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Yahoo
a day ago
- Business
- Yahoo
4 advantages give Alphabet a 'strategic position' in AI race
Needham & Company senior media and internet analyst Laura Martin joins Market Domination with Josh Lipton to discuss Alphabet's (GOOG, GOOGL) upcoming earnings report and what investors need to see for the stock to be considered in good shape. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. alphabet set to report second quarter results on Wednesday, analysts overall optimistic on the tech giant. The stock having 63 buys on the street according to coverage tracked by Bloomberg, but while there are attractive trends at play for alphabet, we know the antitrust risk for the mag 7 stock do hang its overhead here to discuss this and more. Got Needham senior media and internet analyst Laura Martin. Laura, it is great to see you on the show as always. The concern for investors, Laura, on this one, as you well know, and I'm looking at the stock, it's basically flat year to date, is how AI is going to disrupt search, how it's going to disrupt Google's bread and butter. I'm sure you get questions, of course, from your clients about this, Laura. What do you tell them? So I think what we need to see, we're looking for Google to report 9% search growth, 13% YouTube growth, cloud growth of 10. What we want to see is that search number, that search ad number sort of holding up right around double digits, the above 10% would beat the whisper number. Below 9% would be bad. That would imply that generative AI answers is eating into their revenue per query. They're telling us that the revenue is equal, so that that's why growth hasn't slowed. But if we see a break in that, that would be bad for the shares. But so long as they report over 9% ad revenue growth from search, specifically, I think the stock's fine. It bottomed in April. It's had a nice run since April, but as you say, year to date, flat from the beginning of the year to now. So we would expect better performance in the shares if search breaks double digit growth, uh, revenue growth in this, the second quarter. As Laura, as Google now finds itself in this competition with the likes of an open AI, what would you say its competitive advantages are? Well, I think the most important thing that people miss about Google is that, you know, it has a dominance in search, which is now threatened, I guess. But, okay, so search, but it also happened to have the number two mobile, um, choice, which was Android. It now has a cloud business, which Amazon invented and these guys were late to, but they're one of three winners. They're one of three cloud companies with Amazon and Microsoft. And now it's got the Gemini, which is one of the top two or three, depending on who you ask, large language models, proprietary large language models. So in every case, for the last four technological disruptions, Google has a place, a place to play, and these are winner take all economics. So what's nice about Alphabet is that in each one of these tech waves, they've had the human capital to take advantage of it and the strategic position. And as we all know, with generative AI, data is really becomes more valuable, and who has better data than Google? Between YouTube and search, they have data that's second to none with their 3 billion, um, active monthly users. So I actually just think they're really well positioned strategically for the generative AI future.
Yahoo
4 days ago
- Business
- Yahoo
3 reasons to buy Costco stock and steer clear of Target
Ahead of fresh retail sales data, Tematica Research's chief investment officer, Chris Versace, joins Market Domination with Josh Lipton to compare two top retail plays, Costco (COST) and Target (TGT), on today's Good Buy or Goodbye. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Related videos Top Stock Market Highlights of the Week: Centurion Accommodation REIT, NTT DC REIT, MAS, Marina Bay Sands and Singapore Exports Build Reliable Passive Income with These 3 Dependable Singapore Dividend Stocks Bitcoin bubble? How much more is it expected to rise in 2025? Get Smart: When the market looks good… maybe too good? Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
3 reasons to buy Costco stock and steer clear of Target
Ahead of fresh retail sales data, Tematica Research's chief investment officer, Chris Versace, joins Market Domination with Josh Lipton to compare two top retail plays, Costco (COST) and Target (TGT), on today's Good Buy or Goodbye. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Welcome to Good Buy or Good Buy. Our goal here to help cut through the noise and to navigate the best moves for your portfolio. I'm here with Thematica research chief investment officer, that would be Christopher Sacchi. Chris, let's go through the first one you like. This is a buy, and it is Costco. Now, this stock hasn't done a whole lot so far this year, up like both single digits. Most on the street, the majority do say this one's a buy, so you're in good company. Let's go through the reasons. The first reason you say winning consumer wallet share. So, Costco is a great company to begin with. But as an investor, they give us a lot of information. One of the things I really like, they're still one of the retailers that actually reports monthly revenue numbers. So what we can do is size this up against other data, like what we'll get tomorrow, for example, the June Retail Sales report. Costco's already reported its June revenue. Uh, US comps sales adjusted up about 5%. We have a nice barometer to measure that against. Then if we do that over the last several months, it's clear Costco is taking consumer wallet share, and it makes sense. Folks are trending down, they're concerned about inflation pressures, they're leaning into what Costco has. Bullet point number two, another reason you say this one's a buy: differentiated membership business model. Yes. So when we talk about Costco, we have to remember it's a membership warehouse club. So you pay your fee, and off you go to shop. But when we amass those fees, they're a significant piece of the company's overall pre-tax income, depending on the quarter, 50-60%. Very different than a Walmart, very different than a Target. It gives it an air of predictability that we like. And it also kind of says that when things get a little rough, there's a nice rock-solid base for their earnings. And a final reason you say this is a smart place to commit capital: expanding warehouse footprint. Absolutely. So, you know, Costco continues to build out the number of their locations, both in the US and internationally. But it's kind of a great feeder business, because as they expand the warehouse footprint, they get more members, they get more members, they continue to build that high-margin membership fee revenue that they have. Now you made your case convincingly, Chris. Before folks jump in, though, let's talk about the downside risk you have to think of. Yeah, so a lot of folks will talk about, you know, consumer spending and stuff, but I continue to think that folks are looking to stretch their disposable spending dollars, they're going to Costco. So that's not as big of a risk for me. For me, given the importance of that membership business model, we have to track renewal rates. They're typically above 90%. If we saw a big drop in that, that would be worrisome to me. All right. So that's our buy. Let's move to one you're not a strong fan of: Target. Now, this one has already been plenty beat up, Chris. You say it's still worth avoiding here. Let's go through the reasons why that. The first reason you say: avoid Target, consumers trading down. Yeah, absolutely. You know, when we take a look at, you know, various survey data, consumers are trending down, you know, off-price brands, trying to stretch those spending dollars, the very reason we expect them to go to Costco. So, you know, when you look at Target, it's kind of a, um, disposable income type of place. They're not big in grocery, you can't buy in bulk, hard to arguably stretch those dollars. So I see them kind of losing wallet share while Costco gains it. Second reason you say this is one to avoid: market share concerns. Well, exactly. So when we talk about consumer wallet share, we already talked about Costco, they're taking it. But we think about Walmart, we think about Amazon, particularly coming off a prime day and expanding that base, adding more digital shopping holidays throughout the year. How does Target compete? It's poised to lose more market share in my view. And another reason to avoid it here: margin pressure. Yeah, so, you know, a lot of retailers, what they're trying to do, whether it's Albertsons, Kroger, or even Target, they're trying to hold the line on prices so people continue to come in. Well, if they continue to hold the line on prices and they're losing market share, it's going to hit their margin dollars. Falling margin dollars, not good for EPS outlook. So I think there's some downside EPS risk there. All right, so before you avoid, though, as we do avoid it, what are some reasons you could be wrong, Chris? What's the upside risk on this one? So, so the biggest one is, you know, if we think about Target being tied to discretionary spending, if we see a reacceleration in disposable income, that would be a very, that would be a reason to turn around and revisit Target. But to see that, we're going to want to see a pickup in job growth, we're going to see a pickup in wages. Those would be the flags to look for. All right. Buy Costco, avoid Target, that's what Chris has to say. Thank you, Chris, and thank you all for watching. Good Buy or Good Buy.
Yahoo
16-07-2025
- Business
- Yahoo
Bank earnings review: Financial sector looks 'pretty good'
Mendon Capital senior portfolio manager Anton Schutz joins Market Domination Overtime with Josh Lipton to discuss his big takeaways from bank earnings and what they reveal about the financials sector, noting that things look "pretty good." Schutz also shares some of his top picks in the sector: FB Financial (FBK) and Equity Bancshares (EQBK). To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. Well, it's been a big week for bank earnings. We know, and to put them into perspective, we're joined now by Anton Schutz, Mendon Capital, Senior Portfolio Manager, uh, Men, Schutz, Mendon Capital, Senior Portfolio Manager. Anton, it is great to see you. Uh, let's start kind of high level there, Anton. I'm just curious about the big themes so far you would pull out of these earnings reports. What have you learned about M&A, IBanking, the consumer? What's been your big takeaways? Big takeaways are things are pretty good. Um, you know, credit continues to behave incredibly well across the spectrum. So, you know, everybody talking about banks failing and commercial real estate loans for due to reprice has been pretty wrong, right? We've got zero banks fail, uh, because of commercial real estate. So, first of all, let's get that one out of the way. Uh, in terms of margin, uh, generally margin's going to end up rising for the industry. So, we've got a mixed bag so far of who's reported, but thus far, you know, I think earnings estimates actually go higher into 26 based upon all these reports. So that's good. Um, M&A finally happened, right? We we we saw a decent sized deal, almost $2 billion. Huntington Bank bought Veritex a couple days ago, and, you know, good transaction for everybody involved. Nice premium for the shareholders of Veritex. Um, full disclosure, my fund was a shareholder, has been a shareholder of Veritex for 10 years. So nice to see that come along, true capitalists. And we expect to see a lot more M&A coming forward. So, and also capital markets look good. I I think, uh, investment pipelines are building for deals, IPOs, M&A activity across more than just financials. So, you know, I think the health of the space is great. Valuations also look very, very good compared to any other sector of the S&P. Anton, another big theme, you know, investors in the space are watching, uh, deregulation. What do you see ahead there? Uh, what's it going to mean for the industry? When's it going to show up in the financial results? Well, I mean, it's already showing up through the perspective of, you know, Huntington's deal is announced, and they say they're going to close the deal in three months. I mean, that's that's unheard of in recent history. So, I think that's really good news. Um, you know, we had deals out there that would languish for a year without ever getting an answer. So, you know, really, really big change in terms of approvals. I think capital levels, again, are very, very robust in the industry. I think banks are going to be allowed to return more capital through dividends and buybacks. So, again, more good news there. And I do think you'll see some bigger M&A deals come come down. I think you'll you'll see companies like Fifth Third and PNC potentially roll up some of the rest of the industry. Let's get to some some picks, Anton. Uh, top, some of your top topics, FB Financial, ticker FBK, what why is that a buy? Yeah, I mean, that that's a company that's consistently delivered, right? They they've done M&A, they've bought other companies, they've added a value, they've added to their attractive footprint in Tennessee, and they'll be moving into other attractive markets like the Carolinas and maybe Georgia. But, uh, really great management team, and they would actually benefit if there's other M&A that takes place in their markets, and there could certainly be more M&A that's disruptive in their markets, and they'll take advantage of that. So, really like that management team, strong capital, really strong reserve ratios, very conservative management team. So, I think they're a builder of value since their IPO. One more ticker while I have you, Anton. Equity Bancshares, EQBK. Another, you know, buyer of other banks. They have 800 small banks in their footprint that they could buy, and they'll go to these small towns, and they'll buy a two-branch bank, and they'll pay the right price for their shareholders, the other bank shareholders, they'll create value, they'll clean up the bond portfolio, and they'll create some growth. So, they've got, again, got a very good history of doing this. So, either one of these companies could announce a deal at any point in time, and they're great at executing in a regulatory environment. They're closing deals quickly. Equity announced a deal, I believe, in February, and again, it's already closed. So, um, you know, love management teams, love people who, you know, get deals done, have great relationships with the regulators, and have the ability to execute transactions that are good for their shareholders. And we're going to see plenty of other, you know, upside coming from other banks actually getting taken over, and premiums being paid as well. There's a really big gap between the market cap of the mid-cap banks and the smid and smaller. So, the bigger banks get to pay really nice premiums, it's a win for all shareholders, including their own. And when that math happens, you know, you've got an environment's right, right? Regulation allows deals to happen, average age of a board of directors is up to 66 years, it's up six years since 2018, right? Because deals just haven't had a chance to happen. I mean, think about the things we've had since 18, right? We had the pandemic, uncertainty, we had the Fed raising rates really quickly, caused some failures, uncertainty on the funding side, so again, hardly have M&A happen. But fear over recessions, uncertainty, it appears that things are starting to get a little more certain, right? That the the tariffs are happening, the world's not falling apart, we've got economic growth, and I I think we're really going to see a very good second half of the year for M&A period. It's going to benefit everybody in the ecosystem. Related Videos Netflix: Earnings preview & possible UFC deal US dollar falls on Trump–Powell chaos: FX euro shift 'has legs' United Airlines posts earnings beat, but cuts profit outlook BofA's Moynihan on US Consumers, Fed Policy and AI 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
Yahoo
15-07-2025
- Business
- Yahoo
White House has a new take on the markets' mild tariff reaction
Markets (^GSPC, ^IXIC, ^DJI) have been brushing off President Trump's daily tariff threats. Yahoo Finance Washington Correspondent Ben Werschkul joins Market Domination host Josh Lipton to explain how the White House's read on market reactions sharply contrasts with Wall Street's view. He also discusses the president's new deal with Indonesia and what it could signal. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. markets growing less responsive to ongoing trade talks and there's different views on why that may be. For more, let's get to Yahoo Finance's Washington correspondent. That would be, of course, Ben Worskol. Ben. Hey, Josh. Yes. So this is the question, kind of one of the big questions of the month for markets is sort of why are markets shrugging off this, these tariff threats that I'm on with you pretty much every day to outline, they come kind of every day from Trump. It's a nuanced question for sure. Our colleague Josh Shafer has a smart look at the kind of China aspect of this. But what I'm looking at for a story tomorrow in Yahoo Finance is the White House view of this. And this is important for traders to know because it's essentially 180 degrees away from most of what you're going to hear on Wall Street. The White House case, which has, we've seen in evidence in recent days, and it's gotten sharper, kind of as markets continue to rise, is essentially that the signal we're getting here is that traders are okay with tariffs now. That the traders are saying that they understand what Trump is trying to do with tariffs and that the market reaction is, is, is, is, is, is reflecting that. You see a lot of skepticism from that on Wall Street, who kind of give the opposite view that traders, it's not like traders like tariffs now. They just don't believe Trump is going to follow through. But we're seeing this again and again. Treasury Secretary Scott Beson offered this morning that the markets understand what, what Trump is doing now, which is a clear contrast to April. Somebody's going to be wrong here. These are two sides, and this is, the question is kind of whether this question gets tested. The way it doesn't get tested is if Trump can follow through on different trade deals and lower rates via that route for him. We saw, we saw one pact with Indonesia today. But it does get tested if some of these, these trade deals don't go through, and then Trump is essentially empowered by this view that he, that, that, by not, by, by the market's not rising so far, maybe he can stand firm on tariffs and go forward. Put another way, does the market looking at the Taco trade essentially lessen the chance of Trump, of Trump chickening out? We're seeing some concerns on that front that maybe the markets are underpricing. You were talking about Jamie Diamond earlier. He's offered commentary on this. The markets are complacent in this. This is, this is going to be a big theme of the next few weeks as we get to this August 1st deadline. Ben, just quickly, you mentioned Indonesia there. I want your take because Trump did say he reached this deal with Indonesia. It does sound like we have, have some specifics there. Ben, what are the details? Yeah. So we have some specifics from the White House side on what this Indonesia pact brings forward today. Trump sketched it out to reporters and also on a truth social, two social posts. The headline here is a 19% tariff on Indonesian goods and from, and according to Trump, a 0% tariff on US companies trying to do business. As, as Trump put it, quote, full access to Indonesia. He added in true social that there's other aspects here, $15 billion in Indonesian purchases of US energy, four, four and a half billion dollars in American agriculture, and 50 Boeing jets. The key caveat here is that we do not have confirmation on this from the Indonesian side. This is a trend we've seen where Trump will announce a deal, and then the question is whether the other side has agreed to all the terms here. We saw a little bit of that with Vietnam. But either way, this is a clear indication that this is the sort of model he even, Trump even had a comment about this today, that this is the sort of outline of what he wants with these other deals. Essentially, somewhere around a 20% tariff on coming in, on product coming in, and then a 0% tariff on products going out. It's the sort of same parameters of what he laid out with Vietnam. So, so he's, it comes with sort of Trump is promising other trade deals again ahead of this August 1st deadline, in his view hoping to be kind of this be the, be the model going forward. 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
