Latest news with #BankofAmerica
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4 hours ago
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BofA Reiterates Buy as Agora (API) Gains Traction in Live Engagement
Agora Inc. (NASDAQ:API) is one of the 10 best debt-free IT penny stocks to buy. On June 28, Bank of America Securities' analyst Daley Li reiterated a Buy rating on Agora (NASDAQ:API), setting a price target of $7.10. Agora's Q1 2025 results showed modest top-line growth, with revenue up 1% year-over-year. While overall growth was limited, the company's international business stood out, benefiting from stronger demand in areas like live shopping and entertainment. A consumer smiling as they engage with streaming apps and voice platforms. For the second quarter, management guided for core revenue growth of 7% to 13% year-over-year. This range broadly matches market expectations and suggests that conditions are starting to improve—particularly in China's social entertainment and education markets—while international demand continues to hold up well. The analyst also pointed to signs of progress on the profitability front. Q1 2025 was Agora's second straight profitable quarter, along with an improvement in gross margins. The company is also commanding a stronger net cash position which adds further flexibility, allowing it to pursue growth opportunities like in the field of AI. Agora Inc. (NASDAQ:API) is a China-based company that provides a real-time engagement platform-as-a-service (PaaS), enabling developers to embed voice, video, and live interactive streaming capabilities into their applications. While we acknowledge the potential of API as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Best Tech Stocks to Buy According to Billionaires. Disclosure: None.
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5 hours ago
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BofA Raises Datadog (DDOG) Price Target, Maintains Buy Rating
Datadog, Inc. (NASDAQ:DDOG) is one of . Bank of America analyst Koji Ikeda has raised the firm's price target on Datadog, Inc. (NASDAQ:DDOG) to $150 from $138 while maintaining a Buy rating on the shares. The upgrade reflects growing confidence in Datadog's long-term growth prospects, following encouraging insights from the company's recent customer event and survey data. A close-up of a laptop with a software engineer coding on the monitor. Ikeda cited strong feedback from Datadog's annual DASH conference, where enterprise adoption trends and product momentum were evident. The analyst noted that sentiment among customers remains positive, pointing to continued investment in observability and cloud infrastructure monitoring tools. These insights align with results from Bank of America's proprietary Datadog survey, which highlighted a stable demand environment and increasing customer reliance on the platform's expanded capabilities. According to Ikeda, Datadog remains one of the most well-positioned vendors in the observability space, supported by durable top-line growth and strong free cash flow performance. He believes the company is on track to sustain more than 20% annual revenue growth and 20%-plus free cash flow margins over the long term, underpinned by its broad product portfolio and expanding enterprise footprint. With the increased price target, Bank of America reinforces Datadog, Inc. (NASDAQ:DDOG) as a 'top pick' for the second half of 2025. The firm views Datadog's continued innovation and customer traction as key drivers of upside in a competitive software landscape. While we acknowledge the potential of DDOG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DDOG and that has 100x upside potential, check out our report about this cheapest AI NEXT: 10 Best Small Cap Tech Stocks With Biggest Upside Potential and 7 Most Popular AI Penny Stocks Under $5 To Avoid. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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5 hours ago
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Bank of America says tariffs might spark a ‘reshoring' boom—but experts say it might be a double-edged sword for the economy
Evidence of a U.S. manufacturing slowdown is mounting, according to the Bank of America Institute. Tariffs could help reduce that slowdown and bring more advanced production back stateside, but improving productivity might happen without increasing employment. President Donald Trump has been adamant his tariffs will bring factory jobs back to American shores. Higher import taxes will likely push manufacturers to move operations back to the U.S., according to Bank of America economists, but so-called reshoring might incentivize firms to put more robots than humans on the assembly line. A lack of skilled labor and high costs remain big impediments as companies come home, BofA warns. Automation might be the key to unlocking reshoring, potentially boosting the sluggish productivity of American manufacturers without meaningfully increasing employment. Evidence of a slowdown in the sector is mounting, according to a recent report from the Bank of America Institute. New orders for manufactured durable goods fell in April, while the famous manufacturing Purchasing Managers' Index has signaled a contraction since March. Focusing on small businesses, BofA's internal client data shows deposit growth from manufacturers has also declined. 'It's possible, right, that these [tariffs] could support momentum going forward and potentially reverse some of that slowdown, especially for certain subsectors within the industry,' the report's author, BofA economist Taylor Bowley, told Fortune. 'But tariff costs and labor issues do exist.' Reshoring has been all the rage in corporate America after Trump's first trade war with China—and the COVID-19 pandemic—highlighted risks to global supply chains. The Biden-era CHIPS and Inflation Reduction Acts, meanwhile, heavily subsidized companies willing to make semiconductors and clean energy technology in the U.S. While U.S. manufacturing accounts for just 8% of total employment, reshoring has created 2 million jobs in the past 15 years, according to a May note from BofA economists. Half of those new positions have been created in the past five years, they noted, though the trend has slowed since peaking in 2022. In a survey of 56 analysts across the bank, covering roughly 1,200 firms worth over $38 trillion in market cap, roughly 60% said production will continue to move back to the U.S.—at least modestly—if tariffs remain high. Those following industrials and manufacturing expect the greatest shift to the U.S. There are still obstacles to coming back stateside, though. In the BofA survey, 54% of the analysts said issues finding skilled workers would be a significant impediment for companies. Higher labor costs are one of the primary reasons manufacturers shifted away from the U.S. in the first place, Bowley said. While a 2024 survey from the Cato Institute found 80% of Americans think the country would benefit from increasing manufacturing employment, just a quarter believe they would be better off individually working in a factory. If firms struggle to fill positions, Bowley said, they are forced to figure out how to improve productivity without hiring people. 'And that's where this conversation around automation and productivity comes in,' she said. Two-thirds of respondents to the BofA survey said any production shift to the U.S. would require significantly more automation than an offshore factory. That makes more advanced industries the best candidates for moving back to the U.S., BofA economists said, like auto assembly and high-end furniture. 'Millions and millions of human beings screwing in little, little screws to make iPhones,' as Commerce Secretary Howard Lutnick suggested? Not so much. Meanwhile, Lutnick's ability to continue making trade deals might matter most to small businesses. They account for 98% of American manufacturing, according to the U.S. Small Business Administration, and many rely on cheap imports. 'A lot of them depend on a specific part—for example, to complete their manufacturing process—that simply isn't made domestically,' Bowley said. Therefore, for smaller manufacturers, tariff uncertainty makes planning capital expenditures especially difficult, even if their products become more competitive domestically. With profit margins and productivity lagging other industries in the U.S., passing price hikes on to consumers is the obvious response. However, if firms need to absorb some of the cost to keep customers, Bowley said, reducing inventories, operations, or headcount are other potential options. 'Reshoring in that aspect for smaller firms is kind of a double-edged sword,' she said. Nonetheless, sales are expected to grow in the coming months, Bowley said. But businesses might start feeling the squeeze, she added, when inventories start running low in the second half of the year. This story was originally featured on Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
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7 hours ago
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Looming Rate Cuts Suggest Winter is Coming for Berkshire Hathaway Stock (BRK.B)
Warren Buffett's Berkshire Hathaway (BRK.B) has amassed a $347.7 billion cash hoard, reaping substantial interest income amid high rates—but with rate cuts looming and the stock trading at elevated levels, that war chest could soon turn from asset to liability for investors seeking safety. TipRanks data shows BRK.B stock keeping pace with the S&P 500 (SPX) so far this year, rising approximately 8% despite macroeconomic risks flourishing in several key investment areas. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter However, exactly how much longer the fund can sustain its performance remains to be seen, given the Fed's looming actions. As a result, I'm apprehensive about Berkshire's ability to recycle its magic touch, and I'm therefore Neutral on BRK.B stock. Berkshire's cash mountain didn't appear overnight. Over the past few quarters, Buffett and his team have been net sellers of stocks, trimming significant holdings like Apple (AAPL), selling over 600 million shares last year alone, reducing its stake to $70 billion from $175 billion, and Bank of America (BAC), with sales exceeding 235 million shares. One of the key barometers — Berkshire's total equity value — remains steady and above $200 billion, according to Main Street Data. These sales, alongside continued cash flows from Berkshire's insurance, railroad, and energy businesses, pushed its cash reserves to a record $347.68 billion by Q1, with most of it parked in U.S. Treasury bills. This strategy has paid off handsomely, delivering risk-free returns at yields above 5% in a volatile market where uncertainty (from geopolitical tensions to economic slowdown fears) has kept investors jittery. Buffett's aptitude for capital preservation shines here, turning Berkshire into a safe haven, which explains why many investors have 'flown to safety' by buying BRK stock. The U.S. economy is currently managing a substantial national debt, which has reached approximately $36 trillion. If interest rates remain elevated, annual interest payments are projected to climb to around $1.14 trillion by 2028. In response, many analysts anticipate two to three interest rate cuts by the end of 2025, potentially reducing the federal funds rate from the current 4.75%–5% range to between 4.25% and 4.5%. For Berkshire Hathaway, a declining rate environment poses meaningful implications. Its substantial holdings in Treasury bills—totaling $286 billion—generated $14.5 billion in investment income in 2024, a 43% increase year-over-year, primarily due to elevated short-term interest rates. However, as rates decline, that income stream could face pressure. Additionally, Berkshire's insurance float, which relies on reinvesting premium income at favorable yields, may also deliver lower returns in a low-rate environment. While Berkshire's conservative approach remains a hallmark of its strategy, a shift toward looser monetary policy presents a structural challenge that could diminish the short-term benefits of its liquidity reserves. Interestingly, Buffett's hesitancy to dive into equities, even during significant market dips in recent quarters, raises questions about Berkshire's next move. With nearly $350 billion in cash, identifying investments that can move the needle for a trillion-dollar conglomerate is no small feat. Major acquisitions or stock buys need to be huge to generate meaningful returns, yet Buffett has passed on opportunities, wary of overpaying. If rate cuts spark a market rally, as they often do, Berkshire risks missing out, with its cash earning paltry returns while equities soar. Adding to the caution, Berkshire Hathaway currently trades at a price-to-book (P/B) ratio of 1.6—near its highest level in the past decade and above its historical median of 1.4—reflecting heightened investor demand for defensive assets. Adding support to its revenue mix, earnings from insurance policies, which show the company's ability to convert written premiums into actual income, are inching higher, as TipRanks data indicates. Notably, the company has essentially paused its share buyback program, which may indicate that management views the stock as fully valued or even overvalued at current levels. This elevated valuation leaves limited margin for error. If cash yields decline and Berkshire is unable to redeploy capital efficiently, the stock could be vulnerable to multiple compression, particularly if investor sentiment shifts back toward growth-oriented equities in a lower-rate environment. Wall Street analysts remain actively bullish on BRK.B stock, possibly reflecting confidence in the firm's future leadership change, despite shares trading at a lofty P/B premium. Today, the stock has a Moderate Buy consensus rating based on two unanimous Buy ratings over the past three months. BRK's average price target of $591 implies that shares have a roughly 20% upside from their current levels. Berkshire Hathaway's circa $348 billion cash reserve—fueled by strategic asset sales and substantial operating income—has been a standout asset in a high-interest-rate environment. However, with growing U.S. debt levels putting pressure on the Fed to cut rates, the yield on that cash is likely to fall, just as Warren Buffett remains cautious on new equity investments. Meanwhile, the stock's elevated price-to-book ratio heightens downside risk. As economic conditions evolve, investors seeking shelter in Berkshire may face increased volatility ahead, and there may be more agile and better-positioned alternatives in today's macro landscape. Disclaimer & DisclosureReport an Issue
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12 hours ago
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Warren Buffett's 3 Secrets to Value Investing
(0:30) - Where Can Value Investors Find Investments Right Now? (5:40) - Tracey's Top Stock Picks For Your Portfolio (29:00) - Episode Roundup: BRK.B, BAC, COP, OXY, OZK, CMWAY Podcast@ Buffett has 3 secrets to investing: patience, conviction and a strong stomach. Do you have the patience to invest in energy and banks right now? Banks like Bank of America and Bank OZK are cheap and have rising earnings. Welcome to Episode #409 of the Value Investor Podcast. Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks. Recently, on X, Tracey saw a quote from a retired oil executive discussing how 'painful' it has been investing in oil stocks, especially with the Magnificent 7 near all-time highs. But he believed that the energy market would eventually rebalance. Until then, however, he said you had to have 'patience, conviction and a strong stomach.' These are the attributes of a value investor. Warren Buffett, the CEO of Berkshire Hathaway and long considered to be the greatest value investor ever, is often described as having these same attributes, especially patience. However, it's easier said than done. Are you willing to have patience to own stocks in the hated industries like energy and banks? 1. Berkshire Hathaway (BRK.B) Berkshire Hathaway hit a new high earlier in the year but over the last month, shares have struggled. Berkshire Hathaway is down 4.7% in that period while other large caps are breaking out. It remains an expensive stock. Berkshire Hathaway trades with a forward P/E of 23.6 and has a PEG ratio of 3.4. A P/E under 15 usually indicates a value stock. Is this weakness a buying opportunity in Berkshire Hathaway, or not? 2. Occidental Petroleum Corp. (OXY) Occidental Petroleum is a large oil company and a member of the Berkshire Hathaway equity portfolio. Buffett has been steadily buying shares of Occidental the last few years. Shares of Occidental Petroleum have fallen 14% year-to-date and 32.3% over the last year as oil prices have tumbled. The earnings outlook is not good in the energy sector. Occidental is expected to see a 36% decline in earnings this year. This will be the third year in a row of declining earnings. Occidental trades with a forward P/E of 18.8. Is this a buying opportunity in Occidental Petroleum? 3. Bank of America Corp. (BAC) Bank of America is one of the largest banks in the United States. It's in the Berkshire Hathaway equity portfolio. Shares of Bank of America are up 7.1% year-to-date and are eyeing 5-year highs. Earnings are expected to rise 12.5% in 2025 and 16.3% in 2026. Bank of America also pays a dividend, yielding 2.2%. Buffett has mostly abandoned the banks in recent years even as the earnings outlook has improved. Should Bank of America be on your short list? 4. Bank OZK (OZK) Bank OZK is a regional bank which specializes in real estate. It gives development loans. Bank OZK has a market cap of $5.7 billion. It's paying a dividend, yielding 3.6%. While earnings are expected to fall 3.3% in 2025, they are forecast to rebound 11.1% in 2026. Shares of Bank OZK are up 5.4% year-to-date but have been stuck in a trading range the last 4 years. It's cheap. Bank OZK trades with a price-to-book (P/B) ratio of just 0.98. Bank analysts recommend buying a bank at 1.0 and selling it when the P/B ratio reaches 2.0. Should value investors put Bank OZK on their watch list? 5. Commonwealth Bank of Australia (CMWAY) Commonwealth Bank of Australia is a large cap bank with several business segments including insurance, commercial and personal lending, and wealth management. It is based in Australia with a market cap of $202 billion. Shares of Commonwealth Bank of Australia are breaking out to new 5-year highs. It's up 26.5% year-to-date. Earnings are expected to rise 7.8% in 2025 and another 2.5% in 2026. But the shares are not cheap anymore. Commonwealth Bank of Australia trades with a forward P/E of 31. It pays a dividend, yielding 2.2%. Commonwealth Bank of Australia is a Zacks Rank #1 (Strong Buy). There are currently 16 Strong Buy foreign banks. What's going on with foreign banks? Should value investors consider a foreign bank like Commonwealth Bank of Australia? What Else Should You Know About Buffett's Secrets? Tune into this week's podcast to find out. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC) : Free Stock Analysis Report Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report Bank OZK (OZK) : Free Stock Analysis Report Commonwealth Bank of Australia Sponsored ADR (CMWAY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
