TFT #78: AMD, Okta, and AI Stocks Surge in Tandem with Bitcoin's Momentum, and More
Hello Reader,
In this issue, we cover the remarkable surge in stock values for AMD and cloud computing leader Okta, driven by positive market sentiment and robust financial performances. Additionally, we delve into the significant upswings experienced by c3.ai (AI) stock, the recent momentum seen in Bitcoin's market, and more.
Let’s get into it.
AMD Sets New All-Time High as Bulls Rally: What's Next for the Semiconductor Giant?
Advanced Micro Devices (AMD) reached a historic milestone on Friday, smashing through its previous all-time high record to hit $202. The surge in AMD's stock price reflects the bullish sentiment surrounding the semiconductor industry and the company's promising prospects.
As investors eagerly anticipate AMD's next move, analysts are eyeing potential resistance levels. If the current bullish momentum persists, we could see AMD's stock price extend beyond key resistance areas, including $208, $219, and $229. These levels represent significant milestones for the company and could serve as indicators of further upside potential.
The semiconductor market is experiencing robust growth, driven by increasing demand for AI-related servers and data center accelerators. With AMD positioned as a key player in this space, investors are optimistic about the company's ability to capitalize on emerging opportunities and deliver strong financial performance in the coming quarters.
Moreover, AMD's recent breakthrough in market valuation underscores its growing influence in the industry. As the company continues to innovate and expand its product portfolio, analysts remain bullish on its long-term growth prospects.
While the road ahead may present challenges, particularly in navigating market fluctuations and competitive pressures, AMD's recent achievements signal a promising trajectory for the semiconductor giant. As investors await further developments, all eyes will be on AMD as it charts its course in the dynamic semiconductor landscape.
(Disclaimer: AMD are one of the stocks/ETFs we are currently trading/investing)
Zoom Video Communications Surges After Crushing EPS Estimates
Zoom Video Communications, Inc. ($ZM) stunned investors with a 56% earnings per share (EPS) beat, propelling its stock price by 11% to US$68.17 following the full-year results announcement. While revenues hit the expected US$4.5 billion mark, Zoom surpassed expectations with a (statutory) profit of US$2.07 per share, exceeding forecasts by an impressive margin. Analysts promptly adjusted their earnings models to assess the company's future prospects.
According to the consensus forecast from 29 analysts, Zoom is expected to achieve revenues of US$4.62 billion in 2025, marking a 2.1% revenue increase compared to the previous year. However, statutory EPS is projected to decline by 3.0% to US$2.03 during the same period, despite a notable expansion in EPS expectations post-results.
While the consensus price target remained stable at US$79.01, analyst estimates varied, ranging from a bullish US$95.00 per share to a bearish US$57.00. This divergence indicates differing views on Zoom's future performance, although it does not suggest extreme optimism or pessimism.
Zoom's revenue growth is expected to slow significantly, with a forecasted annualized growth rate of 2.1% by the end of 2025, contrasting sharply with the historical growth rate of 37% over the past five years. This slowdown places Zoom behind industry peers, which are projected to grow revenue at a rate of 12% per year.
In summary, while Zoom's EPS upgrade signals improved sentiment, revenue forecasts imply a subdued performance compared to industry peers. The company's long-term prospects are crucial, with estimates extending to 2027. Despite mixed guidance for the upcoming quarter and fiscal year 2025, Zoom's authorization to repurchase up to $1.5 billion of its Class A common stock indicates confidence in its future trajectory
Technically, ZM has been consolidating above the $60 price level. The earnings report served as a catalyst, breaking the 50-day simple moving average (SMA), which it is currently maintaining. If this level holds and the price rises above $72, we might anticipate a retest of upper resistance levels at $75, $79, $84, and potentially up to $89.
(Disclaimer: ZM is one of the stocks/ETFs we are currently trading/investing)
Bitcoin Skyrockets Amidst Market Frenzy
In the midst of market speculation, Bitcoin catapults to astronomical heights, showcasing the wild volatility inherent in the cryptocurrency world. Despite its lack of intrinsic value, Bitcoin's surge to near all-time highs within 15 months of a significant decline indicates the fervent optimism pervading the market.
Fueling this frenzy is a palpable fear of missing out (FOMO), evident in the manic trading activity and soaring prices. Today's rollercoaster ride saw Bitcoin's value breach $60,000, only to plummet within minutes, erasing billions in value. The intense trading activity even led to temporary glitches on platforms like Coinbase, highlighting the unprecedented demand.
Coinbase ($COIN), a leading cryptocurrency exchange, reported record-breaking trading volumes, further accentuating the resurgence of interest in digital assets. Concurrently, equity market proxies for crypto, such as Microstrategy ($MSTR), witnessed soaring trading volumes, reflecting the broader market euphoria.
Amidst this crypto frenzy, U.S. investing platform Webull announced plans to go public through a SPAC deal, capitalizing on the current market fervor. As the cryptocurrency market continues to captivate investors worldwide, the allure of digital assets shows no signs of abating.
(Disclaimer: COIN is one of the stocks/ETFs we are currently trading/investing)
C3.ai Targets Skyrocket: Analysts Bullish on Growth Prospects
C3.ai, Inc. ($AI) shareholders have reason to celebrate following the company's robust financial performance in its latest quarter. With revenues surpassing expectations at US$78 million, a 3.0% beat, and statutory losses narrower than anticipated at US$0.60 per share, investor sentiment has been notably positive. Analysts have subsequently adjusted their earnings projections, prompting an examination of the company's future prospects.
Post-earnings forecasts indicate a consensus among 13 analysts for C3.ai to achieve revenues of US$367.1 million in 2025, marking a substantial 24% increase from the previous year. Losses are expected to narrow by 2.6% to US$2.21 per share. While revenue forecasts remained stable, there was a slight uptick in the consensus regarding losses per share.
Although analysts now predict higher losses, the average price target has risen by 6.6% to US$26.67, suggesting that these losses may be considered temporary or unlikely to significantly impact the company's long-term trajectory. Nevertheless, investors are advised to consider a range of estimates rather than fixating on a single price target. Analysts' valuations for C3.ai vary widely, with price targets ranging from US$15.00 to US$40.00 per share, reflecting differing perspectives on the company's future performance.
Looking ahead, analysts anticipate continued revenue growth for C3.ai, aligning with its historical trend of 19% annual growth over the past five years. This growth rate exceeds the broader industry's forecasted growth of 12% annually, positioning C3.ai as a potential outperformer within its sector.
While analysts have revised loss estimates upwards for the next fiscal year, C3.ai's sustained revenue growth outlook remains promising, driving an upgrade in the price target. This suggests analysts' confidence in the company's improving intrinsic value over time.
Okta Surges on Stellar Earnings: Analysts Bullish on Future Growth
Okta's ($OKTA) stock witnessed a significant surge following its impressive quarterly results, with both market enthusiasts and analysts alike expressing optimism for its future trajectory. BofA Global Research notably upgraded its rating to Buy, reflecting a rare double upgrade on the stock.
Despite facing a significant security breach in the previous year, Okta's latest financials showcased resilience and strength. CEO Todd McKinnon highlighted robust demand from a larger clientele, dismissing concerns of spending fatigue reported by competitors. The stock soared 22% in recent trading, marking its largest one-day percentage increase since December 2022.
Analysts, including Madeline Brooks from BofA, have become increasingly bullish, with price targets being revised upwards. Brooks notably doubled her price target to $130, reflecting a positive sentiment on Okta's growth prospects. Other analysts have also raised their price targets, underscoring confidence in the company's ability to navigate challenges and sustain growth.
Okta's stellar performance in Q4, coupled with optimistic guidance for fiscal year 2025, has instilled confidence among investors, reaffirming its position as a promising player in the cybersecurity sector amidst evolving market dynamics.
Beyond Meat's Bold Turnaround Sparks Investor Enthusiasm
Beyond Meat's ($BYND) shares are sizzling as the company unveils ambitious turnaround strategies amidst challenges in its plant-based meat empire. Facing sales stagnation and widening losses, Beyond Meat shifts its focus to five key pillars: cost reduction, product renovation, pricing adjustments, capital allocation, and European expansion. Investor excitement surges as short interest fuels a stock rally, despite ongoing operational challenges.
BYND embarks on aggressive cost-cutting, targeting a $70 million reduction in operating expenses for 2024. It aims to streamline production and discontinue less lucrative products like Beyond Meat Jerky. The company's strategy includes launching its fourth plant-based beef iteration and implementing pricing programs to restore margins.
Despite a challenging fiscal quarter, management remains optimistic, emphasizing profitability plans and operational restructuring. However, uncertainties loom amidst intense competition and market saturation. With investor enthusiasm driving shares higher, the success of Beyond Meat's turnaround hinges on the effective execution of its strategic initiatives.
(Disclaimer: BYND is one of the stocks/ETFs we are currently trading/investing)
Dell Technologies Hits Record High on AI Surge
Dell Technologies ($DELL) witnessed a remarkable surge, hitting an all-time high after unveiling its fiscal 2024 financial results. Despite a 14% decline in net revenue and a 10% drop in operating income, Dell's stock soared by approximately 27%, reaching unprecedented levels since its re-entry into the public market in 2018.
The standout performance stems from robust demand for Dell's AI-optimized servers, with orders spiking by nearly 40% sequentially. The company's backlog for AI-related products surged to $2.9 billion, reflecting escalating interest in artificial intelligence solutions.
While Dell's Client Solutions Group (CSG) faced a 12% revenue decline, its Infrastructure Solutions Group (ISG) showcased resilience, buoyed by solid demand for networking equipment and AI servers. Dell's strategic focus on AI positions it favorably for future growth, with plans to unveil new AI-driven products at Dell Technologies World in May.
Despite near-term market softness, Dell remains optimistic about long-term prospects, particularly in its CSG business. However, with Dell's stock soaring by 200% over the past three years, investors are advised to tread cautiously amidst valuation risks, despite the company's strong performance and optimistic outlook.
Dell has surged above the $100 price level, reaching $131, nearing the channel's upper boundary. A retracement is probable to fill the lower gap on the chart, potentially retesting support levels at $111 and $103. Should these support levels hold and confirm, a rebound is likely, signaling a continuation of the upward trend. In such a scenario, anticipate price movements targeting upper resistance levels at $131, $138, $147, and potentially reaching as high as $158.
Justice Department Targets UnitedHealth Amid Cybersecurity Concerns
The Justice Department's scrutiny of UnitedHealth takes center stage as regulators examine the relationship between its insurance unit, UnitedHealthcare ($UNH), and its health-services division, Optum. With UnitedHealth's dominance in the U.S. health insurance market, antitrust concerns resurface, especially in light of its recent cybersecurity issues. Analysts question how UnitedHealth's acquisitions of doctor groups impact competition and consumers. Despite past regulatory challenges, ongoing investigations into its acquisition of Amedsiys and other relationships unsettle investors, compounding existing concerns over rising medical costs. With UnitedHealth's stock under pressure, the market awaits updates on the company's ongoing cyber crisis. The 10-day cyberattack on its subsidiary, Change Healthcare, by the Russian-backed ransomware group Blackcat further adds to UnitedHealth's challenges, leaving healthcare providers unpaid and pharmacies unable to fill prescriptions. As UnitedHealth navigates these challenges, the long-term implications remain uncertain amidst evolving regulatory and cybersecurity landscapes.
Duolingo's Remarkable Surge: A Closer Look at Its Fourth Quarter Success
Duolingo ($DUOL) investors are celebrating as the language learning platform reports an exceptional performance in its fourth-quarter earnings. The company's stock soared over 30% this week, hitting an all-time high and boasting a market cap of $10 billion.
Key highlights include a significant jump in daily active users (DAUs) by 65% to 26.9 million and a surge in paid subscribers by 57% to 6.6 million. Financially, Duolingo recorded impressive revenue growth of 45% in Q4, reaching $151 million. Notably, add-on purchases skyrocketed by 94% in 2023 to $34.7 million, contributing to the company's profitability.
With a free cash flow of $47.7 million and a margin of 31.6% in Q4, Duolingo demonstrates remarkable growth while maintaining profitability—a rare feat in today's market.
However, despite the company's stellar performance, investors should approach with caution. At a market cap of $10 billion, Duolingo trades at a significant premium, raising concerns about future earnings growth already being priced into the stock. While Duolingo's business is thriving, its stock's high valuation suggests potential risks for investors amid elevated expectations.
DOUL is currently breaking out above a descending trend line around the $220 mark. Should the price sustain this level and surpass the previous all-time high of approximately $246, we could anticipate further upward momentum. In such a scenario, the price may test upper resistance levels at $258, $275, and potentially reach as high as $292, representing the channel top.
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