FINSUM + Magnifi: There’s a Global Chip Shortage but These Two Chipmakers are in Prime Position
April 29, 2021
The global chip shortage continues to ravage many sectors, most notably automotive. However, traders are betting on producers AMD and Nvidia to see the largest gains. AMD has lagged the SMH Semiconductor ETF, but strong demand and a weak Intel are projecting it to eat a larger market share. Intel had a 20% decline in data center revenue, while AMD saw growth in chips. As Intel continues to shrink in the space, AMD pushes ahead in performance, innovation, and costs. Others are bullish on Nvidia. Nvidia has stalled since the chip shortage at around $600 per share, but traders are setting a $700 target price point.
FINSUM + Magnifi: JP Morgan Warns of Big Tech Correction
April 29, 2021
For anyone who has enjoyed the big rally in tech shares after the rough February through March period, JP Morgan has bad news for you. The bank says that while the reflation and “reopening” trade has paused for the last month, it is poised to resume. This would rotate capital out of growth and quality into cyclicals and value, which could pose big trouble for FAANGs and other tech funds. According to the bank, “With U.S. and Europe cases now declining, the fast pace of vaccination and seasonal tailwinds (Northern Hemisphere), we believe that the reopening and reflation trade will resume with a move that will be bigger than we saw early this year... As the COVID-19 recovery takes place, reopening, reflation and inflation themes, and value likely will significantly outperform growth and defensives”.
FINSUM + Magnifi: Tech Sector Health Looks Strong on IBM Earnings
April 23, 2021
IBM stock price rose about 4% on trading early this week as the company had its first market-beating earnings report in some time and first quarter of revenue growth in the last four. Earnings came in at $1.77 per share vs the expected $1.63 that markets were predicting. IBM’s Cloud and Cognitive, Global Business Services and Systems divisions all had revenue growth ranging from 2-4%. Client-based business volume bounced back such as retail and consumer products. These were some of the worst suffering areas from the pandemic. Additionally, IBM announced the acquisition of two cloud computing-related companies: Taos and 7Summits.
FINSUM + Magnifi: Big Tech’s Winners and Losers as the Pandemic Fades
April 20, 2021
The pandemic fueled growth in lots of different technology sectors, but it remains to be seen how permanent these changes are. Technology acceleration was high: FactSet expects earnings growth to jump 22% in Q1 2021 as compared to the same quarter last year. But after the pandemic fades which industries will remain? E-commerce companies like Amazon, Pinterest, and Etsy will likely stick around as many shopping patterns have changed permanently. Companies like Zoom and video companies will taper off as the workplace returns to normal. However, hardware and cloud computing will likely retain strong earnings given trends. Finally, chip manufacturing is still running shortages but Nvidia, AMD, and Qualcomm will have pent-up demand for the foreseeable future.
FINSUM + Magnifi: Ecommerce Will Benefit from This Change to Consumer Spending
April 8, 2021
Consumers spent more at online stores last year than the previous year by a staggering $900 billion according to a Mastercard Economics Institute study. This isn’t very surprising as more shopping was relegated to online retailers due to the pandemic. But what is shocking is that a large share of it is here to stay. The study shows that habits have formed in consumer shopping, and that online deal hunting will remain electronic. Grocers will retain about 70-80% of their online commerce. Even industries more likely to return to pre-pandemic levels, clothing and electronics are expected to keep about 20% of their digital sales.
FINSUM + Magnifi: Video Game Stock gets Buy Recommendations Across Wall Street
April 8, 2021
Roblox (RBLX) the children's hybrid social media/video game platform received nothing but praise and recommendations to buy from various Wall Street Analysts. Morgan Stanley, BofA, and Truist were vocal advocates of RBLX. Growing revenues were a large part of the fundamentals moving the stock up to $71 up from its March IPO of $45. Additionally, deals with Tencent are moving Roblox into a Chinese market that would vastly grow its clientele. Strike prices range from $78 to $100 as the future looks promising as RBLX plans education, concerts, and movie pairings.
FINSUM + Magnifi: Pay Attention to This Big Bear Market Warning Sign
April 8, 2021
The stock market has been on one of the most historic recoveries in market history, but hedge funds are holding off on their buying. New data shows that hedge funds have some of the lowest levels of their positions in cyclical markets (energy, finance, tech) in the last decade, but instead are heavy on resilient industries such as healthcare and consumer staples. Hedge funds might be suspicious of how normal the economy will look as vaccines roll out, or that the benefits of the stimulus packages will be short-lived.
FINSUM + Magnifi: Amp Up Your Portfolio with Robotic Stocks
March 2021
For years robotics was pigeonholed into major US manufacturing duties but new technology and
artificial intelligence are turning that around. Robots look to assist a much larger capacity with these
technology improvements, such as personal assistance, autonomous vehicles, biomedical assistance,
and delivery. Robotics was expected to have a CAGR of 25% from 2020 to 2025 so the growth is promising. Companies like Intuitive Surgical (ISRG), iRobot Corp (IRBT), and Rockwell Automation (ROK),
offer promising future growth prospects and value buys like ABB offer P/E ratios that are attractive
compared to the S&P 500.
FINSUM + Magnifi: This Fintech Just Saw its Shares Surge Like GameStop
March 2021
Fintech company Upstart experienced a rally reminiscent of the Reddit-fueled GameStop frenzy weeks back as its stock jumped 171% over the last three trading days. However, fundamentals and not internet boards were the catalyst here. Upstart uses AI and machine learning techniques to underwrite consumer loans and passes this information off to banks that can better place borrowers. The company saw revenue growth due to a spiking 124,000 loan originations last quarter prompting the surge in stock price.
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FINSUM + Magnifi: Why the Nasdaq is Really Dropping
(March 2021)
The ten-year treasury yield hit one year high at 1.6% on Friday, just after President Biden signed the $1.9 trillion stimulus package into law. Some are arguing that this is a new equilibrium for a healthy U.S. economy; others are concerned that inflation is on the rise. The rest of the market was mixed as the Dow Rose on open and the S&P fell. The bigger story is tech stocks, as the Nasdaq fell over a percentage point on open. Some are pointing the fingers at increased regulation in China as tighter regulation affects the whole sector. However, others believe it’s the increase in bond yields that point to the reason for technology faltering. Inflation erodes future cash flows and if the Fed raises rates in the short run that could limit growing companies' access to cheap liquidity. Meanwhile, vaccine companies did well among the news of increased effectiveness in the U.K.
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