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Industrial plays for the second half, and why Netflix is primed to go even higher
Industrial plays for the second half, and why Netflix is primed to go even higher

CNBC

timea day ago

  • Business
  • CNBC

Industrial plays for the second half, and why Netflix is primed to go even higher

(This is a wrap-up of the key money moving discussions on CNBC's "Worldwide Exchange" exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Investors are seeing opportunity in tech outside the "Magnificent Seven" and giving top picks in the industrials space after it finished the first half of 2025 as the top-performing sector. Worldwide Exchange pick: Netflix Victoria Greene of G Squared said Netflix still has more second half upside despite a more than 50% gain in the first six month of the year and a forward PE ratio of 50. "Bulls don't die from a big PE," Greene said. "You need to focus on the fact that linear TV is still under a lot of pressure, streaming is just now becoming the highest percentage of viewership." She added: "They are brilliant in what they are doing, look at their pricing tiers, their addition of ad-based which hasn't really made much. But we think ad revenue is going to be $3 billion and that is going to ramp up closer to $10 billion." In April, Netflix guided for ad revenue to "roughly double" this year while referring to it as "very small relative to subscription revenue." WEX pick: Johnson Controls Amit Mehrotra, industrials head at UBS, said Johnson Controls is one of his top picks. "It's really tied to the energy efficiency trade," said Mehrotra "Fifty-percent of it's business is commercial HVAC. When you think about data centers or all the demand for power in the U.S. as power prices go higher, the payback for upgrading commercial HVAC is meaningful." Johnson Controls has a consensus overweight rating and $105 price target, according to FactSet. Mehrotra's other top industrials picks for the second half of 2025 are 3M and Honeywell . Bullish on midcaps Alan McKnight of Regions Asset Management is bullish on midcap companies in the second half of the year, seeing a catchup trade after underperformance against the S & P 500. "When you think about it from an earnings growth perspective, they are almost on parity on growth, but the valuation disparity doesn't accurately the opportunity going forward in Midcap," said McKnight. "For those companies in the midcap space that have solid balance sheets, that have good earnings growth on par with what we are looking at in large cap, they should start to receive a garner a valuation that is more akin to what their large cap peers are receiving." The S & P 500 trades at approximately 23 times forward earnings while the S & P Midcap 400 trades at approximately 16 times forward earnings.

Why Oracle can rally another 70%, according to investor Victoria Greene
Why Oracle can rally another 70%, according to investor Victoria Greene

CNBC

time12-06-2025

  • Business
  • CNBC

Why Oracle can rally another 70%, according to investor Victoria Greene

Oracle shares may be rallying on its latest earnings beat, but it still has much higher to go, according to Victoria Greene, chief investment officer at G Squared Private Wealth. The cloud computing company was one of three names Greene discussed on CNBC's " Power Lunch " Thursday – two made her buy list, while one is a hold. Oracle Shares of Oracle rallied 13% on Thursday after the company's fourth-quarter earnings and revenue topped analysts expectations . Although the stock is already up 20% year to date, Greene thinks it isn't too late for investors to get in on the action. "The train is leaving the station, but you've got to jump on the stock," she said. "I see this as a $300 stock in the next 12 months." That would mean a 50% rally ahead, as of Thursday's close. During the earnings conference call after the bell Wednesday, CEO Safra Catz said Oracle's cloud infrastructure revenue should jump by more than 70% in the 2026 fiscal year. "That 70% growth they've had, they're going to blow it out of the water with the continued A.I. investment, especially with Stargate," Greene said. "Everybody's investing in this and it's being built on Oracle." The stock hit a 52-week high on Thursday. IBM IBM has been a favorite of Greene's for some time, and she still loves the stock. She believes it can push "significantly" higher the next two to three years. "This company completely reimagined itself through acquisitions," she said. IBM completed its $6.4 billion acquisition of HashiCorp , a multi-cloud infrastructure automation company, in February. In 2023, it bought software company Apptio . On Tuesday, IBM announced its plan to develop a large-scale, fault-tolerant quantum computer, Quantum Starling. "They have great strategic partners," Greene said. "They even talk about their patient zero for using AI and they're saving $3 billion — 20% to 30% of their code is now being built on their AI." "This stock is touching everything you want to touch right now," she added. Shares of IBM hit a 52-week high on Thursday and are up about 28% year to date. Datadog Greene is staying on the sidelines with Datadog , which popped nearly 3% on Thursday after an upgrade to outperform at Wolfe Research. She said she'd like to see the cloud computing stock trade above its 200-day moving average, which is around $123. "It's got headwinds on margins, controlling costs [and] on competition," Greene said. "It's got a fantastic, definite product that is being utilized, but at the same point, they're kind of stalling out on their cross selling. You haven't seen a massive increase in the number of companies that are increasing their number of modules," she added. Shares are down 14% year to date.

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