Best Stocks trends: AI, e-Commerce, and BioMedical
The rise of AI
According to investment firm Oppenheimer, the next great technological frontier is artificial intelligence, and the hardware that enables it is a quickly increasing industry.
Artificial intelligence hardware might be valued at $105 billion by 2025, according to Oppenheimer.
According to Oppenheimer, Nvidia is the “AI accelerator 800lb gorilla.” In addition to its AI expertise, the chipmaker is a market leader in gaming and cryptocurrency mining.
Nvidia stock has recently risen 41.9 percent in the last three months and 34.7 percent this year. The company’s first-quarter financial results, which were released in May, exceeded Wall Street’s expectations.
“In our opinion, NVIDIA remains a thought leader,” Schafer said. “Within the semiconductor space, NVIDIA was one of the first to recognize the AI market opportunity and significantly pivoted its offerings to address the market faster than peers.”
Oppenheimer observes that Nvidia has a sizable market share in GPUs, which are the number-crunching graphics processors used in AI, PC games, and cryptocurrency mining.
According to Oppenheimer, Intel, which invented the first microprocessor, is the dominant player in data center server processors. According to Oppenheimer, the company controls nearly 90% of the market for CPUs (central processing units).
According to Oppenheimer, AMD has gained some market share in the CPU market but still trails Intel. The semiconductor company’s stock is down 11% year on year but up 5% in the last three months.
According to Oppenheimer, Qualcomm is the market leader in mobile chip platforms. “Qualcomm’s technology is well suited for edge AI applications, and it should continue to grow rapidly,” Schafer said.
Oppenheimer’s list also includes Broadcom, Marvell, and Xilinx as AI silicon developers.
Consumers and e-Commerce
Still, consumers continue to buy home-furnishing goods, even as some investors fear that the trend is ending as the epidemic eases, according to Jim Cramer.
In response to the extraordinarily high demand for technology products and services, Barry said during a conference call Thursday after the company beat Wall Street expectations for its fiscal first-quarter earnings that “customer demand for technology products and services was extraordinarily high.”
Barry said, “All of these activities, including working, studying, cooking, entertaining, redesigning, and renovating, are a part of our daily routine.
Cramer believes Barry’s comments are important for investors trying to determine how long pandemic-era tailwinds will last.
“The theme is still for real … and everyone keeps wondering when it will run out,” Cramer said, suggesting that some market participants believe this is final quarter where an elevated emphasis on home spending will boost earnings. That is why Best Buy’s stock was moving slowly on Friday, according to him.
Best Buy isn’t the only retailer who expects it to continue, according to Cramer. “There’s just a shift in what people do, and they don’t think it’ll stop,” he said, referring to industry executives.
He mentioned, for example, that Williams-Sonoma CEO Laura Alber attested to the durability on Thursday’s episode of “Mad Money.”
“You can see right now, we’re comping the pandemic time last year and really, I think, outperforming what anyone expected us to do,” Alber told Cramer on the show. “We don’t see that stopping because we have so many growth initiatives that are ahead of schedule, and they’re all in their infancy, so can you imagine how they’ll grow as they get going?”
Even if only a tiny number of patients utilize the medicine, Biogen’s approval of the Alzheimer’s treatment might be a profitable move for the business, according to Cowen.
Following the clearance of the medicine, known as Aduhelm, the company’s shares rose 38% on Monday.
According to Cowen analyst Phil Nadeau, who upgraded the company to outperform from market perform, the shares have much more potential ahead.
“This is also a turning point for Biogen. There are 6 million individuals in the United States who have Alzheimer’s disease – Aduhelm addresses a significant unmet need and business opportunity,” according to the letter.
The medicine will be priced at $56,000 per year. Biogen CEO Michel Vounatsos told CNBC that the pricing was “reasonable” and promised not to raise it for the next four years.
According to Cowen, the medicine will be taken by 8% of mild Alzheimer’s patients by 2025, earning $7 billion in sales. Aduhelm’s successful development comes at a time when Biogen’s multiple sclerosis treatments are under increased challenge from generic competitors.
“A very moderate penetration of the Alzheimer’s population will generate money in the billions of dollars.” According to the note, “respondents to a poll of Alzheimer’s experts we performed in February 2021 predict around 15% of patients with moderate cognitive impairment related to Alzheimer’s to be on treatment [within] 3 years after launch.” “According to several payor respondents in our study, penetration might be far higher.”
The brokerage increased its price objective for the company from $225 to $450 per share. The revised target is 13.7 percent higher than the stock’s closing price on Monday.