Amazon Setting Up, Robinhood Makes Bullish Move: Five Stocks Near Buy Points
Amazon.com (AMZN) leads five stocks near buy points, along with Robinhood, Ryan Specialty, Texas Roadhouse (TXRH) and Mastercard (MA).
With the market in an uptrend, IBD currently recommends 80% to 100% market exposure for investments. The S&P 500 and Dow Jones Industrial Average are right at record highs, while the Nasdaq holds above 18,100, not far from its high.
Among this week’s list of stocks to watch, Ryan Specialty (RYAN) and Robinhood (HOOD) both rank on the IBD Big Cap 20 list.
↑
X
Stocks Mixed But Cap Solid Week: Cava, Ryan Specialty, Eli Lilly In Focus
Amazon Stock
Amazon stock is trending back toward its record highs from mid-July ahead of its Q3 results due in late October. The Magnificent Seven member and e-commerce giant should benefit from the looming holiday season. Meanwhile, Amazon is duking it out with Microsoft (MSFT) to become the leading cloud platform for artificial intelligence via Amazon Web Services.
Analysts expect Amazon to report a 10% revenue increase in its coming report after Q2 sales missed forecasts and the Dow Jones firm gave a lower-than-expected guidance for Q3 sales and operating income.
AMZN stock is working up the right side of a 12-week consolidation, toward a 201.20 buy point on a daily chart. With shares pulling back slightly in the past week, Amazon has a handle on a weekly chart with a 195.37 buy point.
Amazon stock rebounded above its 200-day and 50-day moving averages in early September. Shares have held above those levels since.
Amazon stock has rallied nearly 24% in 2024.
Texas Roadhouse Stock
Texas Roadhouse is trading just below a buy zone for a flat base. TXRH stock broke out above the 177.72 buy point last week, closing above the entry on Thursday before sliding Friday.
The 5% buy zone stretches to 186.60.
TXRH is holding above its key moving averages after rebounding above its 50-day line on Sept. 19.
Texas Roadhouse vaulted 43% so far this year.
A number of restaurant stocks are performing well along with Texas Roadhouse, including Cava (CAVA), Wingstop (WING) and Shake Shack (SHAK).
Guggenheim on Wednesday raised its price target on TXRH stock to 195 from 190 and kept a buy rating on shares, based on higher earnings estimates heading into Q3, The Fly reported. Texas Roadhouse earnings accelerated over the last three quarters, to a 47% gain for its July 25 report.
Is Amazon Stock A Buy As Tech Giant’s Shares Approach July Highs?
Ryan Specialty Stock
Wholesale broker and managing underwriter Ryan Specialty Holdings leads the Insurance-Brokers Group according to the IBD Stock Checkup. The Chicago-based insurance company on Sept. 16 completed the acquisition of the property and casualty managing general underwriters, owned by Ethos Specialty Insurance, from Ascot Group for an undisclosed amount.
Ryan Specialty topped Q2 expectations on Aug. 1 and lifted its 2024 revenue growth outlook to a range of 13% to 14%.
BMO upgraded Ryan Specialty to outperform on Tuesday, noting a strong EBITDA (earnings before interest, taxes, depreciation and amortization) growth runway, according to The Fly. The firm increased its EBITDA estimates by more than 6% based on a combination of higher profit margins and accretive acquisition expectations. Ryan’s purchases of higher-margin businesses and “healthy” double-digit organic growth appears to give the company a “fog-free runway” to continue margin expansions in the coming quarters. BMO lifted its price target on RYAN stock to 75 from 65.
RYAN stock has moved up the right side of shallow cup base with a 69.03 buy point, matching its all-time high. Shares bounced strongly off their 50-day moving average on Tuesday, which could have been an early entry opportunity.
But RYAN stock pulled back the rest of the week, indicating a new handle could be on the way in a couple more sessions.
The handle looks to be shaping up with a 68.47 buy point, but still needs a few days to form.
RYAN stock has soared 53% in 2024.
Robinhood Stock
Robinhood stock is extended from the top of the official buy zone from a cup-with-handle base’s 21.54 buy point. But a recent pause created an alternate handle at 24.06. Friday’s 6.5% move to 23.89 in higher volume offered an early entry.
Robinhood stock has shot up more than 87% this year.
Meanwhile, Robinhood and London-based fintech firm Revolut are exploring the opportunity to launch stablecoins, Bloomberg reported Thursday. Stablecoins are cryptocurrencies designed to hold a specific price over time, and the value is tied to a reference asset. Many stablecoins are designed to maintain at $1. Digital asset firm Tether’s USDT token currently accounts for more than two-thirds of the $170 billion stablecoin market.
Elsewhere, Citi on Friday raised its price target on Robinhood stock to 23 from 19 and kept a neutral rating.
More broadly, Robinhood is a crypto-friendly free trading app at a time when brokerages are doing well and cryptocurrencies are rebounding.
Mastercard
Mastercard stock is trading in the bottom of a cup buy zone, above a 490 buy point following a Sept. 12 breakout. Investors also could use the Sept. 18 all-time high of 501.80 as a high-handle entry.
MA shares are finding support at their 21-day exponential moving average. The pause over the past couple of weeks is letting the 50-day line catch up somewhat.
Mastercard stock advanced nearly 16% in 2024.
JPMorgan on Wednesday said that Mastercard, Fiserv (FI) and FIS (FIS) will likely benefit after the Department of Justice slapped Dow Jones rival Visa (V) with an antitrust lawsuit on Tuesday. The regulator alleges that Visa illegally monopolized the debit card market in the U.S. since 2012 via incentive payments to keep competition out of the market and punishing merchants with higher fees for routing transactions. The DOJ also accused Visa of harming customers because card fees were passed on in the form of higher prices for goods and services.
JPMorgan noted that a resolution will be “multiple years in the making.”
Citi on Tuesday said it now prefers Mastercard over Visa due to the lawsuit.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
YOU MAY ALSO LIKE:
Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists
Looking For The Next Big Stock Market Winners? Start With These 3 Steps
Join IBD Live And Learn Top Chart Reading And Trading Techniques From Pros
The cold war between Google and Microsoft has 'gone hot'
A long-standing feud between Google (GOOG, GOOGL) and Microsoft (MSFT) is spilling into public view once again.
The latest shot from Google came in a complaint filed with the European Commission Wednesday, accusing Microsoft of violating the European Union’s antitrust law.
Google said in a document provided to Yahoo Finance that Microsoft illegally leveraged its dominant enterprise server software “Windows Server” licenses to force customers to stick with Microsoft for cloud computing.
Microsoft predicted Google would “fail” in this instance, saying it had already settled similar concerns raised by European cloud providers.
“Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission,” a Microsoft spokesperson said.
The new dispute demonstrates “this is a cold war that’s gone hot,” Adam Kovacevich, CEO and Founder of the tech policy advocacy group Chamber of Progress, told Yahoo Finance.
‘Scroogled’
The two tech giants have spent the last two decades battling for supremacy in technologies ranging from online search and cloud computing to the markets for operating systems, gaming software, online advertising — and now artificial intelligence, or AI.
The feud began in the first decade after Microsoft settled a landmark antitrust case brought by the US Justice Department alleging it boxed out rivals by making its browser free and the default on its dominant Windows operating system.
A 2002 settlement opened the door to broader competition in the internet browser software market and created an opportunity for Google, then a startup formed by Stanford students Sergey Brin and Larry Page, to begin its period of meteoric growth in the 2000s.
Microsoft defended its reestablished territory in a series of videos first released in 2011, in which Microsoft skewered Google with parodies suggesting that Google’s competing Gmail service, Chrome browser, and accompanying software lacked quality and privacy.
A video titled “Gmail Man” questioned Google’s ethics by accusing it of mining every word within its Gmail customers’ private emails in order to target them with advertisements.
In other videos titled “Scroogled” and “Googlighting” — a spoof on the 1980s hit television series “Moonlighting” — Microsoft questioned whether consumers should trust Google with handling their private information.
In 2016, the companies entered into a ceasefire with an agreement to end regulatory complaints against each other globally as two new CEOs — Google’s Sundar Pichai and Microsoft’s Satya Nadella — took over.
The pact came to an end in 2021 as regulators in the US and EU stepped up pressure on both companies, and Microsoft complained that Google used unfair tactics to compete in online search and advertising.
‘You brush your teeth, and you search on Google’
Things really got uncomfortable last year during a high-profile antitrust trial that pitted Google against the US Justice Department — a case that alleged Google illegally monopolized the online search engine market and had echoes of the case the DOJ filed against Microsoft in the 1990s.
The most prominent witness to testify against Google was Nadella, who did not hesitate to take a shot at his rival while on the stand.
“You get up in the morning, you brush your teeth, and you search on Google,” Nadella said, emphasizing Google’s overwhelming dominance in the search engine market.
Nadella said Microsoft’s own search engine, Bing, failed to gain traction because Google had negotiated for Google Search to get default placement on browsers, desktops, and mobile devices like Apple’s iPhones and iPads and Android-based smartphones made by Samsung and others.
Nadella went on to describe the imbalance as a “vicious cycle” that he worried would intensify with the development of AI.
Google lost the case in a judge’s ruling that labeled its search business an illegal monopoly. The resolution is now pending a remedies phase that could result in a breakup of Google’s empire.
Microsoft certainly had a lot to gain from a Google defeat, Kovacevich said.
“They were probably the main instigator of the US Justice Department’s antitrust suit over Google,” Kovacevich said. “And the guilty verdict against Google probably stands to benefit Microsoft’s Bing most of anyone.”
Microsoft is taking a similar approach in yet another antitrust lawsuit against Google that is still in its initial trial phase. It argues there that Google’s control of online advertising technologies has harmed the success of its Bing browser.
New feud before the EU
It’s unknown if the EU will take up Google’s most recent attack against Microsoft’s cloud computing rules.
Google is arguing that Microsoft imposed a 400% markup on customers to migrate their Windows Server licenses to a competing cloud service, while customers who chose Microsoft’s cloud services, Azure, could migrate for “essentially nothing.”
In making its case, Google is using the same sort of “bundling” or “tying” claims used in the 1998 case against Microsoft brought by the DOJ.
Back then, US prosecutors alleged that Microsoft illegally monopolized the market for personal computing operating systems by using its Windows operating system to give away its browser, Internet Explorer, for free.
The move bundled the browser along with Windows, eventually putting rival browser Netscape Navigator out of business.
Microsoft was eventually required to open up Windows to third party software, which paved the way for companies including Google to “interoperate” or run their browser and search software using Microsoft-powered computers.
Now, in the market for cloud computing, Google is arguing that Microsoft leveraged “dominance in one market to prevent competition on the merits in a separate, unrelated market,” according to the document shared with Yahoo Finance.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
Click here for the latest technology news that will impact the stock market
Read the latest financial and business news from Yahoo Finance
History Says the S&P 500 Could Soar: 2 Monster Stocks to Buy Now
The bull market still has legs, as the S&P 500 recently hit new highs after a recent dip. The stock market could keep climbing for at least another three years, if history is any guide.
Previous bull markets have stretched for about five years, but in the last 40 years, the stock market has tended to climb for around a decade before the next bear market strikes. Investors who put their money in top growth stocks could earn substantial returns. Here are two to buy right now.
1. Shopify
Shopify (NYSE: SHOP) is building a world-class operating system for businesses that positions it well for growth in the global e-commerce market. Its quarterly revenue growth has been consistently hovering above 20% year over year over the last year, which is pointing to a profitable investment opportunity.
Starting and growing a business is complicated, and this is why more merchants are turning to Shopify. Adjusted revenue grew 25% year over year in the second quarter, driven by a 27% increase in subscription solutions. Shopify has successfully extended its offering from online commerce tools to point-of-sale, business-to-business, and cross-border services.
As Shopify becomes a do-it-all merchant services platform, it continues to gain share of global e-commerce. Gross payments volume grew 61% year over year to $41 billion in Q2 alone. That’s an annual run rate of over $160 billion, which is a lot, but that is peanuts in a global e-commerce market expected to reach $8 trillion by 2027, according to eMarketer.
Of course, the total commerce market is much bigger than that. Total consumer payments — combining online and in-store — in the global economy are valued at $20 trillion. Consistent with that massive opportunity, Shopify’s point-of-sale platform is growing rapidly, with offline gross merchandise volume up 27% year over year in Q2. Management sees significant growth potential for its payments service through international expansion and offline business-to-business opportunities.
The stock is a great buy as it rebounds from the recent dip. The company’s momentum and future opportunities to expand internationally should deliver above-average returns for investors over the next several years.
2. Salesforce
Salesforce (NYSE: CRM) is another subscription-based business that helps companies more efficiently tackle sales leads and improve customer service. It offers a suite of software applications for managing sales, marketing, messaging, and more. International Data Corp. ranks it the No. 1 customer relationship management provider, but with just 22% market share, Salesforce still has a lot growth potential.
Salesforce has a big opportunity with its data cloud, which brings all of a company’s data together on one platform. Demand has been strong for this product, with the number of paid data cloud customers more than doubling over the year-ago quarter. Getting customers on the cloud is crucial to allow Salesforce to tap into the growing demand for artificial intelligence (AI) services.
The upcoming launch of the new Agentforce AI platform could be a game changer. This tool can analyze data, automate customer service inquiries, and qualify sales leads. Salesforce said bookings for new AI products more than doubled over the previous quarter, with 1,500 AI deals signed last quarter alone.
Salesforce is not growing revenue at the double-digit rates it was a few years ago, but the stock offers significant upside as margins increase. Free cash flow grew an impressive 20% year over year in Q2, putting the company on track to double free cash flow within five years, which is a catalyst for the share price.
The stock trades at a price-to-sales ratio of 7, which is very reasonable compared to other software companies, which trade around 10 times sales. Investors should expect the stock to increase in line with free-cash-flow growth, which means the potential to double your money by 2030.
Should you invest $1,000 in Shopify right now?
Before you buy stock in Shopify, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Shopify wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $743,952!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 23, 2024
John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Salesforce and Shopify. The Motley Fool has a disclosure policy.
History Says the S&P 500 Could Soar: 2 Monster Stocks to Buy Now was originally published by The Motley Fool
Is Palantir Stock a Buy?
Palantir Technologies (NYSE: PLTR) has been one of the market’s hottest stocks this year, with its price more than doubling. However, it is also one of the more divisive names in the market, largely due to its valuation.
Let’s take a look at both the bull and bear cases with Palantir to help determine whether the stock is a buy at current levels.
The bull case
Palantir has established itself as one of the top data gathering and analytics companies in the world. The U.S. government has used the company’s technology for such mission critical tasks as fighting terrorism and tracking the spread of COVID-19. As a result, the company’s resume is undeniable.
More recently, the company has created an artificial intelligence platform (called AIP) that is expanding its use cases and making the company’s services more desirable to commercial clients. AIP lets users build AI apps, actions, and agents in a workflow builder to help solve complex problems across industries.
The new offering has been resonating with commercial clients, as seen in its recent results. Its commercial segment revenue jumped 33% year over year in the second quarter to $307 million, while its U.S. commercial revenue surged 55% to $159 million.
The company is implementing a go-to-market strategy of using boot camps to attract new customers to its AIP offering. Through these boot camps, Palantir provides training and onboarding to demonstrate to customers how they can use AIP. This is helping greatly increase the company’s customer count, with U.S. commercial customers surging 83% year over year and 13% sequentially to 295 customers.
The company sees its next big growth driver as taking these new customer wins and moving them from prototype work into production. This is a classic land-and-expand strategy and it is still in its early days. The company showed solid net dollar retention of 114% last quarter. This is a metric that measures growth of existing customers after any churn over the past year. However, Palantir noted that this metric does not take into account the momentum it is seeing in customers acquired in the past 12 months.
At the same time, revenue growth from its largest client, the U.S. government, is starting to reaccelerate after a lull. In its most recent quarter, U.S. government revenue climbed to 23%, up from 14% overall government growth in 2023.
The company has also announced a number of government contract wins this year, including a five-year nearly $100 million deal to expand its Maven Smart System access across the military and an initial $153 million production contract to make licenses of its AI-enabled operating system available across the Department of Defense. Palantir also recently announced it is teaming up with Microsoft to deploy its services over Microsoft’s government and classified cloud environments to try to speed up the process of implementing AIP offerings within the government vertical.
Altogether, Palantir appears to have a lot of growth opportunities in front of it.
The bear case
The bear case for Palantir largely stems from its valuation, as the fervor around the stock has driven it to lofty valuations, with the stock trading at a forward price-to-sales (P/S) multiple of 30 based on current-year analyst estimates. That type of P/S multiple just does not match with the 27% revenue growth the company saw last quarter or the 17% revenue growth it generated in 2023.
Prior to the pandemic, high-gross-margin software-as-a-service (SaaS) companies with growth generally between 25% to 35% would typically trade at an enterprise value-to-revenue ratio of under 10. Palantir is currently trading at a 29 multiple based on current-year analyst estimates for revenue of $2.76 billion and 24 times 2025 analyst revenue estimates of $3.32 billion.
That’s not just a little overvalued, that is an extraordinary valuation given its current growth rate. While a huge acceleration in growth could help justify its valuation, it is worth remembering that it appears Palantir’s government business growth can be a bit lumpy. Analysts, meanwhile, are only projecting about 20% revenue growth in 2025.
At the same time, insiders have also been looking to dump Palantir shares. The company’s chairman, Peter Thiel, recently adopted a Rule 10b5-1 plan to sell nearly 28.6 million Palantir shares by the end of 2025. Meanwhile, Palantir CEO Alex Karp exercised and sold 9 million shares of options at an exercise price of $11.38 that were not set to expire until 2032 through a Rule 10b5-1 plan. It was a big increase from the 575,000 shares he sold as part of the plan in August, indicating there may have been a pre-set trigger price to accelerate his selling.
Meanwhile, other executives including its CFO, and multiple directors have also been selling shares.
While Palantir the company has a bright future ahead, price still matters and Palantir’s stock is trading at extreme levels. As such, I’d follow the lead of the company’s top executives and be a seller of the stock, not a buyer.
Should you invest $1,000 in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $743,952!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 23, 2024
Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Is Palantir Stock a Buy? was originally published by The Motley Fool
Late Stage DEADLINE TOMORROW: ROSEN, RECOGNIZED INVESTOR COUNSEL, Encourages Late Stage Asset Management, LLC Investors with Losses in Excess of $500K to Secure Counsel Before Important September 30 Deadline in Securities Class Action
NEW YORK, Sept. 29, 2024 (GLOBE NEWSWIRE) —
WHY: Rosen Law Firm, a global investor rights law firm, reminds purchasers of Pre-IPO shares through funds issued by Late Stage Asset Management, LLC between March 2019 and March 2023, both dates inclusive (the “Class Period”), of the important September 30, 2024 lead plaintiff deadline.
SO WHAT: If you purchased Pre-IPO shares through funds issued by Late Stage Asset Management, LLC between March 2019 and March 2023, you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency fee arrangement.
WHAT TO DO NEXT: To join the Late Stage class action, go to https://rosenlegal.com/submit-form/?case_id=27548 or call Phillip Kim, Esq. toll-free at 866-767-3653 or email case@rosenlegal.com for information on the class action. A class action lawsuit has already been filed. If you wish to serve as lead plaintiff, you must move the Court no later than September 30, 2024. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.
WHY ROSEN LAW: We encourage investors to select qualified counsel with a track record of success in leadership roles. Often, firms issuing notices do not have comparable experience, resources or any meaningful peer recognition. Many of these firms do not actually litigate securities class actions, but are merely middlemen that refer clients or partner with law firms that actually litigate the cases. Be wise in selecting counsel. The Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Rosen Law Firm has achieved the largest ever securities class action settlement against a Chinese Company. Rosen Law Firm was Ranked No. 1 by ISS Securities Class Action Services for number of securities class action settlements in 2017. The firm has been ranked in the top 4 each year since 2013 and has recovered hundreds of millions of dollars for investors. In 2019 alone the firm secured over $438 million for investors. In 2020, founding partner Laurence Rosen was named by law360 as a Titan of Plaintiffs’ Bar. Many of the firm’s attorneys have been recognized by Lawdragon and Super Lawyers.
DETAILS OF THE CASE: According to the complaint, during the Class Period, the defendants orchestrated a scheme whereby a network of unregistered sales agents fraudulently offered and sold retail investors purportedly “no-fee” unregistered securities in private (Pre-IPO) companies, which turned out to have artificial prices inflated with fees that the defendants took as profit. The complaint further alleges that the defendants made numerous false and misleading statements during the sale of these illegal, unregistered securities in violation of the federal securities laws.
To join the Late Stage class action, go to https://rosenlegal.com/submit-form/?case_id=27548 or call Phillip Kim, Esq. toll-free at 866-767-3653 or email case@rosenlegal.com for information on the class action.
No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff.
Follow us for updates on LinkedIn: https://www.linkedin.com/company/the-rosen-law-firm, on Twitter: https://twitter.com/rosen_firm or on Facebook: https://www.facebook.com/rosenlawfirm/.
Attorney Advertising. Prior results do not guarantee a similar outcome.
——————————-
Contact Information:
Laurence Rosen, Esq.
Phillip Kim, Esq.
The Rosen Law Firm, P.A.
275 Madison Avenue, 40th Floor
New York, NY 10016
Tel: (212) 686-1060
Toll Free: (866) 767-3653
Fax: (212) 202-3827
case@rosenlegal.com
www.rosenlegal.com
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
US Banks' $1 Trillion Windfall, CFOs' Election Predictions, And More: This Week In Economics
The past week has been a rollercoaster ride in the world of finance and economics. From U.S. banks reaping a massive windfall due to high interest rates to CFOs predicting the outcome of the upcoming presidential election and a leading Chinese economist going missing, there’s a lot to catch up on.
Here’s a quick round-up of the top stories.
US Banks Reap $1 Trillion Windfall
Major U.S. banks, including JPMorgan and Bank of America, have reportedly gained a $1 trillion windfall due to the Federal Reserve’s prolonged period of high interest rates. The Fed maintained elevated interest rates for two and a half years, allowing banks to earn higher yields on deposits held at the Fed. However, many banks did not pass these higher rates on to their savers, resulting in $1.1 trillion in excess interest revenue.
CFOs Predict Harris Victory In Presidential Election
In a recent survey, a majority of chief financial officers predict that Vice President Kamala Harris will win the upcoming presidential election, despite believing that Donald Trump would be better for the economy. The third-quarter CNBC CFO Council Survey reveals that 55% of CFOs expect Harris to prevail in the election, marking a notable shift from the previous quarter.
Ex-Obama Adviser Warns Of Threats To Fed’s Independence
Jason Furman, a key figure in former President Barack Obama’s administration, has warned about potential threats to the Federal Reserve’s independence under a possible second term of Republican presidential candidate Donald Trump. Furman argues that Trump’s campaign promises could create inflationary pressures, forcing the Fed to raise interest rates.
Leading Chinese Economist Goes Missing
Zhu Hengpeng, a leading economist in China, has vanished following critical comments about President Xi Jinping‘s economic policies. Zhu, deputy director at the Chinese Academy of Social Sciences (CASS), was detained after allegedly criticizing Xi in a private WeChat group.
Chinese Stocks Soar Following Major Stimulus
Chinese stocks, including Alibaba Group Holding Ltd, soared earlier this week following an unexpected and substantial monetary stimulus from the People’s Bank of China (PBoC). The central bank announced cuts to the reserve requirement ratio (RRR) for banks and the seven-day repo rate, just a day after lowering the 14-day reverse repo rate.
Read Next:
Photo courtesy: Shutterstock
This story was generated using Benzinga Neuro and edited by Ananya Gairola
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Medicare Advantage shopping season arrives with a dose of confusion and some political implications
Thinner benefits and coverage changes await many older Americans shopping for health insurance this fall. That’s if their plan is even still available in 2025.
More than a million people will probably have to find new coverage as major insurers cut costs and pull back from markets for Medicare Advantage plans, the privately run version of the federal government’s coverage program mostly for people ages 65 and older.
Industry experts also predict some price increases for Medicare prescription drug plans as required coverage improvements kick in.
Voters will learn about the insurance changes just weeks before they pick the next president and as Democrat Kamala Harris campaigns on promises to lower health care costs. Early voting has already started in some states.
“This could be bad news for Vice President Harris. If that premium is going up, that’s a very obvious sign that you’re paying more,” said Massey Whorley, an analyst for health care consulting company Avalere. “That has significant implications for how they’re viewing the performance of the current administration.”
Insurance agents say the distraction of the election adds another complication to an already challenging annual enrollment window that starts next month.
Insurers are pulling back from Medicare Advantage
Medicare Advantage plans will cover more than 35 million people next year, or around half of all people enrolled in Medicare, according to the federal government. Insurance agents say they expect more people than usual will have to find new coverage for 2025 because their insurer has either ended a plan or left their market.
The health insurer Humana expects more than half a million customers — about 10% of its total — to be affected as it pulls Medicare Advantage plans from places around the country. Many customers will be able to transfer to other Humana plans, but company leaders still anticipate losing a few hundred thousand customers.
CVS Health’s Aetna projects a similar loss, and other big insurers have said they are leaving several states.
Insurers say rising costs and care use, along with reimbursement cuts from the government, are forcing them to pull back.
Some people can expect a tough search
When insurers leave Medicare Advantage markets, they tend to stop selling plans that have lower quality ratings and those with a higher proportion of Black buyers, said Dr. Amal Trivedi, a Brown University public health researcher.
He noted that market exits can be particularly hard on people with several doctors and on patients with cognitive trouble like dementia.
Most markets will still have dozens of plan choices. But finding a new option involves understanding out-of-pocket costs for each choice, plus figuring out how physicians and regular prescriptions are covered.
“People don’t like change when it comes to health insurance because you don’t know what’s on the other side of the fence,” said Tricia Neuman, a Medicare expert at KFF, a nonprofit that researches health care.
Plans that don’t leave markets may raise deductibles and trim perks like cards used to pay for utilities or food.
Those proved popular in recent years as inflation rose, said Danielle Roberts, co-founder of the Fort Worth, Texas, insurance agency Boomer Benefits.
“It’s really difficult for a person on a fixed income to choose a health plan for the right reasons … when $900 on a flex card in free groceries sounds pretty good,” she said.
Don’t “sleep” on picking a Medicare plan
Prices also could rise for some so-called standalone Part D prescription drug plans, which people pair with traditional Medicare coverage. KFF says that population includes more than 13 million people.
The Centers for Medicare and Medicaid Services said Friday that premiums for these plans will decrease about 4% on average to $40 next year.
But brokers and agents say premiums can vary widely, and they still expect some increases. They also expect fewer plan choices and changes to formularies, or lists of covered drugs. Roberts said she has already seen premium hikes of $30 or more from some plans for next year.
Any price shift will hit a customer base known to switch plans for premium changes as small as $1, said Fran Soistman, CEO of the online insurance marketplace eHealth.
The changes come as a congressional-approved coverage overhaul takes hold. Most notably, out-of-pocket drug costs will be capped at $2,000 for those on Medicare, an effort championed by Democrats and President Joe Biden in 2022.
In the long run, these changes will lead to a “much richer benefit,” Whorley said.
KFF’s Neuman noted that the cap on drug costs will be especially helpful to cancer patients and others with expensive prescriptions. She estimates about 1.5 million people will benefit.
To ward off big premium spikes because of the changes, the Biden administration will pull billions of dollars from the Medicare trust fund to pay insurers to keep premium prices down, a move some Republicans have criticized. Insurers will not be allowed to raise premium prices beyond $35 next year.
People will be able to sign up for 2025 coverage between Oct. 15 and Dec. 7. Experts say all the potential changes make it important for shoppers to study closely any new choices or coverage they expect to renew.
“This is not a year to sleep on it, just re-enroll in the status quo,” said Whorley, the health care analyst.
___
The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.
Rivian's Next Step Will be a Doozy
Rivian (NASDAQ: RIVN) has a lot going for it right now. The company is charging ahead toward positive gross profits in the fourth quarter, starting a pre-owned program to generate new revenue, expanding its leasing program, building delivery vans for Amazon and AT&T, and most of all preparing its upcoming product pipeline of the R2, R3, and R3X, among other things. Despite the excitement surrounding the R2, there’s a crucial step that Rivian is taking that investors might not be fully considering.
Headed overseas
Most investors understandably think of the upcoming R2, set to launch in early 2026, as the key driving force to boosting sales in the U.S. market. It’s true; the more affordable R2, which is targeting a price tag around $45,000, far less than the low to mid-$70,000’s for its R1T and R1S, will raise sales in the U.S. market, but it also has a huge upcoming role overseas.
Rivian has no plans to sell the R1T and R1S in Europe, at least not to date, but they have planned to launch the R2 in Europe, and they are already testing the waters with a rental program. While the R1S doesn’t sell in Europe, the electric SUV is now available to rent in the U.K.
Rental firm EVision is offering the Rivian R1S, which can be rented for one day to three years. For context, EVision is the U.K.’s first and largest pure EV rental company, and it offers many popular names including Tesla models and the Porsche Taycan, among others.
The R2’s move into Europe will be a big step for Rivian, which will face stiff competition including from highly subsidized and well-received Chinese EVs, which might not be slowed much by steep tariffs from Europe and the U.S., and different consumer preferences.
Tariff speed bump
In fact, using the U.S. and its 100% tariff as an example — Europe’s tariffs on Chinese EVs are a bit more gentle — China’s leading EV producer, BYD, is likely to remain unaffected by these tariffs and continue business mostly as usual.
Even with a 100% tariff, BYD would remain the U.S.’s cheapest option for EVs and could undercut American brands. EV industry at a price tag of $25,000 or less. The story is similar in Europe, where Chinese EVs are already trying to take market share.
That’s because BYD’s cheapest electric car, the Seagull EV, which does well in China, starts at under $10,000. One reason Chinese EVs are so far ahead is that the government has highly subsidized the companies to spur an early-mover advantage — which it has successfully done. Already, Chinese automakers have an advantage with supply chains, technology, and production, which have combined to enable much lower prices.
The Chinese EV market is simply years ahead of the United States’ EV market, especially considering that in July, EVs generated over 50% of passenger vehicle sales in China for the first time, while in the U.S., EV market share was only 8.5%.
The good news
Fortunately, for Rivian investors, Rivian will rarely compete directly with Chinese EVs overseas, as many of those models are passenger cars, while Rivian has stuck with its strategy for trucks and SUVs, with the R2 being a crossover. Rivian’s R2 will be a massive boost to U.S. sales and a driving force to the company working its way toward profitability. Yet it will also be a doozy of a step for Rivian to expand sales overseas, where it will face stiff competition and different consumer preferences.
If Rivian’s R2 is a smash hit, here and overseas, the start-up EV will certainly have separated itself from other start-up EV makers.
Should you invest $1,000 in Rivian Automotive right now?
Before you buy stock in Rivian Automotive, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $743,952!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 23, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, BYD Company, Porsche Automobil Se, and Tesla. The Motley Fool has a disclosure policy.
Rivian’s Next Step Will be a Doozy was originally published by The Motley Fool
3 No-Brainer Artificial Intelligence (AI) Stocks to Buy With $400 Right Now
Artificial intelligence (AI) has been the driving force behind the current bull market. Big tech companies like Nvidia have pushed the S&P 500 to new all-time highs in 2024. However, the AI boom might still be in the early stages.
The market for AI hardware and software could grow 40% to 55% per year over the next three years, according to analysts at Bain. That could put total spending on AI close to $1 trillion in 2027.
Many AI stocks already have those high expectations baked into their price, but there are still plenty of opportunities for investors. With just $400, you could buy a share of each of these three businesses, which include hardware, software, and the all-important infrastructure needed to tie it all together.
Here are three no-brainer AI stocks to buy right now.
1. Amazon
Amazon (NASDAQ: AMZN) is the largest public cloud platform. It operates data centers around the world, renting out computing and storage capacity while providing all the tools needed to build and develop new applications.
The data-center needs for AI development are set to expand exponentially. While a large data center might cost $1 billion to $4 billion today, it could cost $10 billion to $25 billion five years from now, according to the analysts at Bain. That means more and more businesses and developers will become increasingly reliant on deep-pocketed hyperscale cloud companies like Amazon over the next few years. And the company is investing heavily to meet that demand.
Its capital spending is expected to top $60 billion this year to support the growth in AI workloads. Only a handful of companies can afford that kind of cash outlay. That puts Amazon at a huge advantage to keep growing.
Amazon Web Services (AWS), the company’s cloud computing platform, grew sales 19% in the second quarter. That’s slower than its biggest competitors, but it’s coming off a bigger base. It also represents an acceleration after growth fell to just 12% in the middle of last year.
The company is a dominant force in e-commerce, led by its Prime membership program. Strong profits are being driven by its retail media advertising and seller services. And its work to make its logistics network more efficient has translated into strong operating margin expansion over the past year for the $500 billion business.
The stock currently trades for 42 times free cash flow and an enterprise-value-to-sales ratio of 3.3. The former is near the low end of Amazon’s historic range, while the latter is about average. When you consider the accelerating growth in sales and positive trend in free cash flow, the stock looks like a great buy around $195 per share.
2. Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing (NYSE: TSM), known as TSMC, is the largest chipmaker in the world. Its ability to print transistors on silicon is unparalleled. If any company needs a cutting-edge chip that’s high powered and energy efficient, it contracts with TSMC. As such, it accounts for 60% of all spending for chip manufacturing.
TSMC’s position as the leading chipmaker creates a virtuous cycle. It generates so much more revenue than its competitors that it can heavily invest in the next generation of manufacturing technology. And that technology lead in turn gives it an edge in attracting the biggest, highest-spending customers.
Nvidia CEO Jensen Huang said his company uses TSMC because it’s the best in the industry “by an incredible margin.” While it could use another company if it had to, it would result in lower performance and higher costs for Nvidia.
TSMC stands to benefit as more and more customers look to use its services. The biggest tech companies in the world are ramping up the development and production of their own custom AI chips, and TSMC is in charge of manufacturing them.
As demand increases on TSMC’s limited resources (setting up a new manufacturing facility takes a long time), it should see strong margins on its sales. Management targets a 53% gross margin, but the potential in the near term could be much higher.
The potential growth might not be fully priced into its stock. Shares trade for just 22 times analysts’ consensus earnings expectations for 2025. Meanwhile, AI-driven demand should produce average annual earnings growth above 20% for the next five years, according to analysts. That makes the stock an incredible value at today’s price of around $180 per share.
3. UiPath
UiPath (NYSE: PATH) is the market leader in robotic process automation (RPA), which replaces repetitive tasks with software. As businesses look to improve efficiency, its capabilities improve, and developing automation software becomes easier, the company has seen strong growth.
The company’s Business Automation Platform helps enterprises discover new opportunities for efficiencies in their workflows using AI. Once UiPath lands a new customer, it can often expand its business with that customer as it uncovers new ways to streamline the customer’s operations.
Its dollar-based net retention rate was 115% in the second quarter, meaning the average UiPath customer spent 15% more than last year.
That said, the company has disappointed investors lately as competition has curbed its overall growth. Total revenue increased just 10% year over year last quarter, and management expects just 9% growth for the full year. Meanwhile, higher stock-based compensation has weighed on its earnings as measured by generally accepted accounting principles.
But there are reasons to be optimistic. UiPath’s 115% dollar-based net retention rate and 19% increase in remaining performance obligations suggest it can grow faster in the future. And the market for robotic process automation is set to grow 40% per year through 2030 driven by the cloud service model, an area where UiPath is seeing great success.
The stock currently trades for around 30 times forward adjusted earnings estimates. With strong operating leverage left in the company and double-digit revenue growth ahead of it, you should expect earnings growth that can more than justify that valuation. At about $12.60 per share, it’s worth adding to your portfolio.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $743,952!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 23, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Levy has positions in Amazon and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Amazon, Nvidia, Taiwan Semiconductor Manufacturing, and UiPath. The Motley Fool has a disclosure policy.
3 No-Brainer Artificial Intelligence (AI) Stocks to Buy With $400 Right Now was originally published by The Motley Fool
Will Kamala Harris's Plan to Raise the Corporate Tax Rate by 33% Cause Stocks to Plunge? History Couldn't Be Clearer.
In a little over five weeks, voters will head to the polls or mail in their ballots to determine which path forward our great country will take over the coming four years.
Although there are aspects to fiscal governance that have nothing to do with Wall Street, some of the laws crafted on Capitol Hill by elected officials do have bearing on corporate America and/or taxpayers.
Arguably the biggest question mark for Wall Street and the investing community is what might happen to corporate tax rates. Whereas former President Donald Trump’s flagship Tax Cuts and Jobs Act permanently reduced the corporate tax rate from 35% to a historically low 21%, current vice president and Democratic Party presidential nominee Kamala Harris has proposed increasing the corporate tax rate by a third to 28% in order to generate additional revenue.
The million-dollar question is: Will raising the corporate tax rate by 33% cause stocks to plunge? For this answer, I’ll allow history to do the talking.
Kamala Harris aims to increase the corporate tax rate by 33% — should investors be concerned?
Before diving into the meat-and-potatoes of what history has to say about previous instances of corporate tax increases and the response of equities, it’s important to understand the “why” that’s compelling Harris to propose raising taxes of businesses.
With the exception of 1998 through 2001, the U.S. federal government has spent more than it’s generated in revenue every year since 1970. These nominal-dollar deficits have ballooned over the past two decades, following the dot-com bubble, the financial crisis, and the COVID-19 pandemic. In 2023, the federal deficit neared $1.7 trillion, which has increased U.S. national debt to around $35 trillion.
The cost to service and sustain our national debt is climbing at a worrying pace and simply isn’t sustainable over the long run, which is necessitating proposals from elected officials, including presidential nominee Harris, to raise revenue and/or cut spending.
Harris’s plan to increase the corporate tax rate to 28% would play a vital role in lifting federal tax revenue by an estimated $4.1 trillion from 2025 through 2034, according to an analysis by the Tax Foundation, a Washington, D.C.-based think tank. Keep in mind this estimate includes the entirety of Harris’s tax proposal and isn’t solely based on increasing corporate taxation.
Raising the corporate tax rate, on paper, would seem to be bad news for businesses. A higher tax rate would be expected to leave less income for hiring, acquisitions, and innovation. But what makes sense on paper doesn’t always translate to the real world.
A study by Fidelity analyzed the impact of three separate types of tax increases — personal, corporate, and capital gains — over a roughly seven-decade stretch, beginning in 1950. All told, the analysts at Fidelity examined 13 separate years where at least one of these tax types increased and took into account the performance of the benchmark S&P 500 (SNPINDEX: ^GSPC) in the calendar year prior to, during, and after the tax change in question was made.
There have been five instances since 1950 where the corporate tax rate was increased: 1950, 1951, 1952, 1968, and 1993. The annual price return for the S&P 500 in these years, per Fidelity, was 22%, 16%, 12%, 8%, and 7%, respectively. On average, the S&P 500 has gained 13% when the corporate tax rate climbs.
While history can be fallible and no metric is foolproof when it comes to predicting the short-term future, corporate tax hikes have correlated positively for stocks 100% of the time since 1950.
There’s a bigger worry for stocks, and it has nothing to do with Harris or Trump
Though investors shouldn’t concern themselves too much about the prospect of a corporate tax hike if Kamala Harris is victorious in November, this doesn’t mean the stock market has a clean bill of health.
Regardless of who claims the Oval Office come January 2025, Kamala Harris or Donald Trump, they’ll be inheriting one of the priciest stock markets in history.
Thanks to the rise of artificial intelligence (AI), stock-split euphoria, and corporate earnings, as a whole, blowing past tempered Wall Street expectations, we’ve witnessed the iconic Dow Jones Industrial Average (DJINDICES: ^DJI), widely followed S&P 500, and growth stock-fueled Nasdaq Composite (NASDAQINDEX: ^IXIC), climb to multiple record-closing highs in 2024. But the broadest of these three indexes, the S&P 500, is making noise for all the wrong reasons.
Despite “value” being in the eye of the beholder, the S&P 500’s Shiller price-to-earnings (P/E) ratio, which is also known as the cyclically adjusted price-to-earnings ratio (CAPE ratio), does a remarkably good job of detailing just how outsized valuations are right now compared to the previous 150-plus years.
The P/E ratio is probably the most well-known investing metric. It divides a company’s share price into its trailing-12-month (TTM) earnings per share (EPS) to come up with a figure that can be compared to its peers, the broader market, and history to determine if a company is relatively cheap or pricey.
Meanwhile, the Shiller P/E ratio is based on average inflation-adjusted EPS over the previous 10 years. The advantage of looking at 10 years of inflation-adjusted EPS data as opposed to TTM EPS is that it smooths out shock events (e.g., the COVID-19 pandemic) that can easily throw off shorter-term valuation measures like the traditional P/E ratio.
When the closing bell tolled on Sept. 26, the S&P 500’s Shiller P/E was at 36.9. This more or less matches its high for the current bull market rally and is more than double the average reading of 17.16 when back-tested to January 1871.
What’s more concerning is how stocks have reacted following the previous five instances where the S&P 500’s Shiller P/E topped 30 during a bull market. Though there’s no rhyme or reasons to how long valuations can remain extended, the S&P 500, Dow Jones Industrial Average, and/or Nasdaq Composite have all eventually (key word!) lost between 20% and 89% of their value following these occurrences.
There have only been two other periods in 153 years — prior to the dot-com bubble bursting and late 2021/early 2022 — where stocks have been pricier than they are right now.
Although history doesn’t repeat to a “T” on Wall Street, it often rhymes. No matter what happens on Nov. 5, current stock valuations should be the biggest concern for investors.
Should you invest $1,000 in S&P 500 Index right now?
Before you buy stock in S&P 500 Index, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $743,952!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 23, 2024
Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Will Kamala Harris’s Plan to Raise the Corporate Tax Rate by 33% Cause Stocks to Plunge? History Couldn’t Be Clearer. was originally published by The Motley Fool