Wednesday was a historic day for the world – or at least Big Tech – as Microsoft became only the second U.S.-based company to climb its way to a $2 trillion valuation. (For the curious, Apple was the first and is currently valued at $2.2 trillion.)
Additionally, the House Judiciary Committee set out to debate six bills aimed at limiting the scope of Big Tech firms such as Facebook, Google, and Apple, amongst others.
And to top it all off, billionaire Warren Buffett stepped down as a trustee from the Bill and Melinda Gates Foundation.
Let’s see what else is happening in tech stocks – and the broader market – in today’s trending list, courtesy of Q.ai and Forbes AI Investor.
Q.ai runs factor models daily to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
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Microsoft Corporation (MSFT)
Microsoft Corporation jumped up 1% Tuesday to $265.51 per share on the back of 24.7 million trades. The tech giant is trending almost $10 over the 22-day price average and is up 19.4% YTD. Currently, Microsoft is trading at 32.9x forward earnings.
Microsoft is a frequent flier on our trending lists, and for good reason: the company is huge, innovative, and a supplier of all (or at least most) things tech for the newly minted work-from-home generation. The stock is trending once again, ironically, due to its own stock price, which pushed the company into the honored position of being the second U.S.-based company to ever reach a $2 trillion market cap.
Moreover, investors and Microsoft connoisseurs alike are a-buzz this week in anticipation of the Windows 11 update, which drops today – 24 June – at 11 a.m. during Microsoft’s big event.
In the last fiscal year, Microsoft’s revenue rose almost 12% to $143 billion, a 45% increase compared to the $110 billion seen three years earlier. Operating profit rose 21.3% to $53 billion against $35 billion, while per-share earnings rose 27% to $5.76 from $2.13 in the three-year-ago period. Moreover, return on equity over doubled to 40.1%.
Microsoft Corporation is expected to see 12-month revenue growth around 8.7%. Our AI rates the company favorably overall, with an A in Low Volatility Momentum and Quality Value, a B in Growth, and a D in Technicals.
Netflix Inc (NFLX)
Netflix, Inc. surged 2.4% Wednesday to $508.82 to the tune of 5.8 million shares. Currently, the streaming behemoth is down 5.9% YTD and is trading at 49.6x forward earnings.
Netflix is trending yet again on Q.ai’s daily list for no reason other than it just is. The company itself is enormous, its share prices are almost as big, and while the streaming giant is expected to only clock around 1 million new subscribers in the next quarter – thus disappointing investors used to continual and accelerating growth – it still boasts an impressive paid subscription list of 207.6 million.
(Not to mention, when compared against a pandemic year with a sudden influx in the number of users with too much free time, a streaming media behemoth like Netflix is always going to lose against itself.)
Over the last fiscal year, Netflix saw revenue growth of 5.6%, bringing the company to almost $25 billion compared to $15.8 billion three years ago. In the same periods, operating income rose 21.8% and 248%, respectively, to $4.585 billion from $1.6 billion. Additionally, EPS is up 36% in the last year alone to $6.08 per share.
Currently, Netflix’s revenue is expected to grow 3.33% in the next year. Our deep-learning algorithms rated the streaming media giant A in Growth, B in Low Volatility Momentum and Quality Value, and D in Technicals.
Morgan Stanley (MS)
Morgan Stanley bumped down 0.3% Tuesday to $85.70 a share with 9.66 million trades on the books. The company is trading more than $5 below the 22-day price average, though the stock remains up over 25% YTD. Currently, Morgan Stanley is trading with a forward 12-month P/E of 13.1.
The investment bank and financial services institution is trending this week not for the company’s massive revenues last year or its CEO’s stance on New York workers being in the office after Labor Day. Rather, the company made a contentious – but not unusual – declaration this week: No vaccine, no entry to its New York offices.
The policy applies to clients and staff alike and will be enforced as early as July 12, with employees in the New York metropolitan area required to attest to their Covid-19 vaccination status by July 1. Employees who aren’t fully vaccinated by the deadline will have to continue working remotely until they receive their second dose of Moderna or Pfizer’s mRNA vaccines or the single dose of Johnson & Johnson’s vaccine.
Morgan Stanley’s revenue grew almost 13.4% in the last fiscal year and 36.2% in the last three from $40.1 billion to $48.2 billion, while operating income jumped 17% and 55.2% respectively, to $17.9 billion from $13.7 billion. Additionally, per-share earnings rose 61.6% in the three-year-period to $6.46.
At this time, our AI rates the investment bank just above average, with B’s in Growth and Low Volatility Momentum, C in Quality Value, and D in Technicals.
Nike Inc (NKE)
Nike, Inc. ticked up 1.9% Tuesday to $132.48 per share on the back of 6 million trades. The stock is trading almost in line with its 22-day price average, though it’s down 6.4% YTD. Currently, Nike is trading at 37.7x forward earnings.
Nike is trending this week as the company prepares to release its Q4 earnings later today (24 June). Despite the stock’s recent downtrend from its all-time highs, the athleticwear retailer’s bottom line is likely to receive a significant boost thanks to shoppers who are flush with cash from recent stimulus checks and tax refunds. This, partnered with increased activity as vaccinations and job postings have allowed the economy to reopen, has led many investors to take bullish positions on the company.
In the last fiscal year, Nike’s revenue grew almost 3% to $37.4 billion compared to $36.4 billion three years ago. In the same period, operating profit jumped 40.9% to $3.1 billion, though it’s down compared to the $4.4 billion seen three years earlier. Per-share earnings ballooned 33.7% in the last year and 82.5% in the last three, bringing EPS from $1.17 to $1.60. Moreover, ROE leapt from 17.4% to 29.7% over the same three-year time span.
Nike is forecasted to see 12-month revenue growth around 9.9%. The company is rated average across the board, with C’s in Technicals, Growth, Low Volatility Momentum, and Quality Value.
Plug Power Inc (PLUG)
Plug Power, Inc. surged 14% Tuesday to $34.02 per share with 68.45 million trades in the bank. The stock is up against its 10- and 22-day price averages around $30.60 per share, and it’s finally seeing some upside at 0.3% YTD.
Plug Power’s significant Tuesday gains come thanks to the stock’s 2021 Q1 fiscal results. The earnings report produced a mixed bottom line (and feelings, for those investors holding the stock) thanks to a 76% revenue increase YOY alongside sharp increases in costs and bottom-line losses.
Several analysts downgraded the stock and adjusted the firm’s price targets after the earnings report, which led Wednesday’s trading session to give up a few pennies of the hydrogen fuel cell manufacturer’s sudden gains.
Unfortunately, the pandemic and subsequent supply and demand issues left Plug Power in a lurch, as the company struggled with rising hydrogen prices as well as increased shipping costs. As a result, the company saw negative $93.2 million revenue in the last fiscal year compared to $174.2 million three years ago.
However, Plug Power’s operating income grew 3.8% to $576.6 million in the last year, for total growth of 683% in the last three from $76.4 million. Moreover, per-share earnings exploded 289% over the last three fiscal years from $0.39 to $1.68. That said, return on equity plunged from 157.5% to 74.6% in the most recent fiscal year.
All told, Plug Power is expected to see 12-month revenue growth around 8.5%. Currently, our AI rates this holding below-average with D’s in Technicals and Low Volatility Momentum and F’s in Growth and Quality Value.
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