News and analysis

HP Inc (HPQ) appears to be gradually narrowing the gap with the broader market. While the S&P 500 broad market index has surged by 27.5% since October 30, 2023, HPQ has lagged behind with a modest 16.4% increase. This disparity presents an opportunity for investors to capitalize on undervalued stocks amidst an environment where many shares are considered overbought.

Recognizing this potential, I plan to initiate a position in HPQ within the price range of $29.50-30.10. By entering at this level, I aim to capitalize on the stock's upward momentum and target a price range of $34.00-35.00, representing a 15% upside potential within the next two months.

To manage risk, I will implement a stop-loss order at $25.00, providing a safeguard against unexpected downturns in the stock price.

Chiliz (CHZ) has demonstrated a solid 4.5% increase, reaching $0.1454 this week, albeit slightly retracing from its peak of $0.1520 on March 26. The most notable achievement is surpassing the crucial resistance level at $0.1500. Remarkably, this breakthrough occurred despite Bitcoin hovering around $70,000, indicating strong underlying momentum within the project.

The positive price action is underpinned by ongoing developments within the Chiliz ecosystem. Notably, the project forged partnerships with prominent entities such as Paris Saint-Germain (PSG) and French energy giant EDF. EDF has become a Chiliz blockchain validator, with its subsidiary Exaion leading efforts to promote blockchain technology adoption while prioritizing sustainability and decentralization. This collaboration has garnered attention and may serve as a catalyst for further upward movement in the token's price.

With this momentum and positive news flow, CHZ could potentially extend its gains beyond the $0.1500 mark, targeting levels around $0.1750 in the near term.

Even though I have a solid portion of Google-parent Alphabet in my portfolio since a sharp retracement to nearly $120 in late October 2023, I believe it is reasonable to double my number of Google shares now. Google remains the only major mega cap stock, which has been hanging about the doorstep of its all-time highs, not daring to breakthrough so far, while so many investment houses continue to raise their target prices on Google, maintaining or shifting to Outperform quality ratings. This week Wedbush released the stock new price target of $175.00, which is almost $23 higher than the current price levels. The reputable analyst group not only cited usual phrases like "a positive outlook on the company's strategic direction", adding than Google is "well-positioned to continue its dominance in the search engine market and capitalize on new monetization avenues", but also mentioned particular strengths like "the integration and expansion" of Google's Search Generative Experience (SGE). Before underlining this belief, Wedbush finished its own independent comprehensive analysis of SGE tools, using a test of 1,200 unbranded Google Search queries. The tests were made to compare SGE with non-SGE results to reveal similar ad show frequencies per result page in favour of ad integration into SGE. Now Wedbush sees a growing belief that, in the long term, SGE could offer monetization opportunities that "match or surpass" those of traditional Google Search. This is a pretty strong. The current ad loads in SGE are tight already, Wedbush investigation added, which are admitted as a positive sign for "the platform's future economic performance". Similar considerations allow me to increase my bets in Google, taking into account a promising agreement with Apple on building its Gemini AI environment into new iPhones, and also that a coalition of tech companies, including Qualcomm and Google are reportedly spearheading an initiative of developing an open-source suite of software tools capable of running AI applications across various types of accelerator chips, effectively targeting Nvidia's proprietary software ecosystem, according to Reuters. "We're actually showing developers how you migrate out from an Nvidia platform," Qualcomm's representative commented. The project's ambitions may extend beyond its founding members, with plans to cover cloud computing giants like Amazon and Microsoft Azure and NVIDIA's rival chip manufacturers, according to the same report. Google is the unique company that may use all chances of teaching its neural network powers with billions of YouTube videos. No Microsoft or Amazon, or chip and AI infrastructure manufacturers have that advantage. In combination with its very special position of a clear global search flagship, this makes me think that Google stock is underestimated by most rating agencies. So, when a big breakthrough will come, all that numbers like $175 or so will be perceived rather as a starting point before a more serious move up. A technically measured move from multi-year charts hints on this scenario as well. Therefore, buying Google just a little bit above $150 looks like making easy money on an underestimated asset everybody knows about.

Nike (NKE) share price dipped more than $7 below the $100 waterline. It dropped to $91.74 at some moment of last Friday regular trading and failed to surface completely, cleaving to an intermediate and a rather occasional support level of $93, after disappointing Wall Street expectations on the company's forward guidance. Any weakness in Nike stock post earnings would be a potential buying opportunity, Citigroup wrote in a client's note about one week before the corporate report, and many smaller investment houses echoed the estimates. Now it suddenly feels like most of them just ducked out staying away from the idea of fresh purchasing in Nike. If not, the price would rebound already, but it is frozen at lower levels for the third trading day in a row. So, retesting at $82.50 low of September 2022 or its vicinity could be considered as a rational scenario.

Nike forward equity per share (EPS) projections for 2025-2027 were revised lower during its March 25 conference call. It was at $4.27-5.41 soon after Christmas, then at $4.23-5.23 only one month after and finally worsened to $4.04-4.85 at the end of last week, IBES data by Refinitiv showed. A poor trend for fiscal ’25 – ’27 revenue estimates is also here, starting from a $55-63 area only three month ago and coming to $53-60 right now. This is why the pure fact of both EPS and revenue beating consensus by far in the recent quarter does not help to support bulls in Nike.

The world's largest supplier of athletic shoes and a great brand of sports apparel faced a number of challenges like turbulent economic environments in China and Europe and an oversupply in North America. Most retailers are still cautious when placing new orders, the competitive pressure is high from brands like New Balance, On and Deckers-owned Hoka, so enhanced inventory management efforts are needed. On's market share at Dick's Sporting in the footwear category rose to 8.2% from the 6.1% it had six month ago, while New Balance faced its market share increase to 5.4% from 4.6%. The 4-year old story with accusations in an alleged using of child slave labour force by some Asian supplying partners of Nike in Uyghur areas also helped rivals. Nike now is replacing Adidas as the main uniform sponsor of Germany's national football teams, which is a good but supposedly costly promotional measure. The company has increasingly used its old iconic basketball shoes from the Jordan brand to boost sales, which started in a distant year of 1985 under the tagline "It's gotta be the shoes". Yet, its market share is now bleeding to other brands, especially in running shoes, which its CEOs admitted.

Shifting consumer tastes is a real problem, which is not so easy to solve. "Retro footwear trends are shifting from court styles (in which Nike is overweight) towards chunky dad shoes and terrace styles", according to Stifel analyst James Duffy. Therefore, Nike chief financial officer Matt Friend said that the company would be cutting back on supplies of its "classic" shoes, including famous Air Force 1 sneakers, trying to focus on "upcoming launches and new product development". Nike already highlighted some upcoming products in the running category. That's a decisive step after decades of too much reliance on legacy or historical products, yet markets probably have no clear idea about the consequences.