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Big October Winners: CRISPR, Alteryx, NVIDIA, Quidel

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·7 min read
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Long time followers know that I have been raving about two technologies that will dramatically change the world as we know it: CRISPR-Cas9, the "genetic scissors" of gene editing, and artificial intelligence.

This week, Jennifer Doudna and Emmanuelle Charpentier, the two women who pioneered how a billion-year old technology could be used to edit genes, were awarded the 2020 Nobel Prize in Chemistry for their collaboration on Clustered Regularly Interspaced Short Palindromic Repeats, aka CRISPR.

The reason I say it's an application of a "billion-year old" process is because bacteria evolved to edit and thus disrupt the DNA of invading viruses eons ago.

From Wikipedia...

“CRISPR is a family of DNA sequences found in the genomes of prokaryotic organisms such as bacteria and archaea. These sequences are derived from DNA fragments of bacteriophages that had previously infected the prokaryote. They are used to detect and destroy DNA from similar bacteriophages during subsequent infections.”

A prokaryotic organism is one with simple, single-cell structure, whereas the eukaryotic cells of plants, animals and fungi have a nucleus which protects their DNA. I'm reading a fascinating book right now, Joseph LeDoux's The Deep History of Ourselves: The Four-Billion-Year Story of How We Got Conscious Brains (Viking, 2019), which explains how bacteria and archaea interacted billions of years ago to form the foundations of all life.

Why Is CRISPR So Revolutionary?

According to the NIH, in the CRISPR model, bacteria capture snippets of DNA from invading viruses and use them to create DNA segments known as CRISPR arrays. The CRISPR arrays allow the bacteria to "remember" the viruses (or closely related ones).

From today's Nature article on the award, by Heidi Ledford & Ewen Callaway...

The Nobel Committee’s selection of Emmanuelle Charpentier, now at the Max Planck Unit for the Science of Pathogens in Berlin, and Jennifer Doudna, at the University of California, Berkeley, puts an end to years of speculation about who would be recognized for their work developing the CRISPR–Cas9 gene-editing tools. The technology allows precise edits to the genome and has swept through laboratories worldwide since its inception in the 2010s. It has countless applications: researchers hope to use it to alter human genes to eliminate diseases; create hardier plants; wipe out pathogens and more.

In the video that accompanies this article, I share my experience and joy investing in and trading the primary public companies who owe their existence, in varying degrees, to Doudna and Charpentier: CRISPR Therapeutics CRSP, Editas Medicine EDIT and Intellia Therapeutics NTLA.

Artificial Intelligence: The Other Mega Disruptor

While the life sciences and physics are stealing the show this week, I wondered what Nobel awards have been given to computer theorists and architects. A Google search revealed The Turing Award, an annual prize given by the Association for Computing Machinery (ACM) for contributions "of lasting and major technical importance to the computer field." It is generally recognized as the highest distinction in computer science -- often called the "Nobel Prize of Computing" -- and has been given every year since 1966. From Wikipedia...

The award is named after Alan Turing, who was a British mathematician and reader in mathematics at the University of Manchester. Turing is often credited as being the key founder of theoretical computer science and artificial intelligence. From 2007 to 2013, the award was accompanied by an additional prize of US$250,000, with financial support provided by Intel and Google. Since 2014, the award has been accompanied by a prize of US$1 million, with financial support provided by Google.

I was pleased to see that Judea Pearl won the award in 2011, and that the wizardly trio of Yoshua Bengio, Geoffrey Hinton, and Yann LeCun won in 2018 for their conceptual and engineering breakthroughs in convolutional deep neural networks.

I can't wait to see if any NVIDIA NVDA engineers should ever win since they are making hardware and software stacks for deep learning and AI that boggle the mind. In the video, I share some of the recent NVDA news that has shares back up near all-time highs after their annual GPU Tech Conference has analysts raising their outlooks and price targets on the $100 billion hyper-scale data center TAM (total addressable market) that Jensen Huang & Co. practically dominate.

Last week, I did another deep-dive on NVIDIA's gaming prowess -- which drives their R&D in AI -- where I interviewed a veteran gamer, my colleague Dave Bartosiak...

Throne of Games: How NVIDIA and Microsoft Rule

Some of My Favorite Birds: Archaeopteryx and Phoenix

In the video, I also share action in some of my other favorite stocks to buy-and-trade, like Alteryx AYX which just pre-announced a great Q3 and sent the stock up 28% Tuesday.

And then there's Quidel QDEL, another rising phoenix that is handing us 70% gains in my TAZR Trader portfolio after announcing FDA Emergency Use Authorization for their newest rapid-results COVID test which is a combo influenza plus SARS-CoV-2 antigen assay. Quidel calls it their "ABC test" because it works for influenza A+B and COVID-19.

William Blair analyst Brian Weinstein believes that having a rapid antigen product that can simultaneously distinguish between influenza A, B, and COVID-19 is value creating for patients, clinicians, and the company as we are now in the 2020-2021 influenza season. With a shortage of tests from other providers like Abbott -- the CDC estimates the US needs over 175 million kits per month -- this has already led QDEL management to raise their revenue forecasts significantly for Q4.

Weinstein noted that many people who would not ordinarily get flu tests and those who may just have seasonal respiratory viruses other than influenza will look for confirmation they have neither influenza nor COVID-19. He expects Quidel's price for the product to be about 50% higher than the stand-alone COVID-19 assay.

Also on Friday, we saw these comments from Piper Sandler's Steven Mah, following my Thursday night commentary QDEL Warns... of Massive Revenues:

Piper Sandler analyst Steven Mah was pleased with Quidel's positive pre-announcement on October 1 and the recent contracts wins with the Pac-12 and Big Ten to supply millions of tests. COVID-19 testing will "remain durable for the coming years (even with a vaccine) and the market is large enough for multiple players," Mah told investors in a research note last Friday. He believes Quidel can capture $1.08 billion and $1.58 billion of COVID-19 revenue in 2020 and 2021, respectively, up from prior COVID-19 estimates of $650 million and $1.15 billion.

Mah also said last week that he would be a buyer of the stock at current levels (then under $240) and kept his Overweight rating on shares with a $360 price target.

The Roaring 20s Bull Market

Finally, on Monday I wrote a special report for Zacks Confidential titled Demographics and Economics: A Strong Case for the Roaring 20s Bull Market.

As I looked at the big-picture potential of this decade for investors, I pivoted off of my colleague Tracey Ryniec’s relentless pursuit of real property and my ideas about the future of software (remote, virtual, intelligent) eating the planet.

In that report, I explain why I'm recommending stocks like Square, The Trade Desk TTD, and Shopify for long-term investors.

If you want a copy, just email Ultimate@Zacks.com and tell 'em Cooker sent you!

Disclosure: I own shares of NVDA, EDIT, NTLA, SQ, TTD, AYX, and QDEL.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
Quidel Corporation (QDEL) : Free Stock Analysis Report
 
Editas Medicine, Inc. (EDIT) : Free Stock Analysis Report
 
The Trade Desk Inc. (TTD) : Free Stock Analysis Report
 
Intellia Therapeutics, Inc. (NTLA) : Free Stock Analysis Report
 
CRISPR Therapeutics AG (CRSP) : Free Stock Analysis Report
 
Alteryx, Inc. (AYX) : Free Stock Analysis Report
 
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