|Bid||287.71 x 1100|
|Ask||287.77 x 1000|
|Day's Range||287.17 - 291.76|
|52 Week Range||204.95 - 313.11|
|Beta (3Y Monthly)||1.06|
|PE Ratio (TTM)||53.78|
|Earnings Date||Sep 17, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||313.92|
The latest round of 13F filings from institutional investors were out this week, revealing to the world the stocks that some of the richest and most successful investors have been buying and selling. Takeaways ...
To receive further updates on this Adobe (NASDAQ:ADBE) trade as well as an alert when it's time to take profits, sign up for a risk-free trial of Strategic Trader today.Stocks dropped again on Wednesday as traders continued to react to negative economic news coming out of China and Europe and as longer-term bond yields continued to drop.But that's OK. At Strategic Trader, we have set up our portfolio to be able to take advantage of moments like these.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOur option-selling strategies can generate income when stocks are rising and when stocks are falling.This week, we're looking to generate some short-term income on Adobe (NASDAQ:ADBE).We took possession of shares of ADBE last week when the ADBE August 9th $302.50 put write we had sold against the stock expired in the money.When that happened, we not only got to keep the premium we received when we sold the put write, we also got some shares of ADBE that we can sell covered calls against to generate income.ADBE has been quite volatile the past two weeks, but that volatility is a good thing for us as covered-call sellers because volatile stocks tend to have options with higher premiums.Daily Chart of Adobe (ADBE) -- Chart Source: TradingViewThe higher the premium, the more income we make when we sell a covered call.For this covered call, we set our strike price at the same price we paid for the shares of ADBE when the stock was put to us.By using this same strike price, we guarantee that we will break even on the stock trade if ADBE suddenly shoots higher and closes above our strike before the calls expire and the stock gets called away from us.But regardless of whether the call we're selling expires in the money or out of the money, we'll get to keep all the profits we make based on the call option's premium.Because we expect ADBE to remain below our strike price in the short term, we've set our expiration date for this trade out only about two weeks.If the option expires out of the money at that time, we plan to sell another covered call against our shares as soon as possible to generate even more income.To find out which ADBE covered calls we're selling--and to get access to our full portfolio of income-generating trades--sign up for a risk-free trial of Strategic Trader today.InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of Strategic Trader.The post Generating Income on Adobe (ADBE) appeared first on InvestorPlace.
IBM (NYSE:IBM) stock continues to struggle. Since hitting highs above $215 per share in 2013, the shares have seen a steady decline. Today, the IBM stock price has fallen below $132 per share.Source: Shutterstock Amid evolving technologies, IBM has to pivot again to remain relevant. It has attempted this feat by buying Red Hat. Investors are bailing out of the shares as integration of the Linux maker will take time. Given the time lag and the falling profits, owning the stock amounts to a gamble on whether management can successfully absorb Red Hat into the company. IBM Stakes its Future on Red HatAs the name International Business Machines implies, the company came to prominence by providing the "computers" that stood at the cutting edge of technology decades ago. What was once known as "Big Blue" has long since ceased to act as an innovator. Yet, it has remained relevant for decades by building businesses around technologies invented by others.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe question on investors' minds now revolves around whether this company can reinvent itself yet again. In a software arena dominated by the likes of Adobe (NASDAQ:ADBE), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG), the company faces a daunting challenge.It took a huge leap forward in the cloud by purchasing Red Hat. As InvestorPlace contributor David Moadel wrote earlier this week, the move makes IBM a "serious contender" in the open-source software arena. Still, one can understand why IBM stock plunged following management's last quarterly report when they told the public that Red Hat would not help boost earnings until 2021. Where Will IBM Go Next?This leaves investors in International Business Machines stock with two key questions: how will IBM perform while the company fully absorbs Red Hat, and will the acquisition ultimately lead to a turnaround in the shares? * 7 Safe Dividend Stocks for Investors to Buy Right Now The drop in IBM stock following the last earnings report means investors should expect very little of the equity for now. Revenue and profits will fall for fiscal 2019. Also, analysts only see modest growth on both measures in 2020. This makes the forward price-to-earnings (PE) ratio of 9.8x appear less appealing. Moreover, the sentiment helped to take the IBM stock price down to about $131.25 per share after Wednesday's market carnage.Answering the question of whether Red Hat will turn IBM around will simply take time. It has remained a force in technology years after the tech it invented became obsolete. That by itself stands as a testament to the firm's resiliency. Still, I would not consider a comeback in IBM stock a sure thing. In truth, it has become a riskier stock than one might think. Mind the DividendThis danger is strongly tied to the IBM dividend. At first glance, the payout looks robust. It currently yields 4.9% and has increased for 22 straight years. The coveted "dividend aristocrat" status requires 25 years of payout hikes. However, this dividend currently eats up more than 65% of the company's profits; that number was about 26.5% as recently as 2014. * Stocks Under $7 to Invest in Now Slashing a payout usually leads to years of stagnation for an equity. Hence, companies like to maintain these streaks if possible. In 1993, IBM reduced its dividend in a bid to save the company. Fortunately for shareholders, the dividend cuts then led to only a short-term selloff in IBM stock. Still, should Red Hat fail to turn the revenue and profit picture for IBM around, the company may have no choice but to cut the payout again. If this happens, traders should not count on a quick recovery for the stock this time. Bottom Line on IBM stockThe near-term prospects for a recovery in IBM stock begin and end with Red Hat. Evolving technologies have hurt profit growth for the venerable tech firm. The company hopes its takeover of the Linux maker will give IBM the technology -- and street cred -- it needs to remain relevant.Simply put, though, IBM stock has no obvious path to recovery without Red Hat. Moreover, the increasing cost of maintaining its dividend depends on this success. Should it cut its payout, it could suffer years of stagnation like other companies forced to surrender their dividend aristocrat status.For now, buying IBM stock has become a gamble on the company's success at integrating Red Hat. A favorable outcome would probably take it back to 2013 highs above $215 per share. A failure means lower dividends and a stagnant or falling stock price, possibly lasting years.How lucky do you feel?As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post Linux-maker Red Hat Purchase Adds Risk to Owning IBM Stock appeared first on InvestorPlace.
When looking for the best artificial intelligence stocks to buy, investors should expand their search to unexpected fields. Salesforce.com and Trade Desk are among AI stocks on IBD's radar.
From the beginning of June to late July, NVIDIA (NASDAQ:NVDA) was on the comeback trail. Nvidia stock went from $134 to $179 during this period.Source: Shutterstock Yet lately things have come undone. Of course, the overall market has been bearish and the situation with U.S.-China relations have deteriorated quickly. So yes, the Nvidia stock price has come under lots of pressure.In fact, for the past 12 months, the return is an awful -39%. This is certainly in stark contrast to the prior years when Nvidia could do no wrong.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo what now? Perhaps NVDA is an opportunity here? Well, on Thursday the company will report its results for the second quarter after the market closes, and this will certainly be an important one. * 15 Growth Stocks to Buy for the Long Haul Here's what the Street is looking for: * Revenues are forecasted to drop by 18% to $2.55 billion (keep in mind that the company's own estimate is for a range of $2.5 billion to $2.6 billion). * Earnings are expected to come to $1.14 per share.Even with the estimated decline on the top-line, NVDA still may have a challenge in beating the forecast. The data center business appears to still be languishing, especially given the impact from rival Advanced Micro Devices (NASDAQ:AMD). The gaming business also continues to have problems.Here's what Instinet analyst David Wong wrote:"With data-center (GPU) sales growing just 4% QoQ in the October 2018 quarter, then falling 14% sequentially in the January 2019 quarter and a further 7% QoQ in the April 2019 quarter (April 2019 down 10% YoY), we expect another YoY decline in data-center segment revenues in the July 2019 quarter and possibly again in the October 2019 quarter." Nvidia Stock Quarterly HighlightsNVDA definitely had an active quarter. Here are some of the notable announcements: * The company said that partners like Dell Technologies (NYSE:DELL), HP (NYSE:HPQ), Lenovo and BOXX will release ten new NVIDIA RTX Studio laptops and professional-grade mobile workstations. They will highlight new capabilities like real-time ray tracing, advanced AI and ultra-high-resolution video editing. * At the SIGGRAPH conference, NVDA announced that top software developers, such as Adobe (NASDAQ:ADBE) and Autodesk (NASDAQ:ADSK), have created over 40 applications for the RTX technology. * NVDA launched various new GPUs, including GeForce RTX 2060 SUPER, GeForce RTX 2070 SUPER and GeForce RTX 2080 SUPER, allowing for next-generation games. What's more, this core RTX technology will be used in the eagerly awaited game, Cyberpunk 2077 (it won over 100 awards at E3 2019). * The company entered a strategic alliance with Volvo Group for the development of autonomous trucks. * NVDA announced a breakthrough in AI language understanding, which should make it easier for businesses to engage with customer conversations. The company's AI platform can train one of the most sophisticated models, called BERT, in less than an hour -- making inferences in just over 2 milliseconds. Bottom Line on Nvidia StockThere's no doubt that NVDA has been prescient in leveraging its GPU expertise into markets beyond gaming, such as the data center and AI. The result is that the company has become a mega powerhouse in the chip industry.But the problem is that the competition is starting to take a toll. For example, companies like Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC), Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) and Amazon.com (NASDAQ:AMZN) are creating their own AI chips. There are also a myriad of startups, like Graphcore, that are gunning for the opportunity.In the meantime, the situation with US-China relations appears to be far from resolved. This is particularly troublesome for NVDA because it has about 23% exposure to China.So in light of all this, it's probably best to hold off on the stock ahead of this week's earnings report.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post It Looks Like a Tough Quarter for Nvidia Stock Ahead of Earnings appeared first on InvestorPlace.
NetApp Inc. this year paid its median employee just shy of $200,000 — a level that puts it on par with some of Silicon Valley's biggest companies and represents a 26 percent jump, year-over-year.
There's no denying Shopify (NYSE:SHOP) has shocked the world. SHOP stock is up more than 165% in 2019, and Shopify stock has rallied an incredible 2000% since its 2015 IPO by doing what many said can't be done. That is, penetrating an e-commerce market dominated by Amazon (NASDAQ:AMZN).Source: Shutterstock SHOP's magic formula has been behind the stratospheric surge of SHOP stock. That formula involves empowering online merchants with tools and information that eBay (NASDAQ: EBAY) and Amazon don't exactly want their sellers to have. The fact that 5,300 companies are using Shopify's products shows that it's got what businesses want. * 7 Large-Cap Stocks to Sell Right Now The enthusiasm of the owners of SHOP stock is understandable.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe huge rally of Shopify stock in just the past few months, though, has left SHOP stock uncomfortably vulnerable to profit-taking and short-selling. Shopify's growth doesn't justify the current valuation of SHOP stock. Shopify Validates the Business ModelFor ages, investors have argued about how far into the future they should look.Amazon is the obvious poster child for an answer along the lines of "many, many years." It was a habitual money loser since its inception in 1994, and didn't start turning consistent profits until 2015. But, now that it's in the black, it's tremendously in the black.Shopify may well be on a similar path.There's a dangerous difference between Amazon then and Shopify now, however. Then, it wasn't entirely clear that e-commerce could ever be profitable. Now, with the industry fully matured, it clearly can be profitable. As a result, many companies with new approaches will enter the sector, while established players like Walmart (NYSE:WMT) are stepping up their game.SHOP, in fact, is one of those newcomers. It's the un-Amazon. It's not even eBay facilitating the establishment of truly independent e-commerce platforms.Others will follow. Shopify Stock Really Does Have a Valuation ProblemThis competition won't be problematic for Shopify stock, though. Indeed, even though Shopify's 10% share of the all-in-one e-commerce platform market is less than that of WooCommerce's and Squarespace, SHOP has arguably already won the battle for mind-share. It should be the market leader, sooner or later.As of the most recent look, however, SHOP stock, with a market cap of $44 billion, is valued as 34 times its trailing 12-month revenue of $1.3 billion. That's not 34 times its earnings, to be clear, which would be considered frothy by most standards. That's 34 times revenueSHOP stock reached that huge valuation even though SHOP wasn't consistently profitable until last year. Based on this year's projected profit of $69 million, SHOP stock is valued at 637 times SHOP's earnings.That's not necessarily the end of the world. Shopify is a work in progress. The market has rewarded less successful names, with less promising prospects.But the point where the current SHOP stock price of $369 will be justified is so far down the road that it can't actually be seen. The 2021 outlook for revenue of $2.7 billion and net income of $218 million still leaves Shopify stock valued at 16.3 times the company's sales and more than 200 times its earnings.On average, stocks are valued at three times companies' revenue, and between 15 and 20 times their earnings.Most people don't realize that the current valuation of Shopify stock isn't justified. It's all based on hype, rooted in the premise that somebody finally figured out how to beat Amazon at its own game. Shopify would have to obliterate its estimates for the next several years to justify the current price of SHOP stock (let alone a higher price) at a time when competitors are improving their own products. The Bottom Line on SHOP StockI'm not suggesting SHOP stock is destined to immediately roll over and lose a big chunk of its value.It's entirely possible -- even likely -- we're at the start of something of a melt-up, as the fear of missing out on continued rallies by Shopify stock pulls more buyers into the incredible rally. Things like fundamentals don't matter until the majority of traders decide they matter, and right now, they don't matter for Shopify stock. A short squeeze may also be in play, artificially pushing the shares higher.Make no mistake though. Every stock always eventually reflects tangible value. Even on a risk-adjusted, potential-adjusted basis, SHOP stock is already in jeopardy.Tread lightly.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 Dividend Aristocrat Stocks to Buy Now No Matter What * 7 Stocks to Buy to Ride the Vegan Wave * 4 Safe Stocks to Buy Amid Trade War Turbulence The post Shopify Is Crushing It, But SHOP Stock Is Set to Be Crushed appeared first on InvestorPlace.
In these days of wild market fluctuations, revisiting your portfolio through the dual lenses of circles of competence and comfort can be quite helpful Continue reading...
See who joins Nvidia, Alibaba, Veeva, Ulta Beauty, and Five Below on this screen based on the investing strategy of Berkshire Hathaway CEO Warren Buffett.
Welcome back, volatility. From the beginning of June to the end of July, the S&P 500 climbed to all-time highs. It did so without ever retreating more than 2%. Now stocks have dropped more than 5% in just a few trading days. Why? The market received bad news in back-to-back days with regards to the only two things investors care about.Source: Shutterstock First, the Fed "only" cut rates by 25 basis points. They also signaled a more hawkish-than-expected tone regarding future rate cuts. Second, U.S. President Donald Trump upped the trade war ante the very next day. He implemented a 10% tariff on $300 billion worth of Chinese goods that, up until early August, had simply been talk.I get why markets are plunging in response to these two downward catalysts. I also think that stocks will bounce back soon. Trump wants lower rates. The easiest way for him to force the Fed to cut rates is to up the trade war. So he did just that. Now, the Fed is going to cut rates. That will normalize the yield curve by dragging down the short end.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAt the same time, the 10-Year Treasury yield will remain below 2% because of muted inflation. That's ideal for the stock market since it supports higher equity valuations. Further, once rates get cut, it's very likely that we get some good news on the trade war front (both because Trump will have what he wanted in lower rates and because this trade war follows a rather predictable cycle). * 10 Generation Z Stocks to Buy Long Thus, today we have a sharply inverted yield curve with the threat of sizable tariffs on the horizon. By the end of 2019, though, we will most likely have a normalized yield curve with tariff threats reduced. The 10-Year Treasury yield will also likely be below 2%. That's a recipe for materially higher stock prices.Consequently, I think this late summer dip in stocks is a buying opportunity into the end of the year. Which stocks am I buying in particular? Here's a list of 10 stocks I think look good amid recent trade war weakness. Stocks to Buy on the Trade War Dip: Adobe (ADBE)% off 2019 Highs: 9%Trade Exposure: Visual cloud giant Adobe (NASDAQ:ADBE) doesn't have much trade war exposure. There is the risk that escalating trade tensions continue to drag on global economic growth, which may weigh on enterprise IT spend and could eat into Adobe's growth trajectory. But, that is about as limited trade war exposure as you will find in the market.Secular Growth Drivers: Adobe is supported by multiple secular growth drivers which should withstand trade war tensions. The first of these secular drivers is the enterprise pivot from on-premise to cloud solutions, which remains only about 20% complete. Due to the cost-saving advantages of cloud over on-premise, this should withstand the rising cost aspect of tariffs. The second secular driver is the global consumer pivot towards visual consumption. The world is becoming increasingly visual every day, and as it does, more enterprises are adopting Adobe's visual cloud solutions to create visually compelling content that resonates with consumers. This pivot will not be disrupted significantly by trade war tensions.Near Term Catalysts: Adobe just reported yet another double-beat earnings report which comprised robust revenue and profit growth. Thus, the growth trajectory here remains favorable. As it does, strong earnings reports will converge on a depressed stock, and spark a nice recovery rally in ADBE stock. Adobe is a stock to buy. Facebook (FB)% off 2019 Highs: 11%Trade Exposure: Digital advertising giant Facebook (NASDAQ:FB) has some trade war exposure as higher costs could pressure U.S. companies. Tariffs mean higher input costs for a lot of small- to medium-sized U.S. retailers and merchants. Many of those companies will not be able to pass on those higher costs to consumers. As such, they will have to absorb higher input costs. That will pressure margins. In response, some of those companies may reduce their ad budgets. If so, that would mean less ad revenue from these companies into Facebook.Secular Growth Drivers: It's unlikely Facebook gets hit much by this reduced ad spend. Instead, if U.S. companies do reduce their ad spend in response to higher input costs, they will likely reduce spend on smaller ad platforms, like Yelp (NYSE:YELP). They almost certainly won't cut Facebook or Instagram ad spend. And that speaks to this company's secular advantage -- it's unparalleled size and reach among the global consumer. So long as this advantage remains in play, and so long as ad dollars continue to shift into the digital channel -- which they should given increases in digital content consumption -- Facebook's secular growth trajectory will remain robust, regardless of trade war noise. * 10 Stocks to Buy From This Superstar Fund Near Term Catalysts: Facebook just started pushing forward on the e-commerce front. As relatively nascent e-commerce businesses like Instagram Shopping gain traction over the next several quarters, investors will start to salivate over the long-term potential of the commerce growth vertical. This will lead to strong investor demand for shares of FB, which should ultimately push Facebook stock higher for the foreseeable future. Electronic Arts (EA)Source: Shutterstock % off 2019 Highs: 17%Trade Exposure: Video game publisher Electronic Arts (NASDAQ:EA) has very limited exposure to the trade war since the video game industry has been largely exempt from tariffs, and projects to remain so for the foreseeable future.Secular Growth Drivers: There are three big secular growth drivers supporting EA stock, all three of which will withstand and outlast trade war noise. First, the sleepy video game industry is on the verge of a huge leap forward with the 2020 release of next-gen consoles -- the first in eight years -- and the 2019/2020 release of cloud gaming platforms. Second, EA has successfully jumped into the "free-to-play" arena with Apex Legends and is set to win big as free-to-play games gain traction over the next few years. Third, EA's portfolio line-up, including Madden and NBA Live, is optimally positioned for eSports. As eSports continue to grow over the next few years, EA should be at the center of all that growth.Near Term Catalysts: Over the next few quarters, it's all about cloud gaming, new consoles, and Apex Legends for EA stock. The release of cloud gaming platforms in late 2019 should breath life back into the stale video game industry. New console releases in 2020 should build on that momentum, and supercharge growth across the whole industry. Meanwhile, EA's second iteration of Apex Legends has been a big success so far. As such, this company's numbers will significantly improve over the next few quarters, and as they do, EA stock will bounce back, making this a stock to buy. Square (SQ)Source: Shutterstock % off 2019 Highs: 22%Trade Exposure: Payments processor Square (NYSE:SQ) has some exposure to the trade war, but it is largely limited to increased input costs for its hardware devices, which represent an increasingly small and unimportant part of Square's overall revenue and profit pie.Secular Growth Drivers: The secular growth driver supporting SQ stock is the global pivot from cash to cash-less payments, which has been happening rapidly and will continue to over the next several years, regardless of how the trade war plays out. The bigger the trade war gets, the less consumers spend, and the slower Square grows. But, the cash-less movement will remain robust, so regardless of how broader consumption trends play out, Square's secular growth driver will remain strong. * 8 of the Most Shorted Stocks in the Markets Right Now Near Term Catalysts: SQ stock is down recently because the company gave a weak guide shortly before the market started to tank. The two compounded on each other, and Square stock now finds itself in bear market territory. But, management is notorious for "sandbagging" guidance. Thus, Q3 numbers will likely come in much better than expected. If that happens, you will have a double-beat report converging on a depressed stock, which should result in a big rally for SQ stock the next time earnings roll around. Lululemon (LULU)% off 2019 Highs: 10%Trade Exposure: Of all the stocks to buy on this list, Lululemon (NASDAQ:LULU) arguably has the most trade war exposure, since nearly 60% of the company's products are manufactured in South East Asia, with 12% manufactured in China. Thus, bigger tariffs mean higher costs, and presumably lower margins.Secular Growth Drivers: There are two secular drivers supporting LULU stock. One, athletic apparel adoption rates are soaring across the world, since consumers are increasingly obsessed with looking good, being healthy, and leading active lifestyles. Two, Lululemon dominates the high-quality niche of this secular growth athletic apparel market, and as such, has exceptionally high consumer demand and brand equity. This will enable the company to weather the trade war by passing higher costs onto consumers without adversely impacting demand. Revenues and margins should remain on a steady uptrend for the next several years, regardless of trade war noise.Near Term Catalysts: The market is presently underestimating the secular strength of the athletic apparel market, and Lululemon's ability to pass higher costs onto consumers without adversely impacting demand. As such, while investors are expecting next quarter's profit numbers to come in lighter than expected, they won't. Instead, it will be yet another double beat quarter, the likes of which will converge on a relatively depressed LULU stock to spark a big rally. Qualcomm (QCOM)% off 2019 Highs: 23%Trade Exposure: Chip giant Qualcomm (NASDAQ:QCOM) has plenty of trade war exposure, since at its core, this is a smartphone company, and the core of the smartphone growth narrative is the rapid urbanization of developing economies, the biggest of whom is China. Thus, rising trade tensions could impact global smartphone demand, which could have an adverse impact on Qualcomm's numbers.Secular Growth Drivers: The bigger story -- and more important growth driver -- at Qualcomm is the mainstream and widespread roll-out of 5G smartphones in 2020. Much like next-gen console releases in 2020 will breathe life back into what has become a stale video game industry, 5G smartphone releases in 2020 will similarly breathe life back into what has become a stale and tired global smartphone industry. This reinvigorated growth will power strong results for Qualcomm over the next several years, which should keep QCOM stock on a long term winning trajectory. * 7 Stocks to Buy With Over 20% Upside From Current Levels Near Term Catalysts: See above. It's all about 5G, and 5G smartphones will start to roll out in 2020. Ahead of that big catalyst, you will likely see investors buy into QCOM stock, especially if trade tensions cool off. Alphabet (GOOG)% off 2019 Highs: 11%Trade Exposure: Digital ad giant Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), much like Facebook, has exposure to the trade war through reduced ad spend as tariffs force U.S. companies to potentially re-think ad budgets.Secular Growth Drivers: The secular growth drivers here are two-fold, and are the same as Facebook's secular growth drivers. One, consumers are only spending more time in the digital channel, so ad dollars will continue to pivot in bulk into that space. Two, Alphabet is the biggest player in the digital ad space with the most reach, so even if U.S. companies do start to re-think their ad budgets, they likely won't reduce spend on Alphabet's platforms. On top of all that, Alphabet's cloud business is supported by secular cloud adoption tailwinds which won't be impacted in any big way by trade issues.Near Term Catalysts: Alphabet just reported a really strong second quarter earnings report wherein revenue and profit growth accelerated sequentially, powered by increasing cloud momentum and improving margin performance. GOOG stock popped big in response to that report. It has since given up all of those gains because of macro headwinds. These macro headwinds won't stick around. Once they disappear, investors will look back at the Q2 earnings report and say, "hey, that was a pretty good print." They will consequently buy back in, and GOOG stock will turn back higher. Twilio (TWLO)Source: Shutterstock % off 2019 Highs: 18%Trade Exposure: Cloud communications company Twilio (NASDAQ:TWLO) has essentially zero direct trade war exposure, although it could be negatively impacted by a global economic slowdown as a result of escalating trade tensions.Secular Growth Drivers: The secular growth narrative at Twilio is all about cloud communications. Real-time communication is becoming an increasingly important part of the consumer experience. That is, in order to enhance their experiences, enterprises are increasingly employing real time communication. Twilio enables this real time communication. As real time communication becomes the norm in consumer experiences over the next several years, every company will adopt these services. Many of them will adopt Twilio, since they are the leader in the market. Nothing about this secular growth narrative is adversely impacted in the long run by trade tensions. * 7 Stocks to Sell This Summer Earnings Season Near Term Catalysts: Twilio just reported a double beat-and-raise earnings report which topped expectations everywhere. Q2 revenues and profits beat estimates. The Q3 revenue and profit guides were above-consensus, too. The FY19 revenue and profit guides were lifted to above-consensus marks. Despite this strength, TWLO stock is down big since that report. Why? Macro noise. This macro noise will fade. When it does, the company's strong internals will move back into spotlight. That transition should propel a nice rebound in TWLO stock over the next few months, especially if rates remain depressed (and if the Fed cuts rates further). Canopy Growth (CGC)Source: Shutterstock % off 2019 Highs: 40%Trade Exposure: Cannabis giant Canopy Growth (NYSE:CGC) has limited exposure to the U.S.-China trade war. However, the worry here is that tariffs are the new norm everywhere. If so, Canadian-based Canopy Growth could have a tough time expanding globally.Secular Growth Drivers: The secular growth narrative is that Canopy is the unchallenged leader in a cannabis market that while small today, projects to be huge at scale, given underlying consumption trends which show marijuana's popularity is huge and growing. Trade disputes impact this narrative to the extent that they might stifle Canopy's international growth prospects. But, it seems like a leap to assume that tariffs are the new global norm. Anything short of that, it's tough to see Canopy's secular growth narrative being derailed by trade.Near Term Catalysts: Canopy's numbers last quarter weren't good. In fact, they were bad enough that the CEO got fired. Next quarter's numbers should be a lot better. Canadian cannabis volume trends have improved significantly over the past few months. Peer Aphria (NYSE:APHA) also reported strong numbers which underscore that things are getting better. Further, cannabis 2.0 products like vapes and edibles are set to launch in Canada later this year. The launch of these products should provide meaningful revenue and margin tailwinds for Canopy. Net net, the numbers over the next few quarters should improve dramatically, and spark a big rebound in CGC stock. Alibaba (BABA)% off 2019 Highs: 22%Trade Exposure: Chinese commerce giant Alibaba (NYSE:BABA) has a ton of trade war risk. Most importantly, Alibaba goes as the China consumer economy goes. That consumer economy has weakened as trade tensions have risen. If trade tensions keep going up, China's consumer economy could keep slowing. If so, Alibaba's once super robust growth trajectory will continue to flatten out.Secular Growth Drivers: The long term fundamentals underlying BABA stock are highly favorable. What you have in China is a consumer economy with well over 1 billion consumers, less than 60% of whom are connected to the internet. In developed economies like the U.S. and Canada, the internet penetration rate is essentially north of about 90%. Thus, China has ample runway to add hundreds of millions new internet-connected consumers over the next several years. All those consumers will flow into the Alibaba ecosystem, since Alibaba is the de facto e-commerce platform in China. Against the backdrop of this secular growth narrative, current trade war noise is just a bump in the road.Near Term Catalysts: It's tough to point to a catalyst on the horizon for BABA stock. The reality is that, so long as trade tensions remain hot between the U.S. and China, BABA stock will remain weak. Thus, buying the dip here require patience. Long term, such patience will be rewarded. This stock has tremendous growth potential in a multi-year window. Alibaba just has to move past near term trade issues in order to realize that long term potential.As of this writing, Luke Lango was long ADBE, FB, EA, SQ, LULU, QCOM, GOOG, TWLO, CGC, and BABA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cyclical Stocks to Buy (or Sell) Now * 7 Biotech ETFs That Should Remain Healthy * 7 of the Hottest AI Stocks to Buy Now The post 10 Stocks to Buy on the Trade War Dip appeared first on InvestorPlace.
Microsoft (NASDAQ:MSFT) stock has dropped recently as the stock market has tumbled on interest rate and trade-war concerns. MSFT stock, like the the S&P 500, presently trades about 4% off of its all time highs.Source: Shutterstock The reality of Microsoft stock is that, if the market keeps dropping on trade and interest-rate concerns, so will MSFT stock.MSFT is not immune to these market headwinds. The company's double-digit-percentage revenue growth rate is somewhat reliant upon healthy macro economic conditions, and those conditions are deteriorating because of rising geopolitical tensions and trade uncertainty.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Cyclical Stocks to Buy (or Sell) Now Meanwhile, MSFT stock is also somewhat reliant upon rates staying lower for longer in order to support its rich valuation, and investors are unsure as to whether or not rates will stay lower for longer.Thus, if the market keeps dropping on interest rate and trade concerns, MSFT stock will keep dropping, too, no matter what Microsoft news is reported.But it will drop a lot less than other tech and growth stocks because. relative to other tech and growth stocks, Microsoft stock is significantly less exposed to interest-rate and trade headwinds. That's because the valuation of MSFT stock isn't that rich, nor is its business that dependent on favorable economic conditions.Consequently, for investors who are looking for safety amid the recent market turmoil but also want growth, MSFT seems like the perfect stock to buy. Microsoft Stock Isn't Immune, But It's Partially ShieldedMicrosoft stock is not immune to interest rate and trade headwinds. But it is partially shielded, and this partial protection makes MSFT stock an attractive, "safe tech stock" to buy in turbulent times.On the trade front, MSFT is partially shielded from trade headwinds because its core business is supported by non-cyclical adoption tailwinds.Specifically, Microsoft's business is all about the cloud today. The company is capitalizing on the non-cyclical pivot from on-premise solutions to cloud solutions.This pivot may slow somewhat as global economic conditions deteriorate and as enterprises pull back on IT spending and investment.But the pivot won't stop. Instead, enterprises will continue to shift to the cloud.The pace of the transition could even increase if the economy slows because cloud solutions provide significant cost savings relative to on-premise solutions.As a result, Microsoft's business won't materially slow as a result of escalating trade headwinds. Instead, its business should remain largely steady and stable.On the interest rate front, MSFT stock is partially shielded because its valuation isn't that rich relative to other tech/growth stocks. MSFT stock trades at 25 times analysts' average forward earnings estimate.That's rich. But it's not that rich. Other big cloud stocks - like Adobe (NASDAQ:ADBE), Salesforce (NYSE:CRM), ServiceNow (NASDAQ:NOW), and Workday (NASDAQ:WDAY) - all trade at over 35 times analysts' average forward earnings estimate.Thus, if rates do creep higher, Microsoft stock won't be pressured as much as other big-name tech stocks.For these two reasons, MSFT stock is a relatively good buy in turbulent times. Indeed, this scenario is already playing out. MSFT stock is presently only 5% off its recent highs. By contrast, every FANG stock is in correction territory. This relative outperformance of MSFT stock will persist. The Long-Term Outlook of MSFT Stock Remains CompellingThe long-term bull thesis on Microsoft stock remains compelling, even amid recent market headwinds.As stated earlier, Microsoft's core cloud businesses are supported by non-cyclical cloud adoption tailwinds. These tailwinds may slow somewhat in the face of global economic uncertainty. Or they may accelerate, as enterprises look to cut costs as times get tough. But these tailwinds won't die. Only 20% of enterprise workloads are in the cloud today. Over time, that number will rise towards 100%. Thus, MSFT can easily sustain double-digit-percentage revenue growth for the next several years.MSFT's gross margins will continue to rise as its cloud businesses, particularly Azure, grow. Double-digit-percentage revenue growth should also be enough to increase its profitability. Share buybacks will also be in play.That combination should produce roughly 15% EPS growth. Reasonably speaking, then, Microsoft's EPS could reach $12 by fiscal 2026. Based on a forward PE multiple of 20, which is average for growth stocks, that equates to a fiscal 2025 price target of $240. Discounted back by 10% per year, we arrive at a fiscal 2020 price target of roughly $150.Thus,MSFT stock can rise meaningfully both over the next 12 months and the next five years. The Bottom Line on MSFT StockThings are getting choppy in the stock market right now, and as they do get choppy, tech and growth stocks will get hit extra hard because they have ample exposure to trade and interest-rate headwinds.But, relative to that tech and growth group, Microsoft stock will outperform in turbulent times because it has less-than-average exposure to the aforementioned headwinds. As a result, for investors looking to stick with growth but also seeking some stability amid the recent volatility, MSFT stock looks like a good choice.As of this writing, Luke Lango was long MSFT and ADBE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cyclical Stocks to Buy (or Sell) Now * 7 Biotech ETFs That Should Remain Healthy * 7 of the Hottest AI Stocks to Buy Now The post Why Microsoft Stock Is a Relatively Safe Tech Stock to Buy appeared first on InvestorPlace.
Silicon Valley's largest technology stocks tumbled on Monday as Wall Street closed out its worst day of 2019 amid rapidly escalating U.S.-China trade tensions.
Fund managers weigh in on what the Federal Reserve’s decision to cut rates means for growth and value funds. Growth stocks are pricey, but now have more room to run.
EVP, Gen. Counsel & Secretary of Adobe Inc (30-Year Financial, Insider Trades) Dana Rao (insider trades) sold 2,832 shares of ADBE on 07/30/2019 at an average price of $303.36 a share. Continue reading...