsnrt.rs/2egbfVh
Global asset performancehttp://tmsnrt.rs/2yaDPgn
Asian stock marketshttps://tmsnrt.rs/2zpUAr4
(Reporting by Kevin Buckland; Editing by Shri Navaratnam and Sonali Desai)
((Kevin.Buckland@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | .N Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others. By Kevin Buckland TOKYO, July 25 (Reuters) - Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped investors' risk appetite. U.S. S&P 500 emini futures EXcv1 slipped 0.08%, pointing to an extension of the benchmark's .SPX 0.93% slump on Friday, when a survey showed business activity contracting for the first time in nearly two years amid persistently heated inflation and rapidly rising interest rates. | .N Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others. At the same time, the dollar built on its recovery from a 2-1/2-week low against major peers, supported by demand for the U.S. currency as a safe haven. In Europe, EURO STOXX 50 index futures STXEc1 pointed 0.61% lower, and FTSE futures FFIc1 slid 0.52%. | .N Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others. Bond yields eased amid bets that an expected U.S. recession would slow the Federal Reserve's aggressive tightening campaign, with markets looking for policy clues from its two-day Federal Open Market Committee meeting which begins on Tuesday. U.S. S&P 500 emini futures EXcv1 slipped 0.08%, pointing to an extension of the benchmark's .SPX 0.93% slump on Friday, when a survey showed business activity contracting for the first time in nearly two years amid persistently heated inflation and rapidly rising interest rates. | .N Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others. In Europe, EURO STOXX 50 index futures STXEc1 pointed 0.61% lower, and FTSE futures FFIc1 slid 0.52%. The dollar index - which measures the safe-haven currency against six major peers - was little changed at 106.64, after climbing off a 2-1/2-week low of 106.10 reached Friday. |
20109.0 | 2022-07-24 00:00:00 UTC | 7 Long-Term Stocks to Buy on the Dip | AAPL | https://www.nasdaq.com/articles/7-long-term-stocks-to-buy-on-the-dip | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Short-term investing inherently carries greater risk. It is notoriously difficult to pick winning stocks with a short time horizon. In the current market environment that is perhaps doubly true. That said, there’s no shortage of media pundits calling a market bottom currently. Despite their credentials, experience or histories of calling previous market bottoms, their guesses remain guesses. A better strategy is to find long-term stocks to buy on the dip.
This strategy is more likely to provide reliable returns because it relies on the general notion that a rising tide lifts all ships. Given that we’re in a bear market a rise is as near a certainty as can be found when investing.
7 Seriously Undervalued Retirement Stocks to Buy Now
It simply requires patience and a willingness to commit to stocks in companies that are likely to grow over time.
Ticker Company Recent Price
GOOG Alphabet $107.85
QS QuantumScape $10.94
AAPL Apple $153.82
U Unity Software $36.28
CHPT ChargePoint $13.83
XPEV XPeng $24.53
X U.S. Steel $19.70
Alphabet (GOOG)
Investors need to consider Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock when they think about the long term. If you’re thinking, “Hey, Google’s already grown so much, why should I invest now?,” then consider its strategy. Too often investors consider Alphabet solely for the current constituent components (Google search, YouTube, Google suite, Android, and Chrome) that drive GOOG stock as an investment.
The notion here is that much more of Google’s growth is behind it than ahead. In other words, Alphabet can’t continue to squeeze massive returns from those businesses indefinitely. But that misses the point of Alphabet: The company is structured such that it will remain relevant for a long time. Its “other” bets, including Waymo, Calico, Verily and others can become “Alpha” bets.
So, if the 23% annual returns over the last decade don’t continue for the next ten years, you can bet management will be working to rotate in the next cash cow.
QuantumScape (QS)
QuantumScape (NYSE:QS) stock has eroded in value throughout 2022. In fact, it’s down more than 50% year-to-date. Combine those facts with the idea that QuantumScape is attempting to be the first to commercialize solid-state batteries. Add to that idea that the firm projects commercialization won’t happen until at least 2024, if ever and the risk in QS stock becomes apparent.
That could reasonably lead investors to question its investment worthiness.
But consider that QuantumScape has continued to hit milestone after milestone in its quest to develop the holy grail of EV batteries. Most recently, that was evidenced by results for the results for its 16-layer cells. That cell showed improved characteristics over the company’s 10-layer cell and proved reliable over more than 500 charging cycles.
7 Cheap Large-Cap Stocks to Buy Before They Surge Higher
The company admits it remains far from commercialization, but it seems to be successfully iterating toward such a future.
Apple (AAPL)
Apple (NASDAQ:AAPL) stock has been one of the strongest long-term performers in recent memory. That has to be among the main reasons investors continue to flock to it even as tech remains subdued. And yes, those returns have been very strong at 23% annually over the past 10 years.
There’s little reason to believe the party’s anywhere near its end, though. Apple’s earnings expectations have been trending slightly downward over the last 3 months, moving from $1.37 to $1.32. And there were already rumblings that Q2 won’t be as strong as previous quarters.
But AAPL stock has plenty of room to continue to grow based on broad fundamentals. And that’s what investors should be focused on. Short-term catalysts that garner headline attention don’t matter, the long term does.
Unity Software (U)
The brief description of Unity Software (NYSE:U) is that it provides software to create 2D and 3D gaming content spanning the spectrum from mobile gaming to augmented and virtual reality devices.
Those last few words provide a clue as to why it has lost more than 50% of its value year-to-date: The metaverse has cooled. At least that’s the general feeling across the market.
But a report by McKinsey & Co. published in June says otherwise. The noted consulting firm estimates that the metaverse could reach $5 trillion in value by 2030. But while the market momentarily cools as Meta Platforms’ (NASDAQ:META) troubles affect the metaverse at large, trends remain clear: The metaverse is here to stay.
7 Cheap Large-Cap Stocks to Buy Before They Surge Higher
That means that Unity Software and U stock aren’t simply pandemic darlings. Rather, the company, which touches 50% of all games created today, will remain highly relevant. It’s going to be integral to the rapid development of the metaverse making it a buy today.
ChargePoint (CHPT)
ChargePoint Holdings (NYSE:CHPT) stock might be down roughly 30% this year. But that isn’t for lack of performance. The firm is doing just about as well as anyone could hope.
The EV charging and infrastructure firm reported $81.6 million in revenues in its most recent earnings report. That was far higher than the $75.7 million Wall Street was expecting on average. And it was well above the $77 million that management’s guidance had given at the high end of the range. So, you could argue that it’s doing even better than anyone could have hoped.
However, growth stocks have shifted out of favor as inflation runs rampant and the Federal Reserve hikes rates in response. So, the fact that ChargePoint posted a net loss of $89.26 million in the same quarter isn’t going to go over well in the markets.
Avoid that notion. Market cyclicality will play out, growth stocks will return to favor eventually, and patient investors will see CHPT stock increase in value as the leading EV charging firm in the U.S.
XPeng (XPEV)
Let’s imagine that an investor holds XPeng (NYSE:XPEV) stock through 2023 and a recession occurs. Let’s also assume that any such recession is shallow as many economists are now predicting.
If it’s a short and shallow recession XPEV stock could end up very strong sometime in 2023. The idea here is that a shallow recession comes and goes in 2023 and growth stocks experience some sort of renaissance.
Consider that XPeng should report roughly $6.2 billion in revenues this year and then more than $10 billion in 2023 and its attraction becomes obvious. It’s a risky proposition in the short term, but as a long-term investment XPEV stock is solid.
7 Best Consumer Stocks to Buy Now
It is one of the leading EV manufacturers in China, the biggest EV market in the world. Investors who ignore that secular trend will kick themselves.
U.S. Steel (X)
At some point, the U.S. will have to address its crumbling infrastructure. When it does, shares in U.S. Steel (NYSE:X) stock surge higher. It’s likely already underway as U.S. Steel recently provided record Q2 guidance.
Right now, the company’s diverse customer base means it is benefiting from energy market customers. The company is projecting $1.6 billion in EBITDA, which leads to $3.85 earnings-per-share. That’s far above the $3.26 EPS Wall Street had earlier predicted. So, in the short term, X stock looks to be in prime position.
In the long term, the narrative shifts toward steel demand as the U.S. rebuilds its infrastructure.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The post 7 Long-Term Stocks to Buy on the Dip appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ticker Company Recent Price GOOG Alphabet $107.85 QS QuantumScape $10.94 AAPL Apple $153.82 U Unity Software $36.28 CHPT ChargePoint $13.83 XPEV XPeng $24.53 X U.S. Steel $19.70 Alphabet (GOOG) Investors need to consider Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock when they think about the long term. Apple (AAPL) Apple (NASDAQ:AAPL) stock has been one of the strongest long-term performers in recent memory. But AAPL stock has plenty of room to continue to grow based on broad fundamentals. | Ticker Company Recent Price GOOG Alphabet $107.85 QS QuantumScape $10.94 AAPL Apple $153.82 U Unity Software $36.28 CHPT ChargePoint $13.83 XPEV XPeng $24.53 X U.S. Steel $19.70 Alphabet (GOOG) Investors need to consider Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock when they think about the long term. Apple (AAPL) Apple (NASDAQ:AAPL) stock has been one of the strongest long-term performers in recent memory. But AAPL stock has plenty of room to continue to grow based on broad fundamentals. | Ticker Company Recent Price GOOG Alphabet $107.85 QS QuantumScape $10.94 AAPL Apple $153.82 U Unity Software $36.28 CHPT ChargePoint $13.83 XPEV XPeng $24.53 X U.S. Steel $19.70 Alphabet (GOOG) Investors need to consider Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock when they think about the long term. Apple (AAPL) Apple (NASDAQ:AAPL) stock has been one of the strongest long-term performers in recent memory. But AAPL stock has plenty of room to continue to grow based on broad fundamentals. | Ticker Company Recent Price GOOG Alphabet $107.85 QS QuantumScape $10.94 AAPL Apple $153.82 U Unity Software $36.28 CHPT ChargePoint $13.83 XPEV XPeng $24.53 X U.S. Steel $19.70 Alphabet (GOOG) Investors need to consider Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock when they think about the long term. Apple (AAPL) Apple (NASDAQ:AAPL) stock has been one of the strongest long-term performers in recent memory. But AAPL stock has plenty of room to continue to grow based on broad fundamentals. |
20110.0 | 2022-07-24 00:00:00 UTC | GLOBAL MARKETS-Stocks slip as growth risks sap confidence; bonds, dollar in demand | AAPL | https://www.nasdaq.com/articles/global-markets-stocks-slip-as-growth-risks-sap-confidence-bonds-dollar-in-demand | nan | nan | By Kevin Buckland
TOKYO, July 25 (Reuters) - Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped investors' risk appetite.
Bond yields eased amid bets that a U.S. recession would slow the Federal Reserve's aggressive tightening campaign, with markets looking for policy clues from its two-day Federal Open Market Committee meeting which begins on Tuesday.
At the same time, the dollar built on its recovery from a 2 1/2-week low against major peers, supported by demand for the U.S. currency as a safe haven.
"Risk markets are obviously priced for some kind of slowdown, but are they priced for an outright recession? I would argue no," said Ray Attrill, head of currency strategy at National Australia Bank.
"In that sense, it's hard to say we've reached a bottom as far as risk sentiment is concerned."
Japan's Nikkei .N225 retreated 0.75%, while Chinese blue chips .CSI300 eased 0.13%.
Hong Kong's Hang Seng .HSI slid 0.45%, with its tech index .HSTECH tumbling 1.51%
MSCI's broadest index of Asia-Pacific shares .MIAP00000PUS lost 0.62% to 158.68, after touching the highest since June 29 at 160.03 on Friday.
U.S. S&P 500 emini futures EXcv1 slipped 0.09%, pointing to an extension of the benchmark's .SPX 0.93% slump on Friday, when a survey showed business activity contracting for the first time in nearly two years amid persistently heated inflation and rapidly rising interest rates.
Earlier that day, data also showed euro zone business activity unexpectedly shrank.
Nasdaq futures NQc1 eased 0.04%, after a 1.77% tumble for the tech-heavy stock index, as the bottom dropped out from under Snap Inc SNAP.N after the Snapchat owner posted its weakest-ever sales growth. .N
Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others.
The dollar index - which measures the safe-haven currency against six major peers - edged 0.1% higher to 106.81, climbing further from a 2 1/2-week low of 106.10 reached Friday.
The greenback added 0.29% to 136.485 yen JPY=EBS, while the euro EUR=EBS slipped 0.24% to $1.01875.
The 10-year U.S. Treasury yield US10YT=RR was little changed at 2.79% after sliding from as high as 3.083% over the previous two sessions.
Equivalent Japanese government bond yields JP10YTN=JBTC dropped to the lowest since March 14 at 0.19%, and Australian yields AU10YT=RR dipped to the lowest since May 31 at 3.285%.
The Fed concludes a two-day meeting on Wednesday and markets are priced for a 75 basis-point rate hike, with about a 9% chance of a full one percentage-point increase. FEDWATCH
In commodities, Brent crude LCOc1 added 0.15%, or 15 U.S. cents, to $103.35 per barrel. Nymex light crude CLc1 was slightly higher at $94.75.
Gold XAU= slipped 0.14% to $1,724.05 per ounce.
World FX rates YTDhttp://tmsnrt.rs/2egbfVh
Global asset performancehttp://tmsnrt.rs/2yaDPgn
Asian stock marketshttps://tmsnrt.rs/2zpUAr4
(Reporting by Kevin Buckland; Editing by Shri Navaratnam)
((Kevin.Buckland@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | .N Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others. By Kevin Buckland TOKYO, July 25 (Reuters) - Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped investors' risk appetite. U.S. S&P 500 emini futures EXcv1 slipped 0.09%, pointing to an extension of the benchmark's .SPX 0.93% slump on Friday, when a survey showed business activity contracting for the first time in nearly two years amid persistently heated inflation and rapidly rising interest rates. | .N Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others. By Kevin Buckland TOKYO, July 25 (Reuters) - Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped investors' risk appetite. Earlier that day, data also showed euro zone business activity unexpectedly shrank. | .N Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others. Bond yields eased amid bets that a U.S. recession would slow the Federal Reserve's aggressive tightening campaign, with markets looking for policy clues from its two-day Federal Open Market Committee meeting which begins on Tuesday. U.S. S&P 500 emini futures EXcv1 slipped 0.09%, pointing to an extension of the benchmark's .SPX 0.93% slump on Friday, when a survey showed business activity contracting for the first time in nearly two years amid persistently heated inflation and rapidly rising interest rates. | .N Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple AAPL.O and Microsoft MSFT.O, among others. Hong Kong's Hang Seng .HSI slid 0.45%, with its tech index .HSTECH tumbling 1.51% MSCI's broadest index of Asia-Pacific shares .MIAP00000PUS lost 0.62% to 158.68, after touching the highest since June 29 at 160.03 on Friday. The dollar index - which measures the safe-haven currency against six major peers - edged 0.1% higher to 106.81, climbing further from a 2 1/2-week low of 106.10 reached Friday. |
20111.0 | 2022-07-24 00:00:00 UTC | Netflix Needs a New Focus | AAPL | https://www.nasdaq.com/articles/netflix-needs-a-new-focus | nan | nan | Netflix (NASDAQ: NFLX) has breathed a sigh of relief as its second quarter reports show the service exceeded expectations by losing 970,000 subscribers rather than the projected 2 million. The company has plans to further grow revenue by cracking down on password sharing, although that might not be the best way forward.
Here's why Netflix should focus on improving its image and boosting consumer satisfaction rather than setting limits on passwords.
A risky approach
In March, Netflix began testing methods of limiting password-sharing in Chile, Costa Rica, and Peru. The company added two new features in these countries, with one allowing Standard and Premium accounts to add up to two sub-accounts for those in separate households for between $2.00 and $3.00 extra. The second feature was applied to all subscription tiers and let consumers transfer a Netflix profile to an entirely new account.
On the surface, Netflix is designing its password-sharing scheme with the consumer in mind. The introduction of sub-accounts would allow millions of consumers to pay less than $5.00 a month for all the benefits of Netflix, costing substantially less than the Standard plan of $15.99/month. Netflix's continued subscriber losses clearly illustrate that the company needs to rethink its business model. Its password-sharing tests abroad can potentially increase revenue.
However, more recent reports on the crackdown are worrying. From August 22, Netflix members in Argentina, El Salvadore, Guatemala, Honduras, and the Dominican Republic will pay a fee for using their account for more than two weeks outside their primary household. The update will only apply to devices connected to a TV, not tablets and smartphones, and cost subscribers around $2.99. The move could push consumers to drop Netflix when traveling, leaving them open to seeking alternative streaming platforms and not returning.
Netflix has led the streaming industry from the start, designing the basis for what most streaming platforms look like today. Its password-sharing initiative is yet another innovation that has the potential to add a new standard to the industry. However, there's also a chance it could backfire if its competitors don't follow suit.
Waning consumer satisfaction
Increased competition in the streaming industry has pushed consumers to compare Netflix to better-valued services -- to the detrimental of the company. Consumer satisfaction and trust has sagged regarding Netflix's value and content quality. A crackdown on password sharing could push its members further into the hands of the competition.
In terms of consumer value, Netflix's offering is at the lower end of the spectrum. Its cheapest plan is $9.99 for one stream at less than 720p resolution, with its next tier being $15.99 for two streams and 1080p resolution. Consumers interested in 4K video quality and up to four simultaneous streams must pay $19.99.
Meanwhile, its biggest competitors, Disney's (NYSE: DIS) Disney+ and Warner Bros. Discovery's (NASDAQ: WBD) HBO Max, allow between three to four streams and have 4K resolution as standard for all members. Disney+ costs $7.99/month, and HBO Max is $14.99/month for ad-free video. Netflix has plans to rectify this with its upcoming ad-supported tier, but it will take time for the public to see the service in a new light.
Furthermore, consumers have long complained about the quality and consistency of Netflix content. The company's hits, such as Stranger Things and Squid Game, have significantly paid off, but that doesn't mean consumers can trust its new content to live up to the same standard. For instance, Netflix most recently released a series adaptation of the popular game Resident Evil. The show had the potential to pull in subscribers from a massive and well-established fanbase, but the series is now one of Netflix's worst-rated shows ever. Additionally, the company's reputation for canceling well-liked and unfinished series has only worsened matters.
Alternatively, HBO Max and Apple's (NASDAQ: AAPL) Apple TV+ have prioritized quality above all else. HBO Max alone walked away with 108 Emmy nominations on July 12, with 140 going to HBO as a whole -- an increase of 10 from 2021. Apple TV+ walked away with 52 nominations, a 40% increase from the previous year. Netflix did well to earn 105 nominations, but this figure decreased from 129 in 2021.
Retaining subscribers
It's positive that Netflix is considering all options as it evolves its business to fit the altered streaming industry. Password sharing is an optimal way to increase revenue, but it is crucial for the company to factor in its competition when planning. If Netflix does not prioritize customer satisfaction before introducing password crackdowns in the U.S., subscribers could flock to platforms without such stipulations.
The company is obviously still working out the kinks with the new system, so not all hope is lost. Investors should watch out for how Netflix handles password-sharing in the U.S. when the update launches and whether or not the competition seems interested in implementing similar restrictions.
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Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Netflix, and Walt Disney. The Motley Fool recommends Warner Bros. Discovery, Inc. and recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Alternatively, HBO Max and Apple's (NASDAQ: AAPL) Apple TV+ have prioritized quality above all else. Netflix (NASDAQ: NFLX) has breathed a sigh of relief as its second quarter reports show the service exceeded expectations by losing 970,000 subscribers rather than the projected 2 million. From August 22, Netflix members in Argentina, El Salvadore, Guatemala, Honduras, and the Dominican Republic will pay a fee for using their account for more than two weeks outside their primary household. | Alternatively, HBO Max and Apple's (NASDAQ: AAPL) Apple TV+ have prioritized quality above all else. Waning consumer satisfaction Increased competition in the streaming industry has pushed consumers to compare Netflix to better-valued services -- to the detrimental of the company. Discovery, Inc. and recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. | Alternatively, HBO Max and Apple's (NASDAQ: AAPL) Apple TV+ have prioritized quality above all else. Waning consumer satisfaction Increased competition in the streaming industry has pushed consumers to compare Netflix to better-valued services -- to the detrimental of the company. The Motley Fool has positions in and recommends Apple, Netflix, and Walt Disney. | Alternatively, HBO Max and Apple's (NASDAQ: AAPL) Apple TV+ have prioritized quality above all else. The company added two new features in these countries, with one allowing Standard and Premium accounts to add up to two sub-accounts for those in separate households for between $2.00 and $3.00 extra. Its password-sharing tests abroad can potentially increase revenue. |
20112.0 | 2022-07-24 00:00:00 UTC | Snap Crackles and Pops After Disappointing Investor Update | AAPL | https://www.nasdaq.com/articles/snap-crackles-and-pops-after-disappointing-investor-update | nan | nan | Snapchat parent Snap (NYSE: SNAP) reported fiscal 2022 second-quarter earnings after the markets closed on Thursday, July 21. The social media company disappointed investors by reporting slower-than-expected revenue growth. Snap had warned the market several weeks earlier that its second quarter was evolving worse than expected, but these results on July 21 managed to disappoint already lowered expectations.
The stock was down as much as 38% on the day following the release, a dramatic fall for the once-loved business. Let's dig into the details of that Q2 report and decipher what is causing the poor performance.
Snap manages to disappoint already lowered expectations
Snap had first forecasted revenue growth between 20% and 25% for its second quarter of 2022. Roughly a month after those projections, Snap said the quarter was moving in the wrong direction, and it would miss even the lower end of that guidance. When it finally revealed Q2 figures on July 21, Snap reported revenue increased 13% year over year. From 2018 to 2021, the company had grown revenue at an average compound annual rate of over 50%, so the Q2 growth was a considerable slowdown.
SNAP Revenue (Annual YoY Growth) data by YCharts
The primary cause of the slowdown is a platform policy change by Apple, making it more difficult for Snap to collect data on its users. That feature allowed Snap to sell targeted advertising to its partners, who appreciated the precision. No longer were marketers showing advertisements for a concert in Los Angeles, California, to sports fans in Orlando, Florida. It also meant that advertisers were willing to pay more per ad because there was less wasted spending.
With the changes in Apple's privacy policy, the level of precision that can be delivered has considerably lessened. As a result, marketers have lowered their willingness to spend on Snap. That's bad news for Snap because it is more of a longer-lasting structural headwind, which can explain why the stock is falling so hard. This is not something Snap can fix overnight, or a macroeconomic issue that will resolve itself over time.
Snap's stock is not a buying opportunity, even at the lower price
SNAP Price to Free Cash Flow data by YCharts
Importantly, as I wrote a few weeks ago, Snap's stock was expensive heading into the Q2 report and remains costly even after the drop. Trading at a price-to-free cash flow ratio of 78, even though it is near the lowest it has sold for in the last year, it is still expensive on an absolute basis. Furthermore, a premium valuation like this is typically reserved for a company with excellent and improving prospects, which is not the case for Snap as the headwinds from Apple's privacy changes will constrain revenue growth longer term. This is not a time for investors to buy the dip.
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Parkev Tatevosian has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Roughly a month after those projections, Snap said the quarter was moving in the wrong direction, and it would miss even the lower end of that guidance. No longer were marketers showing advertisements for a concert in Los Angeles, California, to sports fans in Orlando, Florida. Furthermore, a premium valuation like this is typically reserved for a company with excellent and improving prospects, which is not the case for Snap as the headwinds from Apple's privacy changes will constrain revenue growth longer term. | The social media company disappointed investors by reporting slower-than-expected revenue growth. Snap manages to disappoint already lowered expectations Snap had first forecasted revenue growth between 20% and 25% for its second quarter of 2022. Snap's stock is not a buying opportunity, even at the lower price SNAP Price to Free Cash Flow data by YCharts Importantly, as I wrote a few weeks ago, Snap's stock was expensive heading into the Q2 report and remains costly even after the drop. | Snap manages to disappoint already lowered expectations Snap had first forecasted revenue growth between 20% and 25% for its second quarter of 2022. SNAP Revenue (Annual YoY Growth) data by YCharts The primary cause of the slowdown is a platform policy change by Apple, making it more difficult for Snap to collect data on its users. Snap's stock is not a buying opportunity, even at the lower price SNAP Price to Free Cash Flow data by YCharts Importantly, as I wrote a few weeks ago, Snap's stock was expensive heading into the Q2 report and remains costly even after the drop. | Snap manages to disappoint already lowered expectations Snap had first forecasted revenue growth between 20% and 25% for its second quarter of 2022. With the changes in Apple's privacy policy, the level of precision that can be delivered has considerably lessened. 10 stocks we like better than Snap Inc. |
20113.0 | 2022-07-24 00:00:00 UTC | 3 Stocks the World's Greatest Investors Like the Most Right Now | AAPL | https://www.nasdaq.com/articles/3-stocks-the-worlds-greatest-investors-like-the-most-right-now | nan | nan | If you want to be a better golfer, you'll study the swings of the world's greatest golfers. If you want to be a better manager, you'll study what the world's greatest managers do. But what if you want to be a better investor? It can pay off to study what the world's greatest investors do as well.
Granted, you won't always want to invest in the same stocks as they do. However, knowing their favorite stocks and why those stocks are in their portfolios can be helpful. With that in mind, here are three stocks the world's greatest investors like the most right now.
1. Amazon.com
Amazon.com (NASDAQ: AMZN) ranks as one of the favorite stocks for three multibillionaire investors. It's David Tepper's Appaloosa Management hedge fund's second-largest holding. Amazon is George Soros' Soros Fund Management's fourth-largest position. And while the stock is lower on Warren Buffett's list, his Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) owns more than $1.3 billion worth of Amazon shares.
So far this year, Amazon hasn't done much for these super-wealthy investors' portfolios. The stock has slid partially as a result of the overall market sell-off. However, Amazon also disappointed investors with slower revenue growth.
But it's a pretty safe bet that Tepper, Soros, and Buffett remain confident about Amazon's long-term prospects. The company still dominates e-commerce. Its Amazon Web Services cloud unit continues to grow by leaps and bounds. Amazon is also aggressively expanding into new markets, as evidenced by the company's plans to acquire primary care provider 1Life Healthcare (better known as One Medical) for $3.9 billion.
2. Coca-Cola
Both Buffett and his fellow multibillionaire investor Ray Dalio think very highly of Coca-Cola (NYSE: KO). The food and beverage giant ranks as the third-largest holding for Berkshire and the fourth-biggest stock position for Bridgewater Associates, the huge hedge fund founded by Dalio.
Coca-Cola is handily beating the market in 2022. The stability of the blue-chip stock has attracted many investors who were looking for a relatively safe place to park their money in the midst of tremendous volatility.
However, Buffett and Dalio aren't newcomers to Coke. They've both owned the stock for years. Berkshire first initiated a position in Coca-Cola back in 1988. The purchase prompted Buffett to write in his annual shareholder letter one of his most memorable lines, "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."
3. Apple
There's no way we could leave Apple (NASDAQ: AAPL) off this list. While it's not a top holding for many of the world's greatest investors, it certainly is for Buffett. Apple ranks by far as the biggest position in Berkshire's portfolio. Buffett even refers to the tech company as one of Berkshire's "four giants." The other three "giants" are subsidiaries of Berkshire.
Although Apple has fallen year to date, it's still outperforming the broader market. The company continues to face some supply chain problems that are weighing on financial growth. However, these should only be temporary issues.
You can rest assured that Buffett believes that Apple's future is bright. He led Berkshire to scoop up more shares of the stock earlier this year and only stopped after Apple began to rebound.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple There's no way we could leave Apple (NASDAQ: AAPL) off this list. Amazon is also aggressively expanding into new markets, as evidenced by the company's plans to acquire primary care provider 1Life Healthcare (better known as One Medical) for $3.9 billion. The food and beverage giant ranks as the third-largest holding for Berkshire and the fourth-biggest stock position for Bridgewater Associates, the huge hedge fund founded by Dalio. | Apple There's no way we could leave Apple (NASDAQ: AAPL) off this list. Amazon is George Soros' Soros Fund Management's fourth-largest position. And while the stock is lower on Warren Buffett's list, his Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) owns more than $1.3 billion worth of Amazon shares. | Apple There's no way we could leave Apple (NASDAQ: AAPL) off this list. And while the stock is lower on Warren Buffett's list, his Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) owns more than $1.3 billion worth of Amazon shares. See the 10 stocks *Stock Advisor returns as of June 2, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. | Apple There's no way we could leave Apple (NASDAQ: AAPL) off this list. But what if you want to be a better investor? So far this year, Amazon hasn't done much for these super-wealthy investors' portfolios. |
20114.0 | 2022-07-24 00:00:00 UTC | Wall St Week Ahead-Strong dollar looms over U.S. earnings season | AAPL | https://www.nasdaq.com/articles/wall-st-week-ahead-strong-dollar-looms-over-u.s.-earnings-season-0 | nan | nan | By David Randall
NEW YORK, July 24 (Reuters) - Companies reporting earnings in coming weeks are likely to mention one common factor gouging their results: the strong dollar.
The U.S. currency stands near a 20-year high against a basket of its peers .DXY and is up 15.1% in the past year, lifted by a hawkish Federal Reserve and investors seeking shelter from turbulent markets.
A strong dollar can be a headwind for U.S. companies as it makes exporters’ products less competitive abroad and hurts multinationals that need to convert their foreign profits back into the U.S. currency.
Each percentage point of year-on-year increase in the U.S. Dollar Index .DXY, which measures the dollar against six other currencies, translates to a 0.5 percentage point hit to S&P 500 earnings growth, analysts at MorganStanley estimated.
"You seemingly can't get a break right now. We're starting to get some relief from oil prices, but you've still got the dollar banging on you," said Bill Stone, chief investment officer at the Glenview Trust Company.
International Business Machines Corp IBM.N, Netflix Inc NFLX.O and Johnson & Johnson JNJ.N were among the companies that in the past week cited the dollar’s strength as a headwind, with Johnson & Johnson joining Microsoft Corp MSFT.O by cutting its guidance due to the impact of the greenback’s rise.
Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation.
Investors are also awaiting what the Fed will have to say on those topics at its monetary policy meeting next week, at which it is widely expected to deliver another jumbo-sized 75 basis-point rate increase.
DOLLAR DOLDRUMS
Overall, some 40% of S&P 500 revenues come from overseas, data from FactSet showed. Information technology leads all sectors with 58% of revenues derived internationally, followed by materials with 56%, while utilities companies source just 2% of their revenues out of the United States, according to FactSet.
The dollar’s strength threatens to combine with high inflation, supply chain issues and other factors to weigh on earnings, analysts said.
“The rate of change on the dollar exhibits a strong negative correlation over time vs. S&P 500 earnings revisions. USD strength comes at an inopportune time for corporates already facing margin pressure and increasingly weaker demand,” Morgan Stanley’s analysts wrote.
So far, 5.1% of the S&P 500 companies that have reported their second quarter results have posted earnings above expectations, nearly half the average of 9.5% over the prior four quarters, according to Refintiv data.
Few can say when the dollar will turn, as the inflation-fighting Fed is expected to raise interest rates more aggressively than other central banks, boosting the U.S. currency’s appeal to yield-seeking investors.
Still, some are betting that signs of a peak in the dollar’s rally could balance out some of the damage caused by the burgeoning greenback.
Dollar peaks over the past 40 years have been followed by rallies in the S&P 500, with the benchmark index climbing by an average of 10% in the next 12 months on increased risk appetite and expectations of improving earnings, wrote John Lynch, chief investment officer for Comerica Wealth Management.
Jim Paulsen, chief investment strategist at The Leuthold Group, said the dollar is trading at a nearly 120% “safe-haven premium” based on its historical relationship to the consumer sentiment index.
The dollar has declined by an average 4.5% over 12 months each time its premium rose over 20% since 1988, he added.
Others are looking at the bright side of dollar strength, which some see reflects the belief that the United States can weather a looming global slowdown better than other countries.
Sameer Samana, seniorglobal marketstrategist at Wells Fargo Investment Institute, has been increasing his overweight in U.S. equities, betting that any the effects of a strong dollar will be outweighed by better economic growth over the long run.
"We think investors get too focused on the dollar's impact on earnings," he said.
(Reporting by David Randall; Additional reporting by Sinead Carew; Editing by Ira Iosebashvili and Jonathan Oatis)
((David.Randall@thomsonreuters.com; 646-223-6607; Reuters Messaging: david.randall.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation. Dollar peaks over the past 40 years have been followed by rallies in the S&P 500, with the benchmark index climbing by an average of 10% in the next 12 months on increased risk appetite and expectations of improving earnings, wrote John Lynch, chief investment officer for Comerica Wealth Management. Sameer Samana, seniorglobal marketstrategist at Wells Fargo Investment Institute, has been increasing his overweight in U.S. equities, betting that any the effects of a strong dollar will be outweighed by better economic growth over the long run. | Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation. By David Randall NEW YORK, July 24 (Reuters) - Companies reporting earnings in coming weeks are likely to mention one common factor gouging their results: the strong dollar. International Business Machines Corp IBM.N, Netflix Inc NFLX.O and Johnson & Johnson JNJ.N were among the companies that in the past week cited the dollar’s strength as a headwind, with Johnson & Johnson joining Microsoft Corp MSFT.O by cutting its guidance due to the impact of the greenback’s rise. | Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation. Each percentage point of year-on-year increase in the U.S. Dollar Index .DXY, which measures the dollar against six other currencies, translates to a 0.5 percentage point hit to S&P 500 earnings growth, analysts at MorganStanley estimated. International Business Machines Corp IBM.N, Netflix Inc NFLX.O and Johnson & Johnson JNJ.N were among the companies that in the past week cited the dollar’s strength as a headwind, with Johnson & Johnson joining Microsoft Corp MSFT.O by cutting its guidance due to the impact of the greenback’s rise. | Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation. By David Randall NEW YORK, July 24 (Reuters) - Companies reporting earnings in coming weeks are likely to mention one common factor gouging their results: the strong dollar. Information technology leads all sectors with 58% of revenues derived internationally, followed by materials with 56%, while utilities companies source just 2% of their revenues out of the United States, according to FactSet. |
20115.0 | 2022-07-24 00:00:00 UTC | 6 Red Flags for Snap's Future | AAPL | https://www.nasdaq.com/articles/6-red-flags-for-snaps-future | nan | nan | Snap's (NYSE: SNAP) stock tumbled 27% during after-hours trading on Thursday, July 21, following the release of the social media company's second-quarter earnings report. Its revenue rose 13% year over year to $1.11 billion, which missed analysts' estimates by about $20 million.
Back in May, Snap had already warned investors its second-quarter revenue would come in "below the low end" of its prior guidance for 20%-25% growth amid tough macroeconomic challenges.
Snap's net loss also widened from $152 million to $422 million, while its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) plummeted 94% to just $7 million. Nevertheless, its non-GAAP (generally accepted accounting principles) loss of two cents per share still beat Wall Street's expectations by a penny.
Image source: Getty Images.
Snap's daily active users (DAUs) still increased 18% year over year to 347 million, but its average revenue per user (ARPU) fell 4%. Those results look dismal, but six additional red flags indicate it's still too early to consider the beaten-down social media stock a turnaround play.
1. No more guidance
Snap usually provides guidance for its quarterly revenue and adjusted EBITDA, but it declined to do so for the third quarter due to "uncertainties related to the operating environment."
Specifically, Snap is still grappling with Apple's (NASDAQ: AAPL) privacy changes on iOS, headwinds from the Ukrainian war, and COVID-19-related disruptions in certain markets. Inflation and rising interest rates have been exacerbating that pain by throttling digital ad purchases worldwide.
Snap's cautious outlook isn't surprising, but it previously told investors it could achieve "50%-plus revenue growth" for "multiple years" during its investor day presentation last February. But this chart illustrates Snap's growth trajectory since it set that ambitious goal:
GROWTH (YOY)
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
DAUs
23%
23%
20%
18%
18%
ARPU
76%
28%
18%
17%
(4%)
Revenue
116%
57%
42%
38%
13%
Data source: Snap. YOY = Year over year.
2. Refusing to abandon that 50% target
During the conference call, Snap was asked if that 50% target was still on the table. Instead of answering the question, CFO Derek Andersen said that while Snap faced near-term macro headwinds, it could still be "well positioned over time" as it rolled out new features and expanded overseas.
Analysts expect Snap's revenue to rise about 22% to $5.03 billion for the full year and another 32% to $6.63 billion in 2023, but those estimates will likely be reduced after its latest earnings report.
The responsible thing to do would be to simply walk back its 50% goal (and endure some pain now) instead of stubbornly maintaining it and undermining investors' confidence in its long-term plans.
3. Pausing its headcount growth
During the call, Andersen also said Snap would "effectively pause" its headcount growth. That decision could help it rein in its costs and expenses, which jumped 29% year over year to $1.51 billion during the quarter, as well as stock-based compensation expenses, which gobbled up 29% of its total revenue.
However, reining in its spending could also make it more difficult for Snap to roll out new features and keep pace with fierce competitors like ByteDance's TikTok and Meta Platforms' (NASDAQ: META) Instagram.
4. Deteriorating cash flows
Snap generated a negative free cash flow (FCF) of $147 million in the second quarter, compared to a negative FCF of $116 million a year earlier.
Snap won't run out of cash anytime soon, since it was still sitting on $4.9 billion in cash, cash equivalents, restricted cash, and marketable securities at the end of the quarter. But it's still bleeding out -- and its elevated debt-to-equity ratio of 1.6 doesn't give it too much room to raise fresh funds.
5. A $500 million buyback
It's a bright red flag when an unprofitable company with a negative FCF authorizes a big buyback. That's precisely what Snap did by abruptly authorizing a $500 million buyback for its Class A shares.
Snap says the buyback, which will last for the next 12 months, will offset a "portion of the dilution related to the issuance of restricted stock units to employees." Therefore, this buyback is actually a sign of weakness instead of strength -- and it won't actually make the company's shares any cheaper.
6. A pointless stock split plan
Lastly, Snap pledged to issue a stock split in the form of a dividend of one Class A share for each then-outstanding share if the Class A share reaches $40 within the next 10 years. That decision, which is mainly aimed at letting its founders sell more Class A shares instead of their exclusive tier of Class C shares (which are worth 10 votes apiece), is meaningless and merely seems like a futile attempt to jump on the stock split bandwagon.
All these issues suggest Snap is in serious trouble. Investors looking for a more resilient social media play should take a fresh look at Meta, which might have a better shot at a long-term recovery.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Specifically, Snap is still grappling with Apple's (NASDAQ: AAPL) privacy changes on iOS, headwinds from the Ukrainian war, and COVID-19-related disruptions in certain markets. Back in May, Snap had already warned investors its second-quarter revenue would come in "below the low end" of its prior guidance for 20%-25% growth amid tough macroeconomic challenges. Instead of answering the question, CFO Derek Andersen said that while Snap faced near-term macro headwinds, it could still be "well positioned over time" as it rolled out new features and expanded overseas. | Specifically, Snap is still grappling with Apple's (NASDAQ: AAPL) privacy changes on iOS, headwinds from the Ukrainian war, and COVID-19-related disruptions in certain markets. Snap's (NYSE: SNAP) stock tumbled 27% during after-hours trading on Thursday, July 21, following the release of the social media company's second-quarter earnings report. Pausing its headcount growth During the call, Andersen also said Snap would "effectively pause" its headcount growth. | Specifically, Snap is still grappling with Apple's (NASDAQ: AAPL) privacy changes on iOS, headwinds from the Ukrainian war, and COVID-19-related disruptions in certain markets. Snap's (NYSE: SNAP) stock tumbled 27% during after-hours trading on Thursday, July 21, following the release of the social media company's second-quarter earnings report. Deteriorating cash flows Snap generated a negative free cash flow (FCF) of $147 million in the second quarter, compared to a negative FCF of $116 million a year earlier. | Specifically, Snap is still grappling with Apple's (NASDAQ: AAPL) privacy changes on iOS, headwinds from the Ukrainian war, and COVID-19-related disruptions in certain markets. Its revenue rose 13% year over year to $1.11 billion, which missed analysts' estimates by about $20 million. A pointless stock split plan Lastly, Snap pledged to issue a stock split in the form of a dividend of one Class A share for each then-outstanding share if the Class A share reaches $40 within the next 10 years. |
20116.0 | 2022-07-24 00:00:00 UTC | Weekly Preview: Earnings To Watch Week of July 24 (AAPL, AMZN, GOOG, META, MSFT) | AAPL | https://www.nasdaq.com/articles/weekly-preview%3A-earnings-to-watch-week-of-july-24-aapl-amzn-goog-meta-msft | nan | nan | H
as all of the bad news been priced into the market? Have stocks finally reached bottom? Although stocks didn’t close out Friday on a strong note, I think we are starting to see signs that suggest “yes” is the answer for both questions. The trading action this past week showed an aggressive return to not only to risk assets in general, but also to the high-growth names which were beaten up amid recession fears.
Evidenced by this week's continued resurgence in stocks, and the fresh batch of corporate earnings, investors are seemingly more confident that the upcoming earnings results from the most-influential companies in the S&P 500 will be “less bad” than initial expected, particularly in tech stocks. Roughly 21% of S&P 500 companies have reported earnings so far. Out of that total, about 70% have beaten analyst expectations. Investors nonetheless opted to lock in some profits on Friday.
The Dow Jones Industrial Average fell Friday, giving up 137.61 points, or 0.43%, to end Friday's session at 31,773.98. Among the Dow’s notable decliners were Apple (AAPL), Salesforce (CRM), Microsoft (MSFT) and Walt Disney (DIS). The S&P 500 lost 37.32 points, or 0.93%, finishing at 3,961.63, while the tech-heavy Nasdaq Composite dropped 225.5 points, or 1.87%, to close at 11,834.11. The Nasdaq was pressured by, among others, the 8.7% drop in shares of Roku (ROKU) and the 7.6% drop in Meta Platforms (META).
Despite Friday’s pullback, all three major averages ended with strong weekly gains. Leading the way was the tech-heavy Nasdaq Composite which closed out the week with a gain of 3.4%. The index on Thursday had posted its third straight positive session, driven by positive earnings results from Tesla (TSLA), which popped nearly 10% on Thursday. The Dow Jones Industrial Average added 2.2% for the week, while the S&P 500 rose 2.5%. As it stands, the S&P 500, Nasdaq Composite and Dow closed above their 50-day moving averages for the first time since April.
Some investors are interpreting the 50-day technical recovery as a sign that the worst of the market correction is now behind us. The main question heading into the week is whether this recent rally will continue, particularly as Big Tech comes into focus with Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) slated to announce their results. While it’s still early in the reporting cycle, the guidance they provide for the current quarter and beyond will reveal their level of confident and ability to navigate inflationary headwinds. Here are the names to keep an eye on for this week.
Alphabet (GOOG , GOOGL) - Reports after the close, Tuesday, July 26
Wall Street expects Alphabet to earn $1.30 per share on revenue of $70.27 billion. This compares to the year-ago quarter when earnings came to $1.36 per share on revenue of $61.88 billion.
What to watch: Shares of the Google and YouTube parent have fallen 21% year to date, underperforming the 16% decline in the S&P 500 index. The stock has fallen 8.4% and 12.3% in the respective three months and six months, while only slightly outperforming the losses in the tech-heavy Nasdaq Composite during that span. Amid various macroeconomic concerns such as rising inflation, the tech conglomerate has suffered a slowdown in digital advertising. This is likely to persist given the recent drop in Snap (SNAP) which recently released results of a brutal quarter that missed Street's estimates. That said, execution hasn’t been an issue for Google. In the last two years, the company’s quarterly reports have beaten revenue estimates for eight consecutive times, while missing on profit estimates just once in that span. Ahead of the earnings report, the company said YouTube TV had topped 5 million subscribers, taking the top spot for streaming TV services in the United States, surpassing Disney-owned (DIS) Hulu. And when factoring the recent momentum of Google Cloud Platform and Google Workspace, the company has shown considerably more growth than it has received credit for. Estimates call for Google Cloud to deliver Q2 segment revenues of $6.1 billion, implying year-over-year growth of 43%. On Tuesday investors will look to see if Google’s cloud business can be an offsetting factor for any weakness in the digital ad business.
Microsoft (MSFT) - Reports after the close, Tuesday, July 26
Wall Street expects Microsoft to earn $2.30 per share on revenue of $52.47 billion. This compares to the year-ago quarter when earning were $2.17 per share on $46.15 billion in revenue.
What to watch: The market is broadly bullish ahead of Microsoft’s earnings report, particularly the company’s Azure cloud platform. Citing channel checks and rising demand for Azure, Wedbush Securities analyst Dan Ives expects a 46% year-over-year increase during the just-ended quarter. "On the Azure front, cloud migration and increased focus on digital transformation is not slowing down based on our recent checks with [Microsoft], a core beneficiary of this major enterprise-driven trend," Ives wrote in a note to clients. Rating Microsoft as Outperform with price target of $340, the analyst expects that Azure growth to remain above the 40% threshold into 2023, adding that that roughly 44% of workloads are currently on the cloud. He expects that total to reach 70% by 2025. In other words, inflationary pressures and supply chain challenges aside, Microsoft still has plenty of growth runway ahead from these well-established trends. With the stock down 21% year to date, compared to a 16% decline in the S&P 500 index, Microsoft looks attractive at current levels, assuming Wall Street’s bullish thesis materializes. On Tuesday, the company’s guidance will gauge how confident the management feels about these growth projections.
Meta Platforms (META) - Reports after the close, Wednesday, July 27
Wall Street expects Facebook to earn $2.61 per share on revenue of $29.03 billion. This compares to the year-ago quarter when earnings came to $3.61 per share on revenue of $27.89 billion.
What to watch: Amid the recent tech selloff, Meta shares have been punished, falling 39% and 46% in the respective six months and nine months. Down 45% year to date and 47% over the past year, its shares have lost more than 55% since reaching its 52-week high of $384. Slowing user growth and advertising growth at its core Facebook and Instagram products have scared investors away. On the heels Snapchat (SNAP) and Twitter (TWTR) earnings, which fell short of analysts’ expectations, the market is bracing for another tough quarter from Meta’s digital ad business. But even amid inflationary cost pressures and struggles with daily active users, Meta can still beat profit expectations, which are low. The company guided for Q2 revenue in the range of $28 billion to $30 billion, suggesting a sequential revenue increase of up to $2 billion. What’s more, CEO Mark Zuckerberg is betting heavily on the Metaverse which, according to some estimates, is expected to grow as much as $2 trillion annually. The company’s advances in virtual reality with its Oculus VR headset (Meta Quest) gives it a leg up on the competition. The company on Wednesday will nonetheless need to show improvements in its Reality Labs, demonstrating that the business can emerge as Meta’s profit center that it is expected to become.
Apple (AAPL) - Reports after the close, Thursday, July 28
Wall Street expects Apple to earn $1.16 per share on revenue of $82.83 billion. This compares to the year-ago quarter when earnings came to $1.30 per share on revenue of $81.43 billion.
What to watch: Supply chain disruptions and rising inflation have served as headwinds for the iPhone maker, but the company should meet its Q3 estimates, according to Wedbush Securities analysts Dan Ives, who has an Outperform rating on Apple stock. “Demand for the iPhone is holding up slightly better than expected," Ives noted, though he cautioned that weakness is still expected ahead of the fall launch of the iPhone 14. "Apple is continuing to focus on a robust product pipeline and services ramp into 2023 including what we believe will be the highly anticipated AR/VR headset release," Ives wrote in a note to clients. However, Morgan Stanley analyst Katy Huberty said that potential weakness in the company's Mac and services segments could more than offset "solid iPhone results.” Huberty lowered her price target on Apple stock to $180 from $185, citing weak iPad and Mac sales which she expects to be down by 7% and 26%, respectively, from the first quarter. While Apple stock has rebounded strongly over the past month, rising almost 15%, the shares are still down almost 13% year to date. Investors are hoping for more clarity and conviction on the bullish thesis on Thursday.
Amazon (AMZN) - Reports after the close, Thursday, July 28
Wall Street expects Amazon to earn 15 cents per share on revenue of $119.42 billion. This compares to the year-ago quarter when earnings came to 76 cents per share on revenue of $115.20 billion.
What to watch: What’s wrong with Amazon? Questions related to Amazon’s execution have been raised ever since the company in Q1 reported a $3.8 billion loss. Not only was this its first quarterly loss in seven years, its operating income fell from $8.9 billion to $3.7 billion, while its operating margin dropped by 5% to 3.2%. In response, Amazon stock has gotten punished, falling some 45% from its 52-week high of $188 (split adjusted). Shares of the e-commerce giant are more than 25% year to date, including 12% and 27% in the respective six months and nine months. The company has also suffered due to slowing revenue growth, compounded by rising inflation which is also driving up its operating expenses. The company noted that inflationary pressures have an additional $2 billion in incremental costs during the most recent quarter, as did excess fulfillment capacity which was needed to meet pandemic-fueled e-commerce demand. But Amazon is pivoting to offset these weaknesses, affirming its interest in healthcare by recently spending nearly $3.9 billion to acquire One Medical (ONEM), an operator of a membership-based primary care platform. The all-cash transaction values One Medical at $18 per share, or a near 70% premium. This merits of this deal and improvements in the company’s growth metrics will be the areas investors will focus on during the conference call.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The main question heading into the week is whether this recent rally will continue, particularly as Big Tech comes into focus with Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) slated to announce their results. Among the Dow’s notable decliners were Apple (AAPL), Salesforce (CRM), Microsoft (MSFT) and Walt Disney (DIS). Apple (AAPL) - Reports after the close, Thursday, July 28 Wall Street expects Apple to earn $1.16 per share on revenue of $82.83 billion. | Among the Dow’s notable decliners were Apple (AAPL), Salesforce (CRM), Microsoft (MSFT) and Walt Disney (DIS). The main question heading into the week is whether this recent rally will continue, particularly as Big Tech comes into focus with Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) slated to announce their results. Apple (AAPL) - Reports after the close, Thursday, July 28 Wall Street expects Apple to earn $1.16 per share on revenue of $82.83 billion. | Apple (AAPL) - Reports after the close, Thursday, July 28 Wall Street expects Apple to earn $1.16 per share on revenue of $82.83 billion. Among the Dow’s notable decliners were Apple (AAPL), Salesforce (CRM), Microsoft (MSFT) and Walt Disney (DIS). The main question heading into the week is whether this recent rally will continue, particularly as Big Tech comes into focus with Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) slated to announce their results. | Among the Dow’s notable decliners were Apple (AAPL), Salesforce (CRM), Microsoft (MSFT) and Walt Disney (DIS). The main question heading into the week is whether this recent rally will continue, particularly as Big Tech comes into focus with Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) slated to announce their results. Apple (AAPL) - Reports after the close, Thursday, July 28 Wall Street expects Apple to earn $1.16 per share on revenue of $82.83 billion. |
20117.0 | 2022-07-23 00:00:00 UTC | Do FAANG Stocks Still Have Their Bite? | AAPL | https://www.nasdaq.com/articles/do-faang-stocks-still-have-their-bite | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
With recession and inflation fears to rising interest rates, the tech industry has suffered this year – and with it, the biggest players in the industry: FAANG stocks.
The FAANG group includes Meta Platforms, Inc. (NASDAQ:META), Apple Inc. (NASDAQ:AAPL), Amazon.com Inc. (NASDAQ:AMZN), Netflix Inc. (NASDAQ:NFLX), and Alphabet Inc. (NASDAQ:GOOG). But it seems these FAANG stocks may have lost their bite, as all but Apple (down 13%) are in a bear market this year.
FAANG stocks have been volatile since 2018, when some of the tech companies lost more than 20% of their valuation. Since then, the large influence these prominent stocks can have on the market has been a concern for investors.
And this year is no exception.
While Amazon and Netflix thrived during the pandemic, both companies suffered customer loss and business slowdowns so far in 2022. Apple has been hit by supply chain issues in China; Meta, formerly Facebook, lost more than $500 billion in market value since last summer; and Alphabet has felt the effects of paling revenue from internet advertising.
We’ll get a read on these companies following their quarterly results next week.
So, let’s use today’s Market360 to dig into the FAANG stocks’ earnings previews and see if they’re good buys ahead of their results next week.
Meta Platforms, Inc. (NASDAQ:META)
Meta will release its second-quarter earnings report on Wednesday, July 27, after the market closes. Analysts expect earnings of $2.61 per share, down 100% from earnings of $3.61 per share a year ago. Revenue is expected to increase 4.2% year-over-year to $29.05 billion. Earnings estimates have been revised 8% lower in the past three months.
Apple Inc. (NASDAQ:AAPL)
Apple is scheduled to release its earnings for its third quarter in fiscal year 2022 on Thursday, July 28. Analysts anticipate earnings to decrease 11% year-over-year to $1.16 per share, down from $1.30 per share a year ago. Estimates call for revenue of $82.47 billion, and earnings estimates have been lowered 7.2% in the past three months.
Last quarter, all of Apple’s segments (including the iPhone and Macintosh) grew from last year, except for the iPad. This decrease in sales was due to supply chain constraints and the war in Ukraine – in fact, Apple stopped sales of all its products in Russia as the conflict continues.
Amazon.com Inc. (NASDAQ:AMZN)
Amazon will report its second-quarter earnings on Thursday, July 28. Analysts expect to see earnings for the upcoming quarter of $0.16 per share, down 79% from $0.76 per share a year ago. Revenue estimates of $119.43 billion represent a 3.70% drop from sales of $115.2 billion last year. And earnings estimates have been revised a whopping 99% lower in the past three months, so an earnings surprise is not likely.
Alphabet Inc. (NASDAQ:GOOG)
Alphabet, Google’s parent company, is set to report its earnings on Tuesday, July 26. Analysts anticipate earnings to fall 3% year-over-year to $26.46 per share, down from $27.26 per share a year ago. Revenue is expected to increase 13.60% year-over-year to $70.29 billion. Earnings estimates have been lowered 4% in the past three months.
Netflix Inc. (NASDAQ:NFLX)
We heard from Netflix on Tuesday. I reviewed Netflix’s second-quarter results on Thursday. In case you missed it, here’s a quick review:
For the quarter, Netflix reported adjusted earnings of $3.20 per share on revenue of $7.97 billion, or 7.7% year-over-year earnings growth and 8.6% year-over-year revenue growth. So, Netflix topped earnings expectations but fell slightly short of revenue estimates.
For the third quarter, company management anticipates earnings will decline 34% year-over-year to $2.14 per share. Revenue is expected to increase 4.7% year-over-year to $7.84 billion. This is below analysts’ estimates for third-quarter earnings of $2.75 per share and revenue of $8.1 billion.
Netflix saw a drop of 970,000 subscribers in the second quarter – better than Netflix’s own guidance for a 2 million loss and analysts’ expectations for a 1.9 million loss.
Earnings of $3.20 per share beat analysts’ estimate of $2.94 and posted a 7.7% increase year-over-year. However, revenue decreased from $8.035 billion to $7.97 billion. At Tuesday’s close, Netflix’s shares traded just above $200, compared to $700 last year.
Netflix currently has 220.67 million subscribers, and it anticipates adding back 1 million in the third quarter.
The decrease in the company’s revenue – due in part to competition from other streaming platforms – was addressed by company management. In a letter to its shareholders, Netflix said its “key priority” will be to “re-accelerate revenue growth” through evolving its monetization, largely by cracking down on password sharing.
Where to Invest Next
FAANG stocks dominated the stock market for the last decade with their impressive growth. However, as we discussed. So, it’s really no surprise that most of the companies rate poorly in my Portfolio Grader.
As you can see in the Report Card above, the Total Grades are mixed. Apple has a B-rating, making it a “Buy.” Google has a C-rating, making it a “Hold.” And Amazon, Meta, and Netflix have D-ratings, making them “Sells.”
The overall FAANG portfolio earns a Total Grade of “C”. Although Apple is a more attractive buy, the remainder just are not holding up well right now.
The bottom line: The FAANG stocks lost their bite.
So, the question remains… which stocks still have their teeth?
The answer? The companies that are hyperscalable. These are the companies that can massively grow revenues while minimally growing the costs associated with producing.
On Thursday, I released a special recommendation that is the backbone of hyperscalability. In other words, hypergrowth isn’t possible without it.
This stock is still trading at bargain prices, but it won’t be for long. The company is scheduled to release its latest quarterly results on Thursday, August 4, and given that the analyst community has revised earnings estimates higher in the past three months, an earnings surprise is likely. A big earnings surprise could send the stock soaring, so you’ll definitely want to own this company before its earnings are out.
If you want the name and ticker, click here.
Before we go, I wanted to tell you to keep an eye on your email for details for a special event sent to take place next Thursday, July 28, at 4 p.m. Eastern time. I’ll explain in more detail next week, but I’ll give you a hint today: It has to do with the best way to make cash now – and I can guarantee you it’s not the way you’d think. Again, stay tuned for more details next week!
Sincerely,
Louis Navellier, Market 360
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Meta Platforms, Inc. (NASDAQ:META), Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG)
The post Do FAANG Stocks Still Have Their Bite? appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The FAANG group includes Meta Platforms, Inc. (NASDAQ:META), Apple Inc. (NASDAQ:AAPL), Amazon.com Inc. (NASDAQ:AMZN), Netflix Inc. (NASDAQ:NFLX), and Alphabet Inc. (NASDAQ:GOOG). Apple Inc. (NASDAQ:AAPL) Apple is scheduled to release its earnings for its third quarter in fiscal year 2022 on Thursday, July 28. Apple has been hit by supply chain issues in China; Meta, formerly Facebook, lost more than $500 billion in market value since last summer; and Alphabet has felt the effects of paling revenue from internet advertising. | The FAANG group includes Meta Platforms, Inc. (NASDAQ:META), Apple Inc. (NASDAQ:AAPL), Amazon.com Inc. (NASDAQ:AMZN), Netflix Inc. (NASDAQ:NFLX), and Alphabet Inc. (NASDAQ:GOOG). Apple Inc. (NASDAQ:AAPL) Apple is scheduled to release its earnings for its third quarter in fiscal year 2022 on Thursday, July 28. In case you missed it, here’s a quick review: For the quarter, Netflix reported adjusted earnings of $3.20 per share on revenue of $7.97 billion, or 7.7% year-over-year earnings growth and 8.6% year-over-year revenue growth. | The FAANG group includes Meta Platforms, Inc. (NASDAQ:META), Apple Inc. (NASDAQ:AAPL), Amazon.com Inc. (NASDAQ:AMZN), Netflix Inc. (NASDAQ:NFLX), and Alphabet Inc. (NASDAQ:GOOG). Apple Inc. (NASDAQ:AAPL) Apple is scheduled to release its earnings for its third quarter in fiscal year 2022 on Thursday, July 28. In case you missed it, here’s a quick review: For the quarter, Netflix reported adjusted earnings of $3.20 per share on revenue of $7.97 billion, or 7.7% year-over-year earnings growth and 8.6% year-over-year revenue growth. | Apple Inc. (NASDAQ:AAPL) Apple is scheduled to release its earnings for its third quarter in fiscal year 2022 on Thursday, July 28. The FAANG group includes Meta Platforms, Inc. (NASDAQ:META), Apple Inc. (NASDAQ:AAPL), Amazon.com Inc. (NASDAQ:AMZN), Netflix Inc. (NASDAQ:NFLX), and Alphabet Inc. (NASDAQ:GOOG). InvestorPlace - Stock Market News, Stock Advice & Trading Tips With recession and inflation fears to rising interest rates, the tech industry has suffered this year – and with it, the biggest players in the industry: FAANG stocks. |
20118.0 | 2022-07-23 00:00:00 UTC | Impatience Can Be Costly During Bear Markets | AAPL | https://www.nasdaq.com/articles/impatience-can-be-costly-during-bear-markets | nan | nan | The first half of 2022 was brutal for many popular companies and indexes. The two largest U.S. companies, Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), are down over 19% and 24% year to date, respectively, as of July 18, and the S&P 500 -- which many investors use to gauge how well the broader economy is doing -- is down more than 20%.
Even though many great companies and the major indexes have had a rough year, you shouldn't be discouraged or distracted from your long-term goals. Bear markets are a natural part of the stock market; they've happened often in the past, and there's no reason to think they won't continue happening in the future.
Nobody likes seeing their portfolio's value decrease, but the one thing you don't want to do in a bear market is get impatient and make short-term moves that go against your long-term interest. It can be costly.
Selling now can stop future gains
If you're investing in a company for the long term, the plan should be to make consistent investments to increase your position in the stock over time. If you panic-sell shares during a bear market, those are shares that you're not giving a chance for future growth. Let's take a look at American Express (NYSE: AXP) (AMEX), for example.
In February 2020, AMEX's stock price fluctuated within the $130 to $135 range, but by March 20, 2020, the stock had decreased to just above $74.
Let's imagine you owned 100 shares of AMEX and sold them for $90 each as you saw the stock plunging, pocketing $9,000. Those same 100 shares would be worth over $14,200 as of July 18, 2022, even with AMEX's stock down more than 15% year to date.
Aside from the potential value missed in a stock price increase, panic-selling your shares can cause you to miss out on dividend payments. With a $0.52 quarterly dividend, those 100 shares could generate $208 in dividend income that could be reinvested into the stock to add to the effects of compound interest. Dividends are a way companies reward investors for holding onto their stock, and if you believe in a company's long-term potential (which you should if you're investing in it), you should do just that.
Uncle Sam will need his share
Another consequence of prematurely selling your shares in a bear market is the potential tax bill it could create. If you've held a stock for less than a year and sell it, any profits you make will be taxed at your regular income rate. If you've held the stock for more than a year, you'll get a more favorable capital gains rate, but it's still taxes owed nonetheless.
Finding yourself selling shares because the price is dropping and owing taxes on the sale could possibly add insult to injury. If you bought the 100 AMEX shares mentioned above for $60 each and sold them for $90, the $3,000 you made in profit would be taxed. At the 15% capital gains rate many people pay, that's $450 owed.
Look at it as an opportunity
By no means is it a guarantee that all stocks will weather the bear market storm, but history has shown that blue-chip companies and major indexes tend to make it through and produce good long-term results. Instead of letting bear markets discourage you, use them as a chance to grab some of your favorite stocks at a "discount" and lower your cost basis. If you're able to lower your cost basis, you increase your potential profits when you eventually sell your shares in the future.
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American Express is an advertising partner of The Ascent, a Motley Fool company. Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Apple and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The two largest U.S. companies, Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), are down over 19% and 24% year to date, respectively, as of July 18, and the S&P 500 -- which many investors use to gauge how well the broader economy is doing -- is down more than 20%. Nobody likes seeing their portfolio's value decrease, but the one thing you don't want to do in a bear market is get impatient and make short-term moves that go against your long-term interest. Look at it as an opportunity By no means is it a guarantee that all stocks will weather the bear market storm, but history has shown that blue-chip companies and major indexes tend to make it through and produce good long-term results. | The two largest U.S. companies, Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), are down over 19% and 24% year to date, respectively, as of July 18, and the S&P 500 -- which many investors use to gauge how well the broader economy is doing -- is down more than 20%. Aside from the potential value missed in a stock price increase, panic-selling your shares can cause you to miss out on dividend payments. If you're able to lower your cost basis, you increase your potential profits when you eventually sell your shares in the future. | The two largest U.S. companies, Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), are down over 19% and 24% year to date, respectively, as of July 18, and the S&P 500 -- which many investors use to gauge how well the broader economy is doing -- is down more than 20%. Selling now can stop future gains If you're investing in a company for the long term, the plan should be to make consistent investments to increase your position in the stock over time. In February 2020, AMEX's stock price fluctuated within the $130 to $135 range, but by March 20, 2020, the stock had decreased to just above $74. | The two largest U.S. companies, Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), are down over 19% and 24% year to date, respectively, as of July 18, and the S&P 500 -- which many investors use to gauge how well the broader economy is doing -- is down more than 20%. Dividends are a way companies reward investors for holding onto their stock, and if you believe in a company's long-term potential (which you should if you're investing in it), you should do just that. If you've held a stock for less than a year and sell it, any profits you make will be taxed at your regular income rate. |
20119.0 | 2022-07-23 00:00:00 UTC | Taiwan Semiconductor Is Saying Chip Demand Remains Strong (For Now) | AAPL | https://www.nasdaq.com/articles/taiwan-semiconductor-is-saying-chip-demand-remains-strong-for-now | nan | nan | The second-quarter earnings season is well underway. One of the first companies to report this period is Taiwan Semiconductor Manufacturing (NYSE: TSM), the largest semiconductor/computer chip manufacturer worldwide. TSMC hit the top end of its revenue guidance and generated phenomenal operating margins for the three months ending in June, causing shares to pop in the days following the release.
Investors have been worried about a downturn in semiconductor demand after the pandemic-induced boost to the industry. So far, these worries have not materialized. Taiwan Semiconductor's second-quarter results show strong demand for computer chips worldwide. But how long is that set to last? Let's see exactly what TSMC said in its second-quarter earnings report and conference call.
Solid Q2 results
On July 14, TSMC released its Q2 earnings results. Revenue was up 36.6% year over year to $18.16 billion, hitting the higher end of its previous guidance for $17.6 billion to $18.2 billion. Operating margin came in at 49.1%, significantly beating TSMC's guidance for 45%-47% margins. This occurred because of continued operating leverage from its factories and gains in the value of the U.S. dollar compared to the Taiwanese currency. With a lot of customers like Apple and Nvidia headquartered in the United States, a rising dollar means TSMC gets paid more for the same product output, all else equal.
TSMC continues to grow at such a significant pace for a few main reasons. First, its customers in the high-performance computing (HPC) industry are growing like crazy. These include artificial intelligence researchers, data centers for cloud providers like Amazon's Amazon Web Services, and edge computing networks. HPC revenue grew 14% quarter over quarter in Q2 and now makes up 43% of TSMC's overall revenue.
Second, TSMC continues to take its lead with the most advanced semiconductors. It is one of the few manufacturers in the world with the capacity to make 5-nanometer and 7-nanometer silicon wafers at scale (smaller equals better in the computer chip market), giving it a near monopoly with customers looking for the most advanced computer chips. Advanced nodes of the 5nm and 7nm variety now make up 51% of TSMC's overall revenue.
Over the next few years, TSMC plans to roll out its 3nm and 2nm manufacturing capabilities. This should further increase its competitive positioning versus companies like Samsung and Intel and strengthen its relationship with customers like Apple and Nvidia, who are looking to build some of the most advanced computer chips in the world. The only place they can do that is TSMC.
Potential short-term glut but long-term tailwind
The big worry many investors have with companies like TSMC is the history of cyclicality in the semiconductor market. Historically, as global demand increased for computer chips, companies would end up ordering too much inventory from manufacturers, causing a sharp reduction in demand, which led to a reduction in earnings for manufacturers.
With huge demand increases caused by the COVID-19 pandemic over the last few years, it is possible that TSMC's customers are ordering too much inventory right now, which will cause a slowdown in demand in 2023 or 2024. Management even warned about rising inventories on the Q2 conference call.
However, even if a one- or two-year glut materializes, that changes nothing for long-term shareholders in this business. On the Q2 call, management reiterated their confidence in growing TSMC's revenue by 15%-20% a year through 2026, combined with 53%+ gross margins. As long as you plan to hold shares for five-plus years, it shouldn't concern you if revenue growth slows down in 2023, especially when revenue is growing north of 35% annually right now.
Valuation is getting attractive
TSM Revenue (TTM) data by YCharts. TTM = trailing 12 months.
Even though shares popped last week, TSMC's stock is still down around 30% this year and now trades at a market cap of $430 billion. With $25.9 billion in trailing-12-month operating income, the stock trades at a price-to-operating income (P/OI) of 16.6. For a company with such a dominant market position, this is not expensive at all.
But what if we use TSMC's revenue forecast through 2026? If revenue grows at a 15% rate over the next four years, it will be at $107 billion in 2026. Conservatively, if we estimate that TSMC's operating margin will be 45% by that time, that would equate to $48.1 billion in annual operating income. That is a P/OI of 8.9 based on the stock's current market cap. In my book, this makes the stock an easy buy at these prices.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, Intel, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | With a lot of customers like Apple and Nvidia headquartered in the United States, a rising dollar means TSMC gets paid more for the same product output, all else equal. This should further increase its competitive positioning versus companies like Samsung and Intel and strengthen its relationship with customers like Apple and Nvidia, who are looking to build some of the most advanced computer chips in the world. Potential short-term glut but long-term tailwind The big worry many investors have with companies like TSMC is the history of cyclicality in the semiconductor market. | Historically, as global demand increased for computer chips, companies would end up ordering too much inventory from manufacturers, causing a sharp reduction in demand, which led to a reduction in earnings for manufacturers. The Motley Fool has positions in and recommends Amazon, Apple, Intel, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. | Historically, as global demand increased for computer chips, companies would end up ordering too much inventory from manufacturers, causing a sharp reduction in demand, which led to a reduction in earnings for manufacturers. Even though shares popped last week, TSMC's stock is still down around 30% this year and now trades at a market cap of $430 billion. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. | Taiwan Semiconductor's second-quarter results show strong demand for computer chips worldwide. If revenue grows at a 15% rate over the next four years, it will be at $107 billion in 2026. The Motley Fool has positions in and recommends Amazon, Apple, Intel, and Taiwan Semiconductor Manufacturing. |
20120.0 | 2022-07-22 00:00:00 UTC | Previewing Big Tech Earnings Ahead of a Huge Week for Wall Street | AAPL | https://www.nasdaq.com/articles/previewing-big-tech-earnings-ahead-of-a-huge-week-for-wall-street | nan | nan | Snap shares took a big hit after coming out with quarterly numbers that many in the market see as offering clues to the outlook for digital advertising spending in the current uncertain macroeconomic environment.
The shock from the Instagram rival has put the spotlight on other Tech leaders that are on deck to report June-quarter results this week. Alphabet GOOGL and Microsoft MSFT are set to report after the market’s close on Tuesday (7/26), with Instagram parent Meta Platforms’ META ready to release its results after the closing bell on Wednesday (7/27), while Apple (AAPL) and Amazon AMZN offer up their quarterly financial information after the close on Thursday (7/29).
Wall Street analysts have been literally falling over each other to downgrade Snap shares after the disappointing print on Thursday. The Wall Street analysts’ move brings to mind the saying about closing the barn doors after the horses have left. Another way to look at this mass rush to the exits could be the contrarian capitulation signal. Snap shares lost more than -30% of their value following the disappointing result, but they were already down more than -70% this year before the Q2 report came out.
The chart below shows the year-to-date stock market performance of the Zacks Technology sector (the red line; down -38.8%), the S&P 500 index (down -22.7%), Apple (blue line; down -12.9%), Alphabet (orange line; down -25.3%), Meta (green line; down -49.6%), and Snap (purple line; down – 78.3%). I didn’t add Microsoft and Amazon to the chart to reduce clutter in the visual, but those stocks are down -22.5% and -26.6%, respectively.
Image Source: Zacks Investment Research
Snap is a relatively modest player in the digital ad space, with Alphabet and Meta as the undisputed leaders of that market. Advertising spending is cyclical and should intuitively start weakening as the aggressive Fed tightening cycle takes effect.
To that extent, Alphabet and Meta are as exposed to these macro trends as Snap and others are. That said, the bottom-up nature of Google’s search-driven ad platform likely gives it more ‘stickiness’ than a mere social media platform. You can see this in the performance variance between these operators in the above chart.
Advertisement spending by businesses is not the only category that will be under threat during an economic slowdown or a recession.
Tech giants like Microsoft, Alphabet and Amazon (through its Amazon Web Services or AWS arm) receive a ton of money from other companies for software and services. It is reasonable to expect those receipts to take a hit as customers get cautious in the face of macroeconomic challenges.
We will see what we hear from these companies in their Q2 releases, but historically software spending doesn’t get cut to the same extent as ad spending. Microsoft, Amazon (AWS), and Alphabet are the leaders in the cloud computing space.
Take a look at the chart below that shows current consensus expectations for this group for the current and coming periods in the context of what they were able to achieve in 2022 Q1 and the preceding period.
We have highlighted the expected -7.3% earnings decline on +10.6% higher revenues for this group of 5 Tech leaders in 2022 Q1.
Image Source: Zacks Investment Research
As you can see here revenue growth is expected to remain strong, with cost pressures weighing on earnings expectations. Needless to add that these Tech leaders are faced with compressed margins.
The chart below shows the group’s earnings and revenue growth on an annual basis.
Image Source: Zacks Investment Research
Look at the chart and note the growth trend from 2022 to 2023. In other words, whether the growth trend for these companies is decelerating or not is a function of your holding horizon. These companies are impressive growth engines in the long run, even if those estimates for 2023 and 2024 come down in the days ahead.
Ad spending may be coming down as this week’s reports from Meta and Alphabet will reconfirm, but no one is suggesting that they are expected to lose share to your local newspaper’s classified section. As the macroeconomic clouds clear, as they eventually will, these digital platforms will be there to capture those spending dollars.
Beyond the big 5 Tech players, total Q2 earnings for the Technology sector as a whole are expected to be down -8.9% from the same period last year on +2.8% higher revenues.
The dramatic looking chart below shows the sector’s Q2 earnings and revenue growth expectations in the context of where growth has been in recent quarters and what is expected in the coming four periods.
Image Source: Zacks Investment Research
This big picture view of the ‘Big 5’ players, as well as the sector as a whole shows a decelerating growth trend. That said, unlike this ‘quarterly view’, the annual picture shows a lot more stability, as the chart below shows.
Image Source: Zacks Investment Research
Q2 Earnings Season Scorecard
Through Friday, July 22nd, we have seen Q2 results from 106 S&P 500 members or 21.2% of the index’s total membership. Total earnings for these companies are down -6.9% on +7.2% higher revenues, with 71.7% beating EPS estimates and 63.2% beating revenue estimates.
The comparison charts below put the Q2 earnings and revenue growth rates for these index members in a historical context.
Image Source: Zacks Investment Research
The Finance sector has been a big drag on the ‘headline’ year-over-year growth rate for the companies that have reported already. Second quarter earnings growth for the Finance sector companies that have reported already are down -26.3% from the same period last year.
Excluding this Finance sector’s drag, Q2 earnings growth for the rest of the index improves to +12.2%.
The comparison charts below put the Q2 EPS and revenue beats percentages in a historical context.
Image Source: Zacks Investment Research
The EPS and revenue beats percentages are still tracking on the low side relative to historical periods, as you can see above.
This Week’s Docket
We get into the heart of the Q2 reporting cycle this week, with almost 800 companies on deck to report quarterly results, including 171 S&P 500 members. In addition to the aforementioned Tech giants, this week’s line-up includes a who’s who of America Inc., ranging from Boeing and Pfizer to Coke, GM, and a host of other marquee players.
By this time next week, we will have seen Q2 results from 55% of the S&P 500 members and will have a reasonably good sense of the earnings lay of the land.
The Current Earnings Backdrop
The chart below shows current expectations (and actuals) on a quarterly basis.
Image Source: Zacks Investment Research
Please note that the +3.7% earnings growth expected in 2022 Q2 is solely due to strong gains in the Energy sector. On an ex-Energy basis, Q2 earnings growth drops to a decline of -5%.
The chart below presents the earnings picture on an annual basis.
Image Source: Zacks Investment Research
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>Q2 Earnings Season Off to a Solid Start Despite Recession Fears
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Alphabet GOOGL and Microsoft MSFT are set to report after the market’s close on Tuesday (7/26), with Instagram parent Meta Platforms’ META ready to release its results after the closing bell on Wednesday (7/27), while Apple (AAPL) and Amazon AMZN offer up their quarterly financial information after the close on Thursday (7/29). Apple Inc. (AAPL): Free Stock Analysis Report Snap shares took a big hit after coming out with quarterly numbers that many in the market see as offering clues to the outlook for digital advertising spending in the current uncertain macroeconomic environment. | Alphabet GOOGL and Microsoft MSFT are set to report after the market’s close on Tuesday (7/26), with Instagram parent Meta Platforms’ META ready to release its results after the closing bell on Wednesday (7/27), while Apple (AAPL) and Amazon AMZN offer up their quarterly financial information after the close on Thursday (7/29). Apple Inc. (AAPL): Free Stock Analysis Report Image Source: Zacks Investment Research This big picture view of the ‘Big 5’ players, as well as the sector as a whole shows a decelerating growth trend. | Alphabet GOOGL and Microsoft MSFT are set to report after the market’s close on Tuesday (7/26), with Instagram parent Meta Platforms’ META ready to release its results after the closing bell on Wednesday (7/27), while Apple (AAPL) and Amazon AMZN offer up their quarterly financial information after the close on Thursday (7/29). Apple Inc. (AAPL): Free Stock Analysis Report Image Source: Zacks Investment Research As you can see here revenue growth is expected to remain strong, with cost pressures weighing on earnings expectations. | Alphabet GOOGL and Microsoft MSFT are set to report after the market’s close on Tuesday (7/26), with Instagram parent Meta Platforms’ META ready to release its results after the closing bell on Wednesday (7/27), while Apple (AAPL) and Amazon AMZN offer up their quarterly financial information after the close on Thursday (7/29). Apple Inc. (AAPL): Free Stock Analysis Report Image Source: Zacks Investment Research Snap is a relatively modest player in the digital ad space, with Alphabet and Meta as the undisputed leaders of that market. |
20121.0 | 2022-07-22 00:00:00 UTC | Stock Market News for Jul 22, 2022 | AAPL | https://www.nasdaq.com/articles/stock-market-news-for-jul-22-2022 | nan | nan | U.S. stocks closed sharply higher on Thursday, driven by a rally in tech stocks and a fresh batch of impressive earnings results that offset weak economic data. All the three benchmark indexes hit their highest levels in six weeks to end in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) climbed 0.5% or 162.06 points to end at 32,036.90 points.
The S&P 500 rose 1% or 39.05 points to close at 3,998.95 points. Consumer discretionary, healthcare, materials and tech stocks were the best performers.
The Health Care Select Sector SPDR (XLV) gained 1.6%, while the Consumer Discretionary Select Sector SPDR (XLY) jumped 2.3%. The Technology Select Sector SPDR (XLK) and the Materials Select Sector SPDR (XLB) each added 1.4%. Nine of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq added 1.4% or 161.96 points to finish at 12,059.61 points.
The fear-gauge CBOE Volatility Index (VIX) was down 3.22% to 23.11. Advancers outnumbered decliners on the NYSE by a 1.77-to-1 ratio. On Nasdaq, a 1.52-to-1 ratio favored advancing issues. A total of 10.58 billion shares were traded on Thursday, lower than the last 20-session average of 11.63 billion.
Tech Stocks Drive Rally
It has been a good week so far and all three major indexes are likely to end the week in the green after a long time. Investors have regained some of their lost confidence as the earning’s season so far has been good. Stronger-than-expected quarterly results from a slew of companies have offset weak economic data released this week, which still indicates a slowing economy.
Around 18% of the S&P 500 companies have reported their quarterly earnings, with 71% of them beating expectations. As investors regained their lost confidence, they bet on tech stocks, which have largely been responsible for this week’s rally.
It wasn’t any different on Thursday. Shares of Apple Inc. AAPL and Amazon.com, Inc. AMZN each gained 1.5%.
Consumer discretionary stocks were the biggest gainers in the S&P 500. This saw shares of Spectrum Brands Holdings, Inc. SPB gain 1.2%, while Electronic Arts Inc. EA added 2.1%.
Tesla Impresses, ECB Hikes Rate
Tesla, Inc. TSLA was largely responsible for the S&P 500 rally as its shares finished higher by 9.8% after the electric carmaker posted robust quarterly results. Tesla reported second-quarter 2022 earnings of $2.27 per share, surpassing the Zacks Consensus Estimate of $1.82 per share. Tesla has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, the European Central Bank (ECB) hiked benchmark interest rates by 50 basis points for the first time in 11 years. Following the surprise move by the central bank, the dollar declined. A weakening dollar could help shares of tech companies get a boost as several tech companies make a large portion of their revenues from outside the United States.
This further lifted the morale of the investors on Thursday, sending the beaten-down tech stocks on a rally. However, investors are still concerned about Fed’s next move and are assessing the extent of the next rate hike, which will give a clearer futuristic view of the country’s economy.
Economic Data
In economic data released on Thursday, the Labor Department said that initial jobless claims totaled 251,000 for the week ending Jul 16, increasing 7,000 from the previous week’s revised level of 244,000. This is also the highest level since Nov 2021. The four-week moving average also increased to 240,500, an increase of 4,500 from the previous week’s revised average of 236,000.
Continuing claims came in at 1,384,000, an increase of 51,000 from the previous week’s revised level. The previous week's numbers were revised up by 2,000 from 1,331,000 to 1,333,000. The 4-week moving average was 1,353,250, an increase of 13,250 from the previous week's revised average of 1,340,000.
In a separate report, the Conference Board said that the Leading Economic Index declined 0.8% in June to 117.1 after falling 0.6% in May. This is the index’s fourth straight monthly decline.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Tesla, Inc. (TSLA): Free Stock Analysis Report
Electronic Arts Inc. (EA): Free Stock Analysis Report
Spectrum Brands Holdings Inc. (SPB): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Apple Inc. AAPL and Amazon.com, Inc. AMZN each gained 1.5%. Apple Inc. (AAPL): Free Stock Analysis Report Stronger-than-expected quarterly results from a slew of companies have offset weak economic data released this week, which still indicates a slowing economy. | Shares of Apple Inc. AAPL and Amazon.com, Inc. AMZN each gained 1.5%. Apple Inc. (AAPL): Free Stock Analysis Report This saw shares of Spectrum Brands Holdings, Inc. SPB gain 1.2%, while Electronic Arts Inc. EA added 2.1%. | Shares of Apple Inc. AAPL and Amazon.com, Inc. AMZN each gained 1.5%. Apple Inc. (AAPL): Free Stock Analysis Report U.S. stocks closed sharply higher on Thursday, driven by a rally in tech stocks and a fresh batch of impressive earnings results that offset weak economic data. | Shares of Apple Inc. AAPL and Amazon.com, Inc. AMZN each gained 1.5%. Apple Inc. (AAPL): Free Stock Analysis Report Consumer discretionary, healthcare, materials and tech stocks were the best performers. |
20122.0 | 2022-07-22 00:00:00 UTC | Market Predictions 2022: When Will Stocks Go Back Up? | AAPL | https://www.nasdaq.com/articles/market-predictions-2022%3A-when-will-stocks-go-back-up | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
This article is excerpted from Tom Yeung’s Profit & Protection newsletter dated July 19, 2022. To make sure you don’t miss any of Tom’s picks, subscribe to his mailing list here.
In 1881, the U.S. stock market suffered one of the most severe bear markets on record. By the end of the four-year pullback, shares of the US 100 index had declined by 34.6% — more than during the 2000 tech bubble (or my life expectancy when I was teaching my sister to drive).
The Panic of 1884 was a unique bear market. Railways and steelmaking dominated the U.S. economy; the market pullback directly resulted from overinvestment in capital goods in the post-Reconstruction era.
Yet Wall Street strategists consistently rely on historical data to guide their forecasts, no matter how irrelevant the figures become. Earlier this month, analysts at Deutsche Bank pointed out that historical data suggest that the market usually rallies during earnings season after a selloff.
In other words, they’re predicting a rally in August.
Meanwhile, analysts at Morgan Stanley have taken the same economic data and come to the opposite conclusion: that stocks have a further 20% to fall.
The problem is that market predictions tend to view the U.S. stock market as a single entity (often with human feelings!) — one that repeats past patterns like a commuter driving to work. S&P 500 target prices of 3,000… 5,000… 10,000… assume the stock market is a single vehicle where every passenger experiences the same ride.
The Complex Nature of Our Stock Market
We know, of course, that the S&P 500 is not a circus car with 500 clowns stuffed in it (Although I can’t say the same for the CEOs that run the firms).
Instead, markets are made up of stocks… sectors… sub-industries… that are all zigging and zagging across highway lanes like me and my sister’s driving (Apparently, it runs in the family.) In the past month alone, the energy sector has fallen by -19%, while healthcare and tech are up 4.5%.
These figures also change over time. In 1884, the rail and steel industries dominated the U.S. economic landscape. Today, they make up just 1.1% of our economy when measured by corporate revenues.
And noteworthy shifts can happen in relatively short periods. In 1993, financial companies were twice the size of tech in the S&P 500 index. By 1999, the tech bubble had made the opposite true.
Ignore these differences at your own risk. Deutsche Bank’s rosy conclusion of the economy came after a slew of bank earnings surprises — a far less significant figure today than in the pre-2008 years. And crypto’s recent turnaround comes at a time when cryptocurrencies make up a far larger share of investor wealth.
When Will Stocks Go Back Up?
Fortunately, segmenting the market can help us understand when stocks will go back up.
First, consider tech stocks — the high-growth companies driving in America’s fast lane. Today, the top 10 tech companies make up 25% of the S&P 500 index and 50% of the NASDAQ. Any market analyst would be remiss not to consider them separately.
Increasingly, these tech-focused multinationals are earning profits abroad. In 2021, Apple (AAPL) generated two-thirds of its revenues outside the U.S. Microsoft (MSFT) was close behind with one-half. A slowing domestic economy doesn’t necessarily mean bad times.
These companies are less capital-intensive than banks, industrials, rail or other market-dominating segments of the past. Rising rates only have second-order effects on the solvency of these large tech firms.
On the other hand, the 12.5% rise in the dollar index this year — combined with cratering Chinese consumer confidence — could cause a car wreck. In February, GLJ analyst Gordon Johnson noted, “Tesla’s China operations look to be much more profitable than the company’s U.S. operations.” Several city-wide lockdowns later, that may no longer be the case.
Bearish analysts at Morgan Stanley are probably right that mega-cap tech firms still have room to fall.
I’m not anticipating a full turnaround in these companies until 2023.
Then there are countercyclical, dividend, staple and other “safe-haven” stocks that make up much of the Dow Jones Index. These are the slow-and-steady firms that conservative investors tend to favor.
True to their word, many of these firms have barely registered a slowdown. Coca-Cola (KO), International Business Machines (IBM) and Merck & Co (MRK) are all up for the year.
Even Visa (V), the bellwether of consumer spending, has only dropped 3% since January. To investors in these conservative, dividend-paying companies, the question of “when will stocks go back up” has been a moot point.
It’s why the core Profit & Protection portfolio holds a healthy dose of countercyclical firms like AT&T (T), HanesBrands (HBI) and Charles Schwab (SCHW). For businesses with consistent cash flows, 2022 has been a relatively uneventful year.
To see more of these high-performing dividend picks, click here to download Tom’s latest report on 11 Dividend Stocks to Buy.
Are Tech Stocks Due For a Parabolic Breakout?
Growth stocks… Value stocks… Investors can use history to anticipate when prices of these traditional stocks will go back up.
Then there’s the third class of firms:
Moonshot companies.
These are the big bets, like Luke Lango’s OpenDoor (OPEN) and my pick Desktop Metal (DM) — game-changing startups with 5x… 10x… 50x upside. The firms don’t fit neatly into traditional categories of “growth” or “value,” but they hold incredible power to sway investor sentiment. Wherever the price of these stocks go, so too do market moods.
The issue, of course, is that early-stage firms have a limited history in the stock market. Before the 2010s, venture capital and private equity firms dominated the sector, keeping startups private for as long as they could. Only the bipartisan Jumpstart Our Business Startups (JOBS) Act of 2012 began bringing these startups to public markets.
Valuations of these companies also have little to do with their underlying performance. WeWork (WE) didn’t become a $47 billion firm on the quality of its cash flows or dividends. “Traditional” growth projections are no better; show me any venture capitalist who got rich by running DCF models or using technical analysis.
Instead, investor demand drives the market values of these risky assets.
When times are good and money is plentiful, shares of these zero-profit firms seem to levitate on their own. It should surprise no one that investors can predict 78% of Bitcoin’s changes by watching Tesla’s (TSLA) price action. And when liquidity dries up, these wagers can go to zero.
Today, markets are unfortunately showing little appetite for such bets. The Merrill Lynch Options Volatility Estimate (MOVE) — a well-regarded index of bond investor fear — has remained persistently high since Russia invaded Ukraine in February.
It’s an invaluable measure of investor sentiment — perhaps even more so than the commonly-used VIX Index (VIX) for stock volatility. Credit markets are a leading indicator for Moonshots, since zero-revenue startups depend on fundraising to stay in business. The iShares Biotechnology Index (IBB) peaked in September 2021, one full month before I said Fed Chair Jerome Powell was “ringing the bell at the top of the market.”
But the good news is that these firms will recover faster than mega-cap companies — once rate hikes start moderating. Research by Fidelity has come to similar conclusions: that interest-rate-sensitive firms are the first to recover in early-cycle turnarounds.
That means investors should anticipate a recovery in these high-risk stocks by the end of this year. The Atlanta Federal Reserve Bank estimates that rates will peak sometime between December 2022 and March 2023; demand for risky Moonshots should bottom out several months before that.
When Will Stocks Go Back Up?
The Panic of 1884 would eventually turn to a footnote of U.S. history. Less than a decade later, The Panic of 1893 would bankrupt a quarter of U.S. railroads, cause 35% unemployment in the state of New York, and even kickstart the Free Silver movement.
1907… 1929… 1945… the list of major recessions goes on.
Every dip, however, eventually returns to growth. According to the same Fidelity study, consumer discretionary and industrials are usually the first companies to benefit. These segments — which include automakers and airlines — were once the bellwether of investor sentiment.
Today, Moonshot companies have taken up that mantle. And investors looking to ride the wave back up should consider these faster-moving startups in the earliest stages of the rate-easing cycle.
The post Market Predictions 2022: When Will Stocks Go Back Up? appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In 2021, Apple (AAPL) generated two-thirds of its revenues outside the U.S. Microsoft (MSFT) was close behind with one-half. In February, GLJ analyst Gordon Johnson noted, “Tesla’s China operations look to be much more profitable than the company’s U.S. operations.” Several city-wide lockdowns later, that may no longer be the case. The Merrill Lynch Options Volatility Estimate (MOVE) — a well-regarded index of bond investor fear — has remained persistently high since Russia invaded Ukraine in February. | In 2021, Apple (AAPL) generated two-thirds of its revenues outside the U.S. Microsoft (MSFT) was close behind with one-half. InvestorPlace - Stock Market News, Stock Advice & Trading Tips This article is excerpted from Tom Yeung’s Profit & Protection newsletter dated July 19, 2022. Earlier this month, analysts at Deutsche Bank pointed out that historical data suggest that the market usually rallies during earnings season after a selloff. | In 2021, Apple (AAPL) generated two-thirds of its revenues outside the U.S. Microsoft (MSFT) was close behind with one-half. InvestorPlace - Stock Market News, Stock Advice & Trading Tips This article is excerpted from Tom Yeung’s Profit & Protection newsletter dated July 19, 2022. In 1881, the U.S. stock market suffered one of the most severe bear markets on record. | In 2021, Apple (AAPL) generated two-thirds of its revenues outside the U.S. Microsoft (MSFT) was close behind with one-half. Today, they make up just 1.1% of our economy when measured by corporate revenues. Today, the top 10 tech companies make up 25% of the S&P 500 index and 50% of the NASDAQ. |
20123.0 | 2022-07-22 00:00:00 UTC | Time for Investors to Buy Big Tech Stocks Again? | AAPL | https://www.nasdaq.com/articles/time-for-investors-to-buy-big-tech-stocks-again | nan | nan | Today’s episode of Full Court Finance at Zacks breaks down the market heading into the final week of July that will feature earnings reports from some of the biggest names in technology. The episode then dives into three of the standout stocks—Microsoft (MSFT), Apple (AAPL), and Meta Platform (META)—ahead of their financial releases to see if it might be time to start long-term positions in the stocks.
Wall Street didn’t react in any meaningful way to the hot June CPI print, which could mean the Fed’s ramped-up tightening efforts are more baked into stock prices than some might assume. The market will get some additional clarity on the Fed’s rate hike plans after its FOMC meeting ends on July 27.
The final week of July is also jam-packed with earnings reports from hundreds of companies. The list of stocks includes everyone from McDonald’s to GE and Pfizer. The stars of the show, however, will likely be the big tech stocks, given their huge impact on S&P 500 earnings and the major indexes.
The market has been mixed on the early reports from some tech stocks. Netflix and Tesla climbed on the back of slightly better than projected results that could showcase a willingness to nibble at some of these beaten-down names. But IBM fell as Wall Street assessed the impact the strong U.S. dollar will have on the company, and Snap’s disappointing quarter sent it tumbling over 35% on Friday.
The first name we explore is Microsoft MSFT ahead of its Q4 FY22 financial release on Tuesday, July 26. Microsoft already warned Wall Street that the strong U.S. dollar was poised to negatively impact its top and bottom lines. Recent news that it is cutting open job postings highlights the pending economic slowdown.
Near-term worries and Microsoft's downturn could offer an opportunity to start a position in the diversified technology powerhouse that completely recalibrated its long-term trajectory when it entered the now vital and massive cloud computing market. That said, it might be best to wait for its guidance and see how Wall Street reacts.
Apple Inc. AAPL reports its Q3 FY22 results on Thursday, July 28. AAPL has surged over 10% since mid-June as more investors start to scoop up the stock given its ability to constantly roll out offerings that its customer base seemingly must buy despite lower-priced competition. Crucially, Apple transformed far beyond an iPhone company and makes money from its 825 million paid subscriptions across nearly 2 billion active devices.
Last up is Facebook parent Meta Platforms META which releases its results on Wednesday, July 27. META has been hammered amid worries about Apple’s privacy changes, its metaverse bet, and more. The stock fell again on Friday following Snap’s disappointing showing and is down over 55% from its peaks. The fall, coupled with the fact that it is still a money printing machine, has it trading at a 30% discount to the Zacks Tech sector and 18% below the S&P 500 at 13.5X forward earnings.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL): Free Stock Analysis Report
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To read this article on Zacks.com click here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AAPL has surged over 10% since mid-June as more investors start to scoop up the stock given its ability to constantly roll out offerings that its customer base seemingly must buy despite lower-priced competition. The episode then dives into three of the standout stocks—Microsoft (MSFT), Apple (AAPL), and Meta Platform (META)—ahead of their financial releases to see if it might be time to start long-term positions in the stocks. Apple Inc. AAPL reports its Q3 FY22 results on Thursday, July 28. | The episode then dives into three of the standout stocks—Microsoft (MSFT), Apple (AAPL), and Meta Platform (META)—ahead of their financial releases to see if it might be time to start long-term positions in the stocks. Apple Inc. (AAPL): Free Stock Analysis Report Apple Inc. AAPL reports its Q3 FY22 results on Thursday, July 28. | The episode then dives into three of the standout stocks—Microsoft (MSFT), Apple (AAPL), and Meta Platform (META)—ahead of their financial releases to see if it might be time to start long-term positions in the stocks. Apple Inc. AAPL reports its Q3 FY22 results on Thursday, July 28. AAPL has surged over 10% since mid-June as more investors start to scoop up the stock given its ability to constantly roll out offerings that its customer base seemingly must buy despite lower-priced competition. | The episode then dives into three of the standout stocks—Microsoft (MSFT), Apple (AAPL), and Meta Platform (META)—ahead of their financial releases to see if it might be time to start long-term positions in the stocks. Apple Inc. AAPL reports its Q3 FY22 results on Thursday, July 28. AAPL has surged over 10% since mid-June as more investors start to scoop up the stock given its ability to constantly roll out offerings that its customer base seemingly must buy despite lower-priced competition. |
20124.0 | 2022-07-22 00:00:00 UTC | US STOCKS-Wall Street closes lower as ad tech, social media stocks drop | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-closes-lower-as-ad-tech-social-media-stocks-drop | nan | nan | By Echo Wang
July 22 (Reuters) - U.S. stocks ended lower on Friday as disappointing earnings from Snap spooked investors and shares in social media and ad tech firms dropped, offsetting gains from card issuer American Express following an upbeat forecast.
Still, all three major indexes posted weekly gains despite Friday's losses with the tech heavy Nasdaq closing out the week 3.3% higher. The S&P 500 advanced 2.4%, and the Dow gained 2%.
Snapchat owner posted its weakest-ever quarterly sales growth as a public company, sending Snap Inc's SNAP.N shares down nearly 40%, while Twitter Inc TWTR.N reversed earlier losses to add 0.8% following a surprise fall in revenue.
Other online companies that depend heavily on ads, such as tech giants Meta Platforms Inc META.O and Alphabet Inc GOOGL.O tumbled 7.6% and 5.6%, respectively, weighing on the Nasdaq .IXIC.
Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O.
The S&P 500 communication services .SPLRCL and information technology .SPLRCT tumbled 4.3% and 1.4%, respectively, leading declines among the index's 11 sectors.
The Dow Jones Industrial Average .DJI fell 137.61 points, or 0.43%, to 31,899.29, the S&P 500 .SPX lost 37.32 points, or 0.93%, to 3,961.63 and the Nasdaq Composite .IXIC dropped 225.50 points, or 1.87%, to 11,834.11.
"Earnings are coming in less bad than feared, but they're deteriorating from what we got used to and accustomed to over the last several quarters," said Bob Doll, CIO at Crossmark Global Investments.
With 106 of the S&P 500 companies having reported earnings through Friday morning, 75.5% have topped analyst expectations, below the 81% beat rate over the past four quarters, according to Refinitiv data.L1N2Z31SC
All eyes are on the Federal Reserve's meeting and second-quarter U.S. gross domestic product data next week. While the U.S. central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, the GDP data is likely to be negative again.
Meanwhile, a survey on Friday showed that U.S. business activity contracted for the first time in nearly two years in July, deepening concerns about an economy stunted by high inflation, rising interest rates and dwindling consumer confidence.
“Economic data is coming in weaker.. kind of confirming the fact that a recession is highly likely over the next 12 months. And the markets is trying to figure out what that looks like with economic growth slowing significantly [and] the Fed in the midst of pretty aggressive tightening fiscal,” said Megan Horneman, chief investment officer at Verdence Capital Advisors in Hunt Valley, Maryland.
Verizon Communications Inc VZ.N tumbled 6.8% after announcing it cut its annual adjusted profit forecast as inflation weighs. American Express Co AXP.N rose 1.9% on strong earnings and an increased revenue forecast.
Volume on U.S. exchanges was 10.38 billion shares, compared with the 11.53 billion average for the full session over the last 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a 1.43-to-1 ratio; on Nasdaq, a 2.49-to-1 ratio favored decliners.
The S&P 500 posted 1 new 52-week highs and 31 new lows; the Nasdaq Composite recorded 32 new highs and 74 new lows.
(Reporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal, Aniruddha Ghosh and Bansari Mayur Kamdar in Bengaluru; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila, Shounak Dasgupta and Aurora Ellis)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - U.S. stocks ended lower on Friday as disappointing earnings from Snap spooked investors and shares in social media and ad tech firms dropped, offsetting gains from card issuer American Express following an upbeat forecast. With 106 of the S&P 500 companies having reported earnings through Friday morning, 75.5% have topped analyst expectations, below the 81% beat rate over the past four quarters, according to Refinitiv data.L1N2Z31SC All eyes are on the Federal Reserve's meeting and second-quarter U.S. gross domestic product data next week. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - U.S. stocks ended lower on Friday as disappointing earnings from Snap spooked investors and shares in social media and ad tech firms dropped, offsetting gains from card issuer American Express following an upbeat forecast. Still, all three major indexes posted weekly gains despite Friday's losses with the tech heavy Nasdaq closing out the week 3.3% higher. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - U.S. stocks ended lower on Friday as disappointing earnings from Snap spooked investors and shares in social media and ad tech firms dropped, offsetting gains from card issuer American Express following an upbeat forecast. Still, all three major indexes posted weekly gains despite Friday's losses with the tech heavy Nasdaq closing out the week 3.3% higher. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. Still, all three major indexes posted weekly gains despite Friday's losses with the tech heavy Nasdaq closing out the week 3.3% higher. The S&P 500 advanced 2.4%, and the Dow gained 2%. |
20125.0 | 2022-07-22 00:00:00 UTC | Stock Market Today: Stocks' Momentum Stalls After Shocking Snap Earnings | AAPL | https://www.nasdaq.com/articles/stock-market-today%3A-stocks-momentum-stalls-after-shocking-snap-earnings | nan | nan | The Nasdaq's impressive multi-day winning streak came to a screeching halt on Friday as a negative earnings reaction for social media stock Snap (SNAP, -39.1%) weighed on the broader tech sector.
The parent company of photo-sharing app Snapchat last night reported its weakest quarter ever for revenue growth (+13% year-over-year to $1.11 billion). SNAP also swung to a per-share loss of 2 cents from earnings of 10 cents per share in Q2 2021, while daily active users were up 18% to 347 million. All three metrics fell short of what Wall Street was expecting. Additionally, the company said it will "substantially" slow hiring in order to cut costs.
SEE MORE What Is Digital Fashion, And Why Is It Important?
Twitter (TWTR, +1.1%) earnings were also in focus today. Ahead of today's open, the social media platform said second-quarter revenue fell 0.8% year-over-year to $1.18 billion – coming up well short of analysts' estimates – with advertising revenue rising just 2% for the three-month period.
The company's revenue was "hurt by a tougher ad landscape, as well as negative implications related to the pending Elon Musk acquisition," says CFRA Research analyst Angelo Zino. "While it is impossible to decipher the exact impact Musk's actions have had on TWTR, we think results do provide additional support that Elon has had a notable detrimental impact on the company's fundamentals." As for "Musk's actions," the analyst is referring to the Tesla (TSLA, -0.2%) CEO terminating his $44 billion buyout of Twitter, which is resulting in a court battle between the two parties.
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After three straight sessions of solid gains, the tech-heavy Nasdaq Composite slumped 1.9% to end at 11,843. The S&P 500 Index (-0.9% at 3,961) and Dow Jones Industrial Average (-0.4% at 31,899) also snapped their three-day win streaks.
Despite today's negative price action, all three major benchmarks ended higher on a weekly basis.
YCharts
Other news in thestock market today
The small-cap Russell 2000 shed 1.6% to 1,806.
U.S. crude futures slumped 1.7% to end at $94.70 per barrel.
Gold futures rose 0.8% to end at $1,727.40 an ounce.
Bitcoin retreated 2.6% to $22,588.60. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Verizon Communications (VZ) was the worst Dow Jones stock today, sinking 6.7% after the telecommunications company reported lower-than-expected second-quarter earnings of $1.31 per share and cut its full-year forecast. Q2 revenue of $33.79 billion came in just above the consensus. " We believe VZ is currently between a rock and a hard place," says CFRA Research analyst Keith Snyder (Sell). "On the one side you have AT&T (T), who is being extremely aggressive with promotions, and on the other, you have T-Mobile (TMUS), who has a vastly superior 5G network currently.
American Express (AXP) gained 2.0% after the credit card company reported earnings. In its second quarter, AXP brought in earnings of $2.57 per share on $13.4 billion in revenue, more than analysts were expecting. The company also boosted its full-year revenue forecast. "We are maintaining our Buy rating on American Express following Q2 earnings, which were helped by a continued strong rebound in billed business, but hurt by a $1 billion swing in credit costs with a $410 million loss provision versus a $606 million credit loss recapture," says Argus Research analyst Stephen Biggar.
Next Week Will Be a Busy (and Potentially Volatile) One
There's plenty on tap next week that could spark further volatility in markets. For starters, we're entering the busiest week of the second-quarter earnings season so far, with several mega-cap tech names – such as Apple (AAPL) and Microsoft (MSFT) – set to report. Wall Street will be watching to "see how margins are holding up in the previous stock-market darlings, and hoping they paint a prettier picture than the underperformance from U.S. banks," says Sophie Lund-Yates, equity analyst at U.K.-based financial firm Hargreaves Lansdown.
In addition, the Federal Reserve will issue its latest policy decision at 2 p.m. Eastern time on Wednesday, July 27, with a press conference from Fed Chair Jerome Powell to follow.
SEE MORE 10 Defensive ETFs to Protect Your Portfolio
"The market response will likely be closely tied to comments during the press conference and updated summary of economic projections," says Timothy Chubb, chief investment officer at registered investment adviser Girard, a Univest Wealth Division.
The market is currently pricing in a 75 basis-point (a basis point is one-one hundredth of a percentage point) rate hike, and any deviation from this could spark a reaction, Chubb says. He adds that other significant market moves could "be associated with commentary or language that suggests the current rate of tightening policy is either too much or not enough to break the back of inflation."
Investors looking for sturdier ground amid stormier days can find it in some of the more defensive sectors, such as healthcare and real estate investment trusts (REITs), which tend to be able to withstand roller-coaster markets thanks to stable growth and attractive dividend yields. But for more ideas, check out this list of 43 top stocks for a tumultuous market, compiled by strategists at UBS Research Management. The names featured here are the firm's highest-conviction picks to ride out periods of volatility.
SEE MORE 10 Best Green Energy Stocks for the Rest of 2022
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For starters, we're entering the busiest week of the second-quarter earnings season so far, with several mega-cap tech names – such as Apple (AAPL) and Microsoft (MSFT) – set to report. The company's revenue was "hurt by a tougher ad landscape, as well as negative implications related to the pending Elon Musk acquisition," says CFRA Research analyst Angelo Zino. Wall Street will be watching to "see how margins are holding up in the previous stock-market darlings, and hoping they paint a prettier picture than the underperformance from U.S. banks," says Sophie Lund-Yates, equity analyst at U.K.-based financial firm Hargreaves Lansdown. | For starters, we're entering the busiest week of the second-quarter earnings season so far, with several mega-cap tech names – such as Apple (AAPL) and Microsoft (MSFT) – set to report. The Nasdaq's impressive multi-day winning streak came to a screeching halt on Friday as a negative earnings reaction for social media stock Snap (SNAP, -39.1%) weighed on the broader tech sector. American Express (AXP) gained 2.0% after the credit card company reported earnings. | For starters, we're entering the busiest week of the second-quarter earnings season so far, with several mega-cap tech names – such as Apple (AAPL) and Microsoft (MSFT) – set to report. Ahead of today's open, the social media platform said second-quarter revenue fell 0.8% year-over-year to $1.18 billion – coming up well short of analysts' estimates – with advertising revenue rising just 2% for the three-month period. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.) Verizon Communications (VZ) was the worst Dow Jones stock today, sinking 6.7% after the telecommunications company reported lower-than-expected second-quarter earnings of $1.31 per share and cut its full-year forecast. | For starters, we're entering the busiest week of the second-quarter earnings season so far, with several mega-cap tech names – such as Apple (AAPL) and Microsoft (MSFT) – set to report. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.) Verizon Communications (VZ) was the worst Dow Jones stock today, sinking 6.7% after the telecommunications company reported lower-than-expected second-quarter earnings of $1.31 per share and cut its full-year forecast. Q2 revenue of $33.79 billion came in just above the consensus. " |
20126.0 | 2022-07-22 00:00:00 UTC | Wall Street ends lower as ad tech, social media stocks drop | AAPL | https://www.nasdaq.com/articles/wall-street-ends-lower-as-ad-tech-social-media-stocks-drop | nan | nan | By Echo Wang
July 22 (Reuters) - U.S. stocks ended lower on Friday as shares in social media and ad tech firms lost ground in the wake of earnings from Snap, offsetting gains from card issuer American Express following an upbeat forecast.
Still, all three major indexes posted weekly gains despite Friday's losses.
Snap Inc's SNAP.N shares tumbled, after the Snapchat owner posted its weakest-ever quarterly sales growth as a public company, while Twitter Inc TWTR.N reversed earlier losses following a surprise fall in revenue.
Online ad giants Meta Platforms Inc META.O and Alphabet Inc GOOGL.O tumbled weighing on the Nasdaq .IXIC.
Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O.
The S&P 500 communication services .SPLRCL and information technology .SPLRCT tumbled, leading declines among the index's 11 sectors.
According to preliminary data, the S&P 500 .SPX lost 36.71 points, or 0.92%, to end at 3,962.24 points, while the Nasdaq Composite .IXIC lost 225.94 points, or 1.87%, to 11,835.66. The Dow Jones Industrial Average .DJI fell 131.23 points, or 0.41%, to 31,905.67.
"Earnings are coming in less bad than feared, but they're deteriorating from what we got used to and accustomed to over the last several quarters," said Bob Doll, CIO at Crossmark Global Investments.
With 106 of the S&P 500 companies having reported earnings through Friday morning, 75.5% have topped analyst expectations, below the 81% beat rate over the past four quarters, according to Refinitiv data.L1N2Z31SC
All eyes are on the Federal Reserve's meeting and second-quarter U.S. gross domestic product data next week. While the U.S. central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, the GDP data is likely to be negative again.
Meanwhile, a survey on Friday showed that U.S. business activity contracted for the first time in nearly two years in July, deepening concerns about an economy stunted by high inflation, rising interest rates and dwindling consumer confidence.
“Economic data is coming in weaker.. kind of confirming the fact that a recession is highly likely over the next 12 months. And the markets is trying to figure out what that looks like with economic growth slowing significantly [and] the Fed in the midst of pretty aggressive tightening fiscal,” said Megan Horneman, chief investment officer at Verdence Capital Advisors in Hunt Valley, Maryland
Verizon Communications Inc VZ.N tumbled after announcing it cut its annual adjusted profit forecast as inflation weighs. American Express Co AXP.N rose on strong earnings and an increased revenue forecast.
(Reporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal, Aniruddha Ghosh and Bansari Mayur Kamdar in Bengaluru; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila, Shounak Dasgupta and Aurora Ellis)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - U.S. stocks ended lower on Friday as shares in social media and ad tech firms lost ground in the wake of earnings from Snap, offsetting gains from card issuer American Express following an upbeat forecast. With 106 of the S&P 500 companies having reported earnings through Friday morning, 75.5% have topped analyst expectations, below the 81% beat rate over the past four quarters, according to Refinitiv data.L1N2Z31SC All eyes are on the Federal Reserve's meeting and second-quarter U.S. gross domestic product data next week. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - U.S. stocks ended lower on Friday as shares in social media and ad tech firms lost ground in the wake of earnings from Snap, offsetting gains from card issuer American Express following an upbeat forecast. Still, all three major indexes posted weekly gains despite Friday's losses. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - U.S. stocks ended lower on Friday as shares in social media and ad tech firms lost ground in the wake of earnings from Snap, offsetting gains from card issuer American Express following an upbeat forecast. According to preliminary data, the S&P 500 .SPX lost 36.71 points, or 0.92%, to end at 3,962.24 points, while the Nasdaq Composite .IXIC lost 225.94 points, or 1.87%, to 11,835.66. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - U.S. stocks ended lower on Friday as shares in social media and ad tech firms lost ground in the wake of earnings from Snap, offsetting gains from card issuer American Express following an upbeat forecast. Still, all three major indexes posted weekly gains despite Friday's losses. |
20127.0 | 2022-07-22 00:00:00 UTC | US STOCKS-Wall Street slips as ad tech, social media stocks weigh | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-slips-as-ad-tech-social-media-stocks-weigh | nan | nan | By Shreyashi Sanyal
July 22 (Reuters) - U.S. stock indexes fell on Friday after dismal quarterly revenue from Twitter and Snap triggered declines in social media and ad tech firms, countering gains in American Express following an upbeat forecast.
By early afternoon, Snap Inc's SNAP.N shares plunged nearly 40%, after the Snapchat owner missed revenue targets and declined to make a forecast on Thursday, while Twitter Inc TWTR.N slipped 1.2% following a surprise fall in revenue.
The social media sector is expected to post the slowest ever global revenue growth in the second quarter after a blowout 2021.
Online ad giants Meta Platforms Inc META.O and Alphabet Inc GOOGL.O tumbled 7.5% and 5.6%, respectively, weighing on the Nasdaq .IXIC.
Meta and Alphabet are set to post their earnings next week, along with mega-cap peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O.
The S&P 500 communication services sector .SPLRCL tumbled 4.4%, leading sectoral declines.
"This can be interpreted as a warning signal that profitability is under pressure as the economic environment is slowing," said Lindsey Bell, chief money & markets strategist at Ally Invest, Charlotte, North Carolina.
Investors are focusing on the Federal Reserve's meeting and second-quarter U.S. gross domestic product data next week. While the U.S. central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, the GDP data is likely to be negative again.
Meanwhile, a survey on Friday showed that U.S. business activity contracted for the first time in nearly two years in July, deepening concerns about an economy stunted by high inflation, rising interest rates and dwindling consumer confidence.
Red-hot inflation forced Verizon Communications Inc VZ.N to cut its annual adjusted profit forecast, sending its shares down 7.4%. American Express Co AXP.N rose 2.6%.
Still, the S&P 500 .SPX and the Dow .DJI were set to end the week with their biggest gains in nearly a month, with growth stocks doing most of the heavy lifting after markets cheered quarterly reports from Tesla Inc TSLA.O and Netflix Inc NFLX.O.
At 12:06 p.m. ET the Dow was down 72.07 points, or 0.22%, at 31,964.83, the S&P 500 was down 29.70 points, or 0.74%, at 3,969.25, and the Nasdaq Composite was down 191.42 points, or 1.59%, at 11,868.19.
"The U.S. economy is relatively strong compared to expectations ... earnings are likely to be a positive catalyst as companies are doing better than investors had feared," said Jay Hatfield, chief executive and portfolio manager at InfraCap in New York.
Analysts now expect year-on-year S&P 500 profits to grow 6.2% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.
Advancing issues outnumbered decliners for a 1.12-to-1 ratio on the NYSE, while declining issues outnumbered advancers for a 1.94-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 31 new lows, while the Nasdaq recorded 23 new highs and 51 new lows.
(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Additional reporting by Bansari Mayur Kamdar; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila and Shounak Dasgupta)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - U.S. stock indexes fell on Friday after dismal quarterly revenue from Twitter and Snap triggered declines in social media and ad tech firms, countering gains in American Express following an upbeat forecast. "This can be interpreted as a warning signal that profitability is under pressure as the economic environment is slowing," said Lindsey Bell, chief money & markets strategist at Ally Invest, Charlotte, North Carolina. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - U.S. stock indexes fell on Friday after dismal quarterly revenue from Twitter and Snap triggered declines in social media and ad tech firms, countering gains in American Express following an upbeat forecast. Advancing issues outnumbered decliners for a 1.12-to-1 ratio on the NYSE, while declining issues outnumbered advancers for a 1.94-to-1 ratio on the Nasdaq. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - U.S. stock indexes fell on Friday after dismal quarterly revenue from Twitter and Snap triggered declines in social media and ad tech firms, countering gains in American Express following an upbeat forecast. Advancing issues outnumbered decliners for a 1.12-to-1 ratio on the NYSE, while declining issues outnumbered advancers for a 1.94-to-1 ratio on the Nasdaq. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - U.S. stock indexes fell on Friday after dismal quarterly revenue from Twitter and Snap triggered declines in social media and ad tech firms, countering gains in American Express following an upbeat forecast. The social media sector is expected to post the slowest ever global revenue growth in the second quarter after a blowout 2021. |
20128.0 | 2022-07-22 00:00:00 UTC | After Hours Most Active for Jul 22, 2022 : CCL, CMCSA, QQQ, SNAP, BEKE, AMTD, NLSN, HR, AAPL, AMD, AMZN, MSFT | AAPL | https://www.nasdaq.com/articles/after-hours-most-active-for-jul-22-2022-%3A-ccl-cmcsa-qqq-snap-beke-amtd-nlsn-hr-aapl-amd | nan | nan | The NASDAQ 100 After Hours Indicator is down -1.08 to 12,395.39. The total After hours volume is currently 49,666,225 shares traded.
The following are the most active stocks for the after hours session:
Carnival Corporation (CCL) is -0.01 at $9.25, with 4,594,361 shares traded. CCL's current last sale is 66.07% of the target price of $14.
Comcast Corporation (CMCSA) is unchanged at $42.60, with 4,027,587 shares traded. Over the last four weeks they have had 4 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2022. The consensus EPS forecast is $0.92. CMCSA is scheduled to provide an earnings report on 7/28/2022, for the fiscal quarter ending Jun2022. The consensus earnings per share forecast is 0.92 per share, which represents a 84 percent increase over the EPS one Year Ago
Invesco QQQ Trust, Series 1 (QQQ) is +0.01 at $302.00, with 2,646,437 shares traded. This represents a 12.15% increase from its 52 Week Low.
Snap Inc. (SNAP) is -0.03 at $9.93, with 2,102,959 shares traded., following a 52-week high recorded in today's regular session.
KE Holdings Inc (BEKE) is +0.02 at $13.98, with 2,042,807 shares traded. As reported by Zacks, the current mean recommendation for BEKE is in the "buy range".
AMTD IDEA Group (AMTD) is +0.52 at $2.72, with 1,998,558 shares traded.
Nielsen N.V. (NLSN) is unchanged at $23.91, with 1,825,565 shares traded. NLSN's current last sale is 85.39% of the target price of $28.
Healthcare Realty Trust Incorporated (HR) is unchanged at $24.36, with 1,759,814 shares traded. HR's current last sale is 71.65% of the target price of $34.
Apple Inc. (AAPL) is +0.15 at $154.24, with 1,391,590 shares traded.AAPL is scheduled to provide an earnings report on 7/28/2022, for the fiscal quarter ending Jun2022. The consensus earnings per share forecast is 1.13 per share, which represents a 130 percent increase over the EPS one Year Ago
Advanced Micro Devices, Inc. (AMD) is -0.08 at $88.02, with 1,284,804 shares traded. As reported by Zacks, the current mean recommendation for AMD is in the "buy range".
Amazon.com, Inc. (AMZN) is +0.1 at $122.52, with 1,188,650 shares traded.AMZN is scheduled to provide an earnings report on 7/28/2022, for the fiscal quarter ending Jun2022. The consensus earnings per share forecast is 0.15 per share, which represents a 76 percent increase over the EPS one Year Ago
Microsoft Corporation (MSFT) is +0.25 at $260.61, with 1,153,468 shares traded.MSFT is scheduled to provide an earnings report on 7/26/2022, for the fiscal quarter ending Jun2022. The consensus earnings per share forecast is 2.28 per share, which represents a 217 percent increase over the EPS one Year Ago
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Inc. (AAPL) is +0.15 at $154.24, with 1,391,590 shares traded.AAPL is scheduled to provide an earnings report on 7/28/2022, for the fiscal quarter ending Jun2022. Amazon.com, Inc. (AMZN) is +0.1 at $122.52, with 1,188,650 shares traded.AMZN is scheduled to provide an earnings report on 7/28/2022, for the fiscal quarter ending Jun2022. Microsoft Corporation (MSFT) is +0.25 at $260.61, with 1,153,468 shares traded.MSFT is scheduled to provide an earnings report on 7/26/2022, for the fiscal quarter ending Jun2022. | Apple Inc. (AAPL) is +0.15 at $154.24, with 1,391,590 shares traded.AAPL is scheduled to provide an earnings report on 7/28/2022, for the fiscal quarter ending Jun2022. The consensus earnings per share forecast is 0.92 per share, which represents a 84 percent increase over the EPS one Year Ago The consensus earnings per share forecast is 1.13 per share, which represents a 130 percent increase over the EPS one Year Ago | Apple Inc. (AAPL) is +0.15 at $154.24, with 1,391,590 shares traded.AAPL is scheduled to provide an earnings report on 7/28/2022, for the fiscal quarter ending Jun2022. The consensus earnings per share forecast is 0.92 per share, which represents a 84 percent increase over the EPS one Year Ago The consensus earnings per share forecast is 1.13 per share, which represents a 130 percent increase over the EPS one Year Ago | Apple Inc. (AAPL) is +0.15 at $154.24, with 1,391,590 shares traded.AAPL is scheduled to provide an earnings report on 7/28/2022, for the fiscal quarter ending Jun2022. The following are the most active stocks for the after hours session: Over the last four weeks they have had 4 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2022. |
20129.0 | 2022-07-22 00:00:00 UTC | AAPL February 2023 Options Begin Trading | AAPL | https://www.nasdaq.com/articles/aapl-february-2023-options-begin-trading | nan | nan | Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the February 2023 expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 210 days until expiration the newly available contracts represent a possible opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new February 2023 contracts and identified one put and one call contract of particular interest.
The put contract at the $155.00 strike price has a current bid of $13.35. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $155.00, but will also collect the premium, putting the cost basis of the shares at $141.65 (before broker commissions). To an investor already interested in purchasing shares of AAPL, that could represent an attractive alternative to paying $155.83/share today.
Because the $155.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 8.61% return on the cash commitment, or 14.97% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Apple Inc, and highlighting in green where the $155.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $165.00 strike price has a current bid of $10.95. If an investor was to purchase shares of AAPL stock at the current price level of $155.83/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $165.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 12.91% if the stock gets called away at the February 2023 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AAPL shares really soar, which is why looking at the trailing twelve month trading history for Apple Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAPL's trailing twelve month trading history, with the $165.00 strike highlighted in red:
Considering the fact that the $165.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 7.03% boost of extra return to the investor, or 12.21% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $155.83) to be 30%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, a lot of upside could potentially be left on the table if AAPL shares really soar, which is why looking at the trailing twelve month trading history for Apple Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAPL's trailing twelve month trading history, with the $165.00 strike highlighted in red: Considering the fact that the $165.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the February 2023 expiration. | Below is a chart showing AAPL's trailing twelve month trading history, with the $165.00 strike highlighted in red: Considering the fact that the $165.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the February 2023 expiration. | Below is a chart showing AAPL's trailing twelve month trading history, with the $165.00 strike highlighted in red: Considering the fact that the $165.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the February 2023 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new February 2023 contracts and identified one put and one call contract of particular interest. | At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new February 2023 contracts and identified one put and one call contract of particular interest. Below is a chart showing AAPL's trailing twelve month trading history, with the $165.00 strike highlighted in red: Considering the fact that the $165.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the February 2023 expiration. |
20130.0 | 2022-07-22 00:00:00 UTC | US STOCKS-Social media stocks set to weigh on S&P 500, Nasdaq at open | AAPL | https://www.nasdaq.com/articles/us-stocks-social-media-stocks-set-to-weigh-on-sp-500-nasdaq-at-open | nan | nan | By Shreyashi Sanyal
July 22 (Reuters) - The S&P 500 and the Nasdaq headed for a lower open on Friday as social media and ad tech firms led declines after dismal quarterly revenues from Twitter and Snap, while an upbeat forecast from American Express looked set to boost the Dow.
Twitter Inc TWTR.N shed 1.8% in premarket trading as it reported a surprise fall in revenue, while Snap's shares SNAP.N plunged 32.4% a day after the Snapchat owner missed revenue targets and declined to make a forecast.
Both companies are facing fierce competition from Apple AAPL.O and TikTok as investors brace for the slowest ever global revenue growth for the social media sector in the second quarter.
Online ad giants Meta Platforms Inc META.O and Alphabet Inc GOOGL.O also fell 5.2% and 2.8%, respectively, weighing on Nasdaq futures NQcv1.
Meta and Alphabet are set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O.
"Meta and Google results are going to be subdued relative to last year, but I also think that these stocks have come down enough that most of this bad news is probably priced in," said Thomas Hayes, managing member at Great Hill Capital.
All three of Wall Street's main indexes are still set to end the week with their biggest gains in almost a month, with growth stocks doing most of the heavy lifting after markets cheered quarterly reports from Tesla Inc TSLA.O and Netflix Inc NFLX.O.
The Dow Jones Industrial Average .DJI looked set to open higher as American Express Co AXP.N jumped 3.9% after it raised its annual revenue forecast.
The U.S. Federal Reserve is expected to raise interest rates by 75 basis points next week to curb runaway inflation, followed by second-quarter U.S. gross domestic product data, which is likely to be negative again.
Two quarters of negative GDP would mean the United States is in a recession.
Red-hot inflation also hit Verizon Communications Inc VZ.N, which fell 4.2% after cutting its annual adjusted profit forecast.
At 8:41 a.m. ET, Dow e-minis 1YMcv1were up 59 points, or 0.18%, S&P 500 e-minis EScv1were down 6.25 points, or 0.16%, and Nasdaq 100 e-minis NQcv1were down 48 points, or 0.38%.
Of the 91 S&P 500 companies that have reporting earnings so far, 78% topped expectations. Analysts now see year-on-year S&P 500 profits to grow 6.3% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.
Seagate Technology Holdings STX.O plunged 11% after the memory chip maker announced plans to cut production, hurting shares of rivals Micron Technology MU.O and Western Digital WDC.O.
(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Shounak Dasgupta and Saumyadeb Chakrabarty)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Both companies are facing fierce competition from Apple AAPL.O and TikTok as investors brace for the slowest ever global revenue growth for the social media sector in the second quarter. Meta and Alphabet are set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - The S&P 500 and the Nasdaq headed for a lower open on Friday as social media and ad tech firms led declines after dismal quarterly revenues from Twitter and Snap, while an upbeat forecast from American Express looked set to boost the Dow. | Both companies are facing fierce competition from Apple AAPL.O and TikTok as investors brace for the slowest ever global revenue growth for the social media sector in the second quarter. Meta and Alphabet are set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - The S&P 500 and the Nasdaq headed for a lower open on Friday as social media and ad tech firms led declines after dismal quarterly revenues from Twitter and Snap, while an upbeat forecast from American Express looked set to boost the Dow. | Both companies are facing fierce competition from Apple AAPL.O and TikTok as investors brace for the slowest ever global revenue growth for the social media sector in the second quarter. Meta and Alphabet are set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - The S&P 500 and the Nasdaq headed for a lower open on Friday as social media and ad tech firms led declines after dismal quarterly revenues from Twitter and Snap, while an upbeat forecast from American Express looked set to boost the Dow. | Meta and Alphabet are set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. Both companies are facing fierce competition from Apple AAPL.O and TikTok as investors brace for the slowest ever global revenue growth for the social media sector in the second quarter. By Shreyashi Sanyal July 22 (Reuters) - The S&P 500 and the Nasdaq headed for a lower open on Friday as social media and ad tech firms led declines after dismal quarterly revenues from Twitter and Snap, while an upbeat forecast from American Express looked set to boost the Dow. |
20131.0 | 2022-07-22 00:00:00 UTC | US STOCKS-S&P 500, Nasdaq fall as social media stocks drag | AAPL | https://www.nasdaq.com/articles/us-stocks-sp-500-nasdaq-fall-as-social-media-stocks-drag | nan | nan | By Shreyashi Sanyal
July 22 (Reuters) - The S&P 500 and the Nasdaq fell on Friday as social media and ad tech firms led declines after dismal quarterly revenue from Twitter and Snap, while an upbeat forecast from American Express kept the Dow afloat.
Snap's shares SNAP.N plunged 35%, a day after the Snapchat owner missed revenue targets and declined to make a forecast, while Twitter Inc TWTR.N slipped following a surprise fall in revenue.
The social media sector is expected to post the slowest ever global revenue growth in the second quarter after a blowout 2021.
Online ad giants Meta Platforms Inc META.O and Alphabet Inc GOOGL.O tumbled 5.5% and 2.5%, respectively, weighing on the Nasdaq index .IXIC.
Meta and Alphabet are set to post their earnings next week, along with Big Tech peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O.
The Dow Jones Industrial Average .DJI was lifted by American Express Co AXP.N, which jumped 4% after it raised its annual revenue forecast.
Investors are focusing on the Federal Reserve's meeting and second-quarter U.S. gross domestic product data next week for clues on the health of the economy. While the U.S. central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, the GDP data is likely to be negative again.
Two quarters of negative GDP would mean the United States is in a recession.
Meanwhile, a survey on Friday showed that U.S. business activity contracted for the first time in nearly two years in July, deepening concerns about an economy stunted by high inflation, rising interest rates and dwindling consumer confidence.
Red-hot inflation forced Verizon Communications Inc VZ.N to cut its annual adjusted profit forecast, sending its shares down 5.5%.
Still, Wall Street's three main indexes were set to end the week with their biggest gains in nearly a month, with growth stocks doing most of the heavy lifting after markets cheered quarterly reports from Tesla Inc TSLA.O and Netflix Inc NFLX.O.
"We're looking for the relief rally to mature soon and yield at pullback and at the same time, we're looking for volatility to increase," said Katie Stockton, founder of technical analysis firm Fairlead Strategies.
"And the timing of it would be natural next week with all of the big earnings hitting the tape and the FOMC announcement."
At 9:58 a.m. ET, the Dow Jones Industrial Average .DJI was up 26.11 points, or 0.08%, at 32,063.01, while the S&P 500 .SPX was down 4.82 points, or 0.12%, at 3,994.13. The Nasdaq Composite .IXIC was down 49.86 points, or 0.41%, at 12,009.75.
Of the 106 S&P 500 companies that have reported earnings so far, 75.5% topped expectations. Analysts now see year-on-year S&P 500 profits to grow 6.2% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.
Advancing issues outnumbered decliners by a 1.34-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.51-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 30 new lows, while the Nasdaq recorded 17 new highs and 21 new lows.
(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Meta and Alphabet are set to post their earnings next week, along with Big Tech peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - The S&P 500 and the Nasdaq fell on Friday as social media and ad tech firms led declines after dismal quarterly revenue from Twitter and Snap, while an upbeat forecast from American Express kept the Dow afloat. Meanwhile, a survey on Friday showed that U.S. business activity contracted for the first time in nearly two years in July, deepening concerns about an economy stunted by high inflation, rising interest rates and dwindling consumer confidence. | Meta and Alphabet are set to post their earnings next week, along with Big Tech peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - The S&P 500 and the Nasdaq fell on Friday as social media and ad tech firms led declines after dismal quarterly revenue from Twitter and Snap, while an upbeat forecast from American Express kept the Dow afloat. The Dow Jones Industrial Average .DJI was lifted by American Express Co AXP.N, which jumped 4% after it raised its annual revenue forecast. | Meta and Alphabet are set to post their earnings next week, along with Big Tech peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - The S&P 500 and the Nasdaq fell on Friday as social media and ad tech firms led declines after dismal quarterly revenue from Twitter and Snap, while an upbeat forecast from American Express kept the Dow afloat. Still, Wall Street's three main indexes were set to end the week with their biggest gains in nearly a month, with growth stocks doing most of the heavy lifting after markets cheered quarterly reports from Tesla Inc TSLA.O and Netflix Inc NFLX.O. | Meta and Alphabet are set to post their earnings next week, along with Big Tech peers including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Shreyashi Sanyal July 22 (Reuters) - The S&P 500 and the Nasdaq fell on Friday as social media and ad tech firms led declines after dismal quarterly revenue from Twitter and Snap, while an upbeat forecast from American Express kept the Dow afloat. The Dow Jones Industrial Average .DJI was lifted by American Express Co AXP.N, which jumped 4% after it raised its annual revenue forecast. |
20132.0 | 2022-07-22 00:00:00 UTC | Wall St Week Ahead-Strong dollar looms over U.S. earnings season | AAPL | https://www.nasdaq.com/articles/wall-st-week-ahead-strong-dollar-looms-over-u.s.-earnings-season | nan | nan | By David Randall
NEW YORK, July 21 (Reuters) - Companies reporting earnings in coming weeks are likely to mention one common factor gouging their results: the strong dollar.
The U.S. currency stands near a 20-year high against a basket of its peers .DXY and is up 15.1% in the past year, lifted by a hawkish Federal Reserve and investors seeking shelter from turbulent markets.
A strong dollar can be a headwind for U.S. companies as it makes exporters’ products less competitive abroad and hurts multinationals that need to convert their foreign profits back into the U.S. currency.
Each percentage point of year-on-year increase in the U.S. Dollar Index .DXY, which measures the dollar against six other currencies, translates to a 0.5 percentage point hit to S&P 500 earnings growth, analysts at MorganStanley estimated.
"You seemingly can't get a break right now. We're starting to get some relief from oil prices, but you've still got the dollar banging on you," said Bill Stone, chief investment officer at the Glenview Trust Company.
International Business Machines Corp IBM.N, Netflix Inc NFLX.O and Johnson & Johnson JNJ.N were among the companies that in the past week cited the dollar’s strength as a headwind, with Johnson & Johnson joining Microsoft Corp MSFT.O by cutting its guidance due to the impact of the greenback’s rise.
Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation.
Investors are also awaiting what the Fed will have to say on those topics at its monetary policy meeting next week, at which it is widely expected to deliver another jumbo-sized 75 basis-point rate increase.
DOLLAR DOLDRUMS
Overall, some 40% of S&P 500 revenues come from overseas, data from FactSet showed. Information technology leads all sectors with 58% of revenues derived internationally, followed by materials with 56%, while utilities companies source just 2% of their revenues out of the United States, according to FactSet.
The dollar’s strength threatens to combine with high inflation, supply chain issues and other factors to weigh on earnings, analysts said.
“The rate of change on the dollar exhibits a strong negative correlation over time vs. S&P 500 earnings revisions. USD strength comes at an inopportune time for corporates already facing margin pressure and increasingly weaker demand,” Morgan Stanley’s analysts wrote.
So far, 5.1% of the S&P 500 companies that have reported their second quarter results have posted earnings above expectations, nearly half the average of 9.5% over the prior four quarters, according to Refintiv data.
Few can say when the dollar will turn, as the inflation-fighting Fed is expected to raise interest rates more aggressively than other central banks, boosting the U.S. currency’s appeal to yield-seeking investors.
Still, some are betting that signs of a peak in the dollar’s rally could balance out some of the damage caused by the burgeoning greenback.
Dollar peaks over the past 40 years have been followed by rallies in the S&P 500, with the benchmark index climbing by an average of 10% in the next 12 months on increased risk appetite and expectations of improving earnings, wrote John Lynch, chief investment officer for Comerica Wealth Management.
Jim Paulsen, chief investment strategist at The Leuthold Group, said the dollar is trading at a nearly 120% “safe-haven premium” based on its historical relationship to the consumer sentiment index.
The dollar has declined by an average 4.5% over 12 months each time its premium rose over 20% since 1988, he added.
Others are looking at the bright side of dollar strength, which some see reflects the belief that the United States can weather a looming global slowdown better than other countries.
Sameer Samana, seniorglobal marketstrategist at Wells Fargo Investment Institute, has been increasing his overweight in U.S. equities, betting that any the effects of a strong dollar will be outweighed by better economic growth over the long run.
"We think investors get too focused on the dollar's impact on earnings," he said.
(Reporting by David Randall; Additional reporting by Sinead Carew; Editing by Ira Iosebashvili and Jonathan Oatis)
((David.Randall@thomsonreuters.com; 646-223-6607; Reuters Messaging: david.randall.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation. Dollar peaks over the past 40 years have been followed by rallies in the S&P 500, with the benchmark index climbing by an average of 10% in the next 12 months on increased risk appetite and expectations of improving earnings, wrote John Lynch, chief investment officer for Comerica Wealth Management. Sameer Samana, seniorglobal marketstrategist at Wells Fargo Investment Institute, has been increasing his overweight in U.S. equities, betting that any the effects of a strong dollar will be outweighed by better economic growth over the long run. | Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation. By David Randall NEW YORK, July 21 (Reuters) - Companies reporting earnings in coming weeks are likely to mention one common factor gouging their results: the strong dollar. International Business Machines Corp IBM.N, Netflix Inc NFLX.O and Johnson & Johnson JNJ.N were among the companies that in the past week cited the dollar’s strength as a headwind, with Johnson & Johnson joining Microsoft Corp MSFT.O by cutting its guidance due to the impact of the greenback’s rise. | Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation. Each percentage point of year-on-year increase in the U.S. Dollar Index .DXY, which measures the dollar against six other currencies, translates to a 0.5 percentage point hit to S&P 500 earnings growth, analysts at MorganStanley estimated. International Business Machines Corp IBM.N, Netflix Inc NFLX.O and Johnson & Johnson JNJ.N were among the companies that in the past week cited the dollar’s strength as a headwind, with Johnson & Johnson joining Microsoft Corp MSFT.O by cutting its guidance due to the impact of the greenback’s rise. | Next week’s results from Apple Inc AAPL.O, Microsoft Corp MSFT.O, Coca-Cola Co KO.N and a slew of other companies will give investors a better picture of how businesses are holding up in the face of the strong dollar and soaring inflation. By David Randall NEW YORK, July 21 (Reuters) - Companies reporting earnings in coming weeks are likely to mention one common factor gouging their results: the strong dollar. Information technology leads all sectors with 58% of revenues derived internationally, followed by materials with 56%, while utilities companies source just 2% of their revenues out of the United States, according to FactSet. |
20133.0 | 2022-07-22 00:00:00 UTC | Social media stocks slump as Twitter, Snap warn of dire ad spending | AAPL | https://www.nasdaq.com/articles/social-media-stocks-slump-as-twitter-snap-warn-of-dire-ad-spending | nan | nan | July 22 (Reuters) - Shares of social media firms fell sharply on Friday as Twitter Inc TWTR.N joined the Snapchat owner SNAP.N in signaling a cutback in digital ad spend as economic growth sputters.
Pinterest Inc PINS.N plunged 7.5%, Facebook-owner Meta Platforms Inc META.O dropped 4.6%, Google-owner Alphabet Inc GOOGL.O, which also sells ads online, fell 2.1%.
At current prices Pinterest, Meta, Alphabet and Snap were collectively set to lose about $36 billion in market value.
Twitter also blamed its ongoing battle to close its $44-billion acquisition by Elon Musk for the surprise fall in quarterly revenue. The micro-blogging site's shares were marginally higher.
Advertisers have pared back spending amid rising interest rates and surging inflation as some of them struggle with labor shortages and supply chain disruptions, Snap Inc said on Thursday.
"If you want proof that companies are nervous about the economic outlook, just look at how media platforms and marketing agencies are bemoaning a tougher advertising market," Russ Mould, AJ Bell investment director, said.
Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook.
Snap Inc's shares were down 34.6% and were the most heavily traded across U.S. exchanges, as the company said it was looking for new sources of revenue to grow.
The Snapchat owner's weak quarterly outlook confirm fears that ad spending is worsening, RBC Capital Markets said in a note.
"Unfortunately for Snap and the digital ad sector, we believe there are signs of further ad spending cuts."
Meta and Alphabet are slated to post quarterly results next week, while Pinterest is set to report second-quarter results on Aug. 1.
(Reporting by Medha Singh and Akash Sriram in Bengaluru; Editing by Shounak Dasgupta)
((Medha.Singh@thomsonreuters.com; https://twitter.com/medhasinghs))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook. July 22 (Reuters) - Shares of social media firms fell sharply on Friday as Twitter Inc TWTR.N joined the Snapchat owner SNAP.N in signaling a cutback in digital ad spend as economic growth sputters. Advertisers have pared back spending amid rising interest rates and surging inflation as some of them struggle with labor shortages and supply chain disruptions, Snap Inc said on Thursday. | Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook. July 22 (Reuters) - Shares of social media firms fell sharply on Friday as Twitter Inc TWTR.N joined the Snapchat owner SNAP.N in signaling a cutback in digital ad spend as economic growth sputters. At current prices Pinterest, Meta, Alphabet and Snap were collectively set to lose about $36 billion in market value. | Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook. July 22 (Reuters) - Shares of social media firms fell sharply on Friday as Twitter Inc TWTR.N joined the Snapchat owner SNAP.N in signaling a cutback in digital ad spend as economic growth sputters. "If you want proof that companies are nervous about the economic outlook, just look at how media platforms and marketing agencies are bemoaning a tougher advertising market," Russ Mould, AJ Bell investment director, said. | Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook. July 22 (Reuters) - Shares of social media firms fell sharply on Friday as Twitter Inc TWTR.N joined the Snapchat owner SNAP.N in signaling a cutback in digital ad spend as economic growth sputters. Pinterest Inc PINS.N plunged 7.5%, Facebook-owner Meta Platforms Inc META.O dropped 4.6%, Google-owner Alphabet Inc GOOGL.O, which also sells ads online, fell 2.1%. |
20134.0 | 2022-07-22 00:00:00 UTC | Positive Earnings Surprises Boost Stocks | AAPL | https://www.nasdaq.com/articles/positive-earnings-surprises-boost-stocks | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
All eyes have been on big corporate earnings announcements this week, which continue to buoy this propped-up market.
If companies continue to surprise to the upside, look for the S&P 500 to remain in bull-market territory… even with some major economic announcements looming next week.
We’re watching to see if the S&P can break through resistance or if it will bounce back down – it’s something to consider as you make trading decisions in the coming week.
We’re Binge-Watching Netflix
The world’s biggest streaming company announced Tuesday that it lost nearly 1 million subscribers for the three-month period from April to June, marking the second straight quarter it lost customers. Still, that was less than the loss of 2 million the company had forecast. Netflix shares were up about 6% at $214 in midday trading Wednesday and kept creeping up yesterday as well.
The second-quarter results offer a new bull case for Netflix investors and a beacon of hope for other tech stocks. Losing subscribers doesn’t sound promising, but in comparison to a dismal first quarter, the consensus is that it’s “good enough.” Netflix shares rose on Wednesday, along with other tech stocks like Apple Inc. (AAPL) and Microsoft Corp. (MSFT).
It may seem like now’s the time to capitalize on what seems like a bounce in tech stocks, but we’re holding off on any recommendations for NFLX until we see how all of this shakes out amid rumors of an acquisition in the next year by Microsoft. We explore that possibility and how Netflix might continue to grow and add subscribers in a short on our Learning Markets YouTube channel. Click here to get the rest of the story.
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Hope Emerges on Wall Street as Stocks Rise
Green shoots of hope are emerging on Wall Street as stocks rebound in the run-up to the Fed’s monetary policy decision next week.
Along with the FOMC statement on Wednesday, we’ll see the Consumer Confidence Index announced Tuesday, a prediction of consumer spending based on household consumption and saving. We’re interested in this score to see how consumer staple stocks like Walmart Stores Inc. (WMT), Procter & Gamble (PG), and Dollar General (DG) , will fare.
We’ll get GDP numbers and jobless claims on Thursday, which could boost the market if the numbers meet or exceed expectations. Plus, the core PCE price index will come in Friday. Another tick or two down could signal less inflation and feed those green shoots of hope in the market.
Speaking of, be sure not to miss our latest YouTube livestream, Are You Missing the Bounce in the Stock Market? The stock market is bouncing up from its lows. Learn how you can capitalize on the bounce, or if it’s just another fake out.
When you need more in-depth information about stocks, market trends, options trading, and more, our Learning Markets YouTube channel has what you’re looking for. It’s free to subscribe and is an indispensable resource during the ups and downs of earnings and reporting season.
Sincerely,
John Jagerson and Wade Hansen
Editors, Trading Opportunities
The post Positive Earnings Surprises Boost Stocks appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Losing subscribers doesn’t sound promising, but in comparison to a dismal first quarter, the consensus is that it’s “good enough.” Netflix shares rose on Wednesday, along with other tech stocks like Apple Inc. (AAPL) and Microsoft Corp. (MSFT). FREE REPORT: “March 23, 2020 Is About to Repeat” Why the 2022 sell-off is about to hit a huge turning point that could make you 5 to 10 times your money, beginning immediately… through a historic unveiling this summer in Houston, Texas. Sincerely, John Jagerson and Wade Hansen Editors, Trading Opportunities The post Positive Earnings Surprises Boost Stocks appeared first on InvestorPlace. | Losing subscribers doesn’t sound promising, but in comparison to a dismal first quarter, the consensus is that it’s “good enough.” Netflix shares rose on Wednesday, along with other tech stocks like Apple Inc. (AAPL) and Microsoft Corp. (MSFT). We’re Binge-Watching Netflix The world’s biggest streaming company announced Tuesday that it lost nearly 1 million subscribers for the three-month period from April to June, marking the second straight quarter it lost customers. Hope Emerges on Wall Street as Stocks Rise Green shoots of hope are emerging on Wall Street as stocks rebound in the run-up to the Fed’s monetary policy decision next week. | Losing subscribers doesn’t sound promising, but in comparison to a dismal first quarter, the consensus is that it’s “good enough.” Netflix shares rose on Wednesday, along with other tech stocks like Apple Inc. (AAPL) and Microsoft Corp. (MSFT). InvestorPlace - Stock Market News, Stock Advice & Trading Tips All eyes have been on big corporate earnings announcements this week, which continue to buoy this propped-up market. Hope Emerges on Wall Street as Stocks Rise Green shoots of hope are emerging on Wall Street as stocks rebound in the run-up to the Fed’s monetary policy decision next week. | Losing subscribers doesn’t sound promising, but in comparison to a dismal first quarter, the consensus is that it’s “good enough.” Netflix shares rose on Wednesday, along with other tech stocks like Apple Inc. (AAPL) and Microsoft Corp. (MSFT). InvestorPlace - Stock Market News, Stock Advice & Trading Tips All eyes have been on big corporate earnings announcements this week, which continue to buoy this propped-up market. The stock market is bouncing up from its lows. |
20135.0 | 2022-07-22 00:00:00 UTC | US STOCKS-Wall Street declines as ad tech, social media stocks weigh | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-declines-as-ad-tech-social-media-stocks-weigh | nan | nan | By Echo Wang
July 22 (Reuters) - Major U.S. indexes dipped on Friday as shares in social media and ad tech firms decline following weak earnings from Twitter and Snap, offsetting gains from card issuer American Express following an upbeat forecast.
Still, the S&P 500 .SPX and the Dow .DJI are on track to end the week with their biggest gains in nearly a month, with growth stocks doing most of the heavy lifting as markets cheer quarterly reports from Tesla Inc TSLA.O and Netflix Inc NFLX.O.
Snap Inc's SNAP.N shares tumbled nearly 40%, after the Snapchat owner posted its weakest-ever quarterly sales growth as a public company, while Twitter Inc TWTR.N slipped 0.6% following a surprise fall in revenue.
Online ad giants Meta Platforms Inc META.O and Alphabet Inc GOOGL.O tumbled 7.5% and 6.4%, respectively, weighing on the Nasdaq .IXIC.
Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O.
The S&P 500 communication services .SPLRCL and information technology .SPLRCT tumbled 4.8% and 1.9% respectively, leading declines among the index's 11 sectors.
"Earnings are coming in less bad than feared, but they're deteriorating from what we got used to and accustomed to over the last several quarters," said Bob Doll, CIO at Crossmark Global Investments.
"The other cross current along with earnings is how far is the Fed going to have to go to fight this inflation? Have we seen peak inflation? All these cross currents will continue to create volatility."
Market participants continue to await anxiously for the Federal Reserve's meeting and second-quarter U.S. gross domestic product data next week. While the U.S. central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, the GDP data is likely to be negative again.
Meanwhile, a survey on Friday showed that U.S. business activity contracted for the first time in nearly two years in July, deepening concerns about an economy stunted by high inflation, rising interest rates and dwindling consumer confidence.
Verizon Communications Inc VZ.N cut its annual adjusted profit forecast as inflation weighs, sending its shares down 8%. American Express Co AXP.N rose 2% on strong earnings and an increased revenue forecast.
At 2:07PM ET, the Dow Jones Industrial Average .DJI fell 264.87 points, or 0.83%, to 31,772.03, the S&P 500 .SPX lost 55.4 points, or 1.39%, to 3,943.55 and the Nasdaq Composite .IXIC dropped 276.24 points, or 2.29%, to 11,783.37.
Analysts now expect year-on-year S&P 500 profits to grow 6.2% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.
Declining issues outnumbered advancing ones on the NYSE by a 1.83-to-1 ratio; on Nasdaq, a 2.86-to-1 ratio favored decliners.
The S&P 500 posted 1 new 52-week highs and 31 new lows; the Nasdaq Composite recorded 25 new highs and 58 new lows.
(Reporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal, Aniruddha Ghosh and Bansari Mayur Kamdar in Bengaluru; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila, Shounak Dasgupta and Aurora Ellis)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - Major U.S. indexes dipped on Friday as shares in social media and ad tech firms decline following weak earnings from Twitter and Snap, offsetting gains from card issuer American Express following an upbeat forecast. Snap Inc's SNAP.N shares tumbled nearly 40%, after the Snapchat owner posted its weakest-ever quarterly sales growth as a public company, while Twitter Inc TWTR.N slipped 0.6% following a surprise fall in revenue. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - Major U.S. indexes dipped on Friday as shares in social media and ad tech firms decline following weak earnings from Twitter and Snap, offsetting gains from card issuer American Express following an upbeat forecast. Meanwhile, a survey on Friday showed that U.S. business activity contracted for the first time in nearly two years in July, deepening concerns about an economy stunted by high inflation, rising interest rates and dwindling consumer confidence. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Echo Wang July 22 (Reuters) - Major U.S. indexes dipped on Friday as shares in social media and ad tech firms decline following weak earnings from Twitter and Snap, offsetting gains from card issuer American Express following an upbeat forecast. Snap Inc's SNAP.N shares tumbled nearly 40%, after the Snapchat owner posted its weakest-ever quarterly sales growth as a public company, while Twitter Inc TWTR.N slipped 0.6% following a surprise fall in revenue. | Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. "The other cross current along with earnings is how far is the Fed going to have to go to fight this inflation? While the U.S. central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, the GDP data is likely to be negative again. |
20136.0 | 2022-07-22 00:00:00 UTC | Social media stocks slump as Twitter, Snap warn of dire ad spending | AAPL | https://www.nasdaq.com/articles/social-media-stocks-slump-as-twitter-snap-warn-of-dire-ad-spending-0 | nan | nan | By Medha Singh and Akash Sriram
July 22 (Reuters) - Shares of social media firms fell sharply on Friday after Twitter Inc TWTR.N and Snapchat's owner SNAP.N signaled advertisers had tightened their purse strings in response to a darkening economic outlook.
Pinterest Inc PINS.N plunged 11.3%, Facebook-owner Meta Platforms Inc META.O dropped 5.6%, Google-owner Alphabet Inc GOOGL.O, which also sells ads online, fell 3.3%.
At current prices Pinterest, Meta, Twitter, Alphabet and Snap were collectively set to lose about $42 billion in market value.
Twitter also blamed its ongoing battle to close its $44-billion acquisition by Elon Musk for the surprise fall in quarterly revenue. The micro-blogging site's shares were down 0.1% in choppy trading.
Advertisers have pared back spending amid rising interest rates and surging inflation as some of them struggle with labor shortages and supply chain disruptions, Snap Inc said on Thursday.
"If you want proof that companies are nervous about the economic outlook, just look at how media platforms and marketing agencies are bemoaning a tougher advertising market," Russ Mould, AJ Bell investment director, said.
Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook.
Snap Inc's shares were down 36.4% and were the most heavily traded across U.S. exchanges, as the company said it was looking for new sources of revenue to grow.
"Unfortunately for Snap and the digital ad sector, we believe there are signs of further ad spending cuts," RBC Capital Markets said in a note.
Attention now turns to quarterly reports from mega-cap firms Meta and Alphabet next week. Some analysts believe the drop in their share prices reflects what is likely to be a subdued report.
"While more revenue cuts for advertising stocks are likely, we think Alphabet has more relative revenue stability given breadth of advertisers, more expense flexibility than most peers," analysts at Bank of American Global Research said.
(Reporting by Medha Singh and Akash Sriram in Bengaluru; Editing by Shounak Dasgupta and Shailesh Kuber)
((Medha.Singh@thomsonreuters.com; https://twitter.com/medhasinghs))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook. By Medha Singh and Akash Sriram July 22 (Reuters) - Shares of social media firms fell sharply on Friday after Twitter Inc TWTR.N and Snapchat's owner SNAP.N signaled advertisers had tightened their purse strings in response to a darkening economic outlook. Advertisers have pared back spending amid rising interest rates and surging inflation as some of them struggle with labor shortages and supply chain disruptions, Snap Inc said on Thursday. | Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook. By Medha Singh and Akash Sriram July 22 (Reuters) - Shares of social media firms fell sharply on Friday after Twitter Inc TWTR.N and Snapchat's owner SNAP.N signaled advertisers had tightened their purse strings in response to a darkening economic outlook. At current prices Pinterest, Meta, Twitter, Alphabet and Snap were collectively set to lose about $42 billion in market value. | Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook. By Medha Singh and Akash Sriram July 22 (Reuters) - Shares of social media firms fell sharply on Friday after Twitter Inc TWTR.N and Snapchat's owner SNAP.N signaled advertisers had tightened their purse strings in response to a darkening economic outlook. "If you want proof that companies are nervous about the economic outlook, just look at how media platforms and marketing agencies are bemoaning a tougher advertising market," Russ Mould, AJ Bell investment director, said. | Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's AAPL.O privacy changes further cloud outlook. By Medha Singh and Akash Sriram July 22 (Reuters) - Shares of social media firms fell sharply on Friday after Twitter Inc TWTR.N and Snapchat's owner SNAP.N signaled advertisers had tightened their purse strings in response to a darkening economic outlook. Pinterest Inc PINS.N plunged 11.3%, Facebook-owner Meta Platforms Inc META.O dropped 5.6%, Google-owner Alphabet Inc GOOGL.O, which also sells ads online, fell 3.3%. |
20137.0 | 2022-07-22 00:00:00 UTC | Should Vanguard Mega Cap ETF (MGC) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-vanguard-mega-cap-etf-mgc-be-on-your-investing-radar-3 | nan | nan | Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the Vanguard Mega Cap ETF (MGC), a passively managed exchange traded fund launched on 12/17/2007.
The fund is sponsored by Vanguard. It has amassed assets over $3.72 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.47%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 32.80% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc. (AAPL) accounts for about 7.79% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).
The top 10 holdings account for about 31.17% of total assets under management.
Performance and Risk
MGC seeks to match the performance of the CRSP US Mega Cap Index before fees and expenses. The CRSP U.S. Mega Cap Index includes the largest U.S. companies, with a target of including the top 70% of investable market capitalization. The index includes securities traded on NYSE, NYSE Market, NASDAQ or ARCA.
The ETF has lost about -17.02% so far this year and is down about -8.64% in the last one year (as of 07/22/2022). In the past 52-week period, it has traded between $128.05 and $169.35.
The ETF has a beta of 1 and standard deviation of 24.29% for the trailing three-year period, making it a medium risk choice in the space. With about 242 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mega Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MGC is a sufficient option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $295.87 billion in assets, SPDR S&P 500 ETF has $360.42 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 7.79% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report It has amassed assets over $3.72 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 7.79% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report You should consider the Vanguard Mega Cap ETF (MGC), a passively managed exchange traded fund launched on 12/17/2007. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 7.79% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Vanguard Mega Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 7.79% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space. |
20138.0 | 2022-07-22 00:00:00 UTC | 7 Best Nasdaq Stocks to Buy in July | AAPL | https://www.nasdaq.com/articles/7-best-nasdaq-stocks-to-buy-in-july | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The bear market has not hit all stocks equally. While energy stocks are down big from their highs, the group still remains the best performing in 2022. Conversely, growth stocks have been pummeled and the Nasdaq has taken a beating. While the weakness is discouraging, it has a few brave investors looking to buy the best Nasdaq stocks.
Some readers may consider that brave, but for others, they realize the difficulty that exists in buying stocks that have been severely beaten down. Even the best Nasdaq stocks have suffered large declines of roughly 30% or more. Some of the more less fortunate stocks have seen declines in excess of 50% or 60%.
7 Best Vanguard Funds for Aggressive Investors
That said, not all Nasdaq-listed stocks are tech companies and many investors seem to forget that. So in that light, let’s look at which one stick out as we kickoff the third quarter.
Ticker Company Recent Price
PANW Palo Alto Networks $513.13
AMD Advanced Micro Devices $90.19
AAPL Apple $154.96
MSFT Microsoft $264.03
PEP PepsiCo $168.02
COST Costco Wholesale $525.36
QCOM Qualcomm $154.19
Best Nasdaq Stocks: Palo Alto Networks (PANW)
Maybe it’s because of the selloff we’re seeing the broader market. Perhaps it’s because it’s not one of the big FAANG names or a chip favorite. However, I don’t think Palo Alto Networks (NASDAQ:PANW) gets enough credit.
The stock fought through the bear market pretty well at the beginning of the year. For the first several months of 2022, it was one of the few tech names that hadn’t been swallowed up. Why? Because there remains constant demand for its products as cybersecurity remains a growing concern by municipalities, companies, governments and citizens.
When the company most recently reported earnings, management said, “I’m less worried … right now given what’s going on in the environment … you’re seeing way more security awareness and concern more than I’ve ever seen.”
Analysts call for almost 30% revenue growth this year, then 20%-plus growth in each of the next three years.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) has enjoyed a modest rebound lately, but it has been absolutely crushed so far in 2022. In the fourth quarter of 2021, it was one of the few growth stocks hitting new all-time highs. But its reckoning came right off the bat in January and shares are now down 40% year-to-date.
I don’t know if that’s fair, though.
The company continues to report solid results, while analysts’ earnings and revenue expectations continue to increase at a time where the stock price is decreasing. When that occurs, we get a lower valuation, which is exactly what we’re seeing with AMD stock right now.
Shares trade at a reasonable 19 times this year’s earnings. When we consider the company’s growth and its acquisition of Xilinx (with great free-cash flow), that looks downright cheap. The company has proven to be a long-term winner and with the selloff, it’s looking more and more like a long-term opportunity.
7 Small-Cap Stocks to Buy on the Dip
Further, with the recent report from Taiwan Semiconductor (NYSE:TSM), we know that the semiconductor stocks are not in a state of free-fall.
Apple (AAPL)
With its $2.4 trillion market capitalization, Apple (NASDAQ:AAPL) is the biggest name in the Nasdaq and the entire stock market. As such, it’s no surprise that it’s included on the list of the best Nasdaq stocks to buy.
However, there’s more to it than the simple argument that “Apple is big.”
The company boasts a monumental balance sheet and immense cash flow. Each year, management makes it a point to raise its dividend — although it’s still modest at a 0.65% yield — and approve another round of buybacks. This year, Apple gave the green light to a $70 billion share repurchase program.
That’s good for roughly 3% of the outstanding shares, but more importantly, that breaks down to about $280 million worth of stock per day (assuming Apple were to buy the same amount of stock each trading day of the year). That’s a really nice bid to have in your stock.
In any regard, the company is the best-performing FAANG stock so far this year. That alone is worth some recognition.
Microsoft (MSFT)
Speaking of FAANG, did you know that Microsoft (NASDAQ:MSFT) — which is not in the FAANG group despite being the second-largest company in the U.S. — also bests this group at something?
While Meta Platforms (NASDAQ:META) may have superior gross margins, not one component tops Microsoft in profit margin. Yep, not even Apple.
Microsoft is generating operating margins of 42.5%. To no surprise given its gross margin profile, Meta comes in second, with 36.7% margin. At 30.5%, Apple is roughly 1,200 basis points behind Microsoft. That’s not a knock on Apple or any other FAANG component. But it’s a big compliment toward Microsoft.
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Lastly, Microsoft still has growth. Analysts expect 18.5% revenue growth in 2022 and 14% growth in 2023. As for earnings, the company is forecast to grow its bottom line by 15.5% in each of the next two years.
PepsiCo (PEP)
When investors think of the best Nasdaq stocks, they tend to think of technology stocks. But that’s not always the case, with PepsiCo (NASDAQ:PEP) being one example. With its $250 billion market cap, PepsiCo may be dwarfed by the Apple’s and Microsoft’s of the index, but it’s big enough to be a top-15 holding in the index.
At a time where the market has been volatile, Nasdaq investors can use stocks like PepsiCo to help stabilize the ship. The company pays out an attractive yield of 2.7%, while the dividend was recently increased in May by 7%. It was the company’s 50th straight year with a dividend increase.
It’s not just the dividend that PepsiCo is consistent with. The company is forecast to grow its earnings to $6.63 a share in 2022, up 6% from last year. That’s followed by almost 10% growth forecasts for 2023.
Costco Wholesale (COST)
Like PepsiCo, Costco Wholesale (NASDAQ:COST) is not the quintessential Nasdaq stock. It’s certainly not what comes to mind when investors think of the best Nasdaq stocks to buy. Presently, the company gets a lot of coverage for the low price of its hotdog-and-soda combo — $1.50 — while inflation is scorching higher, but Costco is much more than that.
In the U.S., there are a handful of retailers that are not only surviving, but actually thriving despite disruptions from e-commerce. Thankfully for long-time investors, Costco is thriving.
Case in point? Consensus expectations call for 15.5% revenue growth this year and almost 10% growth next year. As for earnings, analysts expect roughly 18% earnings growth this year and 11% growth in 2023. Throw in Costco’s one downfall, which is that it trades at almost 40 times earnings, and by the numbers we have a pretty normal-looking Nasdaq stock.
7 Small-Cap Stocks to Buy on the Dip
Joking aside, Costco is a great operator that tends to almost always trade at an elevated valuation.
Qualcomm (QCOM)
Looking to end our list of best Nasdaq stocks with a tech company, we have Qualcomm (NASDAQ:QCOM). Even before its recent stroke of good fortune, Qualcomm was setting up with a low valuation and solid growth.
Its downfall is that the company’s contract with Apple was supposed to taper off, as the latter worked on its own 5G modem chip. However, Apple is reportedly having trouble with its own chip and will again rely on Qualcomm to fill the gap that year. It will apparently be the sole provider for the chip as well.
The company is forecast to grow its revenue 33% this year and its earnings to grow 50%. However, estimates for 2023 are now likely conservative due the Apple news. By the time Apple does produce its own chip, it’s expected that Qualcomm will have added enough business to offset the loss of Apple.
While the stock has enjoyed a solid rally lately, shares still trade at just 14 times earnings.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The post 7 Best Nasdaq Stocks to Buy in July appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ticker Company Recent Price PANW Palo Alto Networks $513.13 AMD Advanced Micro Devices $90.19 AAPL Apple $154.96 MSFT Microsoft $264.03 PEP PepsiCo $168.02 COST Costco Wholesale $525.36 QCOM Qualcomm $154.19 Best Nasdaq Stocks: Palo Alto Networks (PANW) Maybe it’s because of the selloff we’re seeing the broader market. Apple (AAPL) With its $2.4 trillion market capitalization, Apple (NASDAQ:AAPL) is the biggest name in the Nasdaq and the entire stock market. Presently, the company gets a lot of coverage for the low price of its hotdog-and-soda combo — $1.50 — while inflation is scorching higher, but Costco is much more than that. | Ticker Company Recent Price PANW Palo Alto Networks $513.13 AMD Advanced Micro Devices $90.19 AAPL Apple $154.96 MSFT Microsoft $264.03 PEP PepsiCo $168.02 COST Costco Wholesale $525.36 QCOM Qualcomm $154.19 Best Nasdaq Stocks: Palo Alto Networks (PANW) Maybe it’s because of the selloff we’re seeing the broader market. Apple (AAPL) With its $2.4 trillion market capitalization, Apple (NASDAQ:AAPL) is the biggest name in the Nasdaq and the entire stock market. Advanced Micro Devices (AMD) Advanced Micro Devices (NASDAQ:AMD) has enjoyed a modest rebound lately, but it has been absolutely crushed so far in 2022. | Ticker Company Recent Price PANW Palo Alto Networks $513.13 AMD Advanced Micro Devices $90.19 AAPL Apple $154.96 MSFT Microsoft $264.03 PEP PepsiCo $168.02 COST Costco Wholesale $525.36 QCOM Qualcomm $154.19 Best Nasdaq Stocks: Palo Alto Networks (PANW) Maybe it’s because of the selloff we’re seeing the broader market. Apple (AAPL) With its $2.4 trillion market capitalization, Apple (NASDAQ:AAPL) is the biggest name in the Nasdaq and the entire stock market. That’s good for roughly 3% of the outstanding shares, but more importantly, that breaks down to about $280 million worth of stock per day (assuming Apple were to buy the same amount of stock each trading day of the year). | Ticker Company Recent Price PANW Palo Alto Networks $513.13 AMD Advanced Micro Devices $90.19 AAPL Apple $154.96 MSFT Microsoft $264.03 PEP PepsiCo $168.02 COST Costco Wholesale $525.36 QCOM Qualcomm $154.19 Best Nasdaq Stocks: Palo Alto Networks (PANW) Maybe it’s because of the selloff we’re seeing the broader market. Apple (AAPL) With its $2.4 trillion market capitalization, Apple (NASDAQ:AAPL) is the biggest name in the Nasdaq and the entire stock market. At 30.5%, Apple is roughly 1,200 basis points behind Microsoft. |
20139.0 | 2022-07-22 00:00:00 UTC | Can Healthy Revenue Growth Aid Qualcomm (QCOM) Q3 Earnings? | AAPL | https://www.nasdaq.com/articles/can-healthy-revenue-growth-aid-qualcomm-qcom-q3-earnings | nan | nan | Qualcomm Incorporated QCOM is set to report third-quarter fiscal 2022 results on Jul 27, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 10.3%. It pulled off a trailing four-quarter earnings surprise of 11.4%, on average.
This San Diego, CA-based company is expected to have recorded higher revenues year over year, driven by the ramp-up in 5G-enabled chips and strength in its Snapdragon portfolio. The company is increasingly benefiting from advanced radio frequency front-end solutions for high-performance 5G devices and automotive chips.
Factors at Play
During the quarter, Qualcomm collaborated with AMD to optimize the Qualcomm FastConnect connectivity system for AMD Ryzen processor-based computing platforms. The AMD Manageability processor and the FastConnect 6900 will help unlock enhanced capabilities for IT to manage systems, offering professional-strength remote manageability for users in the new, hybrid workplace. Such innovative products are likely to have translated into higher revenues in the quarter.
In the fiscal third quarter, Qualcomm completed the acquisition of Arriver from SSW Partners. The transformative deal is expected to offer Qualcomm a firmer footing in the emerging market of driver-assistance technology, as it aims to extend the Snapdragon Ride Advanced Driver Assistance Systems (ADAS) portfolio.
The Arriver business of Veoneer operates the dedicated software unit focused on sensor perception and drive policy, including a full stack of features and functions. With the acquisition, Qualcomm aims to incorporate Arriver's Computer Vision, Drive Policy and Driver Assistance assets into its ADAS portfolio to deliver an open and competitive platform for automakers to better compete with rivals within the self-driving vehicle market. This, in turn, is likely to augment its automotive business as it strives to boost revenues beyond chipmaking for the smartphone market. These are likely to get reflected in the upcoming results.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $10,881 million, indicating growth of 35% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share stands at $2.86, which suggests an increase of 48.9%.
Earnings Whispers
Our proven model does not predict an earnings beat for Qualcomm for the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.63%, with the former pegged at $2.84 and the latter at $2.86. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
QUALCOMM Incorporated Price and EPS Surprise
QUALCOMM Incorporated price-eps-surprise | QUALCOMM Incorporated Quote
Zacks Rank: Qualcomm has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Keysight Technologies, Inc. KEYS is set to release quarterly numbers on Aug 17. It has an Earnings ESP of +1.23% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Qorvo Inc. QRVO is +0.41% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Aug 3.
The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jul 28.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. Apple Inc. (AAPL): Free Stock Analysis Report The transformative deal is expected to offer Qualcomm a firmer footing in the emerging market of driver-assistance technology, as it aims to extend the Snapdragon Ride Advanced Driver Assistance Systems (ADAS) portfolio. | The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. Apple Inc. (AAPL): Free Stock Analysis Report With the acquisition, Qualcomm aims to incorporate Arriver's Computer Vision, Drive Policy and Driver Assistance assets into its ADAS portfolio to deliver an open and competitive platform for automakers to better compete with rivals within the self-driving vehicle market. | The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. Apple Inc. (AAPL): Free Stock Analysis Report The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. | The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. Apple Inc. (AAPL): Free Stock Analysis Report In the last reported quarter, the company delivered an earnings surprise of 10.3%. |
20140.0 | 2022-07-22 00:00:00 UTC | 3 Reasons to Add Boring Stocks to Your Portfolio | AAPL | https://www.nasdaq.com/articles/3-reasons-to-add-boring-stocks-to-your-portfolio | nan | nan | I was initially drawn to investing by the idea of owning exciting companies driving the future of technology. I remember as a teenager doing some back-of-the-envelope math to see how much money I'd have if I'd simply bought my birthday money's worth of Amazon or Apple stock when I was a young child.
It's fun to invest in companies that are trying to change the world, but that excitement comes with risk.
According to Embroker, 90% of start-ups ultimately fail. And while the failure rate for public tech companies is certainly lower, the odds of finding the next Amazon or Tesla are extremely low. That is why smart investors understand the importance of buying boring companies, not just exciting ones.
When I say boring companies, I'm talking about mature businesses with proven track records of execution. These companies usually have strong brand awareness and loyalty, and while they're likely growing slower than tech start-ups, they've done so consistently for years, if not decades.
Image source: Getty Images.
Here are three reasons you should make space in your portfolio for these boring companies.
They're less volatile
If you're losing sleep over your stock portfolio, you're likely overexposed to risk. Recently, growth stocks have taken a beating, with some down as much as 90%, and the tech-heavy Nasdaq Composite down 25% year to date.
Meanwhile, the Fidelity Blue Chip Value ETF -- a fund comprised of at least 80% well-established, medium- to large-cap stocks -- is only down 5% in 2022.
FBCVX Total Return Level data by YCharts.
While there's less upside with blue chip stocks, you're also insulated from the extreme downside that comes with smaller-cap growth companies.
They add consistent compounding growth
Compounding is one of the keys to long-term outperformance. Think of it like a snowball rolling down a hill. At first, the growth is barely noticeable, but by the time the snowball reaches the bottom, it's exponentially larger.
One of the reasons mature businesses tend to be compounding machines is because they elect to return their profits to shareholders in the form of stock buybacks and dividends. Growth companies return value to shareholders by investing cashflows back into the business to increase revenues (and eventually profits).
But at a point, it becomes difficult to continue generating value by investing in growth, so mature companies pay out a portion of their profits to shareholders. This produces slow but consistent returns that snowball over time for investors.
Consider two of the best compounders over the last 20 years -- Costco and The Home Depot.
If you invested $10,000 in Costco in July 2002, your investment would be worth over $174,000 today. And had you reinvested the dividends, you'd be sitting on over $220,000. That's a 2,100% gain and a compound annual growth rate (CAGR) of 17%.
Similarly, had you invested the same amount in The Home Depot 20 years ago, your investment would be worth $155,689, which is a CAGR of 15% (dividends reinvested).
Neither of these companies invented a new technology or disrupted anything over the last two decades. However, they both have strong brands and consistently deliver exceptional value to their customers while growing their bottom lines. Companies that can do this for decades might not be the most exciting, but they will grow your portfolio exponentially.
They tend to keep winning
Many investors look for tiny under-the-radar companies, hoping to get in early before they blow up. And while the occasional bet on micro-cap stocks can make sense, there is plenty of long-term upside in investing in proven winners. This is because great businesses tend to keep executing and winning over long periods of time.
Imagine a massive boat, like a cruise ship or a cargo tanker. It takes tremendous power to get ships of that size moving, but once they reach cruising speed, there's little that can slow them down.
Companies are the same way. It takes an incredible amount of effort and resources to build a winning corporate culture and habits, but once those are instilled, they tend to persist for long periods of time.
That allows companies like Microsoft and Berkshire Hathaway to continue delivering returns for their shareholders for decades upon decades. And the great thing about the stock market is that you can place your bets on the winners throughout the race, not just at the beginning.
Don't overthink it
Oftentimes we think we need to pursue complex investing strategies for strong returns, but the reality is that countless proven businesses will continue to deliver strong returns for their shareholders for years, even decades.
You won't 100x your money, but you can certainly beat the market by investing in boring businesses.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Mark Blank has positions in Tesla. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), Costco Wholesale, Home Depot, Microsoft, and Tesla. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | One of the reasons mature businesses tend to be compounding machines is because they elect to return their profits to shareholders in the form of stock buybacks and dividends. It takes an incredible amount of effort and resources to build a winning corporate culture and habits, but once those are instilled, they tend to persist for long periods of time. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), Costco Wholesale, Home Depot, Microsoft, and Tesla. | That allows companies like Microsoft and Berkshire Hathaway to continue delivering returns for their shareholders for decades upon decades. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), Costco Wholesale, Home Depot, Microsoft, and Tesla. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. | Growth companies return value to shareholders by investing cashflows back into the business to increase revenues (and eventually profits). Don't overthink it Oftentimes we think we need to pursue complex investing strategies for strong returns, but the reality is that countless proven businesses will continue to deliver strong returns for their shareholders for years, even decades. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. | Companies are the same way. You won't 100x your money, but you can certainly beat the market by investing in boring businesses. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), Costco Wholesale, Home Depot, Microsoft, and Tesla. |
20141.0 | 2022-07-22 00:00:00 UTC | Twitter blames Musk, weak ad market for drop in revenue | AAPL | https://www.nasdaq.com/articles/twitter-blames-musk-weak-ad-market-for-drop-in-revenue | nan | nan | Adds details, shares
July 22 (Reuters) - Twitter Inc TWTR.N on Friday blamed uncertainties related to its $44 billion acquisition by Elon Musk and a weakening digital ad market for a surprise fall in quarterly revenue.
Twitter, which has sued Musk for dropping his offer to buy the company, said advertising revenue rose just 2% to $1.08 billion.
It reported second-quarter revenue of $1.18 billion, compared with $1.19 billion a year earlier. Analysts were expecting $1.32 billion, according to Refinitiv IBES data.
Twitter shares were down 3% in trading before the bell.
The company's results come after Snapchat parent Snap Inc SNAP.N posted weak results and declined to make a forecast, citing "incredibly challenging" conditions as advertisers cut back on spending.
Twitter and its peers, including Snap and Alphabet GOOGL.O, saw an uptick in revenue last year as brands spent heavily on advertising online, eyeing a recovery from the pandemic.
But inflation pressures and fears of a recession this year have forced brands to rethink their marketing budgets.
At the same time, Gen Z-favorite TikTok and tech giant Apple Inc AAPL.O, which gives users the choice to opt of data tracking, are grabbing market share in the digital ad space.
(Reporting by Nivedita Balu in Bengaluru; Editing by Saumyadeb Chakrabarty)
((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | At the same time, Gen Z-favorite TikTok and tech giant Apple Inc AAPL.O, which gives users the choice to opt of data tracking, are grabbing market share in the digital ad space. Adds details, shares July 22 (Reuters) - Twitter Inc TWTR.N on Friday blamed uncertainties related to its $44 billion acquisition by Elon Musk and a weakening digital ad market for a surprise fall in quarterly revenue. Twitter and its peers, including Snap and Alphabet GOOGL.O, saw an uptick in revenue last year as brands spent heavily on advertising online, eyeing a recovery from the pandemic. | At the same time, Gen Z-favorite TikTok and tech giant Apple Inc AAPL.O, which gives users the choice to opt of data tracking, are grabbing market share in the digital ad space. Adds details, shares July 22 (Reuters) - Twitter Inc TWTR.N on Friday blamed uncertainties related to its $44 billion acquisition by Elon Musk and a weakening digital ad market for a surprise fall in quarterly revenue. It reported second-quarter revenue of $1.18 billion, compared with $1.19 billion a year earlier. | At the same time, Gen Z-favorite TikTok and tech giant Apple Inc AAPL.O, which gives users the choice to opt of data tracking, are grabbing market share in the digital ad space. Adds details, shares July 22 (Reuters) - Twitter Inc TWTR.N on Friday blamed uncertainties related to its $44 billion acquisition by Elon Musk and a weakening digital ad market for a surprise fall in quarterly revenue. Twitter, which has sued Musk for dropping his offer to buy the company, said advertising revenue rose just 2% to $1.08 billion. | At the same time, Gen Z-favorite TikTok and tech giant Apple Inc AAPL.O, which gives users the choice to opt of data tracking, are grabbing market share in the digital ad space. Adds details, shares July 22 (Reuters) - Twitter Inc TWTR.N on Friday blamed uncertainties related to its $44 billion acquisition by Elon Musk and a weakening digital ad market for a surprise fall in quarterly revenue. Twitter, which has sued Musk for dropping his offer to buy the company, said advertising revenue rose just 2% to $1.08 billion. |
20142.0 | 2022-07-22 00:00:00 UTC | Twitter revenue falls in weakening digital ad market | AAPL | https://www.nasdaq.com/articles/twitter-revenue-falls-in-weakening-digital-ad-market | nan | nan | July 22 (Reuters) - Twitter Inc TWTR.N on Friday posted a surprise fall in revenue amid fierce competition from Apple and TikTok in a weakening advertising market, as the company wages a legal battle with Elon Musk over his $44 billion buyout deal.
The company reported second-quarter revenue of $1.18 billion, compared with $1.19 billion a year earlier.
Analysts were expecting $1.32 billion, according to Refinitiv IBES data.
The results come after Snapchat parent Snap Inc SNAP.N posted weak results and declined to make a forecast, citing "incredibly challenging" conditions as advertisers cut back on spending. [nL1N2Z22MN
(Reporting by Nivedita Balu in Bengaluru; Editing by Saumyadeb Chakrabarty)
((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | July 22 (Reuters) - Twitter Inc TWTR.N on Friday posted a surprise fall in revenue amid fierce competition from Apple and TikTok in a weakening advertising market, as the company wages a legal battle with Elon Musk over his $44 billion buyout deal. The results come after Snapchat parent Snap Inc SNAP.N posted weak results and declined to make a forecast, citing "incredibly challenging" conditions as advertisers cut back on spending. [nL1N2Z22MN (Reporting by Nivedita Balu in Bengaluru; Editing by Saumyadeb Chakrabarty) ((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The company reported second-quarter revenue of $1.18 billion, compared with $1.19 billion a year earlier. The results come after Snapchat parent Snap Inc SNAP.N posted weak results and declined to make a forecast, citing "incredibly challenging" conditions as advertisers cut back on spending. [nL1N2Z22MN (Reporting by Nivedita Balu in Bengaluru; Editing by Saumyadeb Chakrabarty) ((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | July 22 (Reuters) - Twitter Inc TWTR.N on Friday posted a surprise fall in revenue amid fierce competition from Apple and TikTok in a weakening advertising market, as the company wages a legal battle with Elon Musk over his $44 billion buyout deal. The company reported second-quarter revenue of $1.18 billion, compared with $1.19 billion a year earlier. [nL1N2Z22MN (Reporting by Nivedita Balu in Bengaluru; Editing by Saumyadeb Chakrabarty) ((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | July 22 (Reuters) - Twitter Inc TWTR.N on Friday posted a surprise fall in revenue amid fierce competition from Apple and TikTok in a weakening advertising market, as the company wages a legal battle with Elon Musk over his $44 billion buyout deal. The company reported second-quarter revenue of $1.18 billion, compared with $1.19 billion a year earlier. Analysts were expecting $1.32 billion, according to Refinitiv IBES data. |
20143.0 | 2022-07-22 00:00:00 UTC | Is Netflix Stock a Buy Now? | AAPL | https://www.nasdaq.com/articles/is-netflix-stock-a-buy-now-4 | nan | nan | Netflix's (NASDAQ: NFLX) stock has tumbled more than 60% this year amid pressing concerns about its slowing growth, ongoing loss of subscribers, and intensifying competition in the streaming video market. Its plans to chase down shared passwords and launch a cheaper ad-supported tier also suggested that Netflix was starved for new subscribers.
However, shares recently rallied after the company posted a mixed second-quarter earnings report. Has the streaming video giant's stock finally bottomed out, or will it continue to slide over the next few quarters?
Image source: Getty Images.
Another quarter of decelerating growth
Netflix's revenue rose 8.6% year over year to $7.97 billion in the second quarter, but that represented another quarter of slowing growth and narrowly missed analysts' expectations by $60 million.
Its paid subscribers increased 5.5% year over year to 220.67 million, but that still represented its second sequential loss of subs. On the bright side, it lost fewer than a million subscribers, which was significantly better than its own projected loss of about 2 million.
METRIC
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Paid subscribers (millions)
209.18
213.56
221.84
221.64
220.67
Growth (YOY)
8.4%
9.4%
8.9%
6.7%
5.5%
Revenue (billions)
$7.34
$7.48
$7.71
$7.87
$7.97
Growth (YOY)
19.4%
16.3%
16%
9.8%
8.6%
Data source: Netflix. YOY = year over year.
Brighter days could be around the corner
Netflix expects that bleeding to stop with a sequential addition of 1 million subscribers in the third quarter. It attributes that renewed interest to the return of Stranger Things, as well as the high viewership of other hit shows like The Umbrella Academy, The Lincoln Lawyer, and The Ultimatum.
According to Nielsen's ratings, Netflix gained the most viewing minutes (1.33 trillion) of any media outlet in the U.S. during the 2021-2022 TV season. Paramount Global's (NASDAQ: PARA) CBS ranked second with 753 billion minutes, followed by Comcast's (NASDAQ: CMCSA) NBC (597 billion), Disney's (NYSE: DIS) ABC (472 billion), and Fox (323 billion).
Disney+, which is often cited as Netflix's top streaming competitor, ranked sixth with 245 billion viewing minutes. Amazon and Apple ranked even lower. Therefore, the competitive threats might be overblown -- and Netflix might widen its lead with the planned launch of its ad-supported tier in early 2023.
But in the third quarter, Netflix only expects its revenue to rise 5% year over year -- and dip 2% sequentially -- to $7.84 billion as it gains a higher mix of lower-revenue overseas users amid tough currency headwinds. But on a constant currency basis, it expects its Q3 revenue to grow 12%.
But the costs are climbing
Netflix's operating margin declined both year over year and sequentially to 19.8% in the second quarter as it ramped up its production of new content. That was significantly lower than its prior forecast of 21.5%. Its free cash flow (FCF) also plunged sequentially to just $13 million.
METRIC
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Operating margin
25.2%
23.5%
8.2%
25.1%
19.8%
Free cash flow (millions)
($175)
($106)
($569)
$802
$13
EPS growth (YOY)
87%
83%
12%
(6%)
8%
Data source: Netflix. YOY = year over year.
Netflix expects its operating margin to fall again to 16% in the third quarter and for its earnings per share (EPS) to drop 33% year over year.
During the conference call, CFO Spence Neumann predicted its near-term operating margins would remain under pressure as it rolls out new content to "reignite revenue growth." Barring any major currency swings, it expects to generate an operating margin of 19%-20% for the full year, which would represent a slight decline from 21% in 2021.
For the full year, analysts expect Netflix's revenue to rise 7% and for its net income to decline 11%. Next year, they expect its revenue and net income to grow 9% and 13%, respectively, as its spending gradually stabilizes.
Can we consider Netflix a value play?
We should take those estimates with a grain of salt, but Netflix's high-growth days are likely over. However, it could remain the clear leader of the premium streaming video market as rivals like Disney continue to pump billions of dollars into their unprofitable streaming ecosystems.
Netflix stock currently trades at 19 times forward earnings. That multiple seems reasonable relative to its growth rates, but it definitely isn't a screaming bargain yet -- especially if we compare it to traditional media companies like Disney, Comcast, and Paramount, which currently trade at 17, 11, and nine times forward earnings, respectively.
Therefore, Netflix isn't headed off a cliff, but it also isn't a value play. It still faces significant long-term challenges, and its stock could eventually be valued more like its traditional media peers instead of like a high-growth tech company, so I don't see it as a compelling buy right now.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun has positions in Amazon, Apple, and Walt Disney. The Motley Fool has positions in and recommends Amazon, Apple, Netflix, and Walt Disney. The Motley Fool recommends Comcast and recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Netflix's (NASDAQ: NFLX) stock has tumbled more than 60% this year amid pressing concerns about its slowing growth, ongoing loss of subscribers, and intensifying competition in the streaming video market. During the conference call, CFO Spence Neumann predicted its near-term operating margins would remain under pressure as it rolls out new content to "reignite revenue growth." That multiple seems reasonable relative to its growth rates, but it definitely isn't a screaming bargain yet -- especially if we compare it to traditional media companies like Disney, Comcast, and Paramount, which currently trade at 17, 11, and nine times forward earnings, respectively. | Paid subscribers (millions) 209.18 213.56 221.84 221.64 220.67 Growth (YOY) 8.4% 9.4% 8.9% 6.7% 5.5% Revenue (billions) $7.34 $7.48 $7.71 $7.87 $7.97 Growth (YOY) 19.4% 16.3% 16% 9.8% 8.6% Data source: Netflix. Operating margin 25.2% 23.5% 8.2% 25.1% 19.8% Free cash flow (millions) ($175) ($106) ($569) $802 $13 EPS growth (YOY) 87% 83% 12% (6%) 8% Data source: Netflix. The Motley Fool recommends Comcast and recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. | Another quarter of decelerating growth Netflix's revenue rose 8.6% year over year to $7.97 billion in the second quarter, but that represented another quarter of slowing growth and narrowly missed analysts' expectations by $60 million. But in the third quarter, Netflix only expects its revenue to rise 5% year over year -- and dip 2% sequentially -- to $7.84 billion as it gains a higher mix of lower-revenue overseas users amid tough currency headwinds. Netflix expects its operating margin to fall again to 16% in the third quarter and for its earnings per share (EPS) to drop 33% year over year. | Brighter days could be around the corner Netflix expects that bleeding to stop with a sequential addition of 1 million subscribers in the third quarter. Operating margin 25.2% 23.5% 8.2% 25.1% 19.8% Free cash flow (millions) ($175) ($106) ($569) $802 $13 EPS growth (YOY) 87% 83% 12% (6%) 8% Data source: Netflix. That's right -- they think these 10 stocks are even better buys. |
20144.0 | 2022-07-22 00:00:00 UTC | US STOCKS-S&P 500, Nasdaq futures fall, social media stocks lead declines | AAPL | https://www.nasdaq.com/articles/us-stocks-sp-500-nasdaq-futures-fall-social-media-stocks-lead-declines | nan | nan | For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window
Futures: S&P off 0.26%, Nasdaq down 0.54%, Dow flat
July 22 (Reuters) - S&P 500 and Nasdaq futures fell on Friday, with social media firms and companies that sell online ads leading declines after Snap Inc missed quarterly revenue targets.
The Snapchat owner's shares SNAP.N plunged 29.8% in premarket trading as it declined to make a forecast and said record-high inflation and increasing competition hurt advertising demand.
Nasdaq futures NQcv1 fell the most among its peers, with Meta Platforms Inc META.O and Alphabet Inc GOOGL.O involved in online ad tech dropping 4.8% and 2.9%, respectively.
Twitter Inc TWTR.N shed 2.1% before reporting its quarterly results, while Meta and Alphabet were set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O.
Investors are bracing for the slowest ever global revenue growth for the social media sector as intensifying competition from TikTok and Apple in advertising threaten to compound economic woes in the second quarter.
All three of Wall Street's main indexes are still set to end the week with their biggest gains in almost a month, with growth stocks doing most of the heavy lifting after markets cheered quarterly reports from Tesla Inc TSLA.O and Netflix Inc NFLX.O.
The U.S. Federal Reserve is expected to raise interest rates by 75 basis points next week to curb runaway inflation, followed by second-quarter U.S. gross domestic product data, which is likely to be negative again.
Two quarters of negative GDP would mean the United States is in a recession.
At 6:32 a.m. ET, Dow e-minis 1YMcv1 were down 2 points, or 0.01%, S&P 500 e-minis EScv1 were down 10.5 points, or 0.26%, and Nasdaq 100 e-minis NQcv1 were down 68.25 points, or 0.54%.
Of the 91 S&P 500 companies that have reporting earnings so far, 78% topped expectations. Analysts now see year-on-year S&P 500 profits to grow 6.3% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Twitter Inc TWTR.N shed 2.1% before reporting its quarterly results, while Meta and Alphabet were set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. Investors are bracing for the slowest ever global revenue growth for the social media sector as intensifying competition from TikTok and Apple in advertising threaten to compound economic woes in the second quarter. All three of Wall Street's main indexes are still set to end the week with their biggest gains in almost a month, with growth stocks doing most of the heavy lifting after markets cheered quarterly reports from Tesla Inc TSLA.O and Netflix Inc NFLX.O. | Twitter Inc TWTR.N shed 2.1% before reporting its quarterly results, while Meta and Alphabet were set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window Futures: S&P off 0.26%, Nasdaq down 0.54%, Dow flat July 22 (Reuters) - S&P 500 and Nasdaq futures fell on Friday, with social media firms and companies that sell online ads leading declines after Snap Inc missed quarterly revenue targets. ET, Dow e-minis 1YMcv1 were down 2 points, or 0.01%, S&P 500 e-minis EScv1 were down 10.5 points, or 0.26%, and Nasdaq 100 e-minis NQcv1 were down 68.25 points, or 0.54%. | Twitter Inc TWTR.N shed 2.1% before reporting its quarterly results, while Meta and Alphabet were set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window Futures: S&P off 0.26%, Nasdaq down 0.54%, Dow flat July 22 (Reuters) - S&P 500 and Nasdaq futures fell on Friday, with social media firms and companies that sell online ads leading declines after Snap Inc missed quarterly revenue targets. ET, Dow e-minis 1YMcv1 were down 2 points, or 0.01%, S&P 500 e-minis EScv1 were down 10.5 points, or 0.26%, and Nasdaq 100 e-minis NQcv1 were down 68.25 points, or 0.54%. | Twitter Inc TWTR.N shed 2.1% before reporting its quarterly results, while Meta and Alphabet were set to post their earnings next week along with other Big Tech firms including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. The Snapchat owner's shares SNAP.N plunged 29.8% in premarket trading as it declined to make a forecast and said record-high inflation and increasing competition hurt advertising demand. Nasdaq futures NQcv1 fell the most among its peers, with Meta Platforms Inc META.O and Alphabet Inc GOOGL.O involved in online ad tech dropping 4.8% and 2.9%, respectively. |
20145.0 | 2022-07-22 00:00:00 UTC | 7 Best Consumer Stocks to Buy Now | AAPL | https://www.nasdaq.com/articles/7-best-consumer-stocks-to-buy-now | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Fears of a recession are looming and with high inflation, high gas prices and a bear market in multiple asset classes, why wouldn’t those concerns exist? Recession worries have taken a toll on most stocks, but especially on consumer-based stocks. There’s no hiding either; even the best consumer stocks have taken a hit.
While bear markets incite fear and negative emotions out in investors, they also create opportunities. When we look at some of the top consumer brands in the world, they’re still intact. That’s even though the stock prices are not intact.
7 Cheap Stocks That Are Trading at a Discount
So now that gives bulls an opportunity to buy some of the best consumer stocks in the market, even at a steep discount. This is even more true for the long-term investor.
Ticker Company Current Price
NKE Nike $111.62
LULU Lululemon Athletica $307.36
AAPL Apple $155.35
SBUX Starbucks $83.54
CMG Chipotle Mexican Grill $1,368.04
YETI Yeti $49.94
HSY Hershey $215.91
Best Consumer Stocks: Nike (NKE)
Source: pixfly / Shutterstock.com
Nike (NYSE:NKE) is one of the most recognized and strongest brands in the world. Across various sports, cultures and regions, Nike is a dominant company. However, that has not prevented its stock price from being crushed.
At its recent low, shares were down about 45%. However, these are the types of declines that create opportunity for long-term investors. Of course, the biggest risk to Nike is a global recession. If it comes, the entire stock market will come under further pressure; it won’t be a company-specific issue.
As it stands, though, Nike looks set for solid growth. Analysts expect roughly 20% earnings growth this year and next year. If that’s the case, then it’s hard to imagine the stock having significant downside from here.
If it does fall further and Nike does grow its earnings in that manner, then long-term investors will be getting a steal.
Lululemon Athletica (LULU)
Source: lentamart / Shutterstock
Similar to Nike, Lululemon Athletica (NASDAQ:LULU) has become a leading premium consumer brand over the last few years. As a result, it’s become one of the best consumer stocks out there as well.
When the pandemic hit in 2020, Lululemon saw a revenue shock hit its business — as did most businesses. It’s hard for a retailer to generate business with physical locations closed, right? Well, Lululemon’s direct-to-consumer approach led to a rapid rebound in sales. Even amid a global pandemic and a shutdown across the world, customers still wanted comfortable, premium clothes.
Looking at the forecasts now, nothing appears to have changed. Analysts expect 23% revenue growth and 22% earnings growth this year. Next year calls for double-digit growth in both measures as well.
8 Semiconductor Stocks to Buy on the Dip
At 36 times this year’s earnings, Lululemon stock isn’t necessarily cheap by most investors’ standards. However, after a peak-to-trough decline of almost 50%, the valuation has come down quite a bit.
Best Consumer Stocks: Apple (AAPL)
Source: Moab Republic / Shutterstock
Like Nike, Apple (NASDAQ:AAPL) is one of the most well-recognized brands in the world. Despite its peak-to-trough decline of 29%, investors need to take solace in the fact that shares are now down less than 15%.
Not only is that better than all of its FAANG peers — both the percentage off its high and the peak-to-trough decline — but it’s better than the Nasdaq. Apple, the top component in the Nasdaq, is outperforming the index.
Despite its fall, it still commands a $2.5 trillion market capitalization. It also helps that Apple has a perennial bull in Warren Buffett, who keeps buying the dip. Surely, he is not alone either — both when it comes to individual investors and funds.
Furthermore, the company has a stellar business. The Products division gets most of the credit because of Apple’s iPhones, iPads and other well-known products. But did you know that its Services unit is growing revenue almost three times faster than the Products division and that it’s twice as profitable?
In turn, that’s what’s keeping Apple stock in demand — make it one of the best consumer stocks out there.
Starbucks (SBUX)
Source: Grand Warszawski / Shutterstock.com
Shortly after the novel coronavirus pandemic hit the U.S., we went into lockdown as stores, buildings and virtually everything not deemed essential was closed. But then there were drive-thru lines wrapped around Starbucks (NASDAQ:SBUX).
As much flack as this company seems to take at times, it’s hard to argue with its business. Starbucks may be out of its high-growth days, but there’s no denying that it has become a staple in millions of consumers’ lives. Better yet, Starbucks appeals to multiple demographic ages. You’re likely to see a Baby Boomer ordering a coffee right after a Millennial or Generation Z teen orders the latest Frappuccino concoction.
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Forecast to grow sales 11% this year and 10% next year, Starbucks is anything but done. And even if it were, the company has made a serious commitment to returning capital to shareholders and paying a dividend yield. This company will be a cash-cow for years and years to come.
Best Consumer Stocks: Chipotle Mexican Grill (CMG)
Source: Northfoto / Shutterstock.com
Like Starbucks, Chipotle Mexican Grill (NYSE:CMG) is steadily gaining momentum as a top consumer brand in the US. The stigma of food safety dogged Chipotle for years, but new management and several years without any notable issues has this stock back on the right track.
Impressively, the stock has held up better than some of its peers amid the most recent pullback. Shares are down “just” 30% from the all-time high. While that’s not much of an accolade in most cases, it is right now as many stocks have fallen by 50% or more.
The one drawback here is the valuation. At 40 times earnings, Chipotle stock is not exactly cheap. That’s particularly true if this bear market continues to weigh on US equities.
That said, Chipotle has solid growth expectations. Consensus estimates call for 16.5% revenue growth this year and 14% growth next year. On the earnings front, estimates call for 25% growth in 2022 and an acceleration up to 33% growth in 2023.
That doesn’t look like a recession to me.
Yeti (YETI)
Source: David Tonelson / Shutterstock.com
Bears will argue that Yeti (NYSE:YETI) is susceptible to margin pressure and increased competition. To some extent, that risk does exist. However, the company has also proved itself to be a formidable leader when it comes to premium accessories. Its coolers, mugs, tumblers and more have become a staple piece among travelers, beach-goers and anyone who enjoys a warm or cold beverage staying warm or cold.
Like Chipotle, it’s almost as if there are no recession worries for Yeti. Analysts expect almost 20% revenue growth this year and 15% growth next year. Earnings estimates call for double-digit growth in both years too — including 20% growth in 2023.
As for margins, both gross and net margins continue to trend higher over the last several years. Five years ago, Yeti had gross margins in the mid-40% range. Now they are in the mid-50% range. Profit margins have gone from negative five years ago to flat in 2020 to currently about 15%.
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At 15 to 16 times earnings and double-digit growth, Yeti seems like one of the best consumer stocks to buy right now.
Best Consumer Stocks: Hershey (HSY)
Source: George Sheldon / Shutterstock.com
Hershey (NYSE:HSY) may not be the name readers expected this list to end with. But whether we find ourselves in a recession or not, this company may remain in demand. When times are good, people buy candy. When times are bad, it’s an affordable splurge to enjoy.
Known best for its brands like Hershey’s, Kit-Kat, Reese’s, York, Twizzlers and Bark Thins, Hershey also has its less well-known (but healthier options) including Skinny Pop, Paqui and Pirate’s Booty. As a result, the company dominates the list of most popular brands.
The stock is down just 5% from its all-time high, so if the market really starts to sell off, this one could be susceptible to more losses. However, the relative strength is undeniable at this point.
Hershey stock is a bit expensive at 27 times earnings, while the dividend is a bit low at 1.6%. In that sense, HSY stock isn’t for everyone, but it does have some attractive qualities and clearly, investors are finding it attractive as it’s barely off the highs.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The post 7 Best Consumer Stocks to Buy Now appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ticker Company Current Price NKE Nike $111.62 LULU Lululemon Athletica $307.36 AAPL Apple $155.35 SBUX Starbucks $83.54 CMG Chipotle Mexican Grill $1,368.04 YETI Yeti $49.94 HSY Hershey $215.91 Best Consumer Stocks: Nike (NKE) Source: pixfly / Shutterstock.com Nike (NYSE:NKE) is one of the most recognized and strongest brands in the world. Best Consumer Stocks: Apple (AAPL) Source: Moab Republic / Shutterstock Like Nike, Apple (NASDAQ:AAPL) is one of the most well-recognized brands in the world. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Fears of a recession are looming and with high inflation, high gas prices and a bear market in multiple asset classes, why wouldn’t those concerns exist? | Ticker Company Current Price NKE Nike $111.62 LULU Lululemon Athletica $307.36 AAPL Apple $155.35 SBUX Starbucks $83.54 CMG Chipotle Mexican Grill $1,368.04 YETI Yeti $49.94 HSY Hershey $215.91 Best Consumer Stocks: Nike (NKE) Source: pixfly / Shutterstock.com Nike (NYSE:NKE) is one of the most recognized and strongest brands in the world. Best Consumer Stocks: Apple (AAPL) Source: Moab Republic / Shutterstock Like Nike, Apple (NASDAQ:AAPL) is one of the most well-recognized brands in the world. Lululemon Athletica (LULU) Source: lentamart / Shutterstock Similar to Nike, Lululemon Athletica (NASDAQ:LULU) has become a leading premium consumer brand over the last few years. | Ticker Company Current Price NKE Nike $111.62 LULU Lululemon Athletica $307.36 AAPL Apple $155.35 SBUX Starbucks $83.54 CMG Chipotle Mexican Grill $1,368.04 YETI Yeti $49.94 HSY Hershey $215.91 Best Consumer Stocks: Nike (NKE) Source: pixfly / Shutterstock.com Nike (NYSE:NKE) is one of the most recognized and strongest brands in the world. Best Consumer Stocks: Apple (AAPL) Source: Moab Republic / Shutterstock Like Nike, Apple (NASDAQ:AAPL) is one of the most well-recognized brands in the world. 8 Semiconductor Stocks to Buy on the Dip At 36 times this year’s earnings, Lululemon stock isn’t necessarily cheap by most investors’ standards. | Ticker Company Current Price NKE Nike $111.62 LULU Lululemon Athletica $307.36 AAPL Apple $155.35 SBUX Starbucks $83.54 CMG Chipotle Mexican Grill $1,368.04 YETI Yeti $49.94 HSY Hershey $215.91 Best Consumer Stocks: Nike (NKE) Source: pixfly / Shutterstock.com Nike (NYSE:NKE) is one of the most recognized and strongest brands in the world. Best Consumer Stocks: Apple (AAPL) Source: Moab Republic / Shutterstock Like Nike, Apple (NASDAQ:AAPL) is one of the most well-recognized brands in the world. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Fears of a recession are looming and with high inflation, high gas prices and a bear market in multiple asset classes, why wouldn’t those concerns exist? |
20146.0 | 2022-07-22 00:00:00 UTC | Warren Buffett Loves These Stocks. Are They Right for You? | AAPL | https://www.nasdaq.com/articles/warren-buffett-loves-these-stocks.-are-they-right-for-you-2 | nan | nan | Watching the best investors provides terrific insight. Purchases and sales of stocks made by active institutional investors reveal how they see the market and the economy. However, it's important to remember that these investors have different goals, time frames, and resources than most of us, so it isn't practical to mirror their every move.
Warren Buffett's illustrious investing holding company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) has made interesting trades lately; upping its stake in oil stocks with Occidental Petroleum (NYSE: OXY), opening a new banking position in Citigroup (NYSE: C), and continuing to build its monster stake in Apple (NASDAQ: AAPL). Let's take a closer look.
A little more at the pump, a lot more in your retirement account?
Gas prices have come down a bit but continue causing Americans pain at the pump. High gas prices are no fun, but investors can use sky-high oil prices to their advantage with energy stocks. Oil stocks typically pay hefty dividends and earn tons of cash flow when fuel prices rise.
Berkshire's Occidental Petroleum purchases have demanded tons of coverage. The conglomerate upped its stake in the oil exploration and production company to nearly 20%. Once its stake reaches 20%, Berkshire will report the investment differently on its books because of accounting regulations.
What does this mean for us? Two things:
Berkshire believes Occidental will report excellent results moving forward (great!).
Their large purchases might stop or slow once the 20% threshold is reached (not so great).
Occidental's purchase of Anadarko Petroleum in 2019 created massive debt. The pandemic followed, and Occidental slashed the dividend from $0.79 quarterly to just a token penny. The dividend is finally back up to $0.13 quarterly and may soar.
The spike in oil prices comes at an opportune time. The increased cash flow should enable the company to pay the debt and raise the dividend. The debt has been steadily ticking down, as shown in the chart.
Data by YCharts.
Occidental stock is appropriate for investors with at least moderate risk tolerance. For example, oil prices could fall if we have a significant recession, and Berkshire could stop buying stock soon, causing a potential dip in the share price. On the other hand, the dividend could surge if oil prices stay elevated and heartily reward long-term shareholders.
Is Citi too cheap to ignore?
Many folks were surprised when Berkshire purchased nearly $3 billion in Citigroup stock in Q1 2022. Citi's stock still trades well below its pre-pandemic price and has lagged peers like Bank of America and JPMorgan Chase. The low valuation is attractive.
Citi trades at a price-to-book value well below peers and offers the highest dividend yield, as shown in the chart.
Data by YCharts.
Interest rates are rising, which is a double-edged sword for banks. Higher rates mean more interest revenue. But if rate hikes plunge the country into a recession, the slowdown could hurt results.
Purchasing Citigroup is a bet that interest rates will rise and that the economic slowdown will be fairly mild. The low price-to-book valuation offers a margin of safety, and the yield is enticing for income investors.
Will Apple continue to shine?
Apple stock has returned 325% over the past five years, compared to 71% for the S&P 500, dividends included. The past gains are tremendous, but the elephant in the room is a potential slowdown in consumer spending. Consumer sentiment is lower now than it was during the Great Recession and the pandemic.
Data by YCharts.
For a high-end electronics producer like Apple, this could spell trouble.
Berkshire doesn't appear concerned, as more than 40% of its portfolio is Apple stock. There are obvious reasons why: tremendous profits, a dedicated customer base, and excellent management, to name a few.
Apple produces a boatload of cash each period and returns much of it to shareholders through stock buybacks and dividends. Stock buybacks become more pronounced when the stock price dips because Apple can repurchase more shares for the same cost boosting shareholders' profits when the stock goes back up.
Since fiscal 2019, $318 billion has been returned to shareholders, amounting to 13% of the current market cap. As shown in the chart, Apple is slightly ahead of last year's brisk pace this fiscal year.
Data source: Company filings. Chart by author.
Sales, profits, and cash generated from operations are all up this fiscal year. Apple has the fundamentals and clout to withstand a short-term dip in consumer spending, so it's easy to see why it's a Buffett favorite.
Individuals shouldn't try to mirror actively managed portfolios trade-for-trade. After all, institutional investors dont reporttrades in real-time and have different goals. But they do give us clues as to what the best minds think. If you're a long-term investor, these diverse stocks could be right for you.
10 stocks we like better than Occidental Petroleum
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Bradley Guichard has positions in Apple, Berkshire Hathaway (B shares), Citigroup, JPMorgan Chase, and Occidental Petroleum and has the following options: short September 2022 $57.50 calls on Citigroup. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Warren Buffett's illustrious investing holding company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) has made interesting trades lately; upping its stake in oil stocks with Occidental Petroleum (NYSE: OXY), opening a new banking position in Citigroup (NYSE: C), and continuing to build its monster stake in Apple (NASDAQ: AAPL). However, it's important to remember that these investors have different goals, time frames, and resources than most of us, so it isn't practical to mirror their every move. Oil stocks typically pay hefty dividends and earn tons of cash flow when fuel prices rise. | Warren Buffett's illustrious investing holding company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) has made interesting trades lately; upping its stake in oil stocks with Occidental Petroleum (NYSE: OXY), opening a new banking position in Citigroup (NYSE: C), and continuing to build its monster stake in Apple (NASDAQ: AAPL). Bradley Guichard has positions in Apple, Berkshire Hathaway (B shares), Citigroup, JPMorgan Chase, and Occidental Petroleum and has the following options: short September 2022 $57.50 calls on Citigroup. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. | Warren Buffett's illustrious investing holding company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) has made interesting trades lately; upping its stake in oil stocks with Occidental Petroleum (NYSE: OXY), opening a new banking position in Citigroup (NYSE: C), and continuing to build its monster stake in Apple (NASDAQ: AAPL). Stock buybacks become more pronounced when the stock price dips because Apple can repurchase more shares for the same cost boosting shareholders' profits when the stock goes back up. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. | Warren Buffett's illustrious investing holding company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) has made interesting trades lately; upping its stake in oil stocks with Occidental Petroleum (NYSE: OXY), opening a new banking position in Citigroup (NYSE: C), and continuing to build its monster stake in Apple (NASDAQ: AAPL). For example, oil prices could fall if we have a significant recession, and Berkshire could stop buying stock soon, causing a potential dip in the share price. Apple produces a boatload of cash each period and returns much of it to shareholders through stock buybacks and dividends. |
20147.0 | 2022-07-22 00:00:00 UTC | This Eye-Opening Ratio Shows Why Alphabet Stock Is a Buy Now | AAPL | https://www.nasdaq.com/articles/this-eye-opening-ratio-shows-why-alphabet-stock-is-a-buy-now | nan | nan | Stocks come in all shapes and sizes. Some are worth hundreds of thousands of dollars; some trade for pennies. This enormous gap can make apples-to-apples comparisons challenging.
One way to overcome this problem is by comparing stock ratios rather than stock prices. Using these valuation metrics, investors can see how expensive a stock is, no matter how high or low its price.
But with so many valuation ratios to use, they can be intimidating terrain for many investors. Today, I want to explain one: the PEG ratio.
We'll cover its significance, how it varies by industry, and why it's flashing buy signals for Alphabet (NASDAQ: GOOG).
Image source: Getty Images.
What is a PEG ratio?
The price/earnings-to-growth ratio (PEG ratio) is one of my favorite valuation metrics for stocks. What I find so useful about this metric is that it includes not one, but two of the most important financial factors for a stock:
Earnings-per-share (EPS)
Earnings-per-share growth
To really understand how the PEG ratio works, we must examine its valuation metric cousin, the price-to-earnings (P/E) ratio. The P/E ratio helps us standardize and compare stocks by dividing their share price by their full-year EPS.
To see this in action, let's first use Apple as an example. Take Apple's stock price ($148.67), then divide it by Apple's EPS for the past 12 months ($6.15). This results in a P/E ratio of 24.2. Since we used EPS from the past 12 months, this P/E ratio is called a trailing P/E ratio. If you used the EPS estimates for the next 12 months, that ratio would be a forward P/E.
To calculate a stock's PEG ratio, you must divide the trailing P/E ratio by the stock's EPS growth rate. Calculating earnings growth is tricky because it involves projecting a stock's EPS several years into the future. Nevertheless, Wall Street analysts spend millions of hours every year producing EPS estimates. For large companies, there are usually dozens of estimates -- out of which an average (i.e., consensus) estimate will emerge.
Sticking with our example, Apple's consensus EPS growth rate is around 9.3%. So, if you divide Apple's P/E ratio (24.2) by its consensus EPS growth rate (9.3), you'll get its PEG ratio of 2.6.
What's a good PEG ratio?
Broadly speaking, a good PEG ratio is between 0 and 1.0. This indicates a stock that's showing growth at a reasonable price. PEG ratios slightly above 1.0 indicate stocks where P/E ratios are running ahead of earnings estimates, and very high (or negative) PEG ratios can indicate that a stock is overvalued.
The S&P 500, a broad index of 500 large U.S. companies, has a PEG ratio of 1.2. However, that ratio has varied from a low under 1.0 earlier this year to a high of 2.4 in 2020.
There are also differences between sectors. Utilities (2.9), consumer staples (2.6), and healthcare (2.0) have the highest PEG ratios today. Meanwhile, energy (0.3), consumer discretionary (0.8), and communication services (1.0) have the lowest. The technology sector, the largest and arguably most important sector, has a PEG ratio of 1.3.
Why Alphabet's PEG makes it a buy now
Now let's consider Alphabet. The company's (trailing) P/E ratio is 21.0. Its consensus EPS growth rate is 25.5, giving it a PEG ratio of 0.85.
This sub-1.0 PEG ratio means that Alphabet is below both the market average of 1.2 and its sector average of 1.3 -- implying the stock is undervalued. This conclusion is supported by the stock's P/E ratio, which remains near historic lows. Alphabet's shrinking P/E ratio helps explain Alphabet's low PEG ratio, because a stock's P/E ratio is the numerator in its PEG ratio.
Data by YCharts.
In a nutshell, Alphabet's stock price has come down, while its recent earnings (and future earnings expectations) have not. As a result, the company's PEG ratio is passing along a crystal-clear message: Alphabet is cheap, and it's time to buy.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Alphabet (C shares). The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | We'll cover its significance, how it varies by industry, and why it's flashing buy signals for Alphabet (NASDAQ: GOOG). Calculating earnings growth is tricky because it involves projecting a stock's EPS several years into the future. As a result, the company's PEG ratio is passing along a crystal-clear message: Alphabet is cheap, and it's time to buy. | To calculate a stock's PEG ratio, you must divide the trailing P/E ratio by the stock's EPS growth rate. So, if you divide Apple's P/E ratio (24.2) by its consensus EPS growth rate (9.3), you'll get its PEG ratio of 2.6. Alphabet's shrinking P/E ratio helps explain Alphabet's low PEG ratio, because a stock's P/E ratio is the numerator in its PEG ratio. | To calculate a stock's PEG ratio, you must divide the trailing P/E ratio by the stock's EPS growth rate. PEG ratios slightly above 1.0 indicate stocks where P/E ratios are running ahead of earnings estimates, and very high (or negative) PEG ratios can indicate that a stock is overvalued. Alphabet's shrinking P/E ratio helps explain Alphabet's low PEG ratio, because a stock's P/E ratio is the numerator in its PEG ratio. | What is a PEG ratio? To calculate a stock's PEG ratio, you must divide the trailing P/E ratio by the stock's EPS growth rate. Why Alphabet's PEG makes it a buy now Now let's consider Alphabet. |
20148.0 | 2022-07-22 00:00:00 UTC | Should iShares Russell Top 200 Growth ETF (IWY) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-ishares-russell-top-200-growth-etf-iwy-be-on-your-investing-radar-3 | nan | nan | Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the iShares Russell Top 200 Growth ETF (IWY), a passively managed exchange traded fund launched on 09/22/2009.
The fund is sponsored by Blackrock. It has amassed assets over $4.62 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Further, growth stocks have a higher level of volatility associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.20%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.67%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 52.90% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 14.25% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 55.73% of total assets under management.
Performance and Risk
IWY seeks to match the performance of the Russell Top 200 Growth Index before fees and expenses. The Russell Top 200 Growth Index is a style factor weighted index that measures the performance of the largest capitalization growth sector of the U.S. equity market. It is a subset of the Russell Top 200 Index issuers with relatively higher price-to-book ratios and higher forecasted growth, which measures the performance of the largest capitalization sector of the U.S. equity market.
The ETF has lost about -22.52% so far this year and is down about -12.31% in the last one year (as of 07/22/2022). In the past 52-week period, it has traded between $120.18 and $175.61.
The ETF has a beta of 1.06 and standard deviation of 26.68% for the trailing three-year period, making it a medium risk choice in the space. With about 117 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell Top 200 Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IWY is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $72.80 billion in assets, Invesco QQQ has $169.20 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 14.25% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report It has amassed assets over $4.62 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 14.25% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report You should consider the iShares Russell Top 200 Growth ETF (IWY), a passively managed exchange traded fund launched on 09/22/2009. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 14.25% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives IShares Russell Top 200 Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 14.25% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report You should consider the iShares Russell Top 200 Growth ETF (IWY), a passively managed exchange traded fund launched on 09/22/2009. |
20149.0 | 2022-07-22 00:00:00 UTC | Apple Inc. (AAPL) Is a Trending Stock: Facts to Know Before Betting on It | AAPL | https://www.nasdaq.com/articles/apple-inc.-aapl-is-a-trending-stock%3A-facts-to-know-before-betting-on-it-0 | nan | nan | Apple (AAPL) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this maker of iPhones, iPads and other products have returned +12.4% over the past month versus the Zacks S&P 500 composite's +6.3% change. The Zacks Computer - Mini computers industry, to which Apple belongs, has gained 14.1% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings Estimates
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Apple is expected to post earnings of $1.13 per share, indicating a change of -13.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.3% over the last 30 days.
The consensus earnings estimate of $6.09 for the current fiscal year indicates a year-over-year change of +8.6%. This estimate has changed -0.2% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $6.56 indicates a change of +7.8% from what Apple is expected to report a year ago. Over the past month, the estimate has changed -0.8%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Apple is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth Forecast
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Apple, the consensus sales estimate for the current quarter of $81.86 billion indicates a year-over-year change of +0.5%. For the current and next fiscal years, $392.7 billion and $415.44 billion estimates indicate +7.4% and +5.8% changes, respectively.
Last Reported Results and Surprise History
Apple reported revenues of $97.28 billion in the last reported quarter, representing a year-over-year change of +8.6%. EPS of $1.52 for the same period compares with $1.40 a year ago.
Compared to the Zacks Consensus Estimate of $94.54 billion, the reported revenues represent a surprise of +2.9%. The EPS surprise was +6.29%.
Over the last four quarters, Apple surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Apple is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Apple. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (AAPL) is one of the stocks most watched by Zacks.com visitors lately. Apple Inc. (AAPL): Free Stock Analysis Report Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. | Apple (AAPL) is one of the stocks most watched by Zacks.com visitors lately. Apple Inc. (AAPL): Free Stock Analysis Report Last Reported Results and Surprise History Apple reported revenues of $97.28 billion in the last reported quarter, representing a year-over-year change of +8.6%. | Apple (AAPL) is one of the stocks most watched by Zacks.com visitors lately. Apple Inc. (AAPL): Free Stock Analysis Report Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. | Apple (AAPL) is one of the stocks most watched by Zacks.com visitors lately. Apple Inc. (AAPL): Free Stock Analysis Report For the next fiscal year, the consensus earnings estimate of $6.56 indicates a change of +7.8% from what Apple is expected to report a year ago. |
20150.0 | 2022-07-22 00:00:00 UTC | Should You Invest in the Invesco DWA Technology Momentum ETF (PTF)? | AAPL | https://www.nasdaq.com/articles/should-you-invest-in-the-invesco-dwa-technology-momentum-etf-ptf-2 | nan | nan | Launched on 10/12/2006, the Invesco DWA Technology Momentum ETF (PTF) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $200.21 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. PTF seeks to match the performance of the DWA Technology Technical Leaders Index before fees and expenses.
The Dorsey Wright??Technology Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on US exchanges.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 98.30% of the portfolio.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.02% of total assets, followed by Monolithic Power Systems Inc (MPWR) and Lattice Semiconductor Corp (LSCC).
The top 10 holdings account for about 39.92% of total assets under management.
Performance and Risk
So far this year, PTF has lost about -27.66%, and is down about -19.22% in the last one year (as of 07/22/2022). During this past 52-week period, the fund has traded between $105.79 and $184.09.
The ETF has a beta of 1.16 and standard deviation of 39.41% for the trailing three-year period, making it a high risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco DWA Technology Momentum ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PTF is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $41.32 billion in assets, Vanguard Information Technology ETF has $43.97 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Invesco DWA Technology Momentum ETF (PTF): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Lattice Semiconductor Corporation (LSCC): Free Stock Analysis Report
Monolithic Power Systems, Inc. (MPWR): Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.02% of total assets, followed by Monolithic Power Systems Inc (MPWR) and Lattice Semiconductor Corp (LSCC). Apple Inc. (AAPL): Free Stock Analysis Report It has amassed assets over $200.21 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.02% of total assets, followed by Monolithic Power Systems Inc (MPWR) and Lattice Semiconductor Corp (LSCC). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 10/12/2006, the Invesco DWA Technology Momentum ETF (PTF) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.02% of total assets, followed by Monolithic Power Systems Inc (MPWR) and Lattice Semiconductor Corp (LSCC). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Invesco DWA Technology Momentum ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Apple Inc. (AAPL): Free Stock Analysis Report Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.02% of total assets, followed by Monolithic Power Systems Inc (MPWR) and Lattice Semiconductor Corp (LSCC). Launched on 10/12/2006, the Invesco DWA Technology Momentum ETF (PTF) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market. |
20151.0 | 2022-07-22 00:00:00 UTC | 3 Warren Buffett Stocks Down 15% to 36% to Buy Right Now | AAPL | https://www.nasdaq.com/articles/3-warren-buffett-stocks-down-15-to-36-to-buy-right-now | nan | nan | Warren Buffett learned a lot from his mentor, Benjamin Graham. One of the most important of those lessons was Graham's insistence that "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." The idea is that share prices over the short term reflect investors' fickle view, but share prices over the long term reflect the quality of the underlying businesses.
Because Buffett knows that Graham was right, he doesn't worry when stocks in Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) portfolio fall. Instead, he often even sees these declines as great buying opportunities.
Quite a few stocks that Berkshire owns have dropped significantly. Here are three Buffett stocks down 15% to 36% to buy right now.
1. Mastercard
Shares of Mastercard (NYSE: MA) have fallen around 15% below the all-time high set earlier this year. Most of this decline came in June, with rising interest rates and inflation worrying investors that Mastercard's business could be negatively affected by a potential recession.
Buffett trimmed Berkshire's stake in Mastercard somewhat in the fourth quarter of 2021. However, the conglomerate still owns nearly 4 million shares of the payment-processing company.
Wall Street remains bullish about Mastercard. 34 of the 39 analysts surveyed by Refinitiv rate the stock as a buy or strong buy. The average analysts' 12-month price target for the stock reflects an upside potential of nearly 26%.
Of course, Buffett doesn't pay attention to what analysts say. He's more interested in how Mastercard's business is likely to perform over the next five or more years. That long-term performance should remain strong as people increasingly move away from using cash.
2. Apple
Apple (NASDAQ: AAPL) stock has declined close to 18% this year. The same fears affecting Mastercard have weighed on the giant tech stock. Apple also continues to deal with supply chain issues that could reduce its third-quarter sales by as much as $8 billion.
But Buffett's high estimation of Apple hasn't changed one bit. Apple remains, by far, the biggest position in Berkshire's portfolio. Berkshire bought around $600 million worth of Apple shares in the first quarter of 2022. Buffett stated in an interview with CNBC that he stopped buying only because Apple's share price rebounded.
Analysts are nearly as optimistic about Apple as they are about Mastercard. All but six of the 38 analysts surveyed by Refinitiv think the stock is a buy or strong buy. None of the analysts recommend selling Apple. The average 12-month price target is 23% higher than Apple's current share price.
Wall Street's and Buffett's sunny views about Apple are based on the company's underlying business strength. Apple should continue to enjoy solid sales growth thanks to the ecosystem built around the iPhone. The company could also deliver even stronger growth later this decade as augmented reality gains momentum.
3. Amazon.com
Amazon.com (NASDAQ: AMZN) has taken the worst drubbing of these three Buffett stocks. Shares of the e-commerce and cloud leader are down 36% below the peak set in the fourth quarter of 2021. The primary culprit behind Amazon's slide is slowing sales growth.
Berkshire first initiated a position in Amazon in 2019. Buffett didn't personally make the decision to buy the stock. However, he's been a big fan of Amazon for quite a while, even publicly acknowledging that he was an "idiot" for not buying the stock in the past.
As you might expect, Wall Street remains firmly in the Amazon camp. 43 of the 47 analysts covering the stock who were surveyed by Refinitiv think Amazon is either a buy or a strong buy. Their average 12-month price target is a whopping 47% higher than Amazon's current share price.
Amazon is coming off its biggest Prime Day ever. The company's Amazon Web Services cloud unit continues to generate strong growth. Amazon also has tremendous opportunities in healthcare and providing cashier-less checkout technology to brick-and-mortar retailers. Like Mastercard and Apple, this Buffett stock should have a lot of room to run.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights has positions in Amazon, Apple, Berkshire Hathaway (B shares), and Mastercard. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), and Mastercard. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Apple (NASDAQ: AAPL) stock has declined close to 18% this year. Most of this decline came in June, with rising interest rates and inflation worrying investors that Mastercard's business could be negatively affected by a potential recession. Buffett stated in an interview with CNBC that he stopped buying only because Apple's share price rebounded. | Apple Apple (NASDAQ: AAPL) stock has declined close to 18% this year. The idea is that share prices over the short term reflect investors' fickle view, but share prices over the long term reflect the quality of the underlying businesses. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), and Mastercard. | Apple Apple (NASDAQ: AAPL) stock has declined close to 18% this year. 43 of the 47 analysts covering the stock who were surveyed by Refinitiv think Amazon is either a buy or a strong buy. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), and Mastercard. | Apple Apple (NASDAQ: AAPL) stock has declined close to 18% this year. Here are three Buffett stocks down 15% to 36% to buy right now. Apple remains, by far, the biggest position in Berkshire's portfolio. |
20152.0 | 2022-07-22 00:00:00 UTC | Global brands are taking note of Africa's music and talent | AAPL | https://www.nasdaq.com/articles/global-brands-are-taking-note-of-africas-music-and-talent | nan | nan | ABIDJAN, Ivory Coast, July 22 (Reuters) - Global media and music brands are racing to claim a stake in Africa's music market as internet and smartphone penetration popularize artists and genres far beyond Africa's borders.
Companies are taking note of global interest, with Universal Music Group UMG.ASlaunching Virgin Music Africa Label & Artist Servicesin June for independent African labels and artists. The service will digitise out-of-print music catalogues to tap into the growing market for the sounds and chart-toppers of the continent.
Music streaming platforms including Spotify SPOT.N, Apple Music and Boomplay are also entering the market with dedicated and expanded offerings and services.
The interest from global companies is coming as African artists headline festivals and concerts such as, Afro Nation in Portugal and Africolor in France and genres including Afrobeat, Rhumba and Amapiano are topping charts.
Franck-Alcide Kacou, managing director of Universal Music Africa and the new Virgin Music Africa Label, said it has over 15,000 music titles, 50 partner labels and around 100 artists from 25 countries.
The artists include Senegal's M'balax maestro Youssou Ndour, Congo's Lokua Kanza, Magic System from Ivory Coast and Cabo Snoop from Angola.
Kacou added that the service will digitize and distribute African music currently in vinyl, cassette or CD formats to reach today's younger audience.
"It's a real opportunity for countries that are also experiencing this digital transformation to integrate all this heritage into the cultural offer that is made on platforms," Kacou told Reuters in Abidjan.
He said the service will support independent labels in digital distribution who are looking for a wider network.
"Finding a producer on the continent and distributing cultural works is a real challenge for many talents, most of whom do not receive fair remuneration for their musical works," Kacou said.
(Reporting by Loucoumane Coulibaly; Writing by Bate Felix; Editing by Josie Kao)
((bate.felix@thomsonreuters.com; +221 77 569 3192 Twitter: @BateFelix;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The interest from global companies is coming as African artists headline festivals and concerts such as, Afro Nation in Portugal and Africolor in France and genres including Afrobeat, Rhumba and Amapiano are topping charts. The artists include Senegal's M'balax maestro Youssou Ndour, Congo's Lokua Kanza, Magic System from Ivory Coast and Cabo Snoop from Angola. "It's a real opportunity for countries that are also experiencing this digital transformation to integrate all this heritage into the cultural offer that is made on platforms," Kacou told Reuters in Abidjan. | ABIDJAN, Ivory Coast, July 22 (Reuters) - Global media and music brands are racing to claim a stake in Africa's music market as internet and smartphone penetration popularize artists and genres far beyond Africa's borders. Companies are taking note of global interest, with Universal Music Group UMG.ASlaunching Virgin Music Africa Label & Artist Servicesin June for independent African labels and artists. Franck-Alcide Kacou, managing director of Universal Music Africa and the new Virgin Music Africa Label, said it has over 15,000 music titles, 50 partner labels and around 100 artists from 25 countries. | ABIDJAN, Ivory Coast, July 22 (Reuters) - Global media and music brands are racing to claim a stake in Africa's music market as internet and smartphone penetration popularize artists and genres far beyond Africa's borders. Companies are taking note of global interest, with Universal Music Group UMG.ASlaunching Virgin Music Africa Label & Artist Servicesin June for independent African labels and artists. Franck-Alcide Kacou, managing director of Universal Music Africa and the new Virgin Music Africa Label, said it has over 15,000 music titles, 50 partner labels and around 100 artists from 25 countries. | Companies are taking note of global interest, with Universal Music Group UMG.ASlaunching Virgin Music Africa Label & Artist Servicesin June for independent African labels and artists. "It's a real opportunity for countries that are also experiencing this digital transformation to integrate all this heritage into the cultural offer that is made on platforms," Kacou told Reuters in Abidjan. He said the service will support independent labels in digital distribution who are looking for a wider network. |
20153.0 | 2022-07-22 00:00:00 UTC | GRAPHIC-Take Five: It's a Fed hot summer | AAPL | https://www.nasdaq.com/articles/graphic-take-five%3A-its-a-fed-hot-summer | nan | nan | July 22 - A likely second straight 75 basis point rate hike from the U.S. Federal Reserve will keep markets on their toes in the week ahead, just as investors digest a wave of earnings from corporate America and Europe.
The prospect of early elections in Italy after the collapse of the government means there's plenty of political drama too, and Australia's latest inflation numbers may add to pressure on the country's central bank to get ahead of the curve.
Here's your week ahead in markets from Ira Iosebashvili in New York, Kevin Buckland in Tokyo, and Sujata Rao, Dhara Ranasinghe and Vincent Flasseur in London.
1/ FED HOT
Fed officials have poured cold water over expectations for a 100 basis point rate hike in July but Wednesday's meeting will still have drama aplenty.
A 75 bps interest rate hike is priced in, and coming on top of 150 bps worth of tightening so far in this cycle, that is sure to bite consumers and businesses.
Investors will be looking at whether the Fed thinks inflation is peaking and how it views the U.S. economy, as they try to gauge the scope of a September rate move.
Hanging in the balance are nascent rallies in U.S. stocks and bonds. The S&P 500 is up almost 10% from its mid-June low .SPX, 10-year Treasury yields are down 60 bps US10YT=RR.
2/ EARNINGS: PART I
Earnings from Google-parent Alphabet, Microsoft, Coca Cola, Apple and others will show how well corporate America is coping with soaring inflation and a strong dollar.
This year's 17% decline in the S&P 500 has lowered the index's forward price-to-earnings ratio to around 17.3 from 21.7 at the start of 2022, closer to the market's historic average of 15.5, according to Refinitiv Datastream.
While there have been several notable beats this season, it's early days and many worry that earnings estimates may not hold up in the face of the highest inflation in four decades and tightening financial conditions.
Also clouding the picture is the burgeoning dollar, which makes U.S. exports less competitive and hurts firms earning much of their money abroad. Alphabet, Microsoft and Coca Cola report on July 26, Apple and Amazon on July 28.
3/ EARNINGS: PART II
One-sixth of Europe's STOXX 600 equity index reports second-quarter results July 25-29, and Refinitiv I/B/E/S forecasts earnings to have grown 22% year-on-year.
That headline figure masks disparities; earnings growth at energy firms basking in the glow of $100-a-barrel oil is seen at 185%, while real estate businesses will show a 70% drop, Refinitiv predicts.
Statements from retailers, heavy industry and hospitality firms may show how much pain is being inflicted by energy shortages and high inflation. The likes of Airbus, Volkswagen and Mercedes will cast light on the state of European exporters.
Bank earnings, expected to have slowed around 16%, include numbers from UBS, Credit Suisse, Deutsche, Barclays and BNP Paribas.
The Q2 season will show if European shares are correctly valued around 11.5 times forward earnings, versus their 14% long-term average, or need to cheapen further.
4/ MAMMA MIA
A political crisis couldn't come at a worse moment for Italy. The ECB has just jacked up rates for the first time since 2011, inflation is soaring and the country has been hit hard by its exposure to Russian gas .
The collapse of Mario Draghi's government ends months of stability, unnerving markets that had cheered when the ex-ECB chief became prime minister in 2021. They now worry about the prospect of new elections and Rome's ability to pass policies.
It also leaves the ECB, with its new tool to contain stress in bond markets, in an awkward position of determining which part of government bond spread widening is "unwarranted" - or giving up buying Italy's bonds altogether.
5/ CREDIBILITY ISSUE
Reserve Bank of Australia (RBA) boss Philip Lowe is pledging a steady policy-tightening campaign to at least double interest rates from current levels to "chart a credible path" back to the RBA's 2-3% inflation target.
Quarterly inflation numbers due Wednesday could show a further acceleration in price growth, which at 5.1% is already at its highest in two decades.
The rate-rise pledges are ironic coming from Lowe, who just months ago pushed back against markets, saying he didn't see rates rising throughout 2022, but has since lifted them three times since May.
Criticism of the RBA's inflation policy has led to an independent inquiry of its operations.
Fed set to hike rate by 75 bpshttps://tmsnrt.rs/3cvRuYl
STOXX 600 earnings growth by sector STOXX 600 earnings growth by sectorhttps://tmsnrt.rs/3PoX5OX
S&P 500 earnings growth by sector S&P 500 earnings growth by sectorhttps://tmsnrt.rs/3zmjgiZ
Political crisis weighs on Italian bond spread Political crisis weighs on Italian bond spreadhttps://tmsnrt.rs/3PpaAyd
RBA looks for a path back to inflation target RBA looks for a path back to inflation targethttps://tmsnrt.rs/3RQ3PqJ
(Compiled by Dhara Ranasinghe; Graphics by Vincent Flasseur; Editing by Gareth Jones)
((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | July 22 - A likely second straight 75 basis point rate hike from the U.S. Federal Reserve will keep markets on their toes in the week ahead, just as investors digest a wave of earnings from corporate America and Europe. The prospect of early elections in Italy after the collapse of the government means there's plenty of political drama too, and Australia's latest inflation numbers may add to pressure on the country's central bank to get ahead of the curve. That headline figure masks disparities; earnings growth at energy firms basking in the glow of $100-a-barrel oil is seen at 185%, while real estate businesses will show a 70% drop, Refinitiv predicts. | Earnings from Google-parent Alphabet, Microsoft, Coca Cola, Apple and others will show how well corporate America is coping with soaring inflation and a strong dollar. Alphabet, Microsoft and Coca Cola report on July 26, Apple and Amazon on July 28. Fed set to hike rate by 75 bpshttps://tmsnrt.rs/3cvRuYl STOXX 600 earnings growth by sector STOXX 600 earnings growth by sectorhttps://tmsnrt.rs/3PoX5OX S&P 500 earnings growth by sector S&P 500 earnings growth by sectorhttps://tmsnrt.rs/3zmjgiZ Political crisis weighs on Italian bond spread Political crisis weighs on Italian bond spreadhttps://tmsnrt.rs/3PpaAyd RBA looks for a path back to inflation target RBA looks for a path back to inflation targethttps://tmsnrt.rs/3RQ3PqJ (Compiled by Dhara Ranasinghe; Graphics by Vincent Flasseur; Editing by Gareth Jones) ((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | July 22 - A likely second straight 75 basis point rate hike from the U.S. Federal Reserve will keep markets on their toes in the week ahead, just as investors digest a wave of earnings from corporate America and Europe. Reserve Bank of Australia (RBA) boss Philip Lowe is pledging a steady policy-tightening campaign to at least double interest rates from current levels to "chart a credible path" back to the RBA's 2-3% inflation target. Fed set to hike rate by 75 bpshttps://tmsnrt.rs/3cvRuYl STOXX 600 earnings growth by sector STOXX 600 earnings growth by sectorhttps://tmsnrt.rs/3PoX5OX S&P 500 earnings growth by sector S&P 500 earnings growth by sectorhttps://tmsnrt.rs/3zmjgiZ Political crisis weighs on Italian bond spread Political crisis weighs on Italian bond spreadhttps://tmsnrt.rs/3PpaAyd RBA looks for a path back to inflation target RBA looks for a path back to inflation targethttps://tmsnrt.rs/3RQ3PqJ (Compiled by Dhara Ranasinghe; Graphics by Vincent Flasseur; Editing by Gareth Jones) ((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | July 22 - A likely second straight 75 basis point rate hike from the U.S. Federal Reserve will keep markets on their toes in the week ahead, just as investors digest a wave of earnings from corporate America and Europe. One-sixth of Europe's STOXX 600 equity index reports second-quarter results July 25-29, and Refinitiv I/B/E/S forecasts earnings to have grown 22% year-on-year. Fed set to hike rate by 75 bpshttps://tmsnrt.rs/3cvRuYl STOXX 600 earnings growth by sector STOXX 600 earnings growth by sectorhttps://tmsnrt.rs/3PoX5OX S&P 500 earnings growth by sector S&P 500 earnings growth by sectorhttps://tmsnrt.rs/3zmjgiZ Political crisis weighs on Italian bond spread Political crisis weighs on Italian bond spreadhttps://tmsnrt.rs/3PpaAyd RBA looks for a path back to inflation target RBA looks for a path back to inflation targethttps://tmsnrt.rs/3RQ3PqJ (Compiled by Dhara Ranasinghe; Graphics by Vincent Flasseur; Editing by Gareth Jones) ((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. |
20154.0 | 2022-07-21 00:00:00 UTC | US STOCKS-S&P, 500, Nasdaq set to open higher on upbeat Tesla results | AAPL | https://www.nasdaq.com/articles/us-stocks-sp-500-nasdaq-set-to-open-higher-on-upbeat-tesla-results | nan | nan | By Shreyashi Sanyal
July 21 (Reuters) - The S&P 500 and the Nasdaq were set to open higher on Thursday as electric automaker Tesla topped Wall Street's profit target, while futures tracking the Dow struggled for direction.
Tesla TSLA.O rose 3% in premarket trading as its quarterly profit benefited from a string of price increases for its cars. That helped offset production challenges.
Positive earnings reports from Tesla and streaming giant Netflix Inc NFLX.O have of late boosted megacap growth stocks, which have been under pressure from rising interest rates.
Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.6% and 0.7%.
"Is it possible that Tesla provides a short term rally? Yes, absolutely," said Giuseppe Sette, president of the quantitative research firm Toggle.
"However, it seems likely that if we are truly in an age of liquidity withdrawal and quantitative tightening, rallies on high-momentum stocks like Tesla might not be secular or cyclical, but just rather short-term."
While market participants took comfort in the positive results, they continue to await anxiously a Federal Reserve meeting next week where policymakers are expected to raise interest rates by 75 basis points to curb runaway inflation.
The rate decision will be followed by the crucial second-quarter U.S. gross domestic product data, which is likely to be negative again.
By one common rule of thumb, two quarters of negative GDP growth would mean the United States is already in a recession.
"The backdrop for U.S. corporate earnings looks challenging. With slowing economic growth, a strong US dollar and margins looking stretched, we suspect S&P 500 companies will struggle to meet the optimistic expectations embedded in analyst forecasts," said Thomas Mathews, markets economist at Capital Economics.
Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.
Meanwhile, data showed the number of Americans filing new claims for unemployment benefits rose to the highest in eight months, suggesting some cooling in the labor market amid tighter monetary policy and financial conditions.
At 8:38 a.m. ET, Dow e-minis 1YMcv1 were down 25 points, or 0.08%, S&P 500 e-minis EScv1 were up 5 points, or 0.13%, and Nasdaq 100 e-minis NQcv1 were up 53.25 points, or 0.43%.
Falling oil prices hit Chevron Corp CVX.N, which fell 1.9%, while other energy companies including Marathon Oil Corp MRO.N, Occidental Petroleum Corp OXY.N and Exxon Mobil Corp XOM.N dropped between 1.9% and 2.5%.
Shares of U.S. airlines fell, with United Airlines Holdings UAL.O down 6% and American Airlines AAL.O off 3%.
United Airlines posted a lower-than-expected quarterly profit, while American Airlines said cost pressure would remain elevated in the current quarter.
(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Additional reporting by Medha Singh Editing by Arun Koyyur)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.6% and 0.7%. By Shreyashi Sanyal July 21 (Reuters) - The S&P 500 and the Nasdaq were set to open higher on Thursday as electric automaker Tesla topped Wall Street's profit target, while futures tracking the Dow struggled for direction. While market participants took comfort in the positive results, they continue to await anxiously a Federal Reserve meeting next week where policymakers are expected to raise interest rates by 75 basis points to curb runaway inflation. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.6% and 0.7%. Falling oil prices hit Chevron Corp CVX.N, which fell 1.9%, while other energy companies including Marathon Oil Corp MRO.N, Occidental Petroleum Corp OXY.N and Exxon Mobil Corp XOM.N dropped between 1.9% and 2.5%. Shares of U.S. airlines fell, with United Airlines Holdings UAL.O down 6% and American Airlines AAL.O off 3%. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.6% and 0.7%. Positive earnings reports from Tesla and streaming giant Netflix Inc NFLX.O have of late boosted megacap growth stocks, which have been under pressure from rising interest rates. Shares of U.S. airlines fell, with United Airlines Holdings UAL.O down 6% and American Airlines AAL.O off 3%. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.6% and 0.7%. That helped offset production challenges. While market participants took comfort in the positive results, they continue to await anxiously a Federal Reserve meeting next week where policymakers are expected to raise interest rates by 75 basis points to curb runaway inflation. |
20155.0 | 2022-07-21 00:00:00 UTC | Microsoft (MSFT) to Report Q4 Earnings: What's in the Cards? | AAPL | https://www.nasdaq.com/articles/microsoft-msft-to-report-q4-earnings%3A-whats-in-the-cards | nan | nan | Microsoft MSFT is set to report fourth-quarter fiscal 2022 results on Jul 26.
On Jun 2, Microsoft announced that it has lowered its fiscal fourth-quarter guidance, citing unfavorable foreign exchange rate movement. It expects to report between $51.94 billion and $52.74 billion in revenues for the quarter. The company had previously forecast fourth-quarter revenues in the range of $52.4 billion to $53.2 billion.
Microsoft also slightly cut its earnings forecast for the quarter, saying it now expects to report adjusted earnings per share (EPS) in the range of $2.24 to $2.32. Previously, the company projected adjusted EPS between $2.28 and $2.35.
The Zacks Consensus Estimate for revenues is pegged at $52.28 billion, implying growth of 13.28% from the figure reported in the year-ago quarter.
The consensus mark for earnings has declined 0.4% to $2.29 per share over the past 30 days, suggesting 5.53% growth from the figure reported in the year-ago quarter.
Microsoft’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 8.63%.
Let’s see how things have shaped up for the upcoming announcement:
Microsoft Corporation Price and Consensus
Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote
Teams Momentum to Aid Growth
Continued strength in its cloud computing platform, Azure, is expected to have positively impacted the Microsoft’s fiscal fourth-quarter numbers. Azure is witnessing rapid adoption owing to the accelerated digital transformation by business enterprises globally. Microsoft’s industry-specific cloud offering is also driving adoption.
Intelligent Cloud revenues are anticipated between $21.1 billion and $21.35 billion in the fiscal fourth quarter. Azure's revenue growth is likely to have been aided by continued strength in consumption-based services.
The Zacks Consensus Estimate for Intelligent Cloud revenues is currently pegged at $21.13 billion, indicating 21.6% growth from the figure reported in the year-ago quarter.
The momentum witnessed for Teams, Microsoft’s workspace communication offering, might have acted as a tailwind. Teams’ user growth is expected to have been driven by the continuation of remote work and mainstream adoption of the hybrid/flexible work model.
Teams’ monthly user base count has surpassed 270 million so far in 2022. The introductions of Teams Rooms, Mesh for Teams and Teams Essentials are noteworthy developments.
Teams’ expanding customer base and features are actually helping Microsoft win share in the enterprise communication market against Zoom ZM.
At the end of first-quarter fiscal 2023, Zoom had over 198,900 enterprise customers, up 24% year over year. Moreover, 2,916 customers contributed more than $100,000 to the trailing 12 months’ revenues, up 46% year over year.
A solid uptick in Teams and strong Azure demand instill investors’ confidence in Microsoft.
Strong adoption of Dynamics 365 is expected to have driven top-line growth in the to-be-reported quarter. Microsoft expects revenue growth for Dynamics to be in the mid-20% range, driven by strength in Dynamics 365, including continued momentum in PowerApps.
Shares of Microsoft are down 22.1% year to date against Zoom’s plunge of 41.8%. Microsoft currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PC Shipment Decline Likely to Have Hurt Top Line
Revenues from Windows are likely to have been driven by steady traction seen in Windows Commercial products and cloud services growth amid weak PC demand.
Per IDC data, 71.3 million PCs were shipped during the second quarter, down 15.3% from the year-ago period, primarily due to supply chain and geopolitical challenges, backed by lockdowns in China and persistent macroeconomic headwinds.
Among big PC vendors, Dell Technologies DELL, Apple AAPL and ASUS registered a decrease in shipments.
While Apple had a market share of 6.7%, Dell registered a market share of 18.5%. Dell’s PC sales declined 5.3% year over year to 13.2 million units, while Apple witnessed a decrease of 22.5% to 4.8 million units.
Microsoft expects Surface revenues to grow in the lower double-digit range, driven by steady demand for premium devices.
Windows’ commercial products and cloud services revenues are expected to grow in the low double-digit range, driven by demand for Microsoft 365 and advanced security solutions. The consensus mark for revenues from Windows stands at $7.24 billion.
More Personal Computing revenues are expected between $14.65 billion and $14.95 billion. The company expects overall Windows OEM revenues to increase in the low to mid-single digit range, driven by the continued shift to a commercial-led PC market where revenues per license is higher.
The Zacks Consensus Estimate for More Personal Computing revenues is currently pegged at $14.71 billion, indicating 4.5% growth from the figure reported in the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among big PC vendors, Dell Technologies DELL, Apple AAPL and ASUS registered a decrease in shipments. Apple Inc. (AAPL): Free Stock Analysis Report Teams’ expanding customer base and features are actually helping Microsoft win share in the enterprise communication market against Zoom ZM. | Among big PC vendors, Dell Technologies DELL, Apple AAPL and ASUS registered a decrease in shipments. Apple Inc. (AAPL): Free Stock Analysis Report Let’s see how things have shaped up for the upcoming announcement: Microsoft Corporation Price and Consensus Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote Teams Momentum to Aid Growth Continued strength in its cloud computing platform, Azure, is expected to have positively impacted the Microsoft’s fiscal fourth-quarter numbers. | Among big PC vendors, Dell Technologies DELL, Apple AAPL and ASUS registered a decrease in shipments. Apple Inc. (AAPL): Free Stock Analysis Report Let’s see how things have shaped up for the upcoming announcement: Microsoft Corporation Price and Consensus Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote Teams Momentum to Aid Growth Continued strength in its cloud computing platform, Azure, is expected to have positively impacted the Microsoft’s fiscal fourth-quarter numbers. | Among big PC vendors, Dell Technologies DELL, Apple AAPL and ASUS registered a decrease in shipments. Apple Inc. (AAPL): Free Stock Analysis Report The company had previously forecast fourth-quarter revenues in the range of $52.4 billion to $53.2 billion. |
20156.0 | 2022-07-21 00:00:00 UTC | Apple: Don’t Underestimate the Continued Growth Story, Says Analyst | AAPL | https://www.nasdaq.com/articles/apple%3A-dont-underestimate-the-continued-growth-story-says-analyst | nan | nan | Earnings season is now in full swing, but most of the big hitters at Wall Street’s quarterly extravaganza will report the period’s financials next week. And so will the biggest of them all; Apple (AAPL) will deliver its third fiscal quarter results (June quarter) after the close on July 28th (Thursday).
Wedbush's Daniel Ives thinks Apple will be able to meet expectations despite the “albatross” hanging round its neck. Recall, according to the company’s guidance, the Covid lockdowns in China are expected to “negatively impact” revenue to the tune of $4 billion to $8 billion in the quarter. However, despite the ongoing supply issues that have afflicted Apple - and others in the tech sector - iPhone demand is “holding up slightly better than expected.”
In any case, the 5-star analyst went on to add, the Street is “well aware of weakness this quarter and we believe ultimately is looking past June numbers to the September and December quarters with all eyes on the iPhone 14 production/demand cycle for the Fall staying on track.”
Here, Ives believes Apple’s plan for the latest version of its flagship product is to initially match the iPhone 13’s performance, or “flattish,” which to the analyst indicates Apple is confident there’s enough demand for the new handset “despite the jittery macro.”
While Ives claims investors are still underestimating the “stickiness of the iPhone upgrade cycle,” he also emphasizes the ongoing strength of another segment.
Services are expected generate annual revenues of $80 billion this year, and into 2023 are anticipated to climb at a “steady ‘double digit’" rate. To Ives, as the company navigates through the market storm, this key revenue stream is at the heart of Apple's multiple and “growth story.”
In fact, Ives thinks that based on growth and EBITDA, the services segment on its own is worth more than $1 trillion and combined with the flagship hardware business presents a “very compelling” risk/reward case at current levels.
Accordingly, Ives reiterated an Outperform (i.e. Buy) rating on Apple shares, along with a $200 price target, suggesting shares will be changing hands for ~29% premium a year from now. (To watch Ives’ track record, click here)
The Street’s average target is not quite as high, yet at $182.12, the figure leaves room for ~17% share appreciation over the coming months. Rating wise, based on 22 Buys vs. 6 Holds, the consensus view is that AAPL is a Strong Buy. (See Apple stock forecast on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And so will the biggest of them all; Apple (AAPL) will deliver its third fiscal quarter results (June quarter) after the close on July 28th (Thursday). Rating wise, based on 22 Buys vs. 6 Holds, the consensus view is that AAPL is a Strong Buy. Earnings season is now in full swing, but most of the big hitters at Wall Street’s quarterly extravaganza will report the period’s financials next week. | Rating wise, based on 22 Buys vs. 6 Holds, the consensus view is that AAPL is a Strong Buy. And so will the biggest of them all; Apple (AAPL) will deliver its third fiscal quarter results (June quarter) after the close on July 28th (Thursday). Wedbush's Daniel Ives thinks Apple will be able to meet expectations despite the “albatross” hanging round its neck. | And so will the biggest of them all; Apple (AAPL) will deliver its third fiscal quarter results (June quarter) after the close on July 28th (Thursday). Rating wise, based on 22 Buys vs. 6 Holds, the consensus view is that AAPL is a Strong Buy. However, despite the ongoing supply issues that have afflicted Apple - and others in the tech sector - iPhone demand is “holding up slightly better than expected.” In any case, the 5-star analyst went on to add, the Street is “well aware of weakness this quarter and we believe ultimately is looking past June numbers to the September and December quarters with all eyes on the iPhone 14 production/demand cycle for the Fall staying on track.” Here, Ives believes Apple’s plan for the latest version of its flagship product is to initially match the iPhone 13’s performance, or “flattish,” which to the analyst indicates Apple is confident there’s enough demand for the new handset “despite the jittery macro.” While Ives claims investors are still underestimating the “stickiness of the iPhone upgrade cycle,” he also emphasizes the ongoing strength of another segment. | And so will the biggest of them all; Apple (AAPL) will deliver its third fiscal quarter results (June quarter) after the close on July 28th (Thursday). Rating wise, based on 22 Buys vs. 6 Holds, the consensus view is that AAPL is a Strong Buy. Earnings season is now in full swing, but most of the big hitters at Wall Street’s quarterly extravaganza will report the period’s financials next week. |
20157.0 | 2022-07-21 00:00:00 UTC | Wall Street closes higher boosted by strong Tesla earnings | AAPL | https://www.nasdaq.com/articles/wall-street-closes-higher-boosted-by-strong-tesla-earnings | nan | nan | For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Tesla shares rise as profit tops expectations
AT&T drags down communication services sector
Amazon, Apple rise ahead of earnings on July 28
Energy stocks lead sectoral declines
Indexes up: Dow 0.51%, S&P 500 0.99%, Nasdaq 1.36%
Updates prices, adds details
By Echo Wang
July 21 (Reuters) - Wall Street's main indexes rose on Thursday boosted by a late-afternoon rally and gains in heavyweight growth stocks, including Tesla.
The tech-heavy Nasdaq added 1.4% to lead the gains while the S&P 500 closed at its highest level since June 9. The Dow Jones Industrial Average climbed 0.5%.
Tesla TSLA.Oshares surged 9.8% after the electric vehicle maker late on Wednesday posted better-than-expected quarterly results. The gains helped offset a slide in telecom and energy shares, while AT&T Inc T.N tumbled, sending telecom shares down after the wireless carrier cut its cash flow forecast saying some subscribers were delaying bill payments. Energy stocks slipped on weak crude prices.
“The earnings picture has been maybe a little better than investors feared," said J. Bryant Evans, investment adviser and portfolio manager at Cozad Asset Management. "We investors are thinking that ..especially technology (sector) has come down too far, and maybe there's some valuation opportunities there.”
Amazon AMZN.O and Apple AAPL.O each rose 1.5%, with both companies set to report their earnings on July 28.
The Dow Jones Industrial Average .DJI rose 162.06 points, or 0.51%, to 32,036.9, the S&P 500 .SPX gained 39.05 points, or 0.99%, to 3,998.95 and the Nasdaq Composite .IXIC added 161.96 points, or 1.36%, to 12,059.61.
Nine of the 11 major sectors of the S&P 500 closed in positive territory, with consumer discretionary .SPLRCD, heath care .SPXHC and information technology .SPLRCT posting the biggest gains adding over 1% each.
Falling oil prices hit the S&P 500 energy sector .SPNY, which tumbled 1.7% to lead declines across the sectors.
Market participants continue to await anxiously for the U.S. Federal Reserve meeting next week where policymakers are expected to raise interest rates by 75 basis points to curb runaway inflation.
Joining its global peers, the European Central Bank delivered a 50 basis points rate hike to tame inflation in its first rate increase since 2011.
The Fed rate decision next week will be followed by the crucial second-quarter U.S. gross domestic product data, which is likely to be negative again.
By one common rule of thumb, two quarters of negative GDP growth would mean the United States is in a recession.
The number of Americans enrolling for unemployment benefits rose to the highest in eight months, the latest data to further fan fears of a recession.
“Consumers are just beginning to react to less money in their pockets, either from reduced overall job market or from rising interest rates and inflation”, Evans added.
“Part of the strong earnings reflects the past strength of consumers, whereas a lot of this broader decline that we've seen .. over the past few months has priced in a slowing in broader economy that eventually would affect consumers.”
Volume on U.S. exchanges was 10.58 billion shares, compared with the 11.63 billion average for the full session over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 1.77-to-1 ratio; on Nasdaq, a 1.52-to-1 ratio favored advancers.
The S&P 500 posted 1 new 52-week highs and 29 new lows; the Nasdaq Composite recorded 23 new highs and 46 new lows.
(Reporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur and Aurora Ellis)
((E.Wang@thomsonreuters.com; +1 9172873971; Reuters Messaging: E.Wang@thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | "We investors are thinking that ..especially technology (sector) has come down too far, and maybe there's some valuation opportunities there.” Amazon AMZN.O and Apple AAPL.O each rose 1.5%, with both companies set to report their earnings on July 28. Tesla shares rise as profit tops expectations AT&T drags down communication services sector Amazon, Apple rise ahead of earnings on July 28 Energy stocks lead sectoral declines Indexes up: Dow 0.51%, S&P 500 0.99%, Nasdaq 1.36% Updates prices, adds details By Echo Wang July 21 (Reuters) - Wall Street's main indexes rose on Thursday boosted by a late-afternoon rally and gains in heavyweight growth stocks, including Tesla. Nine of the 11 major sectors of the S&P 500 closed in positive territory, with consumer discretionary .SPLRCD, heath care .SPXHC and information technology .SPLRCT posting the biggest gains adding over 1% each. | "We investors are thinking that ..especially technology (sector) has come down too far, and maybe there's some valuation opportunities there.” Amazon AMZN.O and Apple AAPL.O each rose 1.5%, with both companies set to report their earnings on July 28. Tesla shares rise as profit tops expectations AT&T drags down communication services sector Amazon, Apple rise ahead of earnings on July 28 Energy stocks lead sectoral declines Indexes up: Dow 0.51%, S&P 500 0.99%, Nasdaq 1.36% Updates prices, adds details By Echo Wang July 21 (Reuters) - Wall Street's main indexes rose on Thursday boosted by a late-afternoon rally and gains in heavyweight growth stocks, including Tesla. The Dow Jones Industrial Average .DJI rose 162.06 points, or 0.51%, to 32,036.9, the S&P 500 .SPX gained 39.05 points, or 0.99%, to 3,998.95 and the Nasdaq Composite .IXIC added 161.96 points, or 1.36%, to 12,059.61. | "We investors are thinking that ..especially technology (sector) has come down too far, and maybe there's some valuation opportunities there.” Amazon AMZN.O and Apple AAPL.O each rose 1.5%, with both companies set to report their earnings on July 28. Tesla shares rise as profit tops expectations AT&T drags down communication services sector Amazon, Apple rise ahead of earnings on July 28 Energy stocks lead sectoral declines Indexes up: Dow 0.51%, S&P 500 0.99%, Nasdaq 1.36% Updates prices, adds details By Echo Wang July 21 (Reuters) - Wall Street's main indexes rose on Thursday boosted by a late-afternoon rally and gains in heavyweight growth stocks, including Tesla. The Dow Jones Industrial Average .DJI rose 162.06 points, or 0.51%, to 32,036.9, the S&P 500 .SPX gained 39.05 points, or 0.99%, to 3,998.95 and the Nasdaq Composite .IXIC added 161.96 points, or 1.36%, to 12,059.61. | "We investors are thinking that ..especially technology (sector) has come down too far, and maybe there's some valuation opportunities there.” Amazon AMZN.O and Apple AAPL.O each rose 1.5%, with both companies set to report their earnings on July 28. Tesla shares rise as profit tops expectations AT&T drags down communication services sector Amazon, Apple rise ahead of earnings on July 28 Energy stocks lead sectoral declines Indexes up: Dow 0.51%, S&P 500 0.99%, Nasdaq 1.36% Updates prices, adds details By Echo Wang July 21 (Reuters) - Wall Street's main indexes rose on Thursday boosted by a late-afternoon rally and gains in heavyweight growth stocks, including Tesla. The tech-heavy Nasdaq added 1.4% to lead the gains while the S&P 500 closed at its highest level since June 9. |
20158.0 | 2022-07-21 00:00:00 UTC | Snap misses revenue targets as growing competition slows growth, shares fall | AAPL | https://www.nasdaq.com/articles/snap-misses-revenue-targets-as-growing-competition-slows-growth-shares-fall | nan | nan | By Sheila Dang
July 21 (Reuters) - Snap Inc SNAP.N missed second-quarter revenue targets on Thursday as record-high inflation and increasing competition from rival apps like TikTok hurt advertising demand, but it reported higher user growth than Wall Street had expected.
Shares of Snap dropped 21% in trading after the bell.
The Snapchat owner is the first of the major tech firms to report second-quarter earnings, and the results could be a bellwether of conditions also affecting Facebook owner Meta Platforms Inc FB.O, which reports results next week, and Twitter Inc TWTR.N, which reports on Friday.
"We are not satisfied with the results we are delivering, regardless of the current headwinds," Snap said in prepared remarks released ahead of a conference call with analysts.
Revenue for the second quarter ended June 30 was $1.11 billion, an increase of 13% from the prior-year quarter. The figure missed analyst expectations of $1.14 billion, according to IBES data from Refinitiv.
Recent privacy changes on iPhones, macroeconomic challenges and increasing competition for advertising dollars all contributed to "substantially slowed" revenue growth, Snap said.
The Santa Monica, California-based company said it intended to significantly slow hiring, invest in its advertising business and find new sources of revenue, in order to grow at a faster pace.
Daily active users on Snapchat rose 18% year-over-year to 347 million, beating consensus estimates of 344 million users.
Snap said revenue so far in the current third quarter is flat compared with the prior year, but did not provide revenue guidance because "forward-looking visibility remains incredibly challenging."
Investors are expecting the slowest-ever pace of growth for social media ad revenue this year, as increasing competition from TikTok and Apple Inc AAPL.O in advertising could compound economic conditions.
Snap on Thursday also announced a share repurchase program of up to $500 million.
(Reporting by Sheila Dang in Dallas Editing by Matthew Lewis)
((Sheila.Dang@thomsonreuters.com; +1 646-983-0894))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Investors are expecting the slowest-ever pace of growth for social media ad revenue this year, as increasing competition from TikTok and Apple Inc AAPL.O in advertising could compound economic conditions. By Sheila Dang July 21 (Reuters) - Snap Inc SNAP.N missed second-quarter revenue targets on Thursday as record-high inflation and increasing competition from rival apps like TikTok hurt advertising demand, but it reported higher user growth than Wall Street had expected. The Santa Monica, California-based company said it intended to significantly slow hiring, invest in its advertising business and find new sources of revenue, in order to grow at a faster pace. | Investors are expecting the slowest-ever pace of growth for social media ad revenue this year, as increasing competition from TikTok and Apple Inc AAPL.O in advertising could compound economic conditions. By Sheila Dang July 21 (Reuters) - Snap Inc SNAP.N missed second-quarter revenue targets on Thursday as record-high inflation and increasing competition from rival apps like TikTok hurt advertising demand, but it reported higher user growth than Wall Street had expected. The figure missed analyst expectations of $1.14 billion, according to IBES data from Refinitiv. | Investors are expecting the slowest-ever pace of growth for social media ad revenue this year, as increasing competition from TikTok and Apple Inc AAPL.O in advertising could compound economic conditions. By Sheila Dang July 21 (Reuters) - Snap Inc SNAP.N missed second-quarter revenue targets on Thursday as record-high inflation and increasing competition from rival apps like TikTok hurt advertising demand, but it reported higher user growth than Wall Street had expected. Recent privacy changes on iPhones, macroeconomic challenges and increasing competition for advertising dollars all contributed to "substantially slowed" revenue growth, Snap said. | Investors are expecting the slowest-ever pace of growth for social media ad revenue this year, as increasing competition from TikTok and Apple Inc AAPL.O in advertising could compound economic conditions. By Sheila Dang July 21 (Reuters) - Snap Inc SNAP.N missed second-quarter revenue targets on Thursday as record-high inflation and increasing competition from rival apps like TikTok hurt advertising demand, but it reported higher user growth than Wall Street had expected. The Snapchat owner is the first of the major tech firms to report second-quarter earnings, and the results could be a bellwether of conditions also affecting Facebook owner Meta Platforms Inc FB.O, which reports results next week, and Twitter Inc TWTR.N, which reports on Friday. |
20159.0 | 2022-07-21 00:00:00 UTC | Here's Why Peloton's New CEO Is Saying 'No' to Growth | AAPL | https://www.nasdaq.com/articles/heres-why-pelotons-new-ceo-is-saying-no-to-growth | nan | nan | Peloton Interactive (NASDAQ: PTON) is expected to report results for the fourth quarter of its fiscal 2022 early next month. And management will likely communicate its expectations for the business in fiscal 2023 at that time. Considering that shares of Peloton are down by 95% from their all-time high, I'm sure investors will be watching this event with utmost interest.
However, investors need not wonder what new CEO Barry McCarthy's focus will be in the coming year for the connected-fitness company. On the fiscal Q3 2022earnings call McCarthy said five words that unequivocally set the tone for fiscal 2023: "Positive cash flow trumps growth."
Peloton says "no" to growth
Peloton sells home exercise equipment and monetizes its hardware with a subscription service offering exercise classes. Investors were initially attracted to Peloton because it was a high-growth stock. Consider its historical growth rates.
FISCAL YEAR REVENUE GROWTH RATE
2018 $435 million 99%
2019 $915 million 110%
2020 $1.825 billion 100%
2021 $4.021 billion 120%
Source: Peloton Interactive's financial filings. Chart by author.
You'd be hard-pressed to find another business that sustained a compound annual growth rate of more than 100% for four years at this scale. It's commendable. But it's also over.
Through the first three quarters of its fiscal 2022, Peloton has generated $2.9 billion in revenue, and it's guiding for revenue in the $675 million to $700 million range in its Q4. Assuming the company achieves the high end of management's guidance, revenue for fiscal 2022 would be down about 10% year over year.
However, Peloton does have growth opportunities that it's choosing not to pursue. For example, McCarthy said revenue for its subscription business in international markets was up 92% year over year in Q3. Given this strength, one might think it would make sense to energetically push into these nascent markets.
But McCarthy disagrees. Through the first three quarters of fiscal 2022, just 9% of Peloton's total revenue came from international markets. Because these operations don't yet have the necessary scale, if the company were to pursue growth in them more aggressively, it would do so temporarily at the expense of free cash flow.
Therefore, Peloton is saying "no" to this international growth opportunity -- and to other growth opportunities as well -- for now.
Peloton says "yes" to cash flow
With Peloton stock down by 95% from its peak, you might think that the business is in its death throes. However, it does have a viable path back to positive free cash flow -- and McCarthy has a plan. In Q3, he said, "The objective here is to get the business to positive free cash flow in [fiscal year 2023], just full stop."
There are multiple facets to that strategy, but I believe the most significant part involves improving its inventory management. As of Dec. 31 -- the end of its fiscal Q2 2022 -- Peloton had more than $1.5 billion worth of inventory on its balance sheet, an increase of 64% year over year. That same quarter, its revenue from exercise hardware was down 8%. In other words, inventory was building up and demand was sliding.
For most other tech companies, hardware products have short shelf lives as new models make older ones obsolete, making inventory buildup a crushing scenario. Fortunately for Peloton, exercise bikes and treadmills don't go through rapid product iterations. Today's inventory can be sold next year and beyond while still maintaining relevance.
At the end of its Q3, Peloton's inventory was down to $1.4 billion. And management expects that metric to keep falling as its slows manufacturing. Considering that its market capitalization is only $3.1 billion now, selling this existing inventory could result in game-changing amounts of cash flow in fiscal 2023 and beyond.
One of the keys for Peloton, therefore, is whether its brand has enough power to keep attracting customers. On one hand, it seems to have lost a little luster. According to Comparably, Peloton's Net Promoter Score (a measure of consumer engagement) was 63 as of July. This is a significant drop from its score of 76 in August 2021. However, when it comes to these scores, anything above zero is positive, and 63 is still quite a good result.
As another data point, the Prophet Brand Relevance Index recently ranked Peloton as the second-most relevant brand in the U.S. for the second year in a row -- behind only Apple. These data points suggest that Peloton still has the brand power to sustain strong equipment sales, even if its growth is slower (or nonexistent).
All Peloton needs is to maintain fiscal discipline while it converts its excess inventory into cash flow -- and that's what it appears to be doing. Therefore, this broken stock could start performing well from here.
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Jon Quast has positions in Peloton Interactive. The Motley Fool has positions in and recommends Apple and Peloton Interactive. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Peloton Interactive (NASDAQ: PTON) is expected to report results for the fourth quarter of its fiscal 2022 early next month. Considering that its market capitalization is only $3.1 billion now, selling this existing inventory could result in game-changing amounts of cash flow in fiscal 2023 and beyond. These data points suggest that Peloton still has the brand power to sustain strong equipment sales, even if its growth is slower (or nonexistent). | 2018 $435 million 99% 2019 $915 million 110% 2020 $1.825 billion 100% 2021 $4.021 billion 120% Source: Peloton Interactive's financial filings. In Q3, he said, "The objective here is to get the business to positive free cash flow in [fiscal year 2023], just full stop." The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Peloton says "no" to growth Peloton sells home exercise equipment and monetizes its hardware with a subscription service offering exercise classes. Peloton says "yes" to cash flow With Peloton stock down by 95% from its peak, you might think that the business is in its death throes. As of Dec. 31 -- the end of its fiscal Q2 2022 -- Peloton had more than $1.5 billion worth of inventory on its balance sheet, an increase of 64% year over year. | On the fiscal Q3 2022earnings call McCarthy said five words that unequivocally set the tone for fiscal 2023: "Positive cash flow trumps growth." Assuming the company achieves the high end of management's guidance, revenue for fiscal 2022 would be down about 10% year over year. For example, McCarthy said revenue for its subscription business in international markets was up 92% year over year in Q3. |
20160.0 | 2022-07-21 00:00:00 UTC | See Which Of The Latest 13F Filers Holds Apple | AAPL | https://www.nasdaq.com/articles/see-which-of-the-latest-13f-filers-holds-apple-4 | nan | nan | At Holdings Channel, we have reviewed the latest batch of the 20 most recent 13F filings for the 06/30/2022 reporting period, and noticed that Apple Inc (Symbol: AAPL) was held by 15 of these funds. When hedge fund managers appear to be thinking alike, we find it is a good idea to take a closer look.
Before we proceed, it is important to point out that 13F filings do not tell the whole story, because these funds are only required to disclose their long positions with the SEC, but are not required to disclose their short positions. A fund making a bearish bet against a stock by shorting calls, for example, might also be long some amount of stock as they trade around their overall bearish position. This long component could show up in a 13F filing and everyone might assume the fund is bullish, but this tells only part of the story because the bearish/short side of the position is not seen.
Having given that caveat, we believe that looking at groups of 13F filings can be revealing, especially when comparing one holding period to another. Below, let's take a look at the change in AAPL positions, for this latest batch of 13F filers:
FUND NEW POSITION? CHANGE IN SHARE COUNT CHANGE IN MARKET VALUE ($ IN 1000'S)
Mizuho Securities Co. Ltd. Existing -14,499 -$2,504
Stewart & Patten Co. LLC Existing -2,262 -$8,448
Leo H. Evart Inc. Existing -50 -$643
G&S Capital LLC Existing -8,831 -$2,526
Peterson Wealth Advisors LLC Existing -156 -$534
Hollencrest Capital Management Existing -1,828 -$5,243
Alpha Omega Wealth Management LLC Existing -2,318 -$4,291
Morton Brown Family Wealth LLC Existing -121 -$372
Tradewinds Capital Management LLC Existing -34,534 -$6,587
Savior LLC Existing -883 -$322
Welch Group LLC Existing +9,042 -$12,681
Fjarde AP Fonden Fourth Swedish National Pension Fund Existing UNCH $UNCH
Means Investment CO. Inc. Existing -1,345 -$17,344
Atlantic Union Bankshares Corp Existing -2,365 -$11,646
Private Capital Advisors Inc. Existing +3,084 -$13,282
Aggregate Change: -57,066 -$86,423
In terms of shares owned, we count 2 of the above funds having increased existing AAPL positions from 03/31/2022 to 06/30/2022, with 12 having decreased their positions.
Looking beyond these particular funds in this one batch of most recent filers, we tallied up the AAPL share count in the aggregate among all of the funds which held AAPL at the 06/30/2022 reporting period (out of the 1,084 we looked at in total). We then compared that number to the sum total of AAPL shares those same funds held back at the 03/31/2022 period, to see how the aggregate share count held by hedge funds has moved for AAPL. We found that between these two periods, funds reduced their holdings by 1,312,135 shares in the aggregate, from 154,113,118 down to 152,800,983 for a share count decline of approximately -0.85%. The overall top three funds holding AAPL on 06/30/2022 were:
» FUND SHARES OF AAPL HELD
1. Commonwealth Equity Services LLC 12,086,064
2. Cambridge Investment Research Advisors Inc. 5,159,502
3. Gateway Investment Advisers LLC 4,402,544
4-10 Find out the full Top 10 Hedge Funds Holding AAPL »
We'll keep following the latest 13F filings by hedge fund managers and bring you interesting stories derived from a look at the aggregate information across groups of managers between filing periods. While looking at individual 13F filings can sometimes be misleading due to the long-only nature of the information, the sum total across groups of funds from one reporting period to another can be a lot more revealing and relevant, providing interesting stock ideas that merit further research, like Apple Inc (Symbol: AAPL).
10 S&P 500 Components Hedge Funds Are Buying »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | At Holdings Channel, we have reviewed the latest batch of the 20 most recent 13F filings for the 06/30/2022 reporting period, and noticed that Apple Inc (Symbol: AAPL) was held by 15 of these funds. While looking at individual 13F filings can sometimes be misleading due to the long-only nature of the information, the sum total across groups of funds from one reporting period to another can be a lot more revealing and relevant, providing interesting stock ideas that merit further research, like Apple Inc (Symbol: AAPL). Below, let's take a look at the change in AAPL positions, for this latest batch of 13F filers: | At Holdings Channel, we have reviewed the latest batch of the 20 most recent 13F filings for the 06/30/2022 reporting period, and noticed that Apple Inc (Symbol: AAPL) was held by 15 of these funds. Gateway Investment Advisers LLC 4,402,544 4-10 Find out the full Top 10 Hedge Funds Holding AAPL » We'll keep following the latest 13F filings by hedge fund managers and bring you interesting stories derived from a look at the aggregate information across groups of managers between filing periods. Below, let's take a look at the change in AAPL positions, for this latest batch of 13F filers: | We then compared that number to the sum total of AAPL shares those same funds held back at the 03/31/2022 period, to see how the aggregate share count held by hedge funds has moved for AAPL. Gateway Investment Advisers LLC 4,402,544 4-10 Find out the full Top 10 Hedge Funds Holding AAPL » We'll keep following the latest 13F filings by hedge fund managers and bring you interesting stories derived from a look at the aggregate information across groups of managers between filing periods. At Holdings Channel, we have reviewed the latest batch of the 20 most recent 13F filings for the 06/30/2022 reporting period, and noticed that Apple Inc (Symbol: AAPL) was held by 15 of these funds. | Existing +3,084 -$13,282 Aggregate Change: -57,066 -$86,423 In terms of shares owned, we count 2 of the above funds having increased existing AAPL positions from 03/31/2022 to 06/30/2022, with 12 having decreased their positions. Gateway Investment Advisers LLC 4,402,544 4-10 Find out the full Top 10 Hedge Funds Holding AAPL » We'll keep following the latest 13F filings by hedge fund managers and bring you interesting stories derived from a look at the aggregate information across groups of managers between filing periods. At Holdings Channel, we have reviewed the latest batch of the 20 most recent 13F filings for the 06/30/2022 reporting period, and noticed that Apple Inc (Symbol: AAPL) was held by 15 of these funds. |
20161.0 | 2022-07-21 00:00:00 UTC | T-Mobile Unveils Ultimate+ For IPhone Wireless Plan For Small Businesses | AAPL | https://www.nasdaq.com/articles/t-mobile-unveils-ultimate-for-iphone-wireless-plan-for-small-businesses | nan | nan | (RTTNews) - T-Mobile (TMUS) and Apple (AAPL) have teamed up to launch Ultimate+ for iPhone, the first and only wireless plan for small businesses that includes Apple Business Essentials, a new iPhone 13 for new lines, and more. The plan helps keep business customers connected in over 210 countries and destinations across the world with unlimited text and data, including 5GB of free high-speed data per month for $50 a month per line. The plan also includes a 200GB of high-speed hotspot data per month.
The Ultimate+ for iPhone is the only wireless plan that enables customers to get the Apple Business Essentials, which combines device management, 24/7 Apple support, and iCloud backup and storage into a single subscription. Each employee who adds a new line on the plan gets a new iPhone 13.
For small business customers who may want to add Apple Business Essentials to just a few existing lines, T-Mobile is providing a la carte option that allows customers to add Business Essentials to any T-Mobile business plan for $2.99 per month. T-Mobile is also offering free a la carte through the end of 2022.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (RTTNews) - T-Mobile (TMUS) and Apple (AAPL) have teamed up to launch Ultimate+ for iPhone, the first and only wireless plan for small businesses that includes Apple Business Essentials, a new iPhone 13 for new lines, and more. The plan helps keep business customers connected in over 210 countries and destinations across the world with unlimited text and data, including 5GB of free high-speed data per month for $50 a month per line. The Ultimate+ for iPhone is the only wireless plan that enables customers to get the Apple Business Essentials, which combines device management, 24/7 Apple support, and iCloud backup and storage into a single subscription. | (RTTNews) - T-Mobile (TMUS) and Apple (AAPL) have teamed up to launch Ultimate+ for iPhone, the first and only wireless plan for small businesses that includes Apple Business Essentials, a new iPhone 13 for new lines, and more. The plan helps keep business customers connected in over 210 countries and destinations across the world with unlimited text and data, including 5GB of free high-speed data per month for $50 a month per line. For small business customers who may want to add Apple Business Essentials to just a few existing lines, T-Mobile is providing a la carte option that allows customers to add Business Essentials to any T-Mobile business plan for $2.99 per month. | (RTTNews) - T-Mobile (TMUS) and Apple (AAPL) have teamed up to launch Ultimate+ for iPhone, the first and only wireless plan for small businesses that includes Apple Business Essentials, a new iPhone 13 for new lines, and more. The plan helps keep business customers connected in over 210 countries and destinations across the world with unlimited text and data, including 5GB of free high-speed data per month for $50 a month per line. For small business customers who may want to add Apple Business Essentials to just a few existing lines, T-Mobile is providing a la carte option that allows customers to add Business Essentials to any T-Mobile business plan for $2.99 per month. | (RTTNews) - T-Mobile (TMUS) and Apple (AAPL) have teamed up to launch Ultimate+ for iPhone, the first and only wireless plan for small businesses that includes Apple Business Essentials, a new iPhone 13 for new lines, and more. The plan helps keep business customers connected in over 210 countries and destinations across the world with unlimited text and data, including 5GB of free high-speed data per month for $50 a month per line. For small business customers who may want to add Apple Business Essentials to just a few existing lines, T-Mobile is providing a la carte option that allows customers to add Business Essentials to any T-Mobile business plan for $2.99 per month. |
20162.0 | 2022-07-21 00:00:00 UTC | Is a Beat Likely for F5 Networks (FFIV) This Earnings Season? | AAPL | https://www.nasdaq.com/articles/is-a-beat-likely-for-f5-networks-ffiv-this-earnings-season | nan | nan | F5 Networks FFIV is likely to beat expectations when it reports third-quarter fiscal 2022 results after market close on Jul 25. In the last reported quarter, the company delivered an earnings surprise of 6%.
The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 7.5%.
For the fiscal third quarter, F5 Networks estimates revenues in the range of $660-$680 million ($670 million at the midpoint). The Zacks Consensus Estimate for revenues is pegged at $667.4 million, suggesting a year-over-year increase of 2.4%.
The company anticipates non-GAAP earnings in the range of $2.18-$2.30 per share ($2.24 at the midpoint). The Zacks Consensus Estimate stands at $2.23 per share, indicating a year-over-year decrease of approximately 19.2%.
Let’s see how things have shaped up before the upcoming announcement.
F5, Inc. Price and Consensus
F5, Inc. price-consensus-chart | F5, Inc. Quote
Factors to Note Ahead of Q3 Results
F5 Networks’ fiscal third-quarter performance is likely to have benefited from the hybrid work environment and the ongoing digital transformation wave, which is boosting the demand for secured communication networks.
F5 Network’s sustained focus on transitioning the business to a software-driven model is anticipated to have aided the company’s overall performance in the fiscal third quarter. The surging demand for multi-cloud application services is expected to have been a key growth driver during the quarter.
Moreover, the rising traction of the Enterprise License Agreement and annual subscriptions by customers are likely to have boosted software growth. F5 Networks expects revenues from the Software segment to increase in the 35%-40% range in full-fiscal 2022.
Additionally, FFIV and NGINX’s (pronounced as engine x) first combined solution — Controller 3.0 — is expected to have boosted the total addressable market and deal sizes across the DevOps and Super-NetOps customer profiles. This is estimated to have positively impacted the company’s overall performance during the fiscal third quarter.
However, the ongoing industry-wide supply-chain constraints for components are likely to have negatively impacted F5 Networks’ systems sales during the third quarter. The company forecasts that the recent supply-chain constraints will lead to a significant shortfall in its ability to deliver products in the third quarter.
This, in turn, is anticipated to have partially offset the benefits of the growth projection for the software business, thereby leading to much slower growth in overall Product segment revenues. The Zacks Consensus Estimate for Product revenues stands at $324 million, indicating an increase of 4.5% from the year-ago reported figure of $310 million.
Earnings Whispers
Our proven model predicts an earnings beat for F5 Networks this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($2.26 per share) and the Zacks Consensus Estimate ($2.23 per share), is +1.16%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: FFIV carries a Zacks Rank #3.
Other Stocks With the Favorable Combination
Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL also have the right combination of elements to post an earnings beat in their upcoming releases.
Valero sports a Zacks Rank #1 and has an Earnings ESP of +10.22%. The company is scheduled to report second-quarter 2022 results on Jul 28. Valero’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 84.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VLO’s second-quarter earnings is pegged at $8.78 per share, indicating a sharp improvement from the year-ago quarter’s earnings of 48 cents per share. The consensus mark for revenues stands at $39.7 billion, suggesting a year-over-year increase of 42.9%.
Merck currently sports a Zacks Rank #1 and has an Earnings ESP of +7.18%. The company is slated to report its second-quarter 2022 results on Jul 28. Merck’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 13.4%.
The Zacks Consensus Estimate for Merck’s second-quarter earnings stands at $1.77 per share, implying a year-over-year increase of 35.1%. MRK is estimated to report revenues of $13.9 billion, which suggests growth of 21.5% from the year-ago quarter.
Apple is slated to report third-quarter fiscal 2022 results on Jul 28. The company carries a Zacks Rank #3 and has an Earnings ESP of +0.88% at present. Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 11.9%.
The Zacks Consensus Estimate for quarterly earnings is pegged at $1.13 per share, suggesting a year-over-year decline of 13.1%. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Other Stocks With the Favorable Combination Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL also have the right combination of elements to post an earnings beat in their upcoming releases. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion. Apple Inc. (AAPL): Free Stock Analysis Report | Other Stocks With the Favorable Combination Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL also have the right combination of elements to post an earnings beat in their upcoming releases. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion. Apple Inc. (AAPL): Free Stock Analysis Report | Other Stocks With the Favorable Combination Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL also have the right combination of elements to post an earnings beat in their upcoming releases. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion. Apple Inc. (AAPL): Free Stock Analysis Report | Other Stocks With the Favorable Combination Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL also have the right combination of elements to post an earnings beat in their upcoming releases. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion. Apple Inc. (AAPL): Free Stock Analysis Report |
20163.0 | 2022-07-21 00:00:00 UTC | US STOCKS-Nasdaq futures fight to stay positive with upbeat Tesla results | AAPL | https://www.nasdaq.com/articles/us-stocks-nasdaq-futures-fight-to-stay-positive-with-upbeat-tesla-results | nan | nan | For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Futures: Dow down 0.30%, S&P off 0.18%, Nasdaq up 0.05%
July 21 (Reuters) - Nasdaq futures eked out gains on Thursday as electric automaker Tesla topped Wall Street's profit target, while futures tracking the S&P 500 and the Dow struggled for direction ahead of more earnings reports.
Tesla TSLA.O rose 3.4% in premarket trading as its quarterly profit benefited from a string of price increases for its cars. That helped offset production challenges, but Chief Executive Elon Musk said it could hurt demand.
Positive earnings reports from Tesla and streaming giant Netflix Inc NFLX.O have of late boosted megacap growth stocks, which have been under pressure from rising interest rates.
Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.2% and 0.4%.
While market participants cheered the positive results, they continue to await anxiously a Federal Reserve meeting next week where policymakers are expected to raise interest rates by 75 basis points to curb runaway inflation.
The rate decision will be followed by the crucial second-quarter U.S. gross domestic product data, which is likely to be negative again.
By one common rule of thumb, two quarters of negative GDP growth would mean the United States is already in a recession.
"The backdrop for U.S. corporate earnings looks challenging. With slowing economic growth, a strong US dollar and margins looking stretched, we suspect S&P 500 companies will struggle to meet the optimistic expectations embedded in analyst forecasts," said Thomas Mathews, markets economist at Capital Economics.
Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.
At 6:53 a.m. ET, Dow e-minis 1YMcv1 were down 96 points, or 0.3%, S&P 500 e-minis EScv1 were down 7 points, or 0.18%, and Nasdaq 100 e-minis NQcv1 were up 6.25 points, or 0.05%.
Falling oil prices hit Chevron Corp CVX.N, which fell 2.4%, while other energy companies including Marathon Oil Corp MRO.N, Occidental Petroleum Corp OXY.N and Exxon Mobil Corp XOM.N dropped between 2.3% and 4.2%.
(Reporting by Shreyashi Sanyal and Medha Singh in Bengaluru; Editing by Arun Koyyur)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.2% and 0.4%. Positive earnings reports from Tesla and streaming giant Netflix Inc NFLX.O have of late boosted megacap growth stocks, which have been under pressure from rising interest rates. While market participants cheered the positive results, they continue to await anxiously a Federal Reserve meeting next week where policymakers are expected to raise interest rates by 75 basis points to curb runaway inflation. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.2% and 0.4%. Futures: Dow down 0.30%, S&P off 0.18%, Nasdaq up 0.05% July 21 (Reuters) - Nasdaq futures eked out gains on Thursday as electric automaker Tesla topped Wall Street's profit target, while futures tracking the S&P 500 and the Dow struggled for direction ahead of more earnings reports. Positive earnings reports from Tesla and streaming giant Netflix Inc NFLX.O have of late boosted megacap growth stocks, which have been under pressure from rising interest rates. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.2% and 0.4%. Futures: Dow down 0.30%, S&P off 0.18%, Nasdaq up 0.05% July 21 (Reuters) - Nasdaq futures eked out gains on Thursday as electric automaker Tesla topped Wall Street's profit target, while futures tracking the S&P 500 and the Dow struggled for direction ahead of more earnings reports. Positive earnings reports from Tesla and streaming giant Netflix Inc NFLX.O have of late boosted megacap growth stocks, which have been under pressure from rising interest rates. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O also gained between 0.2% and 0.4%. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window. While market participants cheered the positive results, they continue to await anxiously a Federal Reserve meeting next week where policymakers are expected to raise interest rates by 75 basis points to curb runaway inflation. |
20164.0 | 2022-07-21 00:00:00 UTC | Zacks Market Edge Highlights: Microsoft, Apple, Sony, Expedia and Booking | AAPL | https://www.nasdaq.com/articles/zacks-market-edge-highlights%3A-microsoft-apple-sony-expedia-and-booking | nan | nan | For Immediate Release
Chicago, IL – July 21, 2022 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/1955352/how-to-be-a-long-term-stock-investor
How to Be a Long-Term Stock Investor
Welcome to Episode #323 of the Zacks Market Edge Podcast.
(0:30) - What It Takes To Be A Buy and Hold Investor
(6:45) - Breaking Down Jim Cramer's 17 years on Mad Money: Best Performing Stocks
(15:40) - Tracey’s Top Tips For Long Term Investors
(26:55) - Episode Roundup: NFLX, GOOGL, AAPL, REGN, MNST, BKNG, NVDA, AMZN, ILMN, MPWR, TYL, META, SONY
Podcast@Zacks.com
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is going solo to talk about tips on how to be a long-term investor.
Long-term investing should be easy, right? You simply buy some good quality companies and hold for years.
If only it was truly that simple.
Long-Term Investing: Easy?
Unfortunately, bear markets, recessions and other events intrude on the psychology of long-term investors with many ending up questioning the strategy. It takes a strong stomach to hold for years, or even decades.
And how do you pick the "best" companies? Two companies in the same industry may have very different trajectories on the stock market (see below with Booking and Expedia).
Is long-term investing all about luck?
What If You Had Owned These 5 Stocks Over the Last 17 Years?
1. Microsoft (MSFT)
Because of the big 5-year rally, many investors believe Microsoft is a "sure thing" that has always done well. Many kick themselves for not buying after the dot-com bust. But should they?
From March 2005 to March 2015, a 10-year time period, Microsoft shares were only up 61%. But shares were up 924% over the last 17 years, helped by a 251% gain over the last 5 years.
Microsoft shares have fallen 23% year-to-date but still trades with a forward P/E of 24.
Is this a buying opportunity in Microsoft for long-term investors?
2. Apple (AAPL)
Apple is, perhaps, THE stock that most investors "woulda, coulda" on. This is the one they regret not buying when the iPhone launched in 2007.
From March 2005 through this year, shares are up about 10,000%. But that was then and this is now.
Shares of Apple have only pulled back about 15% this year. Apple is not a cheap stock with a forward P/E of 24. And its dividend is a meager 0.6%.
Is Apple still a must-own stock for long-term investors?
3. Sony (SONY)
Sony, the Japanese technology and entertainment giant, has outperformed the S&P 500 over the last 5 years with shares up 108% versus 77.8% for the S&P.
But longer term, Sony has not been the success story for long-term investors like Microsoft and Apple. From 2005 to 2022, shares were up just 124% with the NASDAQ gaining 467% during that time.
After falling 32.7% this year, Sony now trades with a forward P/E of just 14.
Is it time to make a bet on Sony?
4. Expedia (EXPE)
What if you traveled a lot in 2005 and were an Expedia Group member so you decided to buy the stock.
From March 2005 to today -- 17 years -- Expedia shares have gained just 103%. The last 5 years were pretty tough as well, with shares down 40% during that time compared to a 77.8% gain in the S&P 500.
Long-term investors in Expedia have had a rough time but shares are now trading at just 14.3x and earnings are expected to jump 300% this year.
Is it time to consider Expedia?
5. Booking (BKNG)
Back in 2005, Booking was known as Priceline. It was a big dot-com bubble winner but then went bust. If you had bought in March 2005, however, and held until today, it would have gained 7782%.
But much of that gain was front loaded over the last 17 years because over the last 5 years, shares are up just 20.3%. After falling 23.5% this year, Booking now trades at just 17x forward earnings.
With everyone traveling in 2022, should Booking be on your short list?
What Else Should You Know About Long-Term Stock Investing?
Tune into this week's podcast to find out.
[In full disclosure, Tracey owns shares of MSFT and BKNG in her personal portfolio.]
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Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Expedia Group, Inc. (EXPE): Free Stock Analysis Report
Booking Holdings Inc. (BKNG): Free Stock Analysis Report
Sony Corporation (SONY): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (0:30) - What It Takes To Be A Buy and Hold Investor (6:45) - Breaking Down Jim Cramer's 17 years on Mad Money: Best Performing Stocks (15:40) - Tracey’s Top Tips For Long Term Investors (26:55) - Episode Roundup: NFLX, GOOGL, AAPL, REGN, MNST, BKNG, NVDA, AMZN, ILMN, MPWR, TYL, META, SONY Podcast@Zacks.com Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. Apple (AAPL) Apple is, perhaps, THE stock that most investors "woulda, coulda" on. Apple Inc. (AAPL): Free Stock Analysis Report | (0:30) - What It Takes To Be A Buy and Hold Investor (6:45) - Breaking Down Jim Cramer's 17 years on Mad Money: Best Performing Stocks (15:40) - Tracey’s Top Tips For Long Term Investors (26:55) - Episode Roundup: NFLX, GOOGL, AAPL, REGN, MNST, BKNG, NVDA, AMZN, ILMN, MPWR, TYL, META, SONY Podcast@Zacks.com Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. Apple (AAPL) Apple is, perhaps, THE stock that most investors "woulda, coulda" on. Apple Inc. (AAPL): Free Stock Analysis Report | (0:30) - What It Takes To Be A Buy and Hold Investor (6:45) - Breaking Down Jim Cramer's 17 years on Mad Money: Best Performing Stocks (15:40) - Tracey’s Top Tips For Long Term Investors (26:55) - Episode Roundup: NFLX, GOOGL, AAPL, REGN, MNST, BKNG, NVDA, AMZN, ILMN, MPWR, TYL, META, SONY Podcast@Zacks.com Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. Apple (AAPL) Apple is, perhaps, THE stock that most investors "woulda, coulda" on. Apple Inc. (AAPL): Free Stock Analysis Report | (0:30) - What It Takes To Be A Buy and Hold Investor (6:45) - Breaking Down Jim Cramer's 17 years on Mad Money: Best Performing Stocks (15:40) - Tracey’s Top Tips For Long Term Investors (26:55) - Episode Roundup: NFLX, GOOGL, AAPL, REGN, MNST, BKNG, NVDA, AMZN, ILMN, MPWR, TYL, META, SONY Podcast@Zacks.com Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. Apple (AAPL) Apple is, perhaps, THE stock that most investors "woulda, coulda" on. Apple Inc. (AAPL): Free Stock Analysis Report |
20165.0 | 2022-07-21 00:00:00 UTC | Should WisdomTree U.S. LargeCap ETF (EPS) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-wisdomtree-u.s.-largecap-etf-eps-be-on-your-investing-radar-3 | nan | nan | Launched on 02/23/2007, the WisdomTree U.S. LargeCap ETF (EPS) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Wisdomtree. It has amassed assets over $637.62 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.83%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 24.50% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.91% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL).
The top 10 holdings account for about 29.3% of total assets under management.
Performance and Risk
EPS seeks to match the performance of the WisdomTree U.S. Earnings 500 Index before fees and expenses. The WisdomTree U.S. LargeCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the large-capitalization segment of the U.S. Stock Market.
The ETF has lost about -15.26% so far this year and is down about -6.57% in the last one year (as of 07/21/2022). In the past 52-week period, it has traded between $39.74 and $50.92.
The ETF has a beta of 1.01 and standard deviation of 23.98% for the trailing three-year period, making it a medium risk choice in the space. With about 502 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, EPS is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $51.91 billion in assets, Vanguard Value ETF has $95.04 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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WisdomTree U.S. LargeCap ETF (EPS): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.91% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 02/23/2007, the WisdomTree U.S. LargeCap ETF (EPS) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.91% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL). Apple Inc. (AAPL): Free Stock Analysis Report Bottom-Line An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.91% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives WisdomTree U.S. LargeCap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.91% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL). Apple Inc. (AAPL): Free Stock Analysis Report Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space. |
20166.0 | 2022-07-21 00:00:00 UTC | Is John Hancock Multifactor Large Cap ETF (JHML) a Strong ETF Right Now? | AAPL | https://www.nasdaq.com/articles/is-john-hancock-multifactor-large-cap-etf-jhml-a-strong-etf-right-now-1 | nan | nan | Launched on 09/28/2015, the John Hancock Multifactor Large Cap ETF (JHML) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by John Hancock, JHML has amassed assets over $743.76 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. JHML seeks to match the performance of the John Hancock Dimensional Large Cap Index before fees and expenses.
The John Hancock Dimensional Large Cap Index comprises of a subset of securities in the U.S. Universe issued by companies whose market capitalizations are larger than that of the 801st largest U.S. company.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for JHML are 0.29%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.27%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
JHML's heaviest allocation is in the Information Technology sector, which is about 23.50% of the portfolio. Its Healthcare and Financials round out the top three.
When you look at individual holdings, Apple Inc (AAPL) accounts for about 4.10% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN).
The top 10 holdings account for about 17.24% of total assets under management.
Performance and Risk
The ETF has lost about -16.03% so far this year and is down about -7.58% in the last one year (as of 07/21/2022). In the past 52-week period, it has traded between $46.37 and $59.70.
JHML has a beta of 1.01 and standard deviation of 24.23% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 783 holdings, it effectively diversifies company-specific risk.
Alternatives
John Hancock Multifactor Large Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY) tracks S&P 500 Index. IShares Core S&P 500 ETF has $292.65 billion in assets, SPDR S&P 500 ETF has $357.77 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
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John Hancock Multifactor Large Cap ETF (JHML): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 4.10% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 4.10% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 09/28/2015, the John Hancock Multifactor Large Cap ETF (JHML) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 4.10% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 09/28/2015, the John Hancock Multifactor Large Cap ETF (JHML) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 4.10% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report JHML seeks to match the performance of the John Hancock Dimensional Large Cap Index before fees and expenses. |
20167.0 | 2022-07-21 00:00:00 UTC | PREVIEW-Social media revenue growth expected to slow as TikTok, Apple compete | AAPL | https://www.nasdaq.com/articles/preview-social-media-revenue-growth-expected-to-slow-as-tiktok-apple-compete | nan | nan | By Sheila Dang
July 21 (Reuters) - Wall Street is bracing for the slowest global revenue growth in the history of the social media sector, as intensifying competition from TikTok and Apple in advertising threaten to compound economic woes in the second quarter.
The dour expectations come after a blowout 2021, when social media ad sales in the United States grew 36% to reach $58 billion as brands increased marketing budgets to recover from the pandemic and reach customers online.
But social media platforms have since warned investors and employees that the tide is turning as inflation lingers around 40-year highs, an environment where brands spend less on advertising.
Meta Platforms META.O Chief Executive Mark Zuckerberg told employees last month the company was slashing hiring plans and that "this might be one of the worst downturns that we've seen in recent history."
Snap Inc SNAP.N, which owns Snapchat and is due to report earnings after the close, earlier said it expected to miss its own quarterly revenue forecast due to deteriorating economic conditions.
Global social media ad sales are now expected to grow by 11%, the slowest pace on record, according to media intelligence firm MAGNA, which downgraded the growth forecast from 18%.
Analysts had expected some degree of slowing growth after 2021. However, growing competition from viral short-form video app TikTok and Apple has created a "perfect storm" and "investors are rightfully wary" about digital ad growth this year, wrote Barclays analysts in a research note this month.
Apple had already upended the digital ad industry when it introduced new iPhone privacy controls last year that hurt the ability for companies like Meta and Snap to target and measure ads on their apps.
Apple's own advertising business, which mostly consists of developers paying to promote their app on the App Store, is expected to grow 36% this year to $6.9 billion, Barclays wrote, adding that Apple and TikTok together will take 34% of every new ad dollar that is spent outside China this year.
Lior Eldan, chief operating officer of mobile app marketing agency Moburst, which has worked with brands like Uber and Reddit, said clients are now spending about two to three times more on Apple ads, in part because the effectiveness of ads on other platforms has been degraded by Apple's privacy changes.
"We've seen dramatic increases in budgets on Apple search ads following the privacy changes," he said.
While still much smaller than behemoths like Facebook and YouTube, TikTok is poised to grow over 200% to become a $12 billion business, Barclays wrote.
TikTok remains important for many clients' advertising strategies, said Yvonne Williams, vice president of media at ad agency Code3, which has worked with brands like Gap and Dior.
Alphabet's Google, which reports second-quarter earnings on Tuesday, is the company most likely to be shielded from negative effects, because Google Search is "mission critical" for many advertisers, analysts from RBC Capital Markets said in a note on Tuesday.
Meta, Snap and Pinterest PINS.N are more exposed to the Apple privacy changes and competition from TikTok, Barclays said.
(Reporting by Sheila Dang in Dallas; additional reporting by Katie Paul; Editing by Stephen Coates)
((Sheila.Dang@thomsonreuters.com; +1 646-983-0894))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Sheila Dang July 21 (Reuters) - Wall Street is bracing for the slowest global revenue growth in the history of the social media sector, as intensifying competition from TikTok and Apple in advertising threaten to compound economic woes in the second quarter. However, growing competition from viral short-form video app TikTok and Apple has created a "perfect storm" and "investors are rightfully wary" about digital ad growth this year, wrote Barclays analysts in a research note this month. TikTok remains important for many clients' advertising strategies, said Yvonne Williams, vice president of media at ad agency Code3, which has worked with brands like Gap and Dior. | By Sheila Dang July 21 (Reuters) - Wall Street is bracing for the slowest global revenue growth in the history of the social media sector, as intensifying competition from TikTok and Apple in advertising threaten to compound economic woes in the second quarter. However, growing competition from viral short-form video app TikTok and Apple has created a "perfect storm" and "investors are rightfully wary" about digital ad growth this year, wrote Barclays analysts in a research note this month. Apple's own advertising business, which mostly consists of developers paying to promote their app on the App Store, is expected to grow 36% this year to $6.9 billion, Barclays wrote, adding that Apple and TikTok together will take 34% of every new ad dollar that is spent outside China this year. | However, growing competition from viral short-form video app TikTok and Apple has created a "perfect storm" and "investors are rightfully wary" about digital ad growth this year, wrote Barclays analysts in a research note this month. Apple's own advertising business, which mostly consists of developers paying to promote their app on the App Store, is expected to grow 36% this year to $6.9 billion, Barclays wrote, adding that Apple and TikTok together will take 34% of every new ad dollar that is spent outside China this year. Lior Eldan, chief operating officer of mobile app marketing agency Moburst, which has worked with brands like Uber and Reddit, said clients are now spending about two to three times more on Apple ads, in part because the effectiveness of ads on other platforms has been degraded by Apple's privacy changes. | By Sheila Dang July 21 (Reuters) - Wall Street is bracing for the slowest global revenue growth in the history of the social media sector, as intensifying competition from TikTok and Apple in advertising threaten to compound economic woes in the second quarter. However, growing competition from viral short-form video app TikTok and Apple has created a "perfect storm" and "investors are rightfully wary" about digital ad growth this year, wrote Barclays analysts in a research note this month. Lior Eldan, chief operating officer of mobile app marketing agency Moburst, which has worked with brands like Uber and Reddit, said clients are now spending about two to three times more on Apple ads, in part because the effectiveness of ads on other platforms has been degraded by Apple's privacy changes. |
20168.0 | 2022-07-21 00:00:00 UTC | Better FAANG Stock: Alphabet or Amazon? | AAPL | https://www.nasdaq.com/articles/better-faang-stock%3A-alphabet-or-amazon | nan | nan | We're constantly surrounded by technology, from smartphones to online shopping to watching streaming TV. With technology such a huge part of our everyday life, it only makes sense that several top tech companies boast some of the biggest market caps around.
A select group of these companies have even received their own acronym -- FAANG stocks. The term originally referred to Facebook (now Meta Platforms), Amazon.com (NASDAQ: AMZN), Apple, Netflix, and Google (now part of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)).
Two of these five companies, Alphabet and Amazon, compete against other. Which is the better FAANG stock? Here's how the two giants stack up against each other.
The case for Alphabet
Any argument for buying Alphabet stock should begin with the company's impressive moat. Deep-pocketed rivals have tried to dethrone Google Search -- and failed. The most widely used mobile operating system isn't Apple's iOS, it's Alphabet's Android. YouTube has 2.6 billion monthly active users, more than twice as many as its nearest rival, TikTok.
This moat translates to reliable and growing advertising revenue for Alphabet. The company's advertising revenue jumped 22% year over year in the first quarter of 2022 to $54.7 billion. But Alphabet also makes money in other ways outside of advertising.
Google Cloud has become a huge growth driver for Alphabet. Revenue for the cloud hosting business soared nearly 44% year over year in Q1 to $5.8 billion. YouTube TV ranks as a formidable competitor to cable providers.
Alphabet has multiple other avenues to generate growth, as well. Its famous "other bets" notably include self-driving car technology leader Waymo, drone-delivery business Wing, and healthcare units Calico and Verily.
In addition, Alphabet's cash stockpile of nearly $134 billion gives the company a lot of flexibility to reward shareholders. The company's board recently authorized a stock buyback program of up to $70 billion.
The case for Amazon
Amazon's moat isn't too shabby, either. The company remains the clear leader in e-commerce. It just had the biggest Prime Day ever, with more than 300 million items purchased worldwide.
The company isn't limited to online shopping, though. Amazon owns 46 Amazon Fresh grocery stores in addition to more than 500 Whole Foods stores. It recently began offering the "Just Walk Out" no-checkout technology to other brick-and-mortar retailers.
Amazon Web Services (AWS) set the standard in the cloud hosting market. Net sales for AWS jumped 37% year over year in Q2 to $18.4 billion. The unit produced greater operating income ($6.5 billion) in the quarter than Google Cloud generated in revenue.
Amazon's own electronic devices, including Fire TV, Echo virtual assistant, and Blink home security camera, ranked among the best-selling items on the recent Prime Day. The company has other potential growth drivers with its Amazon Care telehealth service and self-driving car company Zoox.
Investing in new initiatives and/or future acquisitions shouldn't be a problem for Amazon. The company ended the first quarter with a cash position of $42.4 billion.
Better FAANG stock?
I personally own both Alphabet and Amazon. However, my view is that there are two key differentiating factors between them right now.
First, Alphabet's growth is much more impressive. Amazon's net sales increased only 7% year over year in Q1. Its bottom line and free cash flow deteriorated, compared to the prior-year period.
Second, Alphabet's valuation is more attractive than Amazon's. Shares of Alphabet trade at under 20 times expected earnings with a price-to-earnings-to-growth (PEG) ratio of 0.79. Amazon's forward earnings multiple tops 71, with its PEG ratio at nearly 4.5.
Both of these FAANG stocks should continue to be big winners for investors over the long run. But if I had to pick only one of them, it would be Alphabet.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, 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 Alphabet (A shares), Amazon, Apple, and Meta Platforms, Inc. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., and Netflix. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | With technology such a huge part of our everyday life, it only makes sense that several top tech companies boast some of the biggest market caps around. Its famous "other bets" notably include self-driving car technology leader Waymo, drone-delivery business Wing, and healthcare units Calico and Verily. Amazon's own electronic devices, including Fire TV, Echo virtual assistant, and Blink home security camera, ranked among the best-selling items on the recent Prime Day. | The term originally referred to Facebook (now Meta Platforms), Amazon.com (NASDAQ: AMZN), Apple, Netflix, and Google (now part of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)). The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., and Netflix. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | The case for Alphabet Any argument for buying Alphabet stock should begin with the company's impressive moat. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., and Netflix. | Google Cloud has become a huge growth driver for Alphabet. The case for Amazon Amazon's moat isn't too shabby, either. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., and Netflix. |
20169.0 | 2022-07-21 00:00:00 UTC | Why This Tech Stock Could Take Off This Earnings Season | AAPL | https://www.nasdaq.com/articles/why-this-tech-stock-could-take-off-this-earnings-season | nan | nan | The stock price of Cirrus Logic (NASDAQ: CRUS) is down 20% so far in 2022, but shares of the chipmaker have started gaining some momentum this month thanks to a rally in semiconductor stocks.
The PHLX Semiconductor Sector index is up 9% in July 2022, and Cirrus stock has tagged along with gains of 6% so far this month. The company, which is known for supplying audio and power-management chips to smartphone giant Apple (NASDAQ: AAPL), could get a nice shot in the arm in a couple of weeks when it releases its fiscal 2023 first-quarter results on Aug. 2.
Let's see why that might be the case.
Cirrus could deliver stronger-than-expected results
Wall Street is looking for $366.7 million in revenue and $0.83 per share in earnings from Cirrus Logic. But the company had guided for revenue between $350 million and $390 million for the fiscal first quarter, the midpoint of which stands at $370 million. It seems that the tepid smartphone sales environment this year has led analysts to temper their expectations from Cirrus.
That's not surprising as smartphone sales were down 11% in the first quarter of 2022 as compared to the prior-year period, according to Canalys. The overall smartphone market is expected to contract by 3% in 2022, according to another estimate.
Cirrus got 79% of its fiscal 2022 revenue from selling chips used in Apple's iPhones and other products, so it is not surprising that analysts aren't upbeat about the upcoming quarterly report.
Assuming Cirrus hits the midpoint of its guidance range, its revenue will jump an impressive 33% year over year. Meanwhile, analysts are looking for a 54% year-over-year jump in Cirrus' earnings per share. Chief financial officer Venkatesh Nathamuni pointed out on the Mayearnings conference callthat "expected revenue growth is primarily driven by anticipated increases in demand for certain components shipping in smartphones, and to a lesser extent higher [average selling prices] compared to the prior year."
The increase in average selling prices of Cirrus' components could help it achieve the ambitious bottom-line growth that analysts are looking for. It is also worth noting that the company's largest customer, Apple, could give Cirrus' results a nice boost. That's because the iPhone maker is reportedly doing well despite the slowdown in the smartphone space.
Supply chain sources suggest that iPhone 13 production from one of the factories had increased year over year in July. That is a tad surprising as older iPhone sales slow down before the launch of a new generation. What's more, Cirrus could issue healthy guidance as well given that Apple has reportedly placed more orders for its next-generation iPhones as compared to iPhone 13 units in 2021.
All this puts Cirrus in a nice position to deliver a solid set of results, especially considering that it is now getting more revenue out of each unit of the iPhone. This, however, is not the only reason the stock is worth buying right now.
More reasons to go long
Cirrus Logic is working on diversifying its business. From bringing Android smartphone OEMs (original equipment manufacturers) on board to moving beyond the traditional audio business into the high-performance mixed-signal (both analog and digital) market, Cirrus Logic seems to be making the right moves to ensure long-term growth.
The high-performance mixed-signal business, for instance, could present a $4.2-billion serviceable available market for Cirrus by 2026. That would be higher than its $3.1 billion serviceable available market that the audio business is expected to create by then. Given that Cirrus generated $1.78 billion in revenue last fiscal year, it is evident it has a lot of room for growth.
Not surprisingly, analysts expect earnings to grow at an annual rate in the double digits over the next five years. That would be a big improvement over the past five years' flat bottom-line performance. All this indicates that Cirrus Logic is a value play right now considering its price-to-earnings ratio of just 13.6. That's well below the Nasdaq-100's multiple of nearly 25, and investors may want to grab this semiconductor stock at this multiple before it moves higher.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Cirrus Logic and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The company, which is known for supplying audio and power-management chips to smartphone giant Apple (NASDAQ: AAPL), could get a nice shot in the arm in a couple of weeks when it releases its fiscal 2023 first-quarter results on Aug. 2. Cirrus got 79% of its fiscal 2022 revenue from selling chips used in Apple's iPhones and other products, so it is not surprising that analysts aren't upbeat about the upcoming quarterly report. Chief financial officer Venkatesh Nathamuni pointed out on the Mayearnings conference callthat "expected revenue growth is primarily driven by anticipated increases in demand for certain components shipping in smartphones, and to a lesser extent higher [average selling prices] compared to the prior year." | The company, which is known for supplying audio and power-management chips to smartphone giant Apple (NASDAQ: AAPL), could get a nice shot in the arm in a couple of weeks when it releases its fiscal 2023 first-quarter results on Aug. 2. The increase in average selling prices of Cirrus' components could help it achieve the ambitious bottom-line growth that analysts are looking for. From bringing Android smartphone OEMs (original equipment manufacturers) on board to moving beyond the traditional audio business into the high-performance mixed-signal (both analog and digital) market, Cirrus Logic seems to be making the right moves to ensure long-term growth. | The company, which is known for supplying audio and power-management chips to smartphone giant Apple (NASDAQ: AAPL), could get a nice shot in the arm in a couple of weeks when it releases its fiscal 2023 first-quarter results on Aug. 2. The stock price of Cirrus Logic (NASDAQ: CRUS) is down 20% so far in 2022, but shares of the chipmaker have started gaining some momentum this month thanks to a rally in semiconductor stocks. Cirrus could deliver stronger-than-expected results Wall Street is looking for $366.7 million in revenue and $0.83 per share in earnings from Cirrus Logic. | The company, which is known for supplying audio and power-management chips to smartphone giant Apple (NASDAQ: AAPL), could get a nice shot in the arm in a couple of weeks when it releases its fiscal 2023 first-quarter results on Aug. 2. The stock price of Cirrus Logic (NASDAQ: CRUS) is down 20% so far in 2022, but shares of the chipmaker have started gaining some momentum this month thanks to a rally in semiconductor stocks. Cirrus got 79% of its fiscal 2022 revenue from selling chips used in Apple's iPhones and other products, so it is not surprising that analysts aren't upbeat about the upcoming quarterly report. |
20170.0 | 2022-07-21 00:00:00 UTC | Can the PC Market Bounce Back From Its Recent Declines? | AAPL | https://www.nasdaq.com/articles/can-the-pc-market-bounce-back-from-its-recent-declines | nan | nan | Global PC sales that skyrocketed during the peak of the pandemic have once again started declining. Demand for PCs has been slowing over the past few years, but the pandemic helped sales to rebound as millions worked and learned remotely. As things get back to normal, with people once again going back to offices and schools, demand for PCs, which include laptops and tablets, seems to be dwindling once again.
However, the economic reopening isn’t the only reason that can be traced back to the decline in global PC sales. The industry is facing several challenges, including a supply-chain crisis, and needs to overcome several other barriers to bounce back from the present situation.
Global PC Shipments Declining Again
The pandemic rattled several industries but also gave a fresh lease of life to many others. Among them, the PC market was one of the biggest beneficiaries. However, things have changed once again and sales are plummeting this year.
According to a report from Gartner, global PC shipments totaled 72 million units in the second quarter of 2022. The number might look impressive, but when compared to the previous year, the decline is 12.6%. Moreover, this is the sharpest decline in nine years.
PC sales started slowing last year after the economy started reopening. However, it was still on track. The decline started in the first quarter of 2022 and sales further plummeted in the second quarter. One of the major reasons for the decline in 2022 is a drop in sales of Alphabet, Inc.’s GOOGL Chromebook. Global PC shipments totaled 77.9 million units in the first quarter of 2022.
Overall, 2022 has so far been quite difficult for the industry and if the challenges continue, global PC shipments will decline 9.5% year over year in 2022, according to a separate report from Gartner.
Global shipments of all types of devices, such as PCs, tablets and smartphones, are expected to decline by 7.6% in 2022.
Challenges Aplenty
The decline in the second quarter has been impacting the big players the most. Although their ranking remained the same, the top three PC manufacturers have also witnessed the biggest decline during this period. Lenovo Group Limited LNVGY, which is still the market leader, saw a decline of 12.5% in its PC shipments in the second quarter of 2022. Although Lenovo Group Limited grew 2% in the global PC market, this is the third consecutive quarter of decline for the company.
HP Inc. HPQ still holds the second position with a market share of 18.8%. However, HPQ’s PC shipments declined 27.5% in the second quarter, the worst drop among the top players. Dell Technologies Inc. DELL is the third largest player. DELL saw shipments declining 5.2% in second-quarter 2022. Dell Technologies’ decline is relatively lower compared HP Inc., which helped it inch closer to HPQ in terms of market share. Dell now has a market share of 18.5%.
However, market shares don’t count much when compared to the sharp declines witnessed by these companies.
Apple, Inc. AAPL is the only company among the top five to have registered growth — 9.3% from the previous quarter — in the second quarter. AAPL currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
That said, the decline in PC shipments is due to several reasons. The ongoing geopolitical instability is hampering production and supply chain, as many companies have stopped production in their units in Russia.
Moreover, inflationary pressures have made people spend cautiously, which saw demand for Chromebooks decline in the second quarter. Also, delivery delays have been affecting the sales of PCs.
Major reasons behind the supply-chain crisis are the shortage of components, especially semiconductors and logistic disruptions. Enterprise buyers have been waiting for the longest time to get deliveries this year.
However, the good news is that the situation began to improve by the end of the second quarter, which may now fasten deliveries. Cities in China have started reopening after the sudden COVID-19-induced lockdown earlier this year, which is likely to expedite production.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple, Inc. AAPL is the only company among the top five to have registered growth — 9.3% from the previous quarter — in the second quarter. AAPL currently has a Zacks Rank #3 (Hold). Apple Inc. (AAPL): Free Stock Analysis Report | Apple, Inc. AAPL is the only company among the top five to have registered growth — 9.3% from the previous quarter — in the second quarter. AAPL currently has a Zacks Rank #3 (Hold). Apple Inc. (AAPL): Free Stock Analysis Report | Apple, Inc. AAPL is the only company among the top five to have registered growth — 9.3% from the previous quarter — in the second quarter. AAPL currently has a Zacks Rank #3 (Hold). Apple Inc. (AAPL): Free Stock Analysis Report | Apple, Inc. AAPL is the only company among the top five to have registered growth — 9.3% from the previous quarter — in the second quarter. AAPL currently has a Zacks Rank #3 (Hold). Apple Inc. (AAPL): Free Stock Analysis Report |
20171.0 | 2022-07-21 00:00:00 UTC | Fintech crash is an M&A opportunity for bold banks | AAPL | https://www.nasdaq.com/articles/fintech-crash-is-an-ma-opportunity-for-bold-banks | nan | nan | Reuters
Reuters
LONDON (Reuters Breakingviews) - Bank chief executives have spent years fretting about disruptive financial technology upstarts including Affirm, Klarna and Robinhood Markets. Now that those erstwhile market darlings are on the ropes, established lenders like Goldman Sachs ought to think about buying them.
Banks are already scooping up smaller fintechs. JPMorgan last year bought UK digital wealth manager Nutmeg for just under $1 billion, according to Reuters, while UBS agreed to pay $1.4 billion https://www.ubs.com/global/en/media/display-page-ndp/en-20220126-wealthfront.html for Wealthfront this January.
But the recent market storm brings bigger fish into the net. Listed pay-later group Affirm and its private rival Klarna are worth around $8 billion and $7 billion respectively, compared with peaks of almost $50 billion. Their fast-growing consumer-lending businesses could be appealing for Goldman, which is already dabbling in the sector through a credit-card partnership with Apple. Meanwhile, $8 billion trading app Robinhood is worth little more than its net cash. Buying it could help a lender target the so-called “mass affluent” U.S. wealth market, like UBS.
Headstrong founders could be an obstacle. Klarna’s Sebastian Siemiatkowski, Affirm’s Max Levchin and Robinhood’s Vladimir Tenev want to shake up old-school finance, so may resist selling to a dinosaur. Possible future regulatory crackdowns on the companies’ businesses are another risk. And their red ink is a headache for banks. Old-school lenders tend to be valued on a multiple of earnings or book value. Buying a loss-making group could therefore destroy equity value.
The financial problem may be fixable. Imagine that Goldman bought Affirm for a 30% premium, implying a $10.5 billion enterprise value. Hitting a respectable 10% return on its investment by 2026 would require about $1.3 billion of pre-tax profit, assuming a 21% rate, compared with a projected pre-tax loss that year of $179 million, using Wedbush forecasts. Closing the gap would mean cutting two-fifths of Affirm’s costs that year. That may be plausible given the likely overlap in marketing and loan underwriting, as well as Goldman’s ability to fund through cheap deposits rather than expensive wholesale markets. Wedbush analysts reckon Affirm’s funding costs as a percentage of revenue will rise to 8% next year from 6% in 2022.
Getting fintechs to the negotiating table may be tough if the upstarts view the crash as a blip. Klarna’s Chairman Michael Moritz, for example, reckons its valuation will improve “after investors emerge from their bunkers”. But interest rates are rising, and markets are less inclined to fund startups’ losses. Bank CEOs’ best argument for a deal may be that the disrupters have no other choice.
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CONTEXT NEWS
Klarna on July 11 said it had raised $800 million from investors. The deal implied a valuation for the Swedish pay-later group of $6.7 billion, after including the new capital raised. That compared with a $45.6 billion valuation in its previous fundraising round, in June 2021.
The ARK Fintech Innovation exchange-traded fund, which seeks exposure to fast-growing financial technology companies, fell 54% between the start of 2022 and July 20.
(Editing by Neil Unmack and Oliver Taslic)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | LONDON (Reuters Breakingviews) - Bank chief executives have spent years fretting about disruptive financial technology upstarts including Affirm, Klarna and Robinhood Markets. Klarna’s Sebastian Siemiatkowski, Affirm’s Max Levchin and Robinhood’s Vladimir Tenev want to shake up old-school finance, so may resist selling to a dinosaur. The ARK Fintech Innovation exchange-traded fund, which seeks exposure to fast-growing financial technology companies, fell 54% between the start of 2022 and July 20. | LONDON (Reuters Breakingviews) - Bank chief executives have spent years fretting about disruptive financial technology upstarts including Affirm, Klarna and Robinhood Markets. Hitting a respectable 10% return on its investment by 2026 would require about $1.3 billion of pre-tax profit, assuming a 21% rate, compared with a projected pre-tax loss that year of $179 million, using Wedbush forecasts. The ARK Fintech Innovation exchange-traded fund, which seeks exposure to fast-growing financial technology companies, fell 54% between the start of 2022 and July 20. | LONDON (Reuters Breakingviews) - Bank chief executives have spent years fretting about disruptive financial technology upstarts including Affirm, Klarna and Robinhood Markets. JPMorgan last year bought UK digital wealth manager Nutmeg for just under $1 billion, according to Reuters, while UBS agreed to pay $1.4 billion https://www.ubs.com/global/en/media/display-page-ndp/en-20220126-wealthfront.html for Wealthfront this January. Listed pay-later group Affirm and its private rival Klarna are worth around $8 billion and $7 billion respectively, compared with peaks of almost $50 billion. | JPMorgan last year bought UK digital wealth manager Nutmeg for just under $1 billion, according to Reuters, while UBS agreed to pay $1.4 billion https://www.ubs.com/global/en/media/display-page-ndp/en-20220126-wealthfront.html for Wealthfront this January. Listed pay-later group Affirm and its private rival Klarna are worth around $8 billion and $7 billion respectively, compared with peaks of almost $50 billion. The deal implied a valuation for the Swedish pay-later group of $6.7 billion, after including the new capital raised. |
20172.0 | 2022-07-20 00:00:00 UTC | US STOCKS-Nasdaq rises on positive earnings signals as inflation concerns loom | AAPL | https://www.nasdaq.com/articles/us-stocks-nasdaq-rises-on-positive-earnings-signals-as-inflation-concerns-loom | nan | nan | By Echo Wang
July 20 (Reuters) - The tech-heavy Nasdaq climbed over 1% on Wednesday as investors digest the latest earnings as positive signals of the economy, albeit rising concerns on inflation and a tightening Fed.
The S&P 500 edged up 0.39% while the Dow Jones Industrial Average slipped 0.12%.
Netflix Inc's NFLX.O shares jumped 6% after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-expected 1 million drop in subscribers in the second quarter.
Other high-growth stocks extended gains following the forecast from the streaming service provider. Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1% and 3.6%.
The S&P 500 technology sector index .SPLRCT rose 1.3%.
“Inflation remains a very strong consideration on investors’ minds… what we are seeing today are some positive earnings announcements allowing investors to hang their hats on some positive news that should bode better for the remainder of Q3, and 2022,” said Greg Bassuk, chief executive at AXS Investments in Port Chester, New York.
“For Tesla, and Netflix and some of these bellwether companies … investors are looking for messaging on the outlook that these companies have on the balance of 2022.”
Electric vehicle maker Tesla Inc TSLA.O added 0.6% ahead of its earnings report after market close.
Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% in this reporting season, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.
Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase.
At 1:45 p.m. ET, the Dow Jones Industrial Average .DJI fell 37.45 points, or 0.12%, to 31,789.6, the S&P 500 .SPX gained 15.19 points, or 0.39%, to 3,951.88 and the Nasdaq Composite .IXIC added 145.44 points, or 1.24%, to 11,858.59.
Trading remained volatile in thin volumes, with the CBOE Volatility index .VIX last down 24.05 points to its lowest in over a month.
"Low volumes accentuate market moves historically and even though we've wiped off $10 or $15 trillion from global equities this year, there's still a lot of excess liquidity. So low volume on excess liquidity can still accentuate moves," John Lynch, chief investment officer for Comerica Wealth Management, said.
Health insurer Elevance Health Inc ELV.N plunged 9% as the largest S&P percentage loser, as the company’s medical costs failed to decrease in line with rival UnitedHealth Group Inc.
Baker Hughes Co BKR.O tumbled 7.8% as the oilfield services provider reported a bigger second-quarter loss, while its adjusted profit also missed estimates.
Advancing issues outnumbered declining ones on the NYSE by a 1.55-to-1 ratio; on Nasdaq, a 2.09-to-1 ratio favored advancers.
The S&P 500 posted one new 52-week high and 29 new lows; the Nasdaq Composite recorded 24 new highs and 24 new lows.
(Reporting by Echo Wang in New York and Shreyashi Sanyal in Bengaluru; Additional reporting by Aniruddha Ghosh in Bengaluru; Editing by Sriraj Kalluvila, Shounak Dasgupta and Lisa Shumaker)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1% and 3.6%. By Echo Wang July 20 (Reuters) - The tech-heavy Nasdaq climbed over 1% on Wednesday as investors digest the latest earnings as positive signals of the economy, albeit rising concerns on inflation and a tightening Fed. Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1% and 3.6%. ET, the Dow Jones Industrial Average .DJI fell 37.45 points, or 0.12%, to 31,789.6, the S&P 500 .SPX gained 15.19 points, or 0.39%, to 3,951.88 and the Nasdaq Composite .IXIC added 145.44 points, or 1.24%, to 11,858.59. "Low volumes accentuate market moves historically and even though we've wiped off $10 or $15 trillion from global equities this year, there's still a lot of excess liquidity. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1% and 3.6%. “For Tesla, and Netflix and some of these bellwether companies … investors are looking for messaging on the outlook that these companies have on the balance of 2022.” Electric vehicle maker Tesla Inc TSLA.O added 0.6% ahead of its earnings report after market close. ET, the Dow Jones Industrial Average .DJI fell 37.45 points, or 0.12%, to 31,789.6, the S&P 500 .SPX gained 15.19 points, or 0.39%, to 3,951.88 and the Nasdaq Composite .IXIC added 145.44 points, or 1.24%, to 11,858.59. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1% and 3.6%. By Echo Wang July 20 (Reuters) - The tech-heavy Nasdaq climbed over 1% on Wednesday as investors digest the latest earnings as positive signals of the economy, albeit rising concerns on inflation and a tightening Fed. Netflix Inc's NFLX.O shares jumped 6% after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-expected 1 million drop in subscribers in the second quarter. |
20173.0 | 2022-07-20 00:00:00 UTC | Wednesday's ETF with Unusual Volume: OMFL | AAPL | https://www.nasdaq.com/articles/wednesdays-etf-with-unusual-volume%3A-omfl | nan | nan | The Invesco Russell 1000—Dynamic Multifactor ETF is seeing unusually high volume in afternoon trading Wednesday, with over 2.8 million shares traded versus three month average volume of about 255,000. Shares of OMFL were trading flat on the day.
Components of that ETF with the highest volume on Wednesday were Apple, trading up about 1% with over 41.5 million shares changing hands so far this session, and Alphabet, down about 0.1% on volume of over 23.0 million shares. Dolby Laboratories is the component faring the best Wednesday, up by about 5.2% on the day, while UnitedHealth Group is lagging other components of the Invesco Russell 1000—Dynamic Multifactor ETF, trading lower by about 3.2%.
VIDEO: Wednesday's ETF with Unusual Volume: OMFL
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The Invesco Russell 1000—Dynamic Multifactor ETF is seeing unusually high volume in afternoon trading Wednesday, with over 2.8 million shares traded versus three month average volume of about 255,000. Components of that ETF with the highest volume on Wednesday were Apple, trading up about 1% with over 41.5 million shares changing hands so far this session, and Alphabet, down about 0.1% on volume of over 23.0 million shares. Dolby Laboratories is the component faring the best Wednesday, up by about 5.2% on the day, while UnitedHealth Group is lagging other components of the Invesco Russell 1000—Dynamic Multifactor ETF, trading lower by about 3.2%. | The Invesco Russell 1000—Dynamic Multifactor ETF is seeing unusually high volume in afternoon trading Wednesday, with over 2.8 million shares traded versus three month average volume of about 255,000. Dolby Laboratories is the component faring the best Wednesday, up by about 5.2% on the day, while UnitedHealth Group is lagging other components of the Invesco Russell 1000—Dynamic Multifactor ETF, trading lower by about 3.2%. VIDEO: Wednesday's ETF with Unusual Volume: OMFL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The Invesco Russell 1000—Dynamic Multifactor ETF is seeing unusually high volume in afternoon trading Wednesday, with over 2.8 million shares traded versus three month average volume of about 255,000. Components of that ETF with the highest volume on Wednesday were Apple, trading up about 1% with over 41.5 million shares changing hands so far this session, and Alphabet, down about 0.1% on volume of over 23.0 million shares. Dolby Laboratories is the component faring the best Wednesday, up by about 5.2% on the day, while UnitedHealth Group is lagging other components of the Invesco Russell 1000—Dynamic Multifactor ETF, trading lower by about 3.2%. | The Invesco Russell 1000—Dynamic Multifactor ETF is seeing unusually high volume in afternoon trading Wednesday, with over 2.8 million shares traded versus three month average volume of about 255,000. Shares of OMFL were trading flat on the day. VIDEO: Wednesday's ETF with Unusual Volume: OMFL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. |
20174.0 | 2022-07-20 00:00:00 UTC | US STOCKS-Wall Street set to open lower after strong gains | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-set-to-open-lower-after-strong-gains | nan | nan | By Shreyashi Sanyal
July 20 (Reuters) - U.S. stock indexes were set for a lower open on Wednesday after sharp gains on Wall Street in the previous session as investors parsed through earnings reports from companies for impact of spiraling inflation on growth.
Fresh uncertainties stemming from the conflict in Ukraine also weighed on sentiment as Russian forces shelled eastern and southern Ukraine, according to reports, after Washington said it saw signs Moscow was preparing to formally annex territory it has seized during nearly five months of war.
Netflix Inc's NFLX.O shares gained 4.8% premarket after the company predicted it would return to customer growth during the third quarter, while posting a 1 million drop in subscribers in the second quarter.
The streaming service provider was the first among big-tech firms to report quarterly results, raising hopes that they will perform well despite a rocky global economic backdrop.
The S&P 500 .SPX and the Dow Jones Industrial Average .DJI gained more than 2% on Tuesday, while the Nasdaq .IXIC rose 3%, following strong corporate earnings.
"Futures were pointing to a higher opening trying to build on yesterday's strong rally, however, they have since turned down a little bit, so I suspect there's some profit taking," Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"Once the earnings come in, if we see a repeat of yesterday (good set of earnings) then I think this profit taking will be short lived."
While Friday's upbeat data on retail sales and consumer sentiment eased some concerns around the economy, fears of a recession or a sharp slowdown remain as the U.S. Federal Reserve raises interest rates to check inflation.
Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase.
In this reporting season, analysts expect aggregate year-on-year S&P 500 profit to grow 5.8%, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.
Electric-vehicle maker Tesla Inc TSLA.O gained 0.6% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O and Meta Platforms Inc META.O rose 0.5% each.
At 8:42 a.m. ET, Dow e-minis 1YMcv1 were down 107 points, or 0.34%, S&P 500 e-minis EScv1 were down 12.75 points, or 0.32%, and Nasdaq 100 e-minis NQcv1 were down 27.5 points, or 0.22%.
Merck & Co Inc MRK.N dropped 0.8% as the company's cancer therapy Keytruda failed to meet the main goal of a late-stage trial testing it in patients with head and neck cancer.
Baker Hughes Co BKR.O fell 5.8% as the oilfield services provider reported a bigger second-quarter loss, while its adjusted profit also missed analysts' estimates.
(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Shounak Dasgupta)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Electric-vehicle maker Tesla Inc TSLA.O gained 0.6% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O and Meta Platforms Inc META.O rose 0.5% each. By Shreyashi Sanyal July 20 (Reuters) - U.S. stock indexes were set for a lower open on Wednesday after sharp gains on Wall Street in the previous session as investors parsed through earnings reports from companies for impact of spiraling inflation on growth. "Futures were pointing to a higher opening trying to build on yesterday's strong rally, however, they have since turned down a little bit, so I suspect there's some profit taking," Peter Cardillo, chief market economist at Spartan Capital Securities in New York. | Electric-vehicle maker Tesla Inc TSLA.O gained 0.6% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O and Meta Platforms Inc META.O rose 0.5% each. The S&P 500 .SPX and the Dow Jones Industrial Average .DJI gained more than 2% on Tuesday, while the Nasdaq .IXIC rose 3%, following strong corporate earnings. ET, Dow e-minis 1YMcv1 were down 107 points, or 0.34%, S&P 500 e-minis EScv1 were down 12.75 points, or 0.32%, and Nasdaq 100 e-minis NQcv1 were down 27.5 points, or 0.22%. | Electric-vehicle maker Tesla Inc TSLA.O gained 0.6% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O and Meta Platforms Inc META.O rose 0.5% each. By Shreyashi Sanyal July 20 (Reuters) - U.S. stock indexes were set for a lower open on Wednesday after sharp gains on Wall Street in the previous session as investors parsed through earnings reports from companies for impact of spiraling inflation on growth. ET, Dow e-minis 1YMcv1 were down 107 points, or 0.34%, S&P 500 e-minis EScv1 were down 12.75 points, or 0.32%, and Nasdaq 100 e-minis NQcv1 were down 27.5 points, or 0.22%. | Electric-vehicle maker Tesla Inc TSLA.O gained 0.6% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O and Meta Platforms Inc META.O rose 0.5% each. "Futures were pointing to a higher opening trying to build on yesterday's strong rally, however, they have since turned down a little bit, so I suspect there's some profit taking," Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "Once the earnings come in, if we see a repeat of yesterday (good set of earnings) then I think this profit taking will be short lived." |
20175.0 | 2022-07-20 00:00:00 UTC | Can Flat Revenue Trajectory Aid Verizon's (VZ) Q2 Earnings? | AAPL | https://www.nasdaq.com/articles/can-flat-revenue-trajectory-aid-verizons-vz-q2-earnings | nan | nan | Verizon Communications Inc. VZ is scheduled to report second-quarter 2022 results before the opening bell on Jul 22. In the last reported quarter, the telecom giant met the Zacks Consensus Estimate, delivering a surprise of 2.9% in the trailing four quarters.
The company is expected to have recorded relatively flat aggregate revenues year over year, as the positive momentum in its core wireless business is likely to have been offset by the challenging macroeconomic environment.
Factors at Play
During the second quarter, Verizon deployed the C-Band spectrum in a phased manner to further expand its 5G coverage and delayed deployment near airports as part of the FAA deal. The company is witnessing significant 5G adoption and fixed wireless broadband momentum while increasing demand for premium mobility and broadband offerings instill optimism. Verizon hiked its wireless prices during the quarter – the first in about two years to offset the rising inflationary pressures. The company informed consumers that the administrative charges for each voice line will be raised by $1.35 from June onward. For business customers, Verizon decided to bring in an “economic adjustment charge” from Jun 16, 2022, which is likely to increase mobile data bills by $2.20 a month and basic service plans by about 98 cents. This is likely to get reflected in the upcoming quarterly results.
Verizon collaborated with Sawatch Labs to help fleet operators seamlessly migrate to electric vehicles. Verizon Connect Reveal, the fleet management software platform from the carrier, offers customizable GPS fleet management software to effectively track vehicle locations and driver behavior like speeding, idling and harsh driving to improve fleet operations. By migrating to 4G and cloud networks and utilizing Sawatch Labs analytics, fleet operators will be able to identify accurate location data for faster-routing facilities by deploying the closest vehicle to customers. With the Verizon Connect Reveal app, which is exclusively available in the 4G network, customers will benefit from a new High-Fidelity Tracking feature. This asset tracking software offers a three-fold jump in the frequency of real-time vehicle location updates on the Live Map, thereby providing higher visibility of project-critical equipment. These developments are likely to have had a positive impact on Verizon’s performance.
During the quarter, Verizon collaborated with Visionable to accelerate the evolution of healthcare using its private 5G and AI-driven secure networking. According to the terms of the collaboration, the technology-led center to be built will showcase the benefits of next-generation connectivity and collaboration with various healthcare environments. The center will bring together professionals in a hub to see and stimulate technology concepts to enable the creation of future innovative solutions. The center will also aid healthcare professionals in accessing data, collaborating and sharing resources. These initiatives are likely to have translated into incremental revenues in the quarter.
In the second quarter, Verizon announced that Age of Learning and Perlego will partner with its +play platform, broadening the depth of the platform’s offerings. +play, a ground-breaking platform, is a unique digital hub designed to centralize subscription services at no additional cost. It is a content hub, providing customers with exclusive deals and offerings for various content services. +play is a natural extension of Verizon’s core strengths. The premium content and entertainment relationships have made this platform one of the largest and most successful direct-to-consumer platforms in the country. Additionally, it builds on Verizon’s strategy to accelerate 5G adoption through premium offerings. However, adverse foreign currency translations and high operating costs for 5G deployments are likely to have led to soft margins in the quarter. The infrastructure investments are expected to have weighed on the margins.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $33,775 million. It reported revenues of $33,764 million in the year-ago quarter. The consensus estimate for adjusted earnings per share stands at $1.34, which suggests a decline from the year-ago tally of $1.37.
Earnings Whispers
Our proven model does not predict an earnings beat for Verizon for the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.71%, with the former pegged at $1.33 and the latter at $1.34. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Verizon Communications Inc. Price and EPS Surprise
Verizon Communications Inc. price-eps-surprise | Verizon Communications Inc. Quote
Zacks Rank: Verizon has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Keysight Technologies, Inc. KEYS is set to release quarterly numbers on Aug 17. It has an Earnings ESP of +1.23% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Qorvo Inc. QRVO is +0.41% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Aug 3.
The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jul 28.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Apple Inc. (AAPL): Free Stock Analysis Report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. Apple Inc. (AAPL): Free Stock Analysis Report For business customers, Verizon decided to bring in an “economic adjustment charge” from Jun 16, 2022, which is likely to increase mobile data bills by $2.20 a month and basic service plans by about 98 cents. | The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. Apple Inc. (AAPL): Free Stock Analysis Report Verizon Connect Reveal, the fleet management software platform from the carrier, offers customizable GPS fleet management software to effectively track vehicle locations and driver behavior like speeding, idling and harsh driving to improve fleet operations. | The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. Apple Inc. (AAPL): Free Stock Analysis Report In the last reported quarter, the telecom giant met the Zacks Consensus Estimate, delivering a surprise of 2.9% in the trailing four quarters. | The Earnings ESP for Apple Inc. AAPL is +0.88% and it carries a Zacks Rank of 3. Apple Inc. (AAPL): Free Stock Analysis Report The company is expected to have recorded relatively flat aggregate revenues year over year, as the positive momentum in its core wireless business is likely to have been offset by the challenging macroeconomic environment. |
20176.0 | 2022-07-20 00:00:00 UTC | US STOCKS-Wall Street ends higher as tech stocks rise on upbeat earnings | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-ends-higher-as-tech-stocks-rise-on-upbeat-earnings | nan | nan | By Echo Wang
July 20 (Reuters) - Wall Street closed higher on Wednesday with the tech-heavy Nasdaq booking a nearly 2% gain on positive earnings signals with a wary eye on inflation and more interest rate hikes by the Fed.
Netflix Inc's NFLX.O shares jumped after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-expected 1 million drop in subscribers in the second quarter.
Other high-growth stocks extended gains following the forecast from the streaming service provider, including shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O.
Electric vehicle maker Tesla Inc TSLA.O added 0.6% ahead of its earnings report after market close.
“Equity prices are trending in a roller coaster fashion, currently being at the mercy of inflation, interest rates and earnings,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
“We're going to need another series of reporting cycles to confirm whether or not inflation indeed is getting under control.”
Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% in this reporting season, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.
Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase.
According to preliminary data, the S&P 500 .SPX gained 22.89 points, or 0.58%, to end at 3,959.58 points, while the Nasdaq Composite .IXIC gained 185.15 points, or 1.58%, to 11,898.30. The Dow Jones Industrial Average .DJI rose 44.10 points, or 0.14%, to 31,871.15.
Trading remained volatile in thin volumes, with the CBOE Volatility index .VIX last down 23.71 points to its lowest in nearly three months.
"Low volumes accentuate market moves historically and even though we've wiped off $10 or $15 trillion from global equities this year, there's still a lot of excess liquidity. So low volume on excess liquidity can still accentuate moves," John Lynch, chief investment officer for Comerica Wealth Management, said.
Health insurer Elevance Health Inc ELV.N plunged as the largest S&P percentage loser, as the company’s medical costs failed to decrease in line with rival UnitedHealth Group Inc.
Baker Hughes Co BKR.O tumbled as the oilfield services provider reported a bigger second-quarter loss, while its adjusted profit also missed estimates.
(Reporting by Echo Wang in New York and Shreyashi Sanyal in Bengaluru; Additional reporting by Aniruddha Ghosh in Bengaluru; Editing by Sriraj Kalluvila, Shounak Dasgupta and Lisa Shumaker)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Other high-growth stocks extended gains following the forecast from the streaming service provider, including shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O. By Echo Wang July 20 (Reuters) - Wall Street closed higher on Wednesday with the tech-heavy Nasdaq booking a nearly 2% gain on positive earnings signals with a wary eye on inflation and more interest rate hikes by the Fed. Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase. | Other high-growth stocks extended gains following the forecast from the streaming service provider, including shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O. “Equity prices are trending in a roller coaster fashion, currently being at the mercy of inflation, interest rates and earnings,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Low volumes accentuate market moves historically and even though we've wiped off $10 or $15 trillion from global equities this year, there's still a lot of excess liquidity. | Other high-growth stocks extended gains following the forecast from the streaming service provider, including shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O. By Echo Wang July 20 (Reuters) - Wall Street closed higher on Wednesday with the tech-heavy Nasdaq booking a nearly 2% gain on positive earnings signals with a wary eye on inflation and more interest rate hikes by the Fed. According to preliminary data, the S&P 500 .SPX gained 22.89 points, or 0.58%, to end at 3,959.58 points, while the Nasdaq Composite .IXIC gained 185.15 points, or 1.58%, to 11,898.30. | Other high-growth stocks extended gains following the forecast from the streaming service provider, including shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O. Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase. According to preliminary data, the S&P 500 .SPX gained 22.89 points, or 0.58%, to end at 3,959.58 points, while the Nasdaq Composite .IXIC gained 185.15 points, or 1.58%, to 11,898.30. |
20177.0 | 2022-07-20 00:00:00 UTC | Is It Showtime for Netflix Shares? | AAPL | https://www.nasdaq.com/articles/is-it-showtime-for-netflix-shares | nan | nan | Netflix NFLX shares have plunged in 2022. The chart below illustrates the performance of Netflix shares year-to-date compared to a few peers, Roku ROKU and Disney DIS.
Image Source: Zacks Investment Research
First, let’s look at what’s fueled this move downwards.
Subscriber Slowdown & Rising Competition
A rapidly increasing number of digital streaming services has no doubt impacted Netflix. A few of these streaming services include Amazon Prime Video AMZN, Apple TV AAPL, Roku ROKU, and Disney+ DIS.
These services have been gaining rapid traction, making the industry much more competitive. Simply put, Netflix is no longer the go-to streaming service that it once was for many people.
Peeling back the pages, in 2021 Q4, the company provided disappointing guidance that it expected new subscriber adds of 2.5 million in 2022 Q1 vs. the consensus of seven million expected.
This is where the trouble began.
Fast-forward to 2022 Q1, and the company reported losing more than 200,000 subscribers in the quarter. It was the company’s first subscriber loss in a decade, and the market priced in this growth slowdown – shares plunged 35% the following day.
Netflix provided further disheartening guidance, forecasting a drop of two million subscribers in 2022 Q2. It seemed that NFLX investors just couldn’t catch a break.
However, Netflix posted a much stronger than expected earnings report yesterday, reporting that it had lost fewer subscribers than the previous guidance of two million.
In turn, NFLX shares soared in pre-market trading. Let’s break down the earnings release to see if Netflix shares are worth another look amid a growth slowdown.
Q2 Earnings Recap
Netflix reported quarterly earnings of $3.20 per share, good enough to pencil in a sizable 10% bottom-line beat and exceed the Zacks Consensus EPS Estimate of $2.90. Quarterly revenue of $7.9 billion came in marginally under expectations but reflected an 8.6% year-over-year change.
Image Source: Zacks Investment Research
In addition, the company reported total global streaming paid memberships at 220.7 million, a 5.5% year-over-year uptick.
The metric everybody was watching closely was global streaming paid net additions. In a big surprise, the company reported that it had lost approximately 970,000 subscribers during the period, half of its previous guidance of two million subscriber losses.
Sometimes, bad news is still good news.
Additionally, the company provided some positive news regarding its cash flow and capital structure.
Netflix expects annual positive FCF moving forward due to increasing revenue, profitability strength, and the successful multi-year evolution of its content model; the company has been transforming its service from licensed second-run content to mostly Netflix originals.
Image Source: Zacks Investment Research
Free cash flow for the quarter was reported at $13 million, compared to -$175 million from the year-ago quarter. Furthermore, net cash generated by operating activities totaled $103 million, up from -$64 million in the year-ago quarter.
Moving Forward
The company soon plans to implement an ad-based subscription tier targeted for a launch in early 2023. In addition, the company has announced that Microsoft MSFT will be its technology and sales partner for this venture.
Netflix forecasts paid subscriber net adds for 2022 Q3 at one million, well below the 4.4 million added in the year-ago quarter. However, it does break the company’s current streak of quarterly subscriber losses.
NFLX is also in the early stages of monetizing more than 100 million households that share accounts and are not direct subscribers. The company is launching two different approaches in Latin America to learn more about and alleviate the issue.
Bottom Line
A staple in many portfolios over the years, the tide has quickly shifted for Netflix throughout 2022, sending shares plummeting. Increasing competition and a slowdown in subscriber growth have fueled the poor share performance.
However, the company has made very positive progress and expects positive annual FCF moving forward. In addition, an ad-based subscription tier and monetizing households who currently utilize but do not pay for the streaming service will undoubtedly aid the top-line once implemented.
Netflix is currently a Zacks Rank #4 (Sell) with an overall VGM Score of a C.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.8% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>
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Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
The Walt Disney Company (DIS): Free Stock Analysis Report
Roku, Inc. (ROKU): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | A few of these streaming services include Amazon Prime Video AMZN, Apple TV AAPL, Roku ROKU, and Disney+ DIS. Apple Inc. (AAPL): Free Stock Analysis Report Subscriber Slowdown & Rising Competition A rapidly increasing number of digital streaming services has no doubt impacted Netflix. | A few of these streaming services include Amazon Prime Video AMZN, Apple TV AAPL, Roku ROKU, and Disney+ DIS. Apple Inc. (AAPL): Free Stock Analysis Report Image Source: Zacks Investment Research In addition, the company reported total global streaming paid memberships at 220.7 million, a 5.5% year-over-year uptick. | A few of these streaming services include Amazon Prime Video AMZN, Apple TV AAPL, Roku ROKU, and Disney+ DIS. Apple Inc. (AAPL): Free Stock Analysis Report However, Netflix posted a much stronger than expected earnings report yesterday, reporting that it had lost fewer subscribers than the previous guidance of two million. | A few of these streaming services include Amazon Prime Video AMZN, Apple TV AAPL, Roku ROKU, and Disney+ DIS. Apple Inc. (AAPL): Free Stock Analysis Report Image Source: Zacks Investment Research Free cash flow for the quarter was reported at $13 million, compared to -$175 million from the year-ago quarter. |
20178.0 | 2022-07-20 00:00:00 UTC | Netflix (NFLX) Q2 Earnings Beat, User Loss Lower Than View | AAPL | https://www.nasdaq.com/articles/netflix-nflx-q2-earnings-beat-user-loss-lower-than-view | nan | nan | Netflix NFLX reported second-quarter 2022 earnings of $3.20 per share, beating the Zacks Consensus Estimate by 10.34% and the company’s guidance of $3 per share. Moreover, the figure increased 7.7% year over year.
Revenues of $7.97 billion increased 8.6% year over year but missed the consensus mark by 0.71%. Average revenue per membership increased 2% year over year on a reported basis and 7% on a foreign-exchange neutral basis.
The streaming giant lost 0.97 million paid subscribers globally, lower than its estimate of losing two million users. Netflix had added 1.54 million paid subscribers in the year-ago quarter.
At the end of the second quarter, Netflix had 220.67 million paid subscribers globally, up 5.5% year over year.
Netflix benefited from strength in its content portfolio. In its first four weeks, Stranger Things season four generated 1.3 billion hours viewed, making the show its biggest season of English TV ever.
Netflix, Inc. Price and Consensus
Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote
However, Netflix is suffering from growing competition from services launched by Apple AAPL, Disney DIS and Comcast CMCSA, as well as the negative impact of Netflix accounts being shared. Sluggish economic growth and the ongoing Russia-Ukraine war have also negatively impacted growth.
Nevertheless, lower than estimated subscriber loss reflects Netflix’s superior content. Shares of this Zacks Rank #4 (Sell) company were up almost 6.5% in pre-market trading following the announcement of the results.
In the year-to-date period, Netflix shares have underperformed Apple, Disney and Comcast. While Netflix shares fell 66.5%, Apple, Disney and Comcast lost 15%, 35.7% and 17.9%, respectively.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Segmental Revenue Details
UCAN reported revenues of $3.54 billion, which rose 9.4% year over year and accounted for 44.4% of total revenues. ARPU grew 5% from the year-ago quarter on a foreign-exchange neutral basis.
Paid-subscriber base decreased 0.9% from the year-ago quarter to 73.28 million. The company lost 1.3 million paid subscribers against the year-ago quarter’s loss of 0.43 million.
Europe, Middle East & Africa (EMEA) reported revenues of $2.46 billion, which climbed 2.4% year over year and accounted for 30.8% of total revenues. ARPU grew 6% from the year-ago quarter on a foreign-exchange neutral basis.
Paid-subscriber base increased 6.2% from the year-ago quarter to 72.97 million. The company lost 0.77 million paid subscribers against the year-ago quarter's net addition of 0.19 million.
Latin America’s (LATAM) revenues of $1.03 billion increased 19.6% year over year, contributing 12.9% of total revenues. ARPU grew15% from the year-ago quarter on a foreign-exchange neutral basis.
Paid subscriber base rose 2.5% from the year-ago quarter to 39.62 million. The company gained 0.35 million paid subscribers against the year-ago quarter’s net addition of 0.36 million.
Asia Pacific’s (APAC) revenues of $908 million increased 13.6% year over year and accounted for 11.4% of total revenues. ARPU decreased 2% year overyear on a foreign-exchange neutral basis.
Paid subscriber base jumped 24.8% from the year-ago quarter to 34.80 million. The company added 1.08 million paid subscribers in the quarter, up 5.9% year over year.
Operating Details
Marketing expenses decreased 4.8% year over year to $575 million. As a percentage of revenues, marketing expenses decreased 100 basis points (bps) to 7.2%.
Operating income decreased 14.6% year over year to $1.58 billion. Operating margin contracted 540 bps on a year-over-year basis to 19.8%.
Balance Sheet & Free Cash Flow
Netflix had $5.82 billion of cash and cash equivalents as of Jun 30, 2022, compared with $6 billion as of Mar 31, 2022.
Long-term debt was $14.2 billion as of Jun 30, 2022, compared with $14.5 billion as of Mar 31, 2022.
Streaming content obligations were $22.37 billion as of Jun 30, 2022, compared with $23.16 billion as of Mar 31, 2022.
Netflix reported free cash flow of $13 million compared with free cash flow outflow of $175million in the previous quarter.
Guidance
For the third quarter of 2022, Netflix forecasts earnings of $2.14 per share, indicating 33% decline from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for the same is pegged at $2.71 per share, currently higher than the company’s expectation, down 15.05% from the figure reported in the year-ago quarter.
Total revenues are anticipated to be $7.838 billion, suggesting growth of 4.7% year over year. The consensus mark for revenues stands at $8.08 billion, higher than the company’s expectation and indicating 7.99% growth from the figure reported in the year-ago quarter.
Netflix now expects to gain one million paid subscribers in third-quarter 2022 compared with the year-ago quarter’s addition of 4.38 million.
Netflix expects to end the third quarter of 2022 with 221.67 million paid subscribers globally, indicating growth of 3.8% from the year-ago quarter.
Operating margin is projected at 16% compared with 23.5% reported in the year-ago quarter.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Netflix, Inc. Price and Consensus Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote However, Netflix is suffering from growing competition from services launched by Apple AAPL, Disney DIS and Comcast CMCSA, as well as the negative impact of Netflix accounts being shared. Apple Inc. (AAPL): Free Stock Analysis Report Shares of this Zacks Rank #4 (Sell) company were up almost 6.5% in pre-market trading following the announcement of the results. | Netflix, Inc. Price and Consensus Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote However, Netflix is suffering from growing competition from services launched by Apple AAPL, Disney DIS and Comcast CMCSA, as well as the negative impact of Netflix accounts being shared. Apple Inc. (AAPL): Free Stock Analysis Report The company lost 0.77 million paid subscribers against the year-ago quarter's net addition of 0.19 million. | Netflix, Inc. Price and Consensus Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote However, Netflix is suffering from growing competition from services launched by Apple AAPL, Disney DIS and Comcast CMCSA, as well as the negative impact of Netflix accounts being shared. Apple Inc. (AAPL): Free Stock Analysis Report At the end of the second quarter, Netflix had 220.67 million paid subscribers globally, up 5.5% year over year. | Netflix, Inc. Price and Consensus Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote However, Netflix is suffering from growing competition from services launched by Apple AAPL, Disney DIS and Comcast CMCSA, as well as the negative impact of Netflix accounts being shared. Apple Inc. (AAPL): Free Stock Analysis Report Average revenue per membership increased 2% year over year on a reported basis and 7% on a foreign-exchange neutral basis. |
20179.0 | 2022-07-20 00:00:00 UTC | US STOCKS-Wall Street closes higher boosted by tech stocks gains on upbeat earnings | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-closes-higher-boosted-by-tech-stocks-gains-on-upbeat-earnings | nan | nan | By Echo Wang
July 20 (Reuters) - U.S. stocks ended higher on Wednesday with the tech-heavy Nasdaq booking a 1.6 % gain on positive earnings signals with a wary eye on inflation and more interest rate hikes by the Fed.
Netflix Inc's NFLX.O shares added 7.4% after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-expected 1 million drop in subscribers in the second quarter.
Other high-growth stocks extended gains following the forecast from the streaming service provider. Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O rose between 1% and 4.2%.
Electric vehicle maker Tesla Inc TSLA.Orose 2% in extended trading after reporting a rise in quarterly profit after the bell.
“Equity prices are trending in a roller coaster fashion, currently being at the mercy of inflation, interest rates and earnings,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
“We're going to need another series of reporting cycles to confirm whether or not inflation indeed is getting under control.”
Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% in this reporting season, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.
Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase.
The Dow Jones Industrial Average .DJI rose 47.79 points, or 0.15%, to 31,874.84, the S&P 500 .SPX gained 23.21 points, or 0.59%, to 3,959.9 and the Nasdaq Composite .IXIC added 184.50 points, or 1.58%, to 11,897.65.
Seven of the 11 major sectors of the S&P 500 gained ground, with consumer discretionary .SPLRCD and information technology .SPLRCTposting the biggest gains.
Trading remained volatile in thin volumes, with the CBOE Volatility index .VIX closed at 23.79 points to its lowest in nearly three months.
Volume on U.S. exchanges was 11.51 billion shares, compared with the 11.43 billion average for the full session over the last 20 trading days.
"Low volumes accentuate market moves historically and even though we've wiped off $10 or $15 trillion from global equities this year, there's still a lot of excess liquidity. So low volume on excess liquidity can still accentuate moves," John Lynch, chief investment officer for Comerica Wealth Management, said.
Baker Hughes Co BKR.O tumbled 8.3% as the largest S&P percentage loser, as the oilfield services provider reported a bigger second-quarter loss, while its adjusted profit also missed estimates.
Advancing issues outnumbered declining ones on the NYSE by a 1.94-to-1 ratio; on Nasdaq, a 2.28-to-1 ratio favored advancers.
The S&P 500 posted one new 52-week high and 29 new lows; the Nasdaq Composite recorded 29 new highs and 38 new lows.
(Reporting by Echo Wang in New York and Shreyashi Sanyal in Bengaluru; Additional reporting by Aniruddha Ghosh in Bengaluru; Editing by Sriraj Kalluvila, Shounak Dasgupta and Lisa Shumaker)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O rose between 1% and 4.2%. By Echo Wang July 20 (Reuters) - U.S. stocks ended higher on Wednesday with the tech-heavy Nasdaq booking a 1.6 % gain on positive earnings signals with a wary eye on inflation and more interest rate hikes by the Fed. Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O rose between 1% and 4.2%. “Equity prices are trending in a roller coaster fashion, currently being at the mercy of inflation, interest rates and earnings,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Low volumes accentuate market moves historically and even though we've wiped off $10 or $15 trillion from global equities this year, there's still a lot of excess liquidity. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O rose between 1% and 4.2%. By Echo Wang July 20 (Reuters) - U.S. stocks ended higher on Wednesday with the tech-heavy Nasdaq booking a 1.6 % gain on positive earnings signals with a wary eye on inflation and more interest rate hikes by the Fed. The Dow Jones Industrial Average .DJI rose 47.79 points, or 0.15%, to 31,874.84, the S&P 500 .SPX gained 23.21 points, or 0.59%, to 3,959.9 and the Nasdaq Composite .IXIC added 184.50 points, or 1.58%, to 11,897.65. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O rose between 1% and 4.2%. By Echo Wang July 20 (Reuters) - U.S. stocks ended higher on Wednesday with the tech-heavy Nasdaq booking a 1.6 % gain on positive earnings signals with a wary eye on inflation and more interest rate hikes by the Fed. “Equity prices are trending in a roller coaster fashion, currently being at the mercy of inflation, interest rates and earnings,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. |
20180.0 | 2022-07-20 00:00:00 UTC | Notable Wednesday Option Activity: TSLA, NVDA, AAPL | AAPL | https://www.nasdaq.com/articles/notable-wednesday-option-activity%3A-tsla-nvda-aapl | nan | nan | Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Tesla Inc (Symbol: TSLA), where a total volume of 570,553 contracts has been traded thus far today, a contract volume which is representative of approximately 57.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 191% of TSLA's average daily trading volume over the past month, of 29.9 million shares. Particularly high volume was seen for the $800 strike call option expiring July 22, 2022, with 31,209 contracts trading so far today, representing approximately 3.1 million underlying shares of TSLA. Below is a chart showing TSLA's trailing twelve month trading history, with the $800 strike highlighted in orange:
NVIDIA Corp (Symbol: NVDA) options are showing a volume of 694,671 contracts thus far today. That number of contracts represents approximately 69.5 million underlying shares, working out to a sizeable 135.4% of NVDA's average daily trading volume over the past month, of 51.3 million shares. Particularly high volume was seen for the $180 strike call option expiring July 22, 2022, with 77,483 contracts trading so far today, representing approximately 7.7 million underlying shares of NVDA. Below is a chart showing NVDA's trailing twelve month trading history, with the $180 strike highlighted in orange:
And Apple Inc (Symbol: AAPL) saw options trading volume of 748,681 contracts, representing approximately 74.9 million underlying shares or approximately 99.9% of AAPL's average daily trading volume over the past month, of 74.9 million shares. Especially high volume was seen for the $155 strike call option expiring July 22, 2022, with 80,245 contracts trading so far today, representing approximately 8.0 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $155 strike highlighted in orange:
For the various different available expirations for TSLA options, NVDA options, or AAPL options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Especially high volume was seen for the $155 strike call option expiring July 22, 2022, with 80,245 contracts trading so far today, representing approximately 8.0 million underlying shares of AAPL. Below is a chart showing NVDA's trailing twelve month trading history, with the $180 strike highlighted in orange: And Apple Inc (Symbol: AAPL) saw options trading volume of 748,681 contracts, representing approximately 74.9 million underlying shares or approximately 99.9% of AAPL's average daily trading volume over the past month, of 74.9 million shares. Below is a chart showing AAPL's trailing twelve month trading history, with the $155 strike highlighted in orange: For the various different available expirations for TSLA options, NVDA options, or AAPL options, visit StockOptionsChannel.com. | Below is a chart showing NVDA's trailing twelve month trading history, with the $180 strike highlighted in orange: And Apple Inc (Symbol: AAPL) saw options trading volume of 748,681 contracts, representing approximately 74.9 million underlying shares or approximately 99.9% of AAPL's average daily trading volume over the past month, of 74.9 million shares. Especially high volume was seen for the $155 strike call option expiring July 22, 2022, with 80,245 contracts trading so far today, representing approximately 8.0 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $155 strike highlighted in orange: For the various different available expirations for TSLA options, NVDA options, or AAPL options, visit StockOptionsChannel.com. | Below is a chart showing NVDA's trailing twelve month trading history, with the $180 strike highlighted in orange: And Apple Inc (Symbol: AAPL) saw options trading volume of 748,681 contracts, representing approximately 74.9 million underlying shares or approximately 99.9% of AAPL's average daily trading volume over the past month, of 74.9 million shares. Especially high volume was seen for the $155 strike call option expiring July 22, 2022, with 80,245 contracts trading so far today, representing approximately 8.0 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $155 strike highlighted in orange: For the various different available expirations for TSLA options, NVDA options, or AAPL options, visit StockOptionsChannel.com. | Below is a chart showing NVDA's trailing twelve month trading history, with the $180 strike highlighted in orange: And Apple Inc (Symbol: AAPL) saw options trading volume of 748,681 contracts, representing approximately 74.9 million underlying shares or approximately 99.9% of AAPL's average daily trading volume over the past month, of 74.9 million shares. Especially high volume was seen for the $155 strike call option expiring July 22, 2022, with 80,245 contracts trading so far today, representing approximately 8.0 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $155 strike highlighted in orange: For the various different available expirations for TSLA options, NVDA options, or AAPL options, visit StockOptionsChannel.com. |
20181.0 | 2022-07-20 00:00:00 UTC | US STOCKS-Nasdaq boosted by growth stocks after Netflix's upbeat forecast | AAPL | https://www.nasdaq.com/articles/us-stocks-nasdaq-boosted-by-growth-stocks-after-netflixs-upbeat-forecast-0 | nan | nan | By Shreyashi Sanyal
July 20 (Reuters) - The Nasdaq gained nearly 2% on Wednesday after a positive forecast from Netflix added to largely upbeat second-quarter earnings from U.S. companies amid rising recession fears due to the Federal Reserve's efforts to tame surging inflation.
Netflix Inc's NFLX.O shares jumped 7.1% after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-expected 1 million drop in subscribers in the second quarter.
The forecast from the streaming service provider helped other high-growth stocks extend gains. Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1.7% and 4.1%.
"Right now, investors seem more willing to reward than to punish because there's already a lot of pessimism baked into trader sentiment," said Steve Sosnick, chief strategist at Interactive Brokers.
"If companies can put out some decent results that could get people to be more willing to buy than to sell."
Electric-vehicle maker Tesla Inc TSLA.O slipped 1.4% ahead of its earnings report after market close.
The S&P 500 growth index .IGX gained 1.6%, while S&P 500 value stocks .IVX were flat.
Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% in this reporting season, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.
Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase.
At 12:20 p.m. ET the Dow Jones Industrial Average .DJI was up 94.42 points, or 0.30%, at 31,921.47, the S&P 500 .SPX was up 35.19 points, or 0.89%, at 3,971.88, and the Nasdaq Composite .IXIC was up 218.41 points, or 1.86%, at 11,931.56.
Trading remained volatile in thin volumes, with the CBOE Volatility index .VIX last down 23.83 points to its lowest in nearly three months.
"Low volumes accentuate market moves historically and even though we've wiped off $10 or $15 trillion from global equities this year, there's still a lot of excess liquidity. So low volume on excess liquidity can still accentuate moves," John Lynch, chief investment officer for Comerica Wealth Management, said.
Merck & Co Inc's MRK.N shares fell 2.2% as the company's cancer therapy Keytruda failed to meet the main goal of a late-stage trial testing it in patients with head and neck cancer.
Baker Hughes Co BKR.O plunged 8.9% as the oilfield services provider reported a bigger second-quarter loss, while its adjusted profit also missed estimates.
Advancing issues outnumbered decliners for a 2.15-to-1 ratio on the NYSE and a 2.76-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 20 new highs and 18 new lows.
(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1.7% and 4.1%. By Shreyashi Sanyal July 20 (Reuters) - The Nasdaq gained nearly 2% on Wednesday after a positive forecast from Netflix added to largely upbeat second-quarter earnings from U.S. companies amid rising recession fears due to the Federal Reserve's efforts to tame surging inflation. Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1.7% and 4.1%. "Low volumes accentuate market moves historically and even though we've wiped off $10 or $15 trillion from global equities this year, there's still a lot of excess liquidity. So low volume on excess liquidity can still accentuate moves," John Lynch, chief investment officer for Comerica Wealth Management, said. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1.7% and 4.1%. By Shreyashi Sanyal July 20 (Reuters) - The Nasdaq gained nearly 2% on Wednesday after a positive forecast from Netflix added to largely upbeat second-quarter earnings from U.S. companies amid rising recession fears due to the Federal Reserve's efforts to tame surging inflation. The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 20 new highs and 18 new lows. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 1.7% and 4.1%. By Shreyashi Sanyal July 20 (Reuters) - The Nasdaq gained nearly 2% on Wednesday after a positive forecast from Netflix added to largely upbeat second-quarter earnings from U.S. companies amid rising recession fears due to the Federal Reserve's efforts to tame surging inflation. The forecast from the streaming service provider helped other high-growth stocks extend gains. |
20182.0 | 2022-07-20 00:00:00 UTC | 2 Dividend Growth Stocks to Buy and Hold for Decades | AAPL | https://www.nasdaq.com/articles/2-dividend-growth-stocks-to-buy-and-hold-for-decades | nan | nan | Having some quality dividend growth stocks in your portfolio can allow you to earn more in recurring income as the business grows. And as that happens, you profit from the rise in the company's valuation along with the dividend. Two excellent examples right now are Amgen (NASDAQ: AMGN) and Apple (NASDAQ: AAPL).
While these two dividend stocks don't quite yet have long track records for increasing their payouts, they are steadily making progress -- and could well become Dividend Aristocrats. Both businesses generate plenty of cash flow, have been raising their dividend payments in recent years, and investors shouldn't expect those trends to end anytime soon.
1. Amgen
Drugmaker Amgen currently pays a dividend yield of 3.1%, which is easily more than the S&P 500 average of 1.7%. Its dividend payments go back to 2011, so it doesn't have the track record income investors may crave. However, Amgen has been rapidly raising its dividend payments; since 2017, the company has grown its payouts from $1.15 every quarter to $1.95, for an increase of 69%. And more increases are likely to come given the company's stability.
AMGN Profit Margin (Quarterly) data by YCharts.
Over the past three years, the company's profit margin has been fairly strong at better than 20% (and note the dip in profitability a year ago was related to a one-time charge due to an acquisition that didn't impact cash flow). Amgen spends just over $1 billion every quarter on its dividend, so there's ample room for the company to continue making more dividend increases.
Plus, Amgen's long-term growth potential looks even better with the Food and Drug Administration approving its lung cancer drug Lumakras in 2021. It has the potential to be a blockbuster, with analysts projecting that its annual sales could top $1.4 billion by next year.
It's a great addition to an already diverse business. Even Amgen's top-selling rheumatoid arthritis drug, Enbrel, accounted for a relatively modest 15% of product sales in the company's most recent quarter (ended March 31). At $862 million in revenue, it's close to the $852 million that osteoporosis drug Prolia brought in. Overall, Amgen had seven drugs in the first quarter that generated at least $300 million in sales.
Strong fundamentals, along with a diverse and growing business, make Amgen a terrific long-term buy for income-focused investors.
2. Apple
One stock that looks like a slam-dunk to eventually become an Aristocrat is Apple. Over the past four quarters, its free cash flow has totaled around $106 billion. By comparison, its dividend payments of $14.7 billion during that period are a drop in the bucket and leave plenty of room for increases to the payout in the future.
The tech giant, which is known for its popular iPads and iPhones, has been consistently making dividend payments since 2012. And even though it has plenty of room to make rate hikes, its last increase was a one-cent boost (or 4.5%) to the quarterly dividend. With a yield of just 0.6%, this isn't likely to attract many serious dividend investors right now -- but that could be a mistake.
The only reason the yield isn't more impressive is that Apple's stock has done incredibly well, rising by 300% in five years (compared to 59% gains for the S&P 500). Without such a significant rise in valuation, the stock price would be lower, and the dividend yield would be higher.
A big part of Apple's success is undoubtedly due to its loyal fan base, and that makes its business relatively resilient. While it has diversified into offering services, revenue from its iPhone still totaled $192 billion in its most recent fiscal year (ended Sept. 25, 2021) and accounted for just over half of all revenue. Wearables, home and accessories, and services combined for less than $107 billion in sales during the year, but those business units likely have more growth potential than Apple's iPhone segment in the years ahead. With its core iPhone business looking strong and more growth opportunities still out there for Apple, the company is in great shape moving forward.
For long-term investors, Apple is a great buy for both its growth potential and its dividend. The dip in its share price this year is likely temporary, and this is a solid investment you can buy and hold for a long time.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Amgen and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Two excellent examples right now are Amgen (NASDAQ: AMGN) and Apple (NASDAQ: AAPL). Both businesses generate plenty of cash flow, have been raising their dividend payments in recent years, and investors shouldn't expect those trends to end anytime soon. Even Amgen's top-selling rheumatoid arthritis drug, Enbrel, accounted for a relatively modest 15% of product sales in the company's most recent quarter (ended March 31). | Two excellent examples right now are Amgen (NASDAQ: AMGN) and Apple (NASDAQ: AAPL). Both businesses generate plenty of cash flow, have been raising their dividend payments in recent years, and investors shouldn't expect those trends to end anytime soon. Strong fundamentals, along with a diverse and growing business, make Amgen a terrific long-term buy for income-focused investors. | Two excellent examples right now are Amgen (NASDAQ: AMGN) and Apple (NASDAQ: AAPL). While these two dividend stocks don't quite yet have long track records for increasing their payouts, they are steadily making progress -- and could well become Dividend Aristocrats. Both businesses generate plenty of cash flow, have been raising their dividend payments in recent years, and investors shouldn't expect those trends to end anytime soon. | Two excellent examples right now are Amgen (NASDAQ: AMGN) and Apple (NASDAQ: AAPL). Both businesses generate plenty of cash flow, have been raising their dividend payments in recent years, and investors shouldn't expect those trends to end anytime soon. Amgen spends just over $1 billion every quarter on its dividend, so there's ample room for the company to continue making more dividend increases. |
20183.0 | 2022-07-20 00:00:00 UTC | US STOCKS-Nasdaq boosted by growth stocks after Netflix's upbeat forecast | AAPL | https://www.nasdaq.com/articles/us-stocks-nasdaq-boosted-by-growth-stocks-after-netflixs-upbeat-forecast | nan | nan | By Shreyashi Sanyal
July 20 (Reuters) - The Nasdaq rose on Wednesday after a positive forecast from Netflix added to a largely upbeat second-quarter earnings from U.S. companies against the backdrop of rising recession fears from the Federal Reserve's efforts to tame surging inflation.
Netflix Inc's NFLX.O shares gained 3% after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-forecast 1 million drop in subscribers in the second quarter.
The forecast from the streaming service provider helped other high-growth stocks extend gains. Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 0.3% and 2%.
"Right now, investors seem more willing to reward than to punish because there's already a lot of pessimism baked into trader sentiment," said Steve Sosnick, chief strategist at Interactive Brokers.
"We've been selling the rumor. If companies can put out some decent results that could get people to be more willing to buy than to sell."
Electric-vehicle maker Tesla Inc TSLA.O slipped 0.3% ahead of its earnings report after market close.
Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% in this reporting season, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.
Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase.
At 10:00 a.m. ET, the Dow Jones Industrial Average .DJI was down 122.60 points, or 0.39%, at 31,704.45, while the S&P 500 .SPX was down 9.92 points, or 0.25%, at 3,926.77. The Nasdaq Composite .IXIC was up 17.22 points, or 0.15%, at 11,730.37.
Trading remained volatile in thin volumes.
Merck & Co Inc MRK.N dropped 0.9% as the company's cancer therapy Keytruda failed to meet the main goal of a late-stage trial testing it in patients with head and neck cancer.
Baker Hughes Co BKR.O plunged 10.1% as the oilfield services provider reported a bigger second-quarter loss, while its adjusted profit also missed estimates.
Declining issues outnumbered advancers for a 1.19-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 17 new highs and 11 new lows.
(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 0.3% and 2%. By Shreyashi Sanyal July 20 (Reuters) - The Nasdaq rose on Wednesday after a positive forecast from Netflix added to a largely upbeat second-quarter earnings from U.S. companies against the backdrop of rising recession fears from the Federal Reserve's efforts to tame surging inflation. Runaway inflation initially led markets to price in a full 100-basis-point hike in interest rates at the Fed's upcoming meeting next week, until some policymakers signaled a 75-basis-point increase. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 0.3% and 2%. Declining issues outnumbered advancers for a 1.19-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the Nasdaq. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 0.3% and 2%. By Shreyashi Sanyal July 20 (Reuters) - The Nasdaq rose on Wednesday after a positive forecast from Netflix added to a largely upbeat second-quarter earnings from U.S. companies against the backdrop of rising recession fears from the Federal Reserve's efforts to tame surging inflation. Netflix Inc's NFLX.O shares gained 3% after the company predicted it would return to customer growth during the third quarter, while posting a smaller-than-forecast 1 million drop in subscribers in the second quarter. | Shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O and Meta Platforms Inc META.O added between 0.3% and 2%. Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% in this reporting season, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data. The Nasdaq Composite .IXIC was up 17.22 points, or 0.15%, at 11,730.37. |
20184.0 | 2022-07-20 00:00:00 UTC | Nancy Pelosi's Husband Is Buying Nvidia Stock -- Should You? | AAPL | https://www.nasdaq.com/articles/nancy-pelosis-husband-is-buying-nvidia-stock-should-you | nan | nan | Drama and scrutiny have flooded the internet over the past few days as investors learned that Nancy Pelosi's husband, Paul Pelosi, had exercised stock options to purchase shares of semiconductor heavyweight Nvidia (NASDAQ: NVDA). Why? Because the Senate is working on a semiconductor manufacturing bill that could positively impact companies such as Nvidia and Intel (NASDAQ: INTC). In the video below, I break down the news, discuss Nvidia's growth drivers, and share my opinions on where the stock is headed next.
*Stock prices used in the below video were during the trading day of July 19, 2022. The video was published on July 19, 2022.
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Eric Cuka has positions in Apple, Intel, and Nvidia. The Motley Fool has positions in and recommends Apple, Intel, Nvidia, and Visa. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Eric is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Drama and scrutiny have flooded the internet over the past few days as investors learned that Nancy Pelosi's husband, Paul Pelosi, had exercised stock options to purchase shares of semiconductor heavyweight Nvidia (NASDAQ: NVDA). Because the Senate is working on a semiconductor manufacturing bill that could positively impact companies such as Nvidia and Intel (NASDAQ: INTC). In the video below, I break down the news, discuss Nvidia's growth drivers, and share my opinions on where the stock is headed next. | Drama and scrutiny have flooded the internet over the past few days as investors learned that Nancy Pelosi's husband, Paul Pelosi, had exercised stock options to purchase shares of semiconductor heavyweight Nvidia (NASDAQ: NVDA). The Motley Fool has positions in and recommends Apple, Intel, Nvidia, and Visa. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. | Drama and scrutiny have flooded the internet over the past few days as investors learned that Nancy Pelosi's husband, Paul Pelosi, had exercised stock options to purchase shares of semiconductor heavyweight Nvidia (NASDAQ: NVDA). See the 10 stocks *Stock Advisor returns as of June 2, 2022 Eric Cuka has positions in Apple, Intel, and Nvidia. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. | In the video below, I break down the news, discuss Nvidia's growth drivers, and share my opinions on where the stock is headed next. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Eric Cuka has positions in Apple, Intel, and Nvidia. The Motley Fool has positions in and recommends Apple, Intel, Nvidia, and Visa. |
20185.0 | 2022-07-20 00:00:00 UTC | Apple (AAPL) Outpaces Stock Market Gains: What You Should Know | AAPL | https://www.nasdaq.com/articles/apple-aapl-outpaces-stock-market-gains%3A-what-you-should-know-5 | nan | nan | Apple (AAPL) closed the most recent trading day at $153.04, moving +1.35% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.59%. At the same time, the Dow added 0.15%, and the tech-heavy Nasdaq lost 0.02%.
Coming into today, shares of the maker of iPhones, iPads and other products had gained 11.14% in the past month. In that same time, the Computer and Technology sector lost 12.83%, while the S&P 500 gained 7.25%.
Apple will be looking to display strength as it nears its next earnings release, which is expected to be July 28, 2022. On that day, Apple is projected to report earnings of $1.13 per share, which would represent a year-over-year decline of 13.08%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $81.86 billion, up 0.53% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.09 per share and revenue of $392.69 billion, which would represent changes of +8.56% and +7.35%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Apple. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.2% lower. Apple is currently sporting a Zacks Rank of #3 (Hold).
Looking at its valuation, Apple is holding a Forward P/E ratio of 24.8. Its industry sports an average Forward P/E of 7.63, so we one might conclude that Apple is trading at a premium comparatively.
Meanwhile, AAPL's PEG ratio is currently 1.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AAPL's industry had an average PEG ratio of 1.94 as of yesterday's close.
The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 100, putting it in the top 40% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (AAPL) closed the most recent trading day at $153.04, moving +1.35% from the previous trading session. Meanwhile, AAPL's PEG ratio is currently 1.96. AAPL's industry had an average PEG ratio of 1.94 as of yesterday's close. | Apple (AAPL) closed the most recent trading day at $153.04, moving +1.35% from the previous trading session. Meanwhile, AAPL's PEG ratio is currently 1.96. AAPL's industry had an average PEG ratio of 1.94 as of yesterday's close. | Apple (AAPL) closed the most recent trading day at $153.04, moving +1.35% from the previous trading session. Meanwhile, AAPL's PEG ratio is currently 1.96. AAPL's industry had an average PEG ratio of 1.94 as of yesterday's close. | Apple (AAPL) closed the most recent trading day at $153.04, moving +1.35% from the previous trading session. Meanwhile, AAPL's PEG ratio is currently 1.96. AAPL's industry had an average PEG ratio of 1.94 as of yesterday's close. |
20186.0 | 2022-07-20 00:00:00 UTC | US STOCKS-Futures slip after strong gains on Wall Street | AAPL | https://www.nasdaq.com/articles/us-stocks-futures-slip-after-strong-gains-on-wall-street | nan | nan | For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Futures down: Dow 0.15%, S&P 0.14%, Nasdaq flat
July 20 (Reuters) - U.S. stock index futures edged lower on Wednesday after sharp gains on Wall Street in the previous session as investors assessed better-than-expected earnings reports against the backdrop of a gloomy economic outlook.
Fresh uncertainties stemming from the war in Ukraine also weighed on sentiment. Russian forces shelled eastern and southern Ukraine on Wednesday, according to reports, after Washington said it saw signs Moscow was preparing to formally annex territory it has seized during nearly five months of war.
Netflix Inc's NFLX.O shares jumped 6.4% premarket after it predicted it would return to customer growth during the third quarter, while posting a 1 million drop in subscribers in the second quarter.
The streaming service provider was the first among big-tech firms to report quarterly results, raising hopes that they will perform well despite a rocky global economic backdrop.
The S&P 500 .SPX and the Dow Jones Industrial Average .DJI gained more than 2% on Tuesday, while the Nasdaq index .IXIC rose 3%, following strong corporate earnings.
Nasdaq futures NQcv1 were flat on Wednesday.
"Futures were pointing to a higher opening trying to build on yesterday's strong rally, however, they have since turned down a little bit, so I suspect there's some profit taking," Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"Once the earnings come in, if we see a repeat of yesterday (good set of earnings) then I think this profit taking will be short lived."
While Friday's upbeat data on retail sales and consumer sentiment eased some concerns around the economy, fears of a recession or a sharp slowdown remain as the U.S. Federal Reserve raises interest rates to check inflation.
In this reporting season, analysts expect aggregate year-on-year S&P 500 profit to grow 5.8%, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.
A full cut-off of Russian gas flows to Europe is "a likely scenario", European Commission President Ursula von der Leyen said on Wednesday.
Electric-vehicle maker Tesla Inc TSLA.O gained 0.8% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Meta Platforms Inc META.O added between 0.1% and 0.3%.
At 6:58 a.m. ET, Dow e-minis 1YMcv1 were down 48 points, or 0.15%, S&P 500 e-minis EScv1 were down 5.5 points, or 0.14%, and Nasdaq 100 e-minis NQcv1 were down 5.25 points, or 0.04%.
(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Shounak Dasgupta)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Electric-vehicle maker Tesla Inc TSLA.O gained 0.8% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Meta Platforms Inc META.O added between 0.1% and 0.3%. Russian forces shelled eastern and southern Ukraine on Wednesday, according to reports, after Washington said it saw signs Moscow was preparing to formally annex territory it has seized during nearly five months of war. "Futures were pointing to a higher opening trying to build on yesterday's strong rally, however, they have since turned down a little bit, so I suspect there's some profit taking," Peter Cardillo, chief market economist at Spartan Capital Securities in New York. | Electric-vehicle maker Tesla Inc TSLA.O gained 0.8% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Meta Platforms Inc META.O added between 0.1% and 0.3%. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window. Futures down: Dow 0.15%, S&P 0.14%, Nasdaq flat July 20 (Reuters) - U.S. stock index futures edged lower on Wednesday after sharp gains on Wall Street in the previous session as investors assessed better-than-expected earnings reports against the backdrop of a gloomy economic outlook. | Electric-vehicle maker Tesla Inc TSLA.O gained 0.8% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Meta Platforms Inc META.O added between 0.1% and 0.3%. Futures down: Dow 0.15%, S&P 0.14%, Nasdaq flat July 20 (Reuters) - U.S. stock index futures edged lower on Wednesday after sharp gains on Wall Street in the previous session as investors assessed better-than-expected earnings reports against the backdrop of a gloomy economic outlook. Russian forces shelled eastern and southern Ukraine on Wednesday, according to reports, after Washington said it saw signs Moscow was preparing to formally annex territory it has seized during nearly five months of war. | Electric-vehicle maker Tesla Inc TSLA.O gained 0.8% ahead of its earnings report after market close, while shares of Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Meta Platforms Inc META.O added between 0.1% and 0.3%. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window. Futures down: Dow 0.15%, S&P 0.14%, Nasdaq flat July 20 (Reuters) - U.S. stock index futures edged lower on Wednesday after sharp gains on Wall Street in the previous session as investors assessed better-than-expected earnings reports against the backdrop of a gloomy economic outlook. |
20187.0 | 2022-07-20 00:00:00 UTC | 7 Best Stocks for College Graduates | AAPL | https://www.nasdaq.com/articles/7-best-stocks-for-college-graduates | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Many financial advisors, when asked how young people should invest, would say that such investors should be risk-seeking. The idea is that they have the benefit of time and that any losses will be overshadowed by big winners. Ideally, such investors will be farther ahead than their more risk-averse peers once they both become a bit older. Those same advisors will recommend that those investors then switch to steadier growth and lower-risk equities.
The complete opposite is the advisor who recommends a high proportion of investment in exchange-traded funds (ETFs) that track indices like the S&P 500 and perhaps a growth sector for some risk. And while ETFs are always a strong bet, I’m going to focus on individual picks for a college graduate. These will be moderate choices as they have both the potential for substantial growth and less downside.
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Here are the seven best stocks for college graduates:
Ticker Company Price
GOOG Alphabet Inc. $113.54
JNJ Johnson & Johnson $172.68
AAPL Apple Inc. $149.67
PG The Procter & Gamble Company $144.17
TSLA Tesla, Inc. $728.98
V Visa Inc. $212.04
SO The Southern Company $71.61
Best Stocks for College Graduates: Alphabet (GOOG)
Source: IgorGolovniov / Shutterstock.com
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock is a fairly easy pick to make. It is an excellent performer now and it should remain so for the foreseeable future.
Alphabet is going to continue to face significant scrutiny as a consequence of its size and practices. Perhaps someday that will drastically change the trajectory of the firm and stock, but it hasn’t yet. So, let’s assume it has decades of continued growth and dominance ahead.
Critics like to knock Alphabet and Google for the smaller issues. Most recently, it was the notion that Google was losing advertising relevance as YouTube ad revenue slipped due to short-video competition. Google always seems to adjust well. That’s precisely what’s happening now.
The point here is that Alphabet is as strong at leveraging its moving parts and adapting as any firm. The company will remain relevant for a long time and its other bets make it a growth firm, as well.
Johnson & Johnson (JNJ)
Source: Alexander Tolstykh / Shutterstock.com
Investing in Johnson & Johnson (NYSE:JNJ) stock is definitely on the more conservative side of things. It is routinely noted in lists about dividend stocks and stocks for bearish economies.
For one, dividends are something college graduates and all young investors should seek to understand. The extra income they provide on top of any returns can be reinvested, creating a powerful compounding effect. Two, young investors are currently experiencing a bear market. For some, this may have been their first such experience. The upside with Johnson & Johnson is that stocks in the healthcare sector tend to significantly outperform bear markets. So, not only could it save them money, but it could help teach them a valuable lesson.
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The other thing to note is that Johnson & Johnson has performed very well over the past decade. Even without factoring in the effects of dividends, JNJ stock has provided an average 12.84% annual return over that period. In other words, $1,000 invested 10 years ago would be worth $3,346.81 today.
Best Stocks for College Graduates: Apple (AAPL)
Source: Eric Broder Van Dyke / Shutterstock.com
College graduates should invest in Apple (NASDAQ:AAPL) stock because it is simply a great company. Let’s start with the same idea of 10-year returns as above. Apple has shown massive annual growth that has averaged 22.19% annually over the last decade. $1,000 invested a decade ago would now be worth $7,420.
Past is not prologue, but let’s say today’s college graduate is able to sink $10,000 into Apple and leave it alone for a decade. By the time they are in their early 30s, they could logically have $70,000. That could be used for something life-changing, like a down payment on a home purchase.
Another strong reason to believe in Apple is its association with the legendary Warren Buffett. Apple stock is by far the biggest holding in his portfolio, accounting for more than 40% of its total value.
Procter & Gamble (PG)
Source: Jonathan Weiss / Shutterstock.com
Procter & Gamble (NYSE:PG) stock is a lot like JNJ stock. Both possess a strong, reliable dividend and both tend to fare well in weak markets. Let’s assume our college graduate investor is at the very beginning of their investment journey. If that’s the case, PG stock is one of the very best to impart the idea of beta and its value.
It carries a five-year monthly beta of 0.39, according to Yahoo! Finance. That means it moves about 39% as much as the broader market. In weak markets, like the one we’re experiencing, it is likely to move downward 61% less than a broad index like the S&P 500, for example.
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Indeed, it is faring much better than the overall markets in 2022. Factor in its dividend and the notion that consumer packaged goods firms weather recessions better, and Procter & Gamble is a smart choice for today’s college graduate investor.
Best Stocks for College Graduates: Tesla (TSLA)
Source: Sheila Fitzgerald / Shutterstock.com
The stock of electric vehicle (EV) pioneer Tesla (NASDAQ:TSLA) has not done well in 2022. Electric vehicle stocks have faced a decline as questions of stretched valuations continue to bounce around.
Nevertheless, Tesla is a pioneering force in the world of electric vehicles. That means something. Legacy manufacturers are scrambling to catch up and are quickly retooling production lines to produce their own EVs and get in on the next evolution of automobiles.
Regardless of what many think of Elon Musk, he will go down as a pivotal figure in the automotive world. It was his drive and ambition that brought Tesla from nothing to the most valuable car stock in the world. It is highly unlikely that his firm or its stock are going anywhere.
Now that it is well established, it is unlikely that TSLA stock can provide the near 60% annual returns it did over the past decade. But it remains a very important name in automobiles today.
Visa (V)
Source: Kikinunchi / Shutterstock.com
Say Visa, (NYSE:V), and most people will automatically think of credit cards. True, fees on transactions drive much of its business. That isn’t going to change and college graduates probably know as much.
But the company is also factoring in the pandemic-driven increase in digital payments. Chief Financial Officer Vasant Prabhu believes secular trends in digital payments have been accelerated by about a year based on data. The point here is that young investors should understand that Visa dominates the current payments landscape and has the resources to carve out a strong position as the sector evolves.
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Visa suffered during the pandemic as higher fees charged for international transactions slowed due to lockdowns. It may stagnate for some time again as the economy looks to weaken further. But it is still a great name for any portfolio.
Best Stocks for College Graduates: The Southern Company (SO)
Source: 360b / Shutterstock.com
College-age investors should also understand the value of utilities equities. Southern Company (NYSE:SO) stock is one to consider. It generates and sells electricity across Alabama, Georgia, Florida, and Mississippi. It also acquires electricity-generating assets, including renewables, and sells power into the wholesale market.
It is a very stable business model noted for steady performance in all market conditions. An investment in SO stock would have slightly more than doubled if left alone for the past decade. But again, that is absent of the effect of its dividend that currently yields 3.79%.
The other reason to consider Southern Co. is that its geographical footprint is well-positioned. The southern states it operates in have seen rapid growth as people migrate from other areas.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The post 7 Best Stocks for College Graduates appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 7 Best Small-Cap Growth Stocks to Buy Now Here are the seven best stocks for college graduates: Ticker Company Price GOOG Alphabet Inc. $113.54 JNJ Johnson & Johnson $172.68 AAPL Apple Inc. $149.67 PG The Procter & Gamble Company $144.17 TSLA Tesla, Inc. $728.98 V Visa Inc. $212.04 SO The Southern Company $71.61 Best Stocks for College Graduates: Alphabet (GOOG) Source: IgorGolovniov / Shutterstock.com Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock is a fairly easy pick to make. Best Stocks for College Graduates: Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com College graduates should invest in Apple (NASDAQ:AAPL) stock because it is simply a great company. Factor in its dividend and the notion that consumer packaged goods firms weather recessions better, and Procter & Gamble is a smart choice for today’s college graduate investor. | 7 Best Small-Cap Growth Stocks to Buy Now Here are the seven best stocks for college graduates: Ticker Company Price GOOG Alphabet Inc. $113.54 JNJ Johnson & Johnson $172.68 AAPL Apple Inc. $149.67 PG The Procter & Gamble Company $144.17 TSLA Tesla, Inc. $728.98 V Visa Inc. $212.04 SO The Southern Company $71.61 Best Stocks for College Graduates: Alphabet (GOOG) Source: IgorGolovniov / Shutterstock.com Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock is a fairly easy pick to make. Best Stocks for College Graduates: Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com College graduates should invest in Apple (NASDAQ:AAPL) stock because it is simply a great company. Johnson & Johnson (JNJ) Source: Alexander Tolstykh / Shutterstock.com Investing in Johnson & Johnson (NYSE:JNJ) stock is definitely on the more conservative side of things. | 7 Best Small-Cap Growth Stocks to Buy Now Here are the seven best stocks for college graduates: Ticker Company Price GOOG Alphabet Inc. $113.54 JNJ Johnson & Johnson $172.68 AAPL Apple Inc. $149.67 PG The Procter & Gamble Company $144.17 TSLA Tesla, Inc. $728.98 V Visa Inc. $212.04 SO The Southern Company $71.61 Best Stocks for College Graduates: Alphabet (GOOG) Source: IgorGolovniov / Shutterstock.com Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock is a fairly easy pick to make. Best Stocks for College Graduates: Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com College graduates should invest in Apple (NASDAQ:AAPL) stock because it is simply a great company. Best Stocks for College Graduates: Tesla (TSLA) Source: Sheila Fitzgerald / Shutterstock.com The stock of electric vehicle (EV) pioneer Tesla (NASDAQ:TSLA) has not done well in 2022. | 7 Best Small-Cap Growth Stocks to Buy Now Here are the seven best stocks for college graduates: Ticker Company Price GOOG Alphabet Inc. $113.54 JNJ Johnson & Johnson $172.68 AAPL Apple Inc. $149.67 PG The Procter & Gamble Company $144.17 TSLA Tesla, Inc. $728.98 V Visa Inc. $212.04 SO The Southern Company $71.61 Best Stocks for College Graduates: Alphabet (GOOG) Source: IgorGolovniov / Shutterstock.com Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock is a fairly easy pick to make. Best Stocks for College Graduates: Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com College graduates should invest in Apple (NASDAQ:AAPL) stock because it is simply a great company. Past is not prologue, but let’s say today’s college graduate is able to sink $10,000 into Apple and leave it alone for a decade. |
20188.0 | 2022-07-20 00:00:00 UTC | iPhone maker Foxconn builds EV partnership with NXP Semiconductors | AAPL | https://www.nasdaq.com/articles/iphone-maker-foxconn-builds-ev-partnership-with-nxp-semiconductors | nan | nan | TAIPEI, July 20 (Reuters) - Taiwan's Foxconn 2317.TW said on Wednesday it has partnered with chipmaker NXP Semiconductors NXPI.O to develop platforms for electric vehicles, adding to a string of such deals by the iPhone assembler as it moves into the auto market.
Foxconn, best known for assembling Apple's AAPL.O iPhone, has expanded into areas including electric vehicles (EVs) and semiconductors in recent years, announcing deals with U.S. startup Fisker Inc FSR.N and Indian conglomerate Vedanta Ltd VDAN.NS.
In a statement, Foxconn said it had signed a memorandum of understanding with NXP to develop platforms for EVs, calling it a "prime opportunity" a boost to its ability to quickly build EV products and reduce costs.
The Taiwan-based company said it plans to build more than 10 automative products with NXP and they will soon be in development, including next-generation EV platforms using NXP's processors.
Foxconn aims to provide components or services to 10% of the world's EVs by 2025 to 2027, Chairman Liu Young-way has said, vowing to lower manufacturing costs for carmaking with its assembly know-how as the world's largest contract electronics manufacturer.
The Taiwan company has been seeking to acquire chip plants globally amid a worldwide chip shortage. It said last week it has become a shareholder in embattled Chinese chip conglomerate Tsinghua Unigroup via a $798 million investment by a subsidiary.
(Reporting By Yimou Lee;Editing by Elaine Hardcastle)
((yimou.lee@thomsonreuters.com; +886-2-8729-5122;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Foxconn, best known for assembling Apple's AAPL.O iPhone, has expanded into areas including electric vehicles (EVs) and semiconductors in recent years, announcing deals with U.S. startup Fisker Inc FSR.N and Indian conglomerate Vedanta Ltd VDAN.NS. TAIPEI, July 20 (Reuters) - Taiwan's Foxconn 2317.TW said on Wednesday it has partnered with chipmaker NXP Semiconductors NXPI.O to develop platforms for electric vehicles, adding to a string of such deals by the iPhone assembler as it moves into the auto market. It said last week it has become a shareholder in embattled Chinese chip conglomerate Tsinghua Unigroup via a $798 million investment by a subsidiary. | Foxconn, best known for assembling Apple's AAPL.O iPhone, has expanded into areas including electric vehicles (EVs) and semiconductors in recent years, announcing deals with U.S. startup Fisker Inc FSR.N and Indian conglomerate Vedanta Ltd VDAN.NS. TAIPEI, July 20 (Reuters) - Taiwan's Foxconn 2317.TW said on Wednesday it has partnered with chipmaker NXP Semiconductors NXPI.O to develop platforms for electric vehicles, adding to a string of such deals by the iPhone assembler as it moves into the auto market. The Taiwan-based company said it plans to build more than 10 automative products with NXP and they will soon be in development, including next-generation EV platforms using NXP's processors. | Foxconn, best known for assembling Apple's AAPL.O iPhone, has expanded into areas including electric vehicles (EVs) and semiconductors in recent years, announcing deals with U.S. startup Fisker Inc FSR.N and Indian conglomerate Vedanta Ltd VDAN.NS. TAIPEI, July 20 (Reuters) - Taiwan's Foxconn 2317.TW said on Wednesday it has partnered with chipmaker NXP Semiconductors NXPI.O to develop platforms for electric vehicles, adding to a string of such deals by the iPhone assembler as it moves into the auto market. In a statement, Foxconn said it had signed a memorandum of understanding with NXP to develop platforms for EVs, calling it a "prime opportunity" a boost to its ability to quickly build EV products and reduce costs. | Foxconn, best known for assembling Apple's AAPL.O iPhone, has expanded into areas including electric vehicles (EVs) and semiconductors in recent years, announcing deals with U.S. startup Fisker Inc FSR.N and Indian conglomerate Vedanta Ltd VDAN.NS. TAIPEI, July 20 (Reuters) - Taiwan's Foxconn 2317.TW said on Wednesday it has partnered with chipmaker NXP Semiconductors NXPI.O to develop platforms for electric vehicles, adding to a string of such deals by the iPhone assembler as it moves into the auto market. In a statement, Foxconn said it had signed a memorandum of understanding with NXP to develop platforms for EVs, calling it a "prime opportunity" a boost to its ability to quickly build EV products and reduce costs. |
20189.0 | 2022-07-20 00:00:00 UTC | Should You Invest in the iShares Expanded Tech Sector ETF (IGM)? | AAPL | https://www.nasdaq.com/articles/should-you-invest-in-the-ishares-expanded-tech-sector-etf-igm-2 | nan | nan | Launched on 03/13/2001, the iShares Expanded Tech Sector ETF (IGM) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $3.69 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Broad segment of the equity market. IGM seeks to match the performance of the S&P North American Technology Sector Index before fees and expenses.
The S&P North American Expanded Technology Sector Index comprises of North American equities in the technology sector and select North American equities from communication services to consumer discretionary sectors.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.43%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.24%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 84.90% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.52% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 51.57% of total assets under management.
Performance and Risk
So far this year, IGM has lost about -28.85%, and is down about -21.45% in the last one year (as of 07/20/2022). During this past 52-week period, the fund has traded between $286.48 and $450.49.
The ETF has a beta of 1.15 and standard deviation of 29.68% for the trailing three-year period, making it a medium risk choice in the space. With about 355 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Expanded Tech Sector ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IGM is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $40.11 billion in assets, Vanguard Information Technology ETF has $42.55 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares Expanded Tech Sector ETF (IGM): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
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Vanguard Information Technology ETF (VGT): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.52% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.52% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report The S&P North American Expanded Technology Sector Index comprises of North American equities in the technology sector and select North American equities from communication services to consumer discretionary sectors. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.52% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.52% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 03/13/2001, the iShares Expanded Tech Sector ETF (IGM) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market. |
20190.0 | 2022-07-20 00:00:00 UTC | What's in the Offing for Infosys (INFY) This Earnings Season? | AAPL | https://www.nasdaq.com/articles/whats-in-the-offing-for-infosys-infy-this-earnings-season | nan | nan | Infosys Limited INFY is scheduled to report first-quarter fiscal 2023 results on Jul 24.
Over the trailing four quarters, the India-based IT services provider’s earnings beat the Zacks Consensus Estimate once, met the same on two occasions and missed it once, the average beat being 0.2%.
In the last reported quarter, Infosys’ adjusted earnings of 18 cents per share missed the Zacks Consensus Estimate by a penny but increased 9.2% year over year. Revenues of $4.28 billion jumped 18.5% year over year but fell short of the consensus mark of $4.30 billion.
The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $4.38 billion, suggesting a 15.8% increase from the year-ago period. The consensus mark for earnings stands at 18 cents per share, 5.9% higher than the year-ago quarter.
Let’s see how things have shaped up before this announcement.
Infosys Limited Price and Consensus
Infosys Limited price-consensus-chart | Infosys Limited Quote
Factors to Consider
Infosys’ first-quarter performance is likely to have benefited from the stellar demand for the cloud, data-analytics solutions and services, the Internet of Things and security products and solutions. Also, higher investments by clients in digital transformation, AI and automation are anticipated to have been conducive to its fiscal first-quarter performance.
Continued large deal wins and growth in digital services are likely to have driven INFY’s quarterly revenues during the to-be-reported quarter. The company’s efforts to reinforce digital transformation capabilities for expanding and solidifying its position in the highly competitive environment are a steady tailwind.
Infosys added 110 clients in the fourth quarter of fiscal 2022. It also signed multiple large deals of a contract value worth $2.3 billion.
The growing traction of its solutions and services in the commercial and corporate banks, consumer, cost and payments, wealth management and custody and mortgage portfolios of its business is likely to have been an upside during the quarter under review.
However, the Indian software giant’s decision to move its business out of Russia following Moscow’s war against Ukraine is likely to have somewhat negatively impacted the top line in the first quarter. Also, inflationary pressures and possible global slowdown concerns are anticipated to have led many organizations push their large IT investments.
Additionally, inflated investments in sales and localization and rising costs to grab large deals might have hurt Infosys’ bottom line during the quarter under discussion.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for INFY this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Infosys carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL have the right combination of elements to post an earnings beat in their upcoming releases.
Valero sports a Zacks Rank #1 and has an Earnings ESP of +10.22%. The company is scheduled to report second-quarter 2022 results on Jul 28. Valero’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 84.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VLO’s second-quarter earnings is pegged at $8.78 per share, indicating a sharp improvement from the year-ago quarter’s earnings of 48 cents per share. The consensus mark for revenues stands at $39.7 billion, suggesting a year-over-year increase of 42.9%.
Merck currently sports a Zacks Rank #1 and has an Earnings ESP of +7.18%. The company is slated to report its second-quarter 2022 results on Jul 28. Merck’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 13.4%.
The Zacks Consensus Estimate for Merck’s second-quarter earnings stands at $1.77 per share, implying a year-over-year increase of 35.1%. MRK is estimated to report revenues of $13.9 billion, which suggests growth of 21.5% from the year-ago quarter.
Apple is slated to report third-quarter fiscal 2022 results on Jul 28. The company carries a Zacks Rank #3 and has an Earnings ESP of +0.88% at present. Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 11.9%.
The Zacks Consensus Estimate for quarterly earnings is pegged at $1.13 per share, suggesting a year-over-year decline of 13.1%. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Stocks With the Favorable Combination Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL have the right combination of elements to post an earnings beat in their upcoming releases. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion. Apple Inc. (AAPL): Free Stock Analysis Report | Stocks With the Favorable Combination Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL have the right combination of elements to post an earnings beat in their upcoming releases. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion. Apple Inc. (AAPL): Free Stock Analysis Report | Stocks With the Favorable Combination Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL have the right combination of elements to post an earnings beat in their upcoming releases. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion. Apple Inc. (AAPL): Free Stock Analysis Report | Stocks With the Favorable Combination Per our model, Valero Energy VLO, Merck & Co. MRK and Apple AAPL have the right combination of elements to post an earnings beat in their upcoming releases. AAPL’s quarterly revenues are estimated to increase 0.5% year over year to $81.9 billion. Apple Inc. (AAPL): Free Stock Analysis Report |
20191.0 | 2022-07-20 00:00:00 UTC | Apple outlines health technology strategy in new report | AAPL | https://www.nasdaq.com/articles/apple-outlines-health-technology-strategy-in-new-report | nan | nan | By Stephen Nellis
July 20 (Reuters) - Apple Inc AAPL.O on Wednesday released a report outlining a two-pronged strategy in digital health markets, courting consumers with health and fitness features on one hand while engaging with traditional healthcare systems on the other.
Spearheaded by Apple's chief operating officer, Jeff Williams, the report is the first time Apple has offered a comprehensive view of its approach to healthcare markets in the eight years since it began releasing health features such as a medical records storage system on iPhones. It has also started partnering with institutions such the Stanford University School of Medicine to conduct large-scale formal medical studies.
Much of the work has centered around the Apple Watch, a device that Williams played a key role in bringing to market and which contains sensors for heart health and other functions.
In the report, Apple said its focus for consumers is on providing a secure place for users to store their health and medical information on iPhones while using tools like the Apple Watch to warn and nudge users toward better health. The device can alert people to heart irregularities and detect when a person takes a hard fall to alert an emergency contact, among other features. Apple said its system can now store 150 different types of health data that is encrypted so that only users, not Apple, can access it.
The company also outlined work it is doing with medical researchers to allow them to use Apple devices to conduct studies, as well as allow patients to share and discuss data collected by Apple devices so that they can monitor their health better between doctor's visits.
Williams wrote in the report that Apple intends to keep developing health-related features for both users and the healthcare industry.
"Our vision for the future is to continue to create science-based technology that equips people with even more information and acts as an intelligent guardian for their health, so they’re no longer passengers on their own health journey," Williams wrote.
(Reporting by Stephen Nellis in San Francisco Editing by Matthew Lewis)
((Stephen.Nellis@thomsonreuters.com; (415) 344-4934;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Stephen Nellis July 20 (Reuters) - Apple Inc AAPL.O on Wednesday released a report outlining a two-pronged strategy in digital health markets, courting consumers with health and fitness features on one hand while engaging with traditional healthcare systems on the other. It has also started partnering with institutions such the Stanford University School of Medicine to conduct large-scale formal medical studies. Much of the work has centered around the Apple Watch, a device that Williams played a key role in bringing to market and which contains sensors for heart health and other functions. | By Stephen Nellis July 20 (Reuters) - Apple Inc AAPL.O on Wednesday released a report outlining a two-pronged strategy in digital health markets, courting consumers with health and fitness features on one hand while engaging with traditional healthcare systems on the other. In the report, Apple said its focus for consumers is on providing a secure place for users to store their health and medical information on iPhones while using tools like the Apple Watch to warn and nudge users toward better health. The company also outlined work it is doing with medical researchers to allow them to use Apple devices to conduct studies, as well as allow patients to share and discuss data collected by Apple devices so that they can monitor their health better between doctor's visits. | By Stephen Nellis July 20 (Reuters) - Apple Inc AAPL.O on Wednesday released a report outlining a two-pronged strategy in digital health markets, courting consumers with health and fitness features on one hand while engaging with traditional healthcare systems on the other. Spearheaded by Apple's chief operating officer, Jeff Williams, the report is the first time Apple has offered a comprehensive view of its approach to healthcare markets in the eight years since it began releasing health features such as a medical records storage system on iPhones. In the report, Apple said its focus for consumers is on providing a secure place for users to store their health and medical information on iPhones while using tools like the Apple Watch to warn and nudge users toward better health. | By Stephen Nellis July 20 (Reuters) - Apple Inc AAPL.O on Wednesday released a report outlining a two-pronged strategy in digital health markets, courting consumers with health and fitness features on one hand while engaging with traditional healthcare systems on the other. In the report, Apple said its focus for consumers is on providing a secure place for users to store their health and medical information on iPhones while using tools like the Apple Watch to warn and nudge users toward better health. The company also outlined work it is doing with medical researchers to allow them to use Apple devices to conduct studies, as well as allow patients to share and discuss data collected by Apple devices so that they can monitor their health better between doctor's visits. |
20192.0 | 2022-07-20 00:00:00 UTC | 3 Surefire Financials Stocks to Buy as You Near Retirement | AAPL | https://www.nasdaq.com/articles/3-surefire-financials-stocks-to-buy-as-you-near-retirement | nan | nan | Retiring means you switch your investor hat from accumulation to preservation, generating enough growth to keep inflation from eating at your wealth while avoiding the risk of ruining your retirement dreams.
Here are three surefire blue chip financial stocks that have proven to be the real deal and are poised to help keep your senior years flush and on the right track.
1. Berkshire Hathaway
Investing in conglomerate Berkshire Hathaway (NYSE: BRK.B) is like entrusting your money to Warren Buffett. Berkshire is Buffett's lifelong work, and he's built it into a massive holding company that owns a diversified portfolio of businesses like Geico and Dairy Queen. It also holds billions of dollars of stocks in companies like Apple, Coca-Cola, and Bank of America.
Berkshire has more than doubled the return of the S&P 500 since 2000, while still accumulating an enormous $106 billion cash position that Buffett uses to make strategic investments or share repurchases.
Buffett hasn't lost his touch in his elder years. Berkshire sports a 17% return on equity, near the highest in a decade. This shows that, despite being a complex business with tons of moving parts, Berkshire Hathaway generates a great return on its capital resources.
BRK.B Return on Equity data by YCharts.
The stock doesn't pay a dividend, but investors are getting a top-class money manager leading a ship that's produced market-beating returns over a long time frame. Buffett won't be around forever, but it's hard to imagine Berkshire's collection of blue chip investments and fortress-like balance sheet failing anytime soon, making it a stock you can count on.
2. Aflac
The global insurance industry is worth more than $5 trillion, and Aflac (NYSE: AFL) has thrived in this huge industry for decades. Aflac is a leading supplemental insurance company in the U.S. and Japan. Additional insurance can be a safety net for what primary insurance won't cover. Aflac's policies cover many things, ranging from expenses for accidents, dental, and cancer to hospital stays and short-term disability.
Insurance companies make money in two ways. First, they collect premiums from customers and must analyze risk well enough to ensure that they're bringing in more premiums than what they pay out in claims. Second, the pool of premium money is invested mostly in bonds and other conservative assets to generate investment income.
Aflac's been at it a long time and has paid a dividend for many years. It's a Dividend Aristocrat that's raised its payout for 40 years, with a current 2.95% dividend yield. The company's stock blends yield and consistent growth, and the most recent 21% increase signals that management is optimistic about the business. The low dividend payout ratio of 22% virtually guarantees the dividend is affordable, barring an apocalyptic scenario.
AFL Dividend data by YCharts.
Aflac won't wow you with growth, but earnings per share (EPS) have grown an average of 12% annually over the past decade, making it a safe business that offers retirees some upside in their portfolios.
3. S&P Global
Companies have credit ratings, just like consumers do, and S&P Global (NYSE: SPGI) is one of the agencies that monitors and reports on the creditworthiness of corporations. S&P Global does corporate credit ratings and market-intelligence reports and creates and manages indexes like the S&P 500. Ratings are S&P's most prominent business segment, contributing half its total revenue and 57% of operating profits.
S&P Global is one of the key authorities in its field, along with Moody's and Fitch. These three are the primary companies officially recognized by the U.S. Securities and Exchange Commission for issuing corporate credit ratings. This essentially blocks the competition because companies need official opinions on their credit to borrow money successfully.
The company has proven its durability through its dividend, which has been raised in 49 consecutive years. It will soon be a Dividend King. The yield won't knock your socks off at just under 1%. However, EPS has grown 15% annually over the past decade, and the stock has outperformed the market. The payout ratio is also just 21%, leaving room for future growth.
SPGI Dividend data by YCharts.
Many companies have borrowed heavily over this past decade of low rates, and S&P Global figures to keep active monitoring and updating their opinions on them. Debt is and will likely always be a heavily used tool of corporations, so investors can feel good that S&P Global will continue performing over the coming years.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), Moody's, and S&P Global. The Motley Fool recommends Aflac and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The stock doesn't pay a dividend, but investors are getting a top-class money manager leading a ship that's produced market-beating returns over a long time frame. Buffett won't be around forever, but it's hard to imagine Berkshire's collection of blue chip investments and fortress-like balance sheet failing anytime soon, making it a stock you can count on. Aflac won't wow you with growth, but earnings per share (EPS) have grown an average of 12% annually over the past decade, making it a safe business that offers retirees some upside in their portfolios. | Aflac won't wow you with growth, but earnings per share (EPS) have grown an average of 12% annually over the past decade, making it a safe business that offers retirees some upside in their portfolios. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), Moody's, and S&P Global. The Motley Fool recommends Aflac and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. | The stock doesn't pay a dividend, but investors are getting a top-class money manager leading a ship that's produced market-beating returns over a long time frame. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool recommends Aflac and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. | Berkshire has more than doubled the return of the S&P 500 since 2000, while still accumulating an enormous $106 billion cash position that Buffett uses to make strategic investments or share repurchases. Aflac's been at it a long time and has paid a dividend for many years. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), Moody's, and S&P Global. |
20193.0 | 2022-07-20 00:00:00 UTC | 2 Stocks to Invest in Virtual Reality | AAPL | https://www.nasdaq.com/articles/2-stocks-to-invest-in-virtual-reality-0 | nan | nan | The virtual reality (VR) market has yet to come into its own, but as more and more technology companies shift their attention to it, a massive $21 billion (by 2025) market is being created.
Because we're still toward the beginning of this expanding market, investors have an opportunity not only to buy shares of companies that are betting big on VR but also benefit from their growth as VR comes into its own.
Two such companies that could end up being good long-term VR investments are Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA). Here's why.
Image source: Getty Images.
Apple
It's true that Apple doesn't have a VR device on the market yet. But rumors have surfaced lately that the company is only a year away from launching an augmented (AR) and VR headset.
Apple has reportedly already shown the device to its board members, which would indicate that the headset is nearly ready to launch. Apple could have a unique opportunity with such a device because the tech giant is rather adept at pairing hardware and software in ways its peers aren't.
Apple CEO Tim Cook has hinted at the potential for the company to enter the VR market, saying last month, "I couldn't be more excited about the opportunities we've seen in this space. And sort of stay tuned and you'll see what we have to offer." Those comments came on the heels of an accidental reveal in Apple's open source code showing that the company is working on what it calls realityOS, likely an operating system for AR/VR.
Launching such a device would be a major step into an entirely new revenue segment for Apple. Some analysts estimate Apple's new headset could generate $18 billion in sales after its fifth year on the market.
Beyond device sales, Apple's strength in pairing hardware and software makes it likely that the company could eventually sell an entirely new set of services for the devices, just like it does now for its iPhones.
Apple already has more than 14,000 AR apps in its App Store, indicating a mixed reality headset could already have a slew of uses when it debuts.
Nvidia
Another way to tap into the growing potential of VR is to look at companies that make the technology that makes VR possible. And you'd be hard-pressed to find a company that's more fundamental to the future of VR hardware than Nvidia.
That's because Nvidia makes some of the best gaming processors on the market. Its gaming graphics processing units (GPUs) allow game developers to develop some of the most detailed virtual worlds and enable gamers to immerse themselves in them.
And just as importantly, Nvidia's GPUs have become an integral part of high-powered data center processing as well. All this is important for the VR market because GPUs will power VR hardware and likely be used for cloud-based VR applications and services as well.
The potential here for Nvidia is to sell more GPUs into an expanding market.
The global GPU market is expected to get a boost from AR and VR devices and services in the coming years and will help the graphics chip market grow to a $200 billion market by 2027.
Patience is the key
VR could take longer to take off than investors may want. Plenty of companies are working to build this market, but it's going to take time. So, investors will need to remain patient while it grows. The good news is that both Nvidia and Apple have lots of potential in other markets beyond VR, which helps round out their opportunities to grow in the coming years.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Two such companies that could end up being good long-term VR investments are Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA). Apple CEO Tim Cook has hinted at the potential for the company to enter the VR market, saying last month, "I couldn't be more excited about the opportunities we've seen in this space. Those comments came on the heels of an accidental reveal in Apple's open source code showing that the company is working on what it calls realityOS, likely an operating system for AR/VR. | Two such companies that could end up being good long-term VR investments are Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA). Beyond device sales, Apple's strength in pairing hardware and software makes it likely that the company could eventually sell an entirely new set of services for the devices, just like it does now for its iPhones. Its gaming graphics processing units (GPUs) allow game developers to develop some of the most detailed virtual worlds and enable gamers to immerse themselves in them. | Two such companies that could end up being good long-term VR investments are Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA). Apple It's true that Apple doesn't have a VR device on the market yet. All this is important for the VR market because GPUs will power VR hardware and likely be used for cloud-based VR applications and services as well. | Two such companies that could end up being good long-term VR investments are Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA). Beyond device sales, Apple's strength in pairing hardware and software makes it likely that the company could eventually sell an entirely new set of services for the devices, just like it does now for its iPhones. Nvidia Another way to tap into the growing potential of VR is to look at companies that make the technology that makes VR possible. |
20194.0 | 2022-07-20 00:00:00 UTC | Smartphone shipments within China up 9.1% year-on-year in June-govt data | AAPL | https://www.nasdaq.com/articles/smartphone-shipments-within-china-up-9.1-year-on-year-in-june-govt-data | nan | nan | SHANGHAI, July 20 (Reuters) - Shipments of smartphones within China grew 9.1% year-on-year to 27.5 million handsets in June, the China Academy of Information and Communications (CAICT) reported on Wednesday.
Shipments were up from about 25.2 million handsets in June 2021 and 20.6 million in May 2022, according to the CAICT, a state-backed think-tank.
The jump marks the first year-on-year increase since December, pointing to a potential recovery for the handset market, which has faced lagging growth in 2022 due to COVID lockdowns in Shanghai and elsewhere.
Overall smartphone shipments in China in the first six months of 2022 fell 21.8% year-on-year, according to CAICT.
Handset brands are currently experiencing production issues due to a global computer chip shortage.
A combination of factors including demand miscalculation, unexpected factory shutdowns and U.S.-China tensions have prompted a number of automobile companies to report chip sourcing issues.
That shortage has since spread to many types of chips and all kinds of hardware, including smartphones.
Delayed upgrades from consumers have also caused sales to slow in China.
(Reporting by Josh Horwitz; Editing by Simon Cameron-Moore)
((Josh.Horwitz@thomsonreuters.com; +86 21 20830007;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The jump marks the first year-on-year increase since December, pointing to a potential recovery for the handset market, which has faced lagging growth in 2022 due to COVID lockdowns in Shanghai and elsewhere. Handset brands are currently experiencing production issues due to a global computer chip shortage. A combination of factors including demand miscalculation, unexpected factory shutdowns and U.S.-China tensions have prompted a number of automobile companies to report chip sourcing issues. | SHANGHAI, July 20 (Reuters) - Shipments of smartphones within China grew 9.1% year-on-year to 27.5 million handsets in June, the China Academy of Information and Communications (CAICT) reported on Wednesday. Shipments were up from about 25.2 million handsets in June 2021 and 20.6 million in May 2022, according to the CAICT, a state-backed think-tank. Overall smartphone shipments in China in the first six months of 2022 fell 21.8% year-on-year, according to CAICT. | SHANGHAI, July 20 (Reuters) - Shipments of smartphones within China grew 9.1% year-on-year to 27.5 million handsets in June, the China Academy of Information and Communications (CAICT) reported on Wednesday. Shipments were up from about 25.2 million handsets in June 2021 and 20.6 million in May 2022, according to the CAICT, a state-backed think-tank. A combination of factors including demand miscalculation, unexpected factory shutdowns and U.S.-China tensions have prompted a number of automobile companies to report chip sourcing issues. | SHANGHAI, July 20 (Reuters) - Shipments of smartphones within China grew 9.1% year-on-year to 27.5 million handsets in June, the China Academy of Information and Communications (CAICT) reported on Wednesday. Shipments were up from about 25.2 million handsets in June 2021 and 20.6 million in May 2022, according to the CAICT, a state-backed think-tank. The jump marks the first year-on-year increase since December, pointing to a potential recovery for the handset market, which has faced lagging growth in 2022 due to COVID lockdowns in Shanghai and elsewhere. |
20195.0 | 2022-07-20 00:00:00 UTC | Should Invesco S&P 500 Top 50 ETF (XLG) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-invesco-sp-500-top-50-etf-xlg-be-on-your-investing-radar-3 | nan | nan | Launched on 05/04/2005, the Invesco S&P 500 Top 50 ETF (XLG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $2.01 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.20%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.16%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 40.50% of the portfolio. Healthcare and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.89% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN).
The top 10 holdings account for about 52.3% of total assets under management.
Performance and Risk
XLG seeks to match the performance of the S&P 500 Top 50 ETF Index before fees and expenses. The S&P 500 Top 50 Index is composed of 50 of the largest companies in the S&P 500 Index.
The ETF has lost about -19.17% so far this year and is down about -7.14% in the last one year (as of 07/20/2022). In the past 52-week period, it has traded between $277.86 and $373.67.
The ETF has a beta of 1 and standard deviation of 24.17% for the trailing three-year period, making it a medium risk choice in the space. With about 53 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Top 50 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XLG is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $290.57 billion in assets, SPDR S&P 500 ETF has $355.33 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.89% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 05/04/2005, the Invesco S&P 500 Top 50 ETF (XLG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market. | Apple Inc. (AAPL): Free Stock Analysis Report Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.89% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Why Large Cap Blend Large cap companies typically have a market capitalization above $10 billion. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.89% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Invesco S&P 500 Top 50 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.89% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 05/04/2005, the Invesco S&P 500 Top 50 ETF (XLG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market. |
20196.0 | 2022-07-20 00:00:00 UTC | Looking for a Dividend Growth Stock? Look No Further Than Apple | AAPL | https://www.nasdaq.com/articles/looking-for-a-dividend-growth-stock-look-no-further-than-apple | nan | nan | Apple (NASDAQ: AAPL) has been on a mission to return a substantial amount of its extra cash to shareholders. Although the stock currently pays a low dividend yield of 0.6%, the long-term reward of owning a stock that pays growing dividends might surprise you.
In fact, Apple's growing dividend might explain why the stock has outperformed the S&P 500 index over the last year. During market downturns, some investors like to add money to stocks that pay regular and growing dividends. Here's why Apple can weather a weakening economy and reward shareholders.
A recession isn't going to slow Apple's dividend growth
With the economy weakening, it might not seem like the best time to buy shares of Apple. After all, it depends on selling pricey tech products that some consumers might not be able to afford if inflation remains high and unemployment ticks up. On that note, recent estimates point to declining smartphone shipments in 2022 across the market.
Although Apple delivered 9% year-over-year growth in revenue last quarter, management noted a negative impact from inflation. Additionally, the company expects the June-ending quarter to reflect the impact of ongoing supply constraints, COVID-related disruptions, foreign currency headwinds, and the pause in sales to Russia.
Apple will report fiscal third-quarter earnings on July 28 after the market close. Management expects gross profit margin to dip from 43.8% in the first half of fiscal 2022 down to a range of 42% and 43%.
Despite the weak trends in smartphone sales, Apple still raised its dividend payment by 5% to $0.23 per share earlier this year. Over the last five years, Apple's dividend has increased 46%.
AAPL Dividends Paid (TTM) data by YCharts.
Apple can keep raising the dividend in the face of weakening demand because it has a large customer base, with an installed base of 1.8 billion active devices. That reflects millions of customers buying new products and apps every year.
Over the last 10 years, Apple has returned $124 billion to shareholders through dividends, but that still leaves the company with $73 billion of net cash on its balance sheet. The business generated $105 billion in free cash flow (FCF) over the last four quarters through March.
AAPL Free Cash Flow data by YCharts.
Free cash flow is the key ingredient that funds a company's operations, possible acquisitions, debt pay down, and dividends to shareholders. Given that Apple's FCF has grown so large in recent years, Apple could accelerate its dividend increases over the next few years.
The percentage of FCF that it pays out in dividends -- known as the payout ratio -- has fallen from 25% to 14% over the last five years, which means FCF has grown faster than the company's ability to distribute it.
AAPL Cash Dividend Payout Ratio data by YCharts.
The rewards of dividend growth
The gains from investing in a company that regularly raises the dividend, even if the yield is relatively low to start, can produce substantial returns over time.
Microsoft has paid a growing dividend since 2003, about twice as long as Apple, and illustrates the rewards of owning a dividend growth stock over the long term. Excluding dividends, a $10,000 investment in the software giant at the end of 2002 would be worth $100,000 today. However, with dividends reinvested in more shares, investors would have $159,000.
Apple plans to increase the dividend every year. With a cash-generative business, large customer base, and cash-rich balance sheet, Apple can pay dividends for decades.
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (NASDAQ: AAPL) has been on a mission to return a substantial amount of its extra cash to shareholders. AAPL Dividends Paid (TTM) data by YCharts. AAPL Free Cash Flow data by YCharts. | AAPL Cash Dividend Payout Ratio data by YCharts. Apple (NASDAQ: AAPL) has been on a mission to return a substantial amount of its extra cash to shareholders. AAPL Dividends Paid (TTM) data by YCharts. | Apple (NASDAQ: AAPL) has been on a mission to return a substantial amount of its extra cash to shareholders. AAPL Dividends Paid (TTM) data by YCharts. AAPL Free Cash Flow data by YCharts. | Apple (NASDAQ: AAPL) has been on a mission to return a substantial amount of its extra cash to shareholders. AAPL Dividends Paid (TTM) data by YCharts. AAPL Free Cash Flow data by YCharts. |
20197.0 | 2022-07-20 00:00:00 UTC | Thailand admits to using phone spyware, cites national security | AAPL | https://www.nasdaq.com/articles/thailand-admits-to-using-phone-spyware-cites-national-security | nan | nan | BANGKOK, July 20 (Reuters) - A Thai minister has admitted the country uses surveillance software to track individuals in cases involving national security or drugs, amid revelations that government critics' phones had been hacked using the Israeli-made Pegasus spyware.
Minister of Digital Economy and Society, Chaiwut Thanakamanusorn, said in parliament late on Tuesday that he is aware of Thai authorities using spyware in "limited" cases but did not specify which government agency used such software, which programme was used or which individuals targeted.
Human rights groups have accused successive Thai governments of using broad definitions of national security as a pretext to prosecute or suppress activities of their main rivals.
A joint investigation by Thai human rights group iLaw, Southeast Asian internet watchdog Digital Reach and Toronto-based Citizen Lab highlighted on Monday the use of Pegasus spyware on at least 30 government critics between October, 2020 to November, 2021.
The probe followed a mass alert from Apple Inc. AAPL.O in November informing thousands of users of its iPhones, including in Thailand, that they were targets of "state-sponsored attackers".
Chaiwut did not name Pegasus but said that he is aware of spyware being used to "listen into or access a mobile phone to view the screen, monitor conversations and messages". But he added his ministry does not have the legal authority to use such software and did not specify which government agency does.
"It is used on national security or drug matters. If you need to arrest a drug dealer you have to listen in to find where the drop would be," he said.
"I understand that there was usage of this sort but it is very limited and only in special cases."
His ministry has previously denied any knowledge of the matter.
The most recent alleged use of the spyware comes after the emergence of a youth-led movement in late 2020 that challenged the country's powerful monarchy and the government of Prime Minister Prayuth Chan-ocha. More than 1,800 people have faced security-related charges since the movement began.
Thai police in a statement denied the use of Pegasus for surveillance or breaches of privacy.
Pegasus has been used by governments to spy on journalists, activists, and dissidents and the Israeli firm behind it, NSO Group, has been sued by Apple and placed on a U.S. trade blacklist.
NSO Group did not respond to Reuters' requests for comment on Monday or Wednesday.
(Reporting by Panu Wongcha-um; Editing by Kanupriya Kapoor)
((Panu.Wongcha-um@thomsonreuters.com; +6626488658;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The probe followed a mass alert from Apple Inc. AAPL.O in November informing thousands of users of its iPhones, including in Thailand, that they were targets of "state-sponsored attackers". BANGKOK, July 20 (Reuters) - A Thai minister has admitted the country uses surveillance software to track individuals in cases involving national security or drugs, amid revelations that government critics' phones had been hacked using the Israeli-made Pegasus spyware. Minister of Digital Economy and Society, Chaiwut Thanakamanusorn, said in parliament late on Tuesday that he is aware of Thai authorities using spyware in "limited" cases but did not specify which government agency used such software, which programme was used or which individuals targeted. | The probe followed a mass alert from Apple Inc. AAPL.O in November informing thousands of users of its iPhones, including in Thailand, that they were targets of "state-sponsored attackers". BANGKOK, July 20 (Reuters) - A Thai minister has admitted the country uses surveillance software to track individuals in cases involving national security or drugs, amid revelations that government critics' phones had been hacked using the Israeli-made Pegasus spyware. Minister of Digital Economy and Society, Chaiwut Thanakamanusorn, said in parliament late on Tuesday that he is aware of Thai authorities using spyware in "limited" cases but did not specify which government agency used such software, which programme was used or which individuals targeted. | The probe followed a mass alert from Apple Inc. AAPL.O in November informing thousands of users of its iPhones, including in Thailand, that they were targets of "state-sponsored attackers". BANGKOK, July 20 (Reuters) - A Thai minister has admitted the country uses surveillance software to track individuals in cases involving national security or drugs, amid revelations that government critics' phones had been hacked using the Israeli-made Pegasus spyware. Minister of Digital Economy and Society, Chaiwut Thanakamanusorn, said in parliament late on Tuesday that he is aware of Thai authorities using spyware in "limited" cases but did not specify which government agency used such software, which programme was used or which individuals targeted. | The probe followed a mass alert from Apple Inc. AAPL.O in November informing thousands of users of its iPhones, including in Thailand, that they were targets of "state-sponsored attackers". BANGKOK, July 20 (Reuters) - A Thai minister has admitted the country uses surveillance software to track individuals in cases involving national security or drugs, amid revelations that government critics' phones had been hacked using the Israeli-made Pegasus spyware. Minister of Digital Economy and Society, Chaiwut Thanakamanusorn, said in parliament late on Tuesday that he is aware of Thai authorities using spyware in "limited" cases but did not specify which government agency used such software, which programme was used or which individuals targeted. |
20198.0 | 2022-07-20 00:00:00 UTC | Taiwan June export orders jump; outlook clouded by global woes | AAPL | https://www.nasdaq.com/articles/taiwan-june-export-orders-jump-outlook-clouded-by-global-woes | nan | nan | Recasts, adds details
June export orders +9.5% y/y vs +5.6% poll forecast
Export orders from China -14.5% y/y vs -13.4% in May
Ministry sees July orders between +0.4% and +3.1% y/y
Ministry warns of clouded outlook on global trade growth
TAIPEI, July 20 (Reuters) - Taiwan's export orders, a bellwether for global technology demand, logged a strong annual rise in June, recovering from COVID-19 lockdowns in China and global supply chain disruptions, but the government warned of a clouded outlook for global trade.
Export orders last month were up 9.5% from a year earlier at $58.83 billion, a record high for June, the Ministry of Economic Affairs said on Wednesday. Analysts had expected 5.6% growth.
First-half orders rose 9.5% compared with the same period of 2021.
June's rise followed a 6% annual expansion seen in May's figures. April logged the first fall since February 2020, when the pandemic had just begun sweeping the world.
Orders for telecommunications products in June grew 22% on a year before. An easing of pandemic measures in China helped unsnarl supply chains and begin clearing a backlog of orders for cellphones and laptop computers.
Orders for electronic products jumped 11.7%, driven by semiconductor demand for high-end computing, automobiles and other appliances, it said.
The trend towards working and studying from home has fuelled growth in orders for Taiwanese electronics in the past two years or more, more recently reinforced by a global semiconductor shortage that has filled Taiwanese chip makers' order books.
The ministry said it expected July export orders to be between 0.4% and 3.1% higher than those of July 2021.
Global tech demand should keep driving export order momentum, the ministry said, but it warned of uncertainly from the war in Ukraine, global inflation and new COVID strains.
"It is feared these will restrain global trade growth," it added.
Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TW, TSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms.
TSMC last week announced a forecast-beating second-quarter profit, saying it was "highly confident" about its long-term prospects.
However, Taiwan's June orders from China were down 14.5% from a year earlier, compared with an annual fall of 13.4% seen in May. Month-on-month, orders from China inched up 0.2%.
Orders from the United States rose 13.3% on a year before, compared with the previous 10.5% rise.
Export orders from Europe grew 18.8%, compared with an annual expansion of 9.5% in May, while those from Japan rose 5.9%.
(Reporting by Emily Chan and Ben Blanchard; Editing by Bradley Perrett)
((ben.blanchard@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TW, TSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms. Export orders last month were up 9.5% from a year earlier at $58.83 billion, a record high for June, the Ministry of Economic Affairs said on Wednesday. An easing of pandemic measures in China helped unsnarl supply chains and begin clearing a backlog of orders for cellphones and laptop computers. | Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TW, TSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms. Recasts, adds details June export orders +9.5% y/y vs +5.6% poll forecast Export orders from China -14.5% y/y vs -13.4% in May Ministry sees July orders between +0.4% and +3.1% y/y Ministry warns of clouded outlook on global trade growth TAIPEI, July 20 (Reuters) - Taiwan's export orders, a bellwether for global technology demand, logged a strong annual rise in June, recovering from COVID-19 lockdowns in China and global supply chain disruptions, but the government warned of a clouded outlook for global trade. The ministry said it expected July export orders to be between 0.4% and 3.1% higher than those of July 2021. | Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TW, TSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms. Recasts, adds details June export orders +9.5% y/y vs +5.6% poll forecast Export orders from China -14.5% y/y vs -13.4% in May Ministry sees July orders between +0.4% and +3.1% y/y Ministry warns of clouded outlook on global trade growth TAIPEI, July 20 (Reuters) - Taiwan's export orders, a bellwether for global technology demand, logged a strong annual rise in June, recovering from COVID-19 lockdowns in China and global supply chain disruptions, but the government warned of a clouded outlook for global trade. The trend towards working and studying from home has fuelled growth in orders for Taiwanese electronics in the past two years or more, more recently reinforced by a global semiconductor shortage that has filled Taiwanese chip makers' order books. | Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TW, TSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms. Recasts, adds details June export orders +9.5% y/y vs +5.6% poll forecast Export orders from China -14.5% y/y vs -13.4% in May Ministry sees July orders between +0.4% and +3.1% y/y Ministry warns of clouded outlook on global trade growth TAIPEI, July 20 (Reuters) - Taiwan's export orders, a bellwether for global technology demand, logged a strong annual rise in June, recovering from COVID-19 lockdowns in China and global supply chain disruptions, but the government warned of a clouded outlook for global trade. However, Taiwan's June orders from China were down 14.5% from a year earlier, compared with an annual fall of 13.4% seen in May. |
20199.0 | 2022-07-19 00:00:00 UTC | Why Apple, Amazon, and Intel Jumped Higher Today | AAPL | https://www.nasdaq.com/articles/why-apple-amazon-and-intel-jumped-higher-today | nan | nan | What happened
Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Intel (NASDAQ: INTC) were all rising today as the broader market made gains amid rising investor optimism. The tech-heavy Nasdaq Composite was up by 3% and the S&P 500 gained 2.6% this afternoon, likely helping to lift stocks higher.
Additionally, Apple may have been rising after positive comments from an analyst, and Intel was likely gaining as Congress works on a bill to help boost chip production in the U.S.
Apple was up by 2.5%, Amazon had gained 4%, and Intel was up 5% as of 2:20 p.m. ET.
So what
Investors were generally optimistic today as some are betting that the technology sector has already hit the bottom. Stocks have, of course, tumbled recently as investors have sold shares on fears of rising inflation, Federal Reserve interest rate hikes, and a potentially slowing economy.
Image source: Getty Images.
Many stocks -- including Apple, Amazon, and Intel -- have suffered as investors have fled the market for safer places to put their money. That's resulted in Apple falling 15%, Amazon down 29%, and Intel sliding 20% year to date.
But some investors may now be looking at the share prices of these stocks and believing that they've finally reached the bottom.
With investors already expecting inflation to be persistent and the Federal Reserve to continue hiking rates, some investors think these headwinds are already baked into many stock prices right now.
As investors came back to the broader market today, Apple, Amazon, and Intel all benefited. But Apple may have also been rising after Wedbush analyst Daniel Ives said in an investor note that he believes iPhone demand is holding up fairly well despite supply chain headwinds.
Additionally, Intel's stock is likely rising today after a recent Wall Street Journal report said that draft Senate legislation shows that the U.S. could invest as much as $52 billion, through subsidies, to increase semiconductor manufacturing in the country.
The U.S. wants to invest in chip manufacturing as a way to stay competitive with China's chip production amid growing tensions between the two countries.
Now what
While it's good to see Apple, Amazon, and Intel making gains today, investors should also understand that there's still a lot of uncertainty in the market right now.
That doesn't mean that these companies aren't great long-term investments, but investors should pay extra close attention to the companies' upcoming earnings reports to see how each is navigating supply chain issues, rising costs, and a potential economic slowdown.
Apple, Amazon, and Intel will all report their latest financial results on July 28.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Amazon, Apple, and Intel. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Intel (NASDAQ: INTC) were all rising today as the broader market made gains amid rising investor optimism. Stocks have, of course, tumbled recently as investors have sold shares on fears of rising inflation, Federal Reserve interest rate hikes, and a potentially slowing economy. But Apple may have also been rising after Wedbush analyst Daniel Ives said in an investor note that he believes iPhone demand is holding up fairly well despite supply chain headwinds. | What happened Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Intel (NASDAQ: INTC) were all rising today as the broader market made gains amid rising investor optimism. Stocks have, of course, tumbled recently as investors have sold shares on fears of rising inflation, Federal Reserve interest rate hikes, and a potentially slowing economy. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. | What happened Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Intel (NASDAQ: INTC) were all rising today as the broader market made gains amid rising investor optimism. Additionally, Apple may have been rising after positive comments from an analyst, and Intel was likely gaining as Congress works on a bill to help boost chip production in the U.S. Apple was up by 2.5%, Amazon had gained 4%, and Intel was up 5% as of 2:20 p.m. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. | What happened Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Intel (NASDAQ: INTC) were all rising today as the broader market made gains amid rising investor optimism. But some investors may now be looking at the share prices of these stocks and believing that they've finally reached the bottom. The Motley Fool has positions in and recommends Amazon, Apple, and Intel. |
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