News and analysis
eBay stocks are trading 50% off their peak prices despite significant progress in key businesses that increase the possibility of an increasing turnover of the auction platform. The dividend yield of the company is at 2.2%, while its buyback yield is at an impressive 24.4%. So, the overall reward for investors is at 26.6% in 2022, a record among public corporates. eBay has bought back shares for $5.3 billion during the last four quarters. So, outstanding shares have been reduced to 551 million from 685 million a year ago.
The company is actively developing collectable trading, including an acquisition of TCGplayer, a marketplace where enthusiasts exchange their collectables like Pokemon, Magic: The Gathering and others. The most important service that the platform provides is guaranteed authenticity of the collectables that ensures the buyers will not be subject to scams and also protect sellers from any malicious fraud. eBay has recently made this service available for jewellery above $500.
The company has published strong forward guidance for Q4 2022 with turnover at $17.8 billion, revenues at $2.46 billion, and EPS at $1.06. The EPS in the Q4 2021 was at $1.05. So, considering the tense situation in the retail market this year, any figures above record values of 2021 should be considered an achievement. eBay stocks will be able to recover rapidly to their peak prices once the market reverses to the upside, and that would mean 100% profit from the current values.
Salesforce is a leader of the CRM systems segment. Its stocks are trading at 47% off their peaks. The company continues to post strong business growth despite being in the market for a long time. It has strong financials and abilities to reward its investors. The last quarter revenue reported by Salesforce rose by 14% year-on-year to $7.8 billion, while its operational margin grew by 290 basis points to 22.7%. This is quite impressive as the company suffered because the strong Dollar undermined its revenues outside the U.S. The company’s management has also approved a buy-back program for $1.7 billion.
Management estimates the company will increase its operational margin to 25% in the next couple of years and boost its revenues to $31 billion during this fiscal year, or by 17%. Salesforce announced the cut of 10% of its staff in order to increase profitability. This is quite a common strategy in the tech sector to keep business expansion going.
The company is also active in the M&A market. The last of its acquisitions is the Slack platform that has posted revenues up by 46% during the reporting quarter. Thus, investors may have a wide variety of outstanding products as they buy CRM stocks.
is ranked by Coinmarketcap at the 12th position by market cap with
$7.8 billion, which is 4% less than Ethereum’s market cap. AVAX prices dropped
by 82% of its peak values, allowing investors to buy it at early 2021 prices.
Avalanche’s infrastructure consists of three logically isolated networks, each
of these with their own processing, validators, and own set of rules.
platform is often compared to the existing internet web infrastructure with
core connection protocols like HTTP, surrounded by a huge number of networks to
their apps. Avalanche allow for the creation of public and private systems as a
blockchain or DAG (Directed Acyclic Graph) and for the use of different virtual
machines for apps, including EVM engine (Ethereum Virtual Machine) that allows
Enthereum network programs to be developed.
includes C-chain to create smart contracts that are processed on an advanced
EVM engine, P-Chain that coordinates validators that process transactions and also
allows for the creation and management of new subnetworks, and X-Chain which is
a directed acyclic graph regulating issuance and trade of cryptoassets. DAG
systems record new transactions on top of the old ones, allowing for processing
speed to be increased and for capacity substantially. It is quite different to
other blockchains, where transactions are compiled in blocks in order to be
advantage of Avalanche is that it provides anyone with the opportunity to
create his or her own isolated blockchain with its own set of parameters,
including access to apps and the programming language with which it will work.
Every subnetwork can process around 4,500 transactions per second compared to
14 processed by the Ethereum network.
Apple stocks have had a very impressive performance amid a clearly bearish market while losing only 20% of their peak values. However, investors should be prepared for elevated turbulence in these stocks considering the situation in China.
China’s zero-tolerance policy to COVID-19 led to a massive exit of employees from Zhengzhou city plant amid fears over tightening curbs. Over 200,000 workers are rumoured to have left the plant. If this is true, the production of iPhone 14 Pro and iPhone 14 Pro Max would be very complicated with no clear outlook on when it could be resumed. The delivery delay shown on Apple’s website has already hit six weeks. Americans who ordered the brand new IPhone for Thanksgiving Day will only receive it for Christmas now. Meanwhile the last two months of the year are very valuable for any mass-market company in terms of holiday sales.
Apple is planning to move iPhone production to India. But that would require years. The company has already invested $75 billion in the Chinese market and now this investment may be at risk as the ruling Communist party in China may put a local ban on the sale of Apple products. China is the third largest market for Apple with the United States at the first place with $153 billion and Europe at the second with $95 billion. Wall Street is expecting Apple’s earning to go up by five percent over the next three years. So, any troubles with production in China may alter these forecasts.
Capital One Financial corporation shares are trading at 50% off their peak prices. This has inspired the management of the company to deliver a massive buyback program bringing the buyback yield to 19.3%. Together with 2.7% dividend yield, this has made the company one of the most generous in the market. COF shares are in great demand among investors that are focused on value stocks, such as Oakmark Fund with more than $45 billion in assets under management.
The specialisation of Capital One is mostly credit cards, auto loans provided to substandard borrowers, or in other words, people with high credit risk profiles. This business is highly profitable, although it does bear high risks too. The company says it has a reliable risk assessment model in place to run the business. The lender generates not only higher margins compared to its peers, but overruns regulators’ requirements of capital adequacy with 13.6% vs required 6%. Considering these criteria, the company is in line with some of the largest banking institutions in the world, like JP Morgan with 14.1% and the Bank of America with 12.8%.
The company’s capital base, which is built on clients’ deposits, is enough to conduct high-margin lending. Such a model of cheap resources is not only profitable but it is also stable. Capital One has a margin of 10-15% on its tangible equity. The interest for the company’s services is unlikely to decline in the foreseeable future considering the current economic environment. So, COF shares could be selected for long term investments with the upside potential of 30-40% once the market starts recovering.
I feel no new risks or damage, only a push-up for most of my stakes on Wall Street, when the market's flagman NVIDIA (NVDA) posted blockbuster earnings and guidance to refresh historical highs again. So, surging demand on GPUs (graphics processing units, for those that have been living under a rock for the last few years), as well as other AI chips and services "worldwide across companies, industries and nations", in the words of NVIDIA's chief executive Jensen Huang, are confirmed to prolong the boom. This is exactly what is behind new all-time records, now above 5,050 points, for the S&P 500 (US500) futures. Another incentive for crowds and experts to raise their target prices for many other AI-led companies which still constitute the foundation and strong pillars of my stock portfolio.
Advanced Micro Devices (AMD) added more than 5% to climb to $175, leaving behind its recent two-day correction. Broadcom (AVGO) gained 3.3% in today's pre-market to launch the third-time retest for its historical resistance area around $1275-$1295 per share. This company joined the club of the Wall Street's top ten in terms of total market caps, yet it has a good opportunity to rise more ahead of its Q4 report, scheduled for March 7. I would only keep it under my radar that day in order to catch a proper moment to split my stake in case of any guidance problems during the conference call. The same approach could be applied to CrowdStrike (CRWD), which lost some part of its market value in the middle of the week, but only because of its rival's Palo Alto (PANW) failure. Palo Alto was, indeed, the main IT loser of the month among popular stocks, but I happily didn't invest in it. As for CrowdStrike (CRWD), it already covered nearly a half of one-time loss, and the only necessary thing to do is also to monitor its behaviour on the day of its quarterly report on March 5. I also see a healthy and climbing picture for Qualcomm (QCOM), which has already posted its Q4 results and may be above suspicion till April. My consumer staples including November's purchase of Walmart (WMT), newly acquired stakes in Procter & Gamble (PG) and Mondelez (MDLZ) are also growing to the upside.
The door to the next heaven for the broader market is open. One proof that is more indirect came from Japan where trading floors literally erupted in cheers in response to the event that Tokyo investors were waiting over 34 long years. The Nikkei 225 (J225) main index of the country of the rising sun hit its next height since the very end of the roaring 1980s and first time closed the session above well-forgotten levels. With the weakening Yen strongly helped the achievement, it is still great and adorable, at least as a litmus test for not only the US or European, but global rally continuation. As for me, everything's alright, everything's fine. And so, I'm going to sleep well tonight and almost every night in the course of, at least, two or three months ahead.
Tezos (XTZ) is experiencing a 4.5% increase, reaching $1.122 this week, contributing to a 17.5% overall rally in February. This growth is slightly lower compared to Bitcoin (BTC), which has seen a 22.0% increase since the beginning of the month.
The performance of XTZ may indicate some weakness, as suggested by CoinCodex AI algorithms, which anticipate a potential 10.5% decline in prices over the next five days. On the other hand, the service also suggests a possible 5% upside, with XTZ reaching $1.200. The Tezos community is actively engaged with an ongoing airdrop that has brought attention to the token. While the airdrop may not significantly impact the token's offering, it is likely to generate increased interest. To sustain upward momentum, XTZ prices need to remain above the $1.100 support level.
American aluminum giant Alcoa (AA) consolidated in the range of $23.0-$26.00 per share during October-December 2023, creating a robust launchpad for potential growth. This consolidation appears to include an accumulation period where bulls are solidifying their positions. Subsequently, prices soared to $35.00 per share. Now, it seems that bulls have taken a pause to continue accumulating Alcoa stocks below $28.50. If this resistance is overcome, the Alcoa rocket could lift off to $35.00-$40.00 per share. I find buying its stocks at current levels around $28.50 appealing. Let’s join the ride!
"The most important stock on planet Earth", under a version of Goldman Sachs Group's trading desk, confirmed its strength last night. NVIDIA's share price jumped by 8.5% in the first hour of extended trading on Wall Street to test its near all-time high levels above $730, following Q4 earnings beat in both top and bottom lines. The AI drive pacemaker slowed its endless rally for a couple of days ahead of this quarterly report, yet it started the engine with renewed vigor.
This set the tone for the S&P 500 broad market barometer, which passed the 5,000 round figure. Peer assets from chip, cloud and other AI-related segments cheered up. Broadcom Inc (AVGO), Advanced Micro Devices (AMD), CrowdStrike (CRWD) immediately added 2% to 3% to their market values in after-hours, while Arm Holdings climbed by more than 5.
The Wall Street consensus preliminarily priced-in a more than three-fold growth in sales YoY, yet ultimately it came out beyond wildest expectations. The giant announced EPS (earnings per share) of $5.16 on revenue of $22.1 billion against analyst poll consensus of $4.64 per share on revenue of $20.55 billion, compared to $4.02 of EPS on revenue of $18.12 billion in Q3 and $0.88 of EPS on revenue of $6.05 billion just one year ago. Behind the numbers was that global extra demand for AI chips fully offset the potential damage from the U.S. export ban to China clients.
Data centre division contribution soared to $18.5 billion, up 409% YoY, which was far above average expert projections of nearly $17 billion, with graphic processing units (GPUs) reigning supreme led by the H100 model. The pricing uptrend for the benchmark H100 chips already created a vast share of NVIDIA's extra income. However, the newly launched H200 model was priced at a nearly 35% premium to the H100, with the latest GH200 getting a 50% premium. Besides, NVidia is going to produce its next-generation B100 Blackwell into its AI-focused lineup to ease some capacity issues.
Orders from Microsoft (MSFT) and Meta Platforms (META) reportedly provided around a third of the overall data centre sales. Analyst polls reassessed a free space for total data centre revenues by forecasting a fivefold leap from the year-earlier period, so that a fiscal year of 2024 would give around $81.1 billion. They also guess gross margins of NVIDIA businesses may rise to 75.5% in the current quarter to hold this achievement until the end of this fiscal year.
We identify $950 per share as the next reasonable target area for NVidia stock. We also agree with the Wedbush analyst Dan Ives who noted that NVidia and Microsoft "are the first derivatives of the AI Revolution, with the second/third/fourth derivatives of AI now starting to form in this market, which speaks to our 2024 tech bull thesis playing out".