Apple (NASDAQ: AAPL) is a stock to buy according to JPMorgan
Analyst Samik Chatterjee reiterated his overweight rating for Apple and increased his price target to $180 per share. Chatterjee stated in a client note on Thursday that the outlook for iPhone sales is improving.
“We are increasing our CY22 iPhone volume estimates (to 246 million units) and see significant upside relative to consensus expectation, which has admittedly been increasing over the past few months due to higher iPhone 12 volumes,” the note said.
JPMorgan’s new price target is 23% higher than the stock’s closing price on Wednesday. Apple’s stock has risen 17 percent in the last three months, reversing a slow start to the year. Its market capitalization is now $2.4 trillion.
The consumer electronics behemoth released the iPhone 12 last year, and Wall Street regarded the sales as a success despite supply-chain issues that have plagued the industry as a whole. The iPhone 13 is expected to be unveiled later this year.
JPMorgan predicts that demand for the iPhone 13 will be lower than for the 12, which was seen as a bigger update, but that 5G capability will continue to drive sales.
“Our expectations are based on an estimated moderation in the upgrade rate to iPhone 13 relative to iPhone 12, but offset by higher volumes for the lower-ASP, but 5G enabled iPhone SE to be launched in CY22 and provide upside through the upgrade of a large installed base looking for a more affordable 5G device,” according to the note.
JPMorgan is far from alone in its optimistic view of Apple.
Top investor promotes Avid Technology (NASDAQ: AVID) as a stock to buy
Lauren Taylor Wolfe co-founded the fund, which has an activist bent in the environmental, social, and governance space. The portfolio is heavily concentrated in just a few stocks, and the founders are looking for companies with long-term viability.
According to filings, the new stake in Envestnet is worth approximately $108 million, making it the fund’s fifth largest holding.
The $270 million position accounts for approximately 22% of the portfolio. The company creates, markets, sells, and supports software for the media industry. Avid Technology shares have recently weakened, but they are still up nearly 70% for 2021 and more than 220 percent over the last year.
SLM Corp., an education loan company, is the fund’s second largest holding, with Asbury Automotive rounding out the top three. During the second quarter, Impactive increased its stake in the auto-holding company by 22%. This year, the stock is up 31%.
During the second quarter, Impactive doubled down on its Wex holding, increasing its share count by about 63 percent. This year, the stock of the payment processing and information management solutions provider has dropped 15%.
During the second quarter, the fund increased its holding of KBR, making it the fund’s fourth largest holding.
Taylor Wolfe made the case for KBR in May, calling it a “deeply misunderstood company” with a potential 75 percent return. The stock has dropped 7% in the last three months, but it is up 27% for 2021.
“The outlook for KBR is the most enticing it has been in recent memory….” Over the next three years, we anticipate a 75 percent to 200 percent increase in value. “We believe KBR is on the verge of a historic re-rating,” she said at the Sohn Conference in May.
Rosenblatt promotes Nvidia (NASDAQ: NVDA) after Q2 earnings
On Thursday, analyst Hans Mosesmann raised his price target for the chip stock by $50 per share to $300. According to FactSet, this is the highest target among major analysts. Mosesmann stated in a client note that the company’s most recent earnings report showed Nvidia was getting closer to what should be a profitable future.
“It wasn’t Nvidia’s beat and raise that impressed us; it was the overall alignment of many years of architectural, hardware, and software efforts into the current transition of AI ‘training’ to AI production or inferencing,” according to the note.
Nvidia reported adjusted earnings per share of $1.04 and revenue of $6.51 billion in the second quarter. Refinitiv polled analysts predicted $1.01 earnings per share and $6.33 billion in revenue.
Rosenblatt’s price target is more than 57% higher than where Nvidia’s stock closed on Wednesday. In early trading on Thursday, the stock was down slightly.
Rosenblatt sees Nvidia as a major winner in the potential technology shift toward artificial intelligence in the long term.
“The industries (all of them) are experiencing what may be the most significant technological inflection ever… and Nvidia is leading the way into new software platforms (Base and Fleet Command) that will only cement the company’s position as the premier AI play,” the note stated.
Nordic Semiconductor (OTCMKTS: NRSDY) is the stock to buy now according to this investor.
Semiconductor stocks have risen broadly in 2021, as high-profile chip shortages have reverberated through the automotive and smartphone sectors.
Nordic Semiconductor has emerged as Europe’s best-performing chip stock by a long shot, and analysts spoke with one of the stock’s few analysts about what’s driving its meteoric rise and where it might go from here.
According to Christoffer Wang Bjrnsen, a financial analyst at DNB Markets in Oslo, the company is poised to grow exponentially in the medium term due to a combination of unique hardware, a changing product environment, and a new low-power cellular offering.
So far this year, Nordic is the fourth best-performing stock on the pan-European Stoxx 600. Future, a British media company, comes in first, followed by EQT, a Swedish investment firm, and AddLife, a Swedish life sciences company.
DNB was drawn to the Nordic Semiconductor story in 2015, according to Bjrnsen, because of its ability to produce small semiconductor chip sets with low power consumption.
Bjrnsen noticed that a single, more expensive Nordic chip was beginning to be used in various products in size-constrained applications such as iPads, smartwatches, or Apple TV remotes. Previously, Bluetooth capabilities and the central microcontroller were provided by separate chips from other chipmakers.
“It’s quite powerful to have a single chip that does a lot of jobs that other vendors have to sell you multiple chips for,” he said. Because the company was able to do the same jobs with a single chip, it was able to reduce material costs while charging more for the chipset, according to Bjrnsen.
Nordic has long been focused on Bluetooth technologies, but in recent years it has been developing its Thread product, which it describes as a “reliable, secure, and scalable way to connect low-power devices.”
Although hesitant at first because the technology was not widely in demand, Bjrnsen stated that Nordic had been proven correct in recent years, and credited management for consistently being ahead of the curve on new developments within the company’s markets.
Credit Suisse identifies the best ‘cheap’ tech stocks to buy right now.
This European stock is up 100% year to date. According to one analyst, it will continue to rise.
“As a result, they have become the primary supplier of these wireless chipsets for Google and Apple, Samsung and Amazon, and smartphone applications,” he said.
“When you talk to the management and mid-level management, you can tell that no one knows more about wireless technology than they do, and that enables them to pinpoint the right technologies to integrate into their chipsets well ahead of competition, which I think is very important in some industries.”
Share Price Predictions
Nordic reported $4.6 million in revenue for its new cellular internet of things division in its second-quarter earnings, a 289 percent increase over the same period in 2020. However, this amounted to only a small portion of the company’s total revenue of $147.6 million.
In addition, the company has accumulated a record order backlog of $1.25 billion, which will last until 2022.
Nordic stocks were trading at around 283 Norwegian krone ($32.04) at the end of last week, but Bjrnsen believes they will soon reach 350 krone. He argued, however, that current valuations do not take into account the seven years of investment in new technologies that are about to bear fruit.
“That is simply based on my expectation that the world of investors will begin to fully appreciate the value of the Bluetooth and short-range core business that is driving all of the revenues today,” he explained.
“Beyond that, I believe the value gap upside, the big opportunity, is to understand that this (cellular IOT) product, which is selling at a 10 times higher average selling price than Nordic’s main products today, will be sold to the same customers.”
DNB estimates that if just 10% of Nordic’s current Bluetooth customers purchase the new cellular IOT products, the company’s revenue base could be doubled.
Bjrnsen believes that, with wireless connectivity currently covering only a small portion of the total addressable market, there is room for Nordic’s IOT products to move from niche to ubiquity, transforming the company into a “multi-billion dollar” enterprise.
He anticipates that the first data points from the new products will demonstrate to the market that the cellular business is gaining traction and will propel Nordic to a “completely new level.”
“So I think if you price them on reported earnings multiples, you’re basically putting a negative value on the center opportunity, which they’ve been investing in for the last seven years,” he explained.
“And I believe that is why the share price remains low in comparison to the current underlying value.”
Oatly (NASDAQ: OTLY) is a stock to buy according to RBC
Analyst Nik Modi upgraded the oat milk company to outperform from sector perform in a note to clients on Thursday, saying that despite the stock’s recent decline, the bull case for the stock remained intact.
“The fundamental story and brand positioning of Oatly, in our opinion, remain unchanged, as does our thesis” (that the brand will continue growing nicely while maintaining premium positioning). While we expect the stock to catch up to its fundamental prospects after a few more quarters of executing the capacity roll out, we believe the current risk-to-reward of the shares is too attractive to ignore,” the note said.
The Swedish firm’s US-traded shares have fallen by 47 percent since early June, wiping out all of its gains since going public earlier this year.
According to RBC, Oatly’s long-term outlook remains positive if the company can execute on its expansion plans.
“Oatly is, in a nutshell, a production story. The demand exists, but the supply does not. The company is ramping up several plants globally and, to our surprise, did not announce any major setbacks to timelines this quarter,” according to the note.
Should investors buy Palantir (NYSE: PLTR)?
The data company, known for its numerous government contracts, revealed in its earnings report last week that it purchased $50 million in gold bars this month as part of a nontraditional currency investment strategy. Bloomberg News reported that the secretive company was preparing for future black swan events.
That should be a red flag for investors, according to Leigh Goehring, managing partner at Goehring & Rozencwajg.
“Given what the company does and its enormous ability to analyze big data and identify trends, I think they’re onto something,” he said.
Gold is frequently regarded as a hedge against inflation and currency depreciation, both of which the Federal Reserve is grappling with as it seeks to reduce some of the monetary stimulus it has provided to the economy.
Despite rising inflationary fears, the metal has yet to gain traction this year. Gold prices are down 6% this year, though they have increased by nearly 2% in the last week.
According to Goehring, while the United States has inflation, it does not yet have inflationary psychology, in which consumers spend more quickly because they believe prices are rising. He also stated that the economy is “perfectly set up” for a black swan event that could trigger inflationary psychology and lead to a bond market sell-off.
‘There is a lot of anxiety.’
Palantir’s gold move, according to Jim Paulsen, chief investment strategist at Leuthold Group, is simply an indicator of the current cultural mindset.
“We wouldn’t normally see companies buying a lot of gold,” he said of Palantir, “but in a world of zero interest rates, with a monetary authority that has abused and overused their policy, and with current runaway inflation, you even got them taking those bold steps.” “I’m not sure that strengthens the case that it’s the right thing to do any more than it strengthens the case that there’s a lot of fear. Underneath a bull market – it’s up a lot and just keeps going up – is a massive wall of worry.”
He also stated that gold has never been higher than it is now, and that while it is expensive in comparison to other commodities, it is still “where everyone is rushing.”
“It says something about emotion and fear, where your values don’t really matter, and you just want to feel safe when you sleep,” he explained.
According to Goehring, institutional investors have time to increase their commitments to the precious metal markets. The goal should be to trade within a corrective trading range period, with a “little more to go” on that.
Similarly, Paulsen predicted a market correction, noting that the economic expansion and bull market are still in their early stages. He also stated that the pandemic has resulted in some good, which could lead to an expanded recovery that grows faster than in the past – even if it does so with higher inflation.
Individual investors should take advantage of the current price decline to buy physical gold and silver on the cheap, according to Goehring.
“If you’re a retail investor, this is probably 1999-2000,” when the price of gold was around $250, and “gold will go significantly higher in 10 years.” It will not only protect you, but it may also turn out to be a very profitable investment.”
Bitcoin as a hedge against a black swan event
Aside from gold, Palantir’s investment strategy includes startups, blank-check companies, and possibly bitcoin, which the company has previously discussed investing in internally.
According to Bloomberg, Palantir has also made bitcoin available to customers as a form of payment. No one has taken them up on their offer, which is unsurprising given that the cryptocurrency’s digital gold narrative has grown stronger over time while the digital cash narrative has dwindled.
Although Paulsen is not convinced that bitcoin is a hedge against a black swan event, he believes that investors could incorporate it into their portfolio for diversification. Though he believes it is unrelated to stock market correlation, it could just as easily fall with the market (as it often has).
“The biggest issue is that no government in the world wants it because they will lose control,” Paulsen explained. “I believe we will overcome that because it is fairly dispersed and the concept is excellent. In economic theory, there is no reason to have a currency that is artificially set by political bonds, but that is exactly what we have. We only have currencies because of political boundaries, but according to economic theory, the optimal number of currencies in the world is one.”
Liquidity will improve, and volatility, its best and worst feature, will decrease, he added.
“With just fixed rules, you could set up a systematic rule to exploit its amazing volatility,” he said. “I put a 1% or 2% position in the portfolio, and if it rises to 3%, I take 1% out. If it falls below 1%, I will reinvest 1%. I’m going to make money over time, even if it’s flat.”