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VIENNA (AP) — Russia’s state-owned natural gas company Gazprom stopped supplies to Austria early Saturday, according to the Vienna-based utility OMV, after OMV said it would stop payments for the gas following an arbitration award.

The official cutoff of supplies before dawn Saturday came after Austrian Chancellor Karl Nehammer on Friday held a hastily called news conference to emphasize his country has a secure supply of alternative fuel for this winter.

OMV said it would stop paying for Gazprom gas to its Austrian arm to offset a 230 million-euro ($242 million) arbitration award it won from the International Chamber of Commerce over an earlier cutoff of gas to its German subsidiary.

The Austrian utility said in an email that no gas delivery was made from 6 a.m. on Saturday.

OMV said Wednesday it has sufficient stocks to provide gas to its customers in case of a potential disruption by Gazprom, and said storage in Austria was more than 90% full.

“Once again Putin is using energy as a weapon,” EU Commission President Ursula von der Leyen wrote in a post on X, formerly known as Twitter. “He is trying to blackmail Austria & Europe by cutting gas supplies. We are prepared for this and ready for the winter.”

Russia cut off most natural gas supplies to Europe in 2022, citing disputes over payment in rubles, a move European leaders described as energy blackmail over their support for Ukraine against Russia’s invasion.

European governments had to scramble to line up alternative supplies at higher prices, much of it liquefied natural gas brought by ship from the U.S. and Qatar.

Austria gets the bulk of its natural gas from Russia, as much as 98% in December last year, according to Energy Minister Lenore Gewessler.

The 2024 presidential election and President-elect Donald Trump is headed back to Washington. The Republican party also won control of the Senate and the House of Representatives.

If Trump’s previous tenure in the Oval Office is an indicator for what can be expected, there’s a good chance for a less stringent regulatory environment.

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One of my big predictions under a Trump presidency is that mergers and acquisitions (M&A) will see a notable uptick. Below, I’ll explain the factors that inhibited deal activity in recent years and make the case for why M&A could make a comeback. In addition, I’ll outline why Viking Therapeutics (NASDAQ: VKTX) is an obvious acquisition candidate.

Before I became a writer at The Motley Fool, I spent a decade working on M&A deals at investment banks and start-ups. While companies are always curious about what strategic opportunities are out there, there are a number of factors that determine whether an acquisition makes financial sense.

During the past few years, M&A deal flow has been particularly sensitive to the following:

1. Interest rates: Between March 2022 and July 2023, the Federal Reserve raised interest rates a total of 11 times. Broadly speaking, companies rarely have enough cash on the balance sheet to finance a large-scale acquisition (deals in excess of $10 billion). In these circumstances, a company will turn to a bank or group of banks that lend the business capital to fund the deal. However, such an approach to dealmaking has been less appealing in recent years due to the high-interest-rate environment.

2. Inflation: The Fed’s consistent rate hikes were aimed at curbing inflation, which reached relatively high levels in the past few years. An inflationary environment isn’t the best time to make an acquisition as it just adds another layer of complexity during an otherwise challenging time to navigate.

3. Valuation: Despite a tough macroeconomic environment, the stock market has remained resilient. The S&P 500 has hit 50 record highs just this year. With valuations soaring across all industry sectors, it makes sense for acquisition appetites to dwindle. Companies want to avoid taking on expensive debt and overpaying for an asset.

4. 

I see two catalysts that could reignite M&A under the Trump administration. First, back in September, the Fed finally started cutting interest rates. The initial 50-basis-point reduction was complemented by another 0.25% earlier this month. This all comes as inflation rates continue to show signs of cooling after peaking at about 9% back in the summer of 2022.

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The second reason I think M&A could see an uptick under a Trump White House is due to changes I think he’ll make inside the federal government. Specifically, I don’t think Lina Khan, chairwoman of the Federal Trade Commission (FTC), is going to remain in her position under a Republic-controlled Congress.

During the past four years, Khan has resisted many big-ticket acquisitions — consistently citing antitrust concerns. Although there are legitimate arguments to be made over heightened regulatory scrutiny, acquisitions can be a very good thing if executed smoothly (I do hold a slight bias given my experience).

Viking is a clinical-stage pharmaceutical company that’s looking to enter the piping hot weight loss market. The company has a number of compelling obesity medication candidates, one of which could be a real disruptor to weight loss market incumbents such as Novo Nordisk and Eli Lilly.

Jared Holz, a research analyst at Mizuho, recently implied that big pharma companies looking to encroach on Novo and Lilly may be willing to pay in the ballpark of $15 billion for Viking. Considering Viking’s current market cap sits at about $6.2 billion, Holz’s outlook suggests there could be some major upside should the company be acquired.

Given that Viking is still an early-stage company and doesn’t yet have consistent revenue, the company may be eager to partner or join forces with a larger player that can help with costs related to clinical trials or even manufacturing capabilities.

With all of this said, it’s important to keep in mind that everything discussed here is speculation. There’s no guarantee that M&A deals will rebound under the new Trump administration, nor is there any firm evidence of Chairwoman Khan being replaced. Even if Viking receives interest from bigger pharmaceutical companies, there’s always a chance the two parties won’t agree on a price and a potential deal falls apart.

Given the above, I wouldn’t encourage investing in Viking stock purely based on speculation that it could get bought out for a premium.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $23,818!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,221!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $451,527!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 11, 2024

Adam Spatacco has positions in Eli Lilly and Novo Nordisk. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.

Prediction: Acquisitions Will Skyrocket Under The Trump Administration. Here’s 1 Pharmaceutical Company I Have My Eyes On. was originally published by The Motley Fool

Palantir (NYSE: PLTR) has been one of the hottest stocks of the year, rising around 275% as of the time of writing. However, a massive chunk of that gain came right after Palantir’s blowout third-quarter earnings; the stock rose 23% the next day. But that strength has continued well past the day following earnings, as the stock is now up 56% since the company announced outstanding results on Nov. 4.

Clearly, many investors are piling into Palantir’s stock, but is that a good idea? After all, the stock has seen a massive run-up and has sky-high expectations built into it.

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Palantir is an artificial intelligence (AI) company that made a name for itself by creating custom AI models for the government. Eventually, it expanded to the commercial space. As of Q3, government business still makes up the majority of its revenue, but it’s a very close split, with government revenue making up 56%.

Palantir’s AI model gives decision-makers real-time guidance based on the data it receives. This is useful in any situation where real-time decisions must be made quickly and accurately. Considering that’s a huge chunk of what governments and businesses do, it makes sense that Palantir’s business is rapidly growing, with many clients rushing to implement AI into their systems.

Another key product Palantir has introduced is its Artificial Intelligence Platform (AIP). AIP allows its clients to integrate AI throughout a business’s inner workings, making AI a tool that isn’t just used on the side. That’s a key differentiator from many AI products available and has been a big reason for Palantir’s blowout results.

In Q3, Palantir’s revenue rose 30% year over year to $726 million. In particular, U.S. commercial revenue rose 54% year over year. Should this demand spread worldwide, it wouldn’t be out of line to see its overall revenue growth accelerate to that level.

Furthermore, Palantir isn’t a growth-at-all-costs business. It is highly profitable and delivered a 20% profit margin in Q3.

These are fantastic results that investors should cheer on. However, if the stock’s exuberance has priced in all future growth, then there’s no reason to own it moving forward. I’m worried that we’ve reached that point, as the expectations built into Palantir’s stock are quite lofty.

While 30% revenue growth is impressive, it’s not that impressive. AI leader Nvidia saw multiple quarters where its revenue growth was above 200%, and even as it’s slowing down, Nvidia is still projected to grow its revenue by about 80% next quarter.

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However, Palantir is now trading at levels that Nvidia’s stock never reached.

With Palantir having a more expensive price tag than Nvidia, despite it having an order of magnitude slower revenue growth, it doesn’t pass the smell test.

Furthermore, if you consider what expectations are built into the stock now, it’s clear Palantir has gone up too far, too fast.

Let’s say the target for Palantir’s stock is to trade for 50 times trailing earnings (still a very expensive valuation). Additionally, let’s assume that Palantir maintains its 30% revenue growth and its current 20% profit margin. At that rate, it will take over six years to achieve that valuation.

That assumes two things: First, the stock price doesn’t budge from today’s prices, and second, the share count doesn’t rise. Considering that Palantir’s share count rose 3.5% over the past year, that’s a bad assumption and would further increase the amount of time it would take to achieve our target.

In reality, Palantir likely has around seven years of growth priced into the stock price already at its current growth rate and profitability level. This is a massive figure and will likely not work out well for investors. As a result, I think it’s best for investors to avoid the stock or at least trim some of their gains. Few stocks (if any) have ever traded for more than 50 times sales and worked out. If Palantir were tripling its revenue like Nvidia did in its prime, I wouldn’t have this same opinion, but 30% revenue growth just isn’t going to cut it for its current valuation.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $23,818!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,221!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $451,527!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 11, 2024

Keithen Drury has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.

Investors Are Piling Into Palantir Stock After Revenue Soars. Should You Follow? was originally published by The Motley Fool

Micron Technology (NASDAQ: MU) stock surged nearly 80% in early 2024 and reached an all-time high of $153.14 on solid adoption of its high-performance memory products in the data economy. Despite this success, the stock is currently down by almost 32% from those highs.

Investors were disappointed with the company’s fiscal 2024 third-quarter results (ended May 30), especially AI sales which fell short of lofty expectations. Furthermore, geopolitical and supply chain challenges plaguing the overall semiconductor industry also did not help overall investor sentiment for Micron.

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The difficult days, however, may now become a thing of the past. Micron came out with impressive results for its fiscal 2024’s fourth quarter (ended Aug. 29) in late September, with revenue and earnings beating analysts’ estimates. The company has been a major beneficiary of the explosive demand for memory and data storage products in various applications such as high-performance computing, autonomous driving, data analytics, and complex AI models.

This is evident considering that the company’s high-margin high-bandwidth memory (HBM) chip inventory (a type of dynamic random access memory or DRAM chip) is already sold out until 2025.

Wall Street is also optimistic about Micron. For the 44 analysts covering Micron stock, the median target price is $145.96, implying an upside of 40% from here. This seems to be a plausible target, considering the many strengths of Micron stock. Here’s why Micron is well poised to surge in the coming months.

Data center server unit shipments are expected to grow in 2024, driven by increasing demand for AI and traditional servers. Data centers are also expected to replace multiple older-generation servers with fewer latest-generation traditional servers for performance improvements, higher power efficiency, and better space management.

Plus, DRAM and NAND content in conventional and AI servers is rising to meet the memory demands of complex applications in areas such as cloud computing, artificial intelligence, and 5G connectivity. All these trends bode extremely well for Micron’s memory offerings.

Micron has been at the forefront of leveraging this growing opportunity. The company is investing capital in the advanced one-beta DRAM node technology as well as G8/G9 NAND process technology to increase the production capacity of its high-margin DRAM offerings, including Double Data Rate 5 (DDR5), Low Power Double Data Rate 5 (LPDDR5), and HBM chips, as well as advanced NAND chips.

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