Latest news with #post-LiberationDay
Business Insider
6 hours ago
- Business
- Business Insider
‘Ultra Bullish,' Says Top Investor About Alphabet Stock
Suffice it to say, Alphabet (NASDAQ:GOOGL) has not been one of the market's big stars during the first half of 2025. Though the technology giant has gained some 30% since a post-Liberation Day lull in early April, this has not been sufficient to claw back all of its losses from the first few months of the year. All told, GOOGL is down some 2% for 2025. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. There are many factors that sway the narrative surrounding a company as big as Alphabet, but first among equals seems to be the impact of AI. Indeed, one of the big fears is that LLMs could replace queries using Alphabet's search engine, leading to decreased ad sales – far and away the company's biggest source of revenue. One top investor known by the pseudonym Deep Value Investing will be paying close attention to these search figures during the company's upcoming Q2 2025 earnings on July 23. That being said, the 5-star investor is not too concerned. 'Overall, I remain bullish going into earnings, as I don't expect to see a major decline in revenue due to AI,' explains Deep Value Investing, who is among the top 3% of TipRanks' stock pros. Of course, Alphabet has many irons in the fire, and there are numerous reasons for Deep Value Investing's overall optimism. This includes the recent announcement that Google has become one of OpenAI's cloud infrastructure providers. Deep Value Investing calls this a 'major catalyst' for Alphabet, one that could even place Google Cloud Platform on par with Microsoft's Azure in the years to come. The investor is also quite keen on Alphabet's Waymo self-driving cars, noting that the company is 'obliterating Tesla' in the race for the robotaxi market. The company is expanding its self-driving service to other cities – and countries – and additional progress on this front on the upcoming earnings call could provide another boost for GOOGL. 'A concrete date for the international expansion would be highly bullish for the stock,' the investor adds. Summing up, Deep Value Investing is happy to reiterate an 'ultra bullish' stance on GOOGL just prior to the company's Q2 earnings report. 'I expect Google to deliver strong Q2 2025 results, with double-digit growth in both EPS and revenue,' predicts Deep Value Investing, who is assigning GOOGL a Strong Buy rating. (To watch Deep Value Investing's track record, click here) This mirrors the general view on Wall Street as well. With 29 Buy and 9 Hold ratings, GOOGL enjoys a Strong Buy consensus rating. Its 12-month average price target of $205.59 has an upside of ~11%. (See GOOGL stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
CNBC
5 days ago
- Business
- CNBC
We're upgrading Wells Fargo stock despite its earnings-driven decline
Wells Fargo reported better-than-expected second-quarter results before Tuesday's opening bell. However, the stock was under pressure after management reduced guidance on a key banking metric. Total revenue for the three months ending June 30 increased 0.6% year over year to $20.8 billion, beating analysts' expectations of $20.77 billion, according to market data provider LSEG. Adjusted earnings per share of $1.54 per share exceeded Wall Street's consensus estimate of $1.41 per share, LSEG data showed. EPS excludes a 6-cent per share gain associated with the company's acquisition of the remaining interest in its merchant services joint venture. WFC YTD mountain Wells Fargo YTD Lofty expectations may have also contributed to Tuesday's drop in Wells Fargo shares. Before the earnings announcement, Wells Fargo shares were up nearly 19% year to date and more than 35% from their post-Liberation Day lows. The financials came into earnings season hot thanks to deregulation tailwinds and a successful round of bank stress tests, leaving Wells shares vulnerable to some profit-taking. With shares down more than 6% on the session, we view the weakness as a buying opportunity. We're upgrading Wells Fargo stock to our 1 rating and reiterating our $90 price target. Bottom line Wells Fargo reported a solid quarter with strong fee growth and muted expense growth, leading to a 15.2% Return on Tangible Common Equity. However, two factors are creating some disappointment. First was the quarterly miss on net interest income and the cut to its full-year NII outlook. The headlines will say this is a bad thing, but Wells Fargo is deliberately prioritizing its balance sheet to focus more on its market business to support stronger client activity in products like commodities and bonds. What it will lose in NII should be made up for in non-interest income. Still, this change caught investors off guard. With the Federal Reserve asset cap finally gone, investors were hoping for better results. Keep in mind, CEO Charlie Scharf has transformed the bank over the past few years to make it less hostage to the bond market yield curve. He wants Wells Fargo to make the most money possible durably, and if that means sacrificing some NII in the short run, then so be it. "We're not focused on maximizing net interest income. We're focused on maximizing returns, how much money we make overall. And so we'll try and do as good a job as we can going forward, giving some more clarity on how we intend to use that balance sheet, how it can affect the different pieces," Scharf explained on the earnings call. We don't think the balance sheet shift is a bad thing, since Wells Fargo is giving up some interest-rate-based revenue streams in favor of more fee growth, which we think is the better bet over the long run. A second disappointment may be related to the lack of significant balance sheet growth Wells Fargo expects for the rest of the year. But anyone expecting a growth explosion immediately after the cap was lifted hasn't been listening to what the company has said. Scharf repeatedly said that when the asset cap is lifted, it won't be like a "light switch" that goes off. "We never wanted to lead people to believe that there'd be any major change in the next week, the next month, the next quarter. But it certainly does open options for us to grow and increase returns beyond what we've seen in the past," Scharf explained on the call. The way we see it, Scharf isn't managing the bank on a quarter-to-quarter basis to make its NII numbers. He's doing what's best for the long run – strategically expanding the balance sheet and investing organically to generate the highest return for shareholders. With shares down more than 6% on the session, we think this weakness is an opportunity. We are upgrading Wells Fargo stock to our 1 rating and reiterating our $90 price target. Commentary Second quarter net interest income declined about 2% from last year to $11.7 billion, missing expectations of $11.9 billion. The bank's net interest margin, which measures the difference in what the bank receives in interest on loans and pays out on deposits, was 2.68%, below estimates of 2.71%. The bank cited the impact of lower interest rates on floating rate assets and the impact of deposit mix changes as reasons for the decline from last year. Wells Fargo's period-end loans were up about 1% from last year and 1% from the first quarter of 2025. On a sequential basis, commercial loans increased 2% while consumer loans were flat. Total deposits were down about 2% from both the first quarter of 2025 and the second quarter of 2024. Non-interest income increased 5% year over year to $9.11 billion, beating the Q2 consensus estimate of $8.85 billion. Even when backing out a $253 million gain on a merchant services joint venture acquisition, non-interest income still beat. Compared to last year, investment advisory fees and brokerage commissions increased 4%; investment banking fees grew 9%; card fees were up 7%; and net gains from trading activities were down 12%. Non-interest expense increased less than 1% year over year at $13.38 billion, slightly better than the consensus estimate of $13.42 billion. The increase from last year was due to increases in both personnel and non-personnel expenses. The higher personnel expense was driven by higher revenue-related compensation in wealth and investment management, while non-personnel expenses were due to increases in technology and equipment expense as well as higher advertising and promotion expenses. Still, Wells Fargo remains committed to becoming more efficient. It has reduced headcount for 20 consecutive quarters. Why we own it We bought Wells Fargo as a turnaround story under CEO Charlie Scharf. And, he has delivered. His tireless efforts to clean up the bank's act after a series of misdeeds before his tenure paid off in the Federal Reserve finally lifting its 2018-imposed $1.95 trillion asset cap in early June. Competitors : Bank of America and Citigroup Weight in Club portfolio : 4.3% Most recent buy : Aug. 7, 2024 Initiated : Jan. 8, 2021 Wells Fargo also repurchased 43.9 million shares or $3 billion worth of stock in the quarter, bringing its share count down 5% from a year ago. That works out to an average price of $68.34, which is a great outcome with shares trading at around $79. Provisions for credit losses were about $1 billion, which was lower than the $1.18 billion expected. The bank's allowance for credit losses for loans was up slightly from the first quarter but down from $1.23 billion in the second quarter last year. 2025 guidance Wells Fargo now expects net interest income to be roughly in line with 2024 NII of $47.7 billion. This flattish year-over-year outlook was a cut versus prior guidance of about 1% growth and about $325 million below the consensus estimate of $48.02 billion. What changed between the company's prior guidance to now was lower NII in its markets business, which is being largely offset by higher non-interest income. Basically, as alluded to earlier, Wells Fargo is dedicating more of its balance sheet toward supporting its fee-based market business, which does not earn interest. So, the cost of funding this shift will result in lower net interest income, while most of the revenue will be recognized in non-interest income. On the expense side, Wells Fargo reaffirmed its expectation of non-interest expense of $54.2 billion. (Jim Cramer's Charitable Trust is long WFC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Mid East Info
30-06-2025
- Business
- Mid East Info
Wall Street rallies as tariff fears ease and Fed boosts sentiment - Middle East Business News and Information
By Daniela Sabin Hathorn, senior market analyst at Equity markets have resumed their upward trajectory, climbing the proverbial 'wall of worry' despite persistent trade uncertainties and geopolitical tensions. Last week, Wall Street not only recovered all pre- and post-Liberation Day losses but also surged to new record highs, highlighting a resurgence in bullish sentiment across U.S. markets. Markets Price in Trade Progress: There appears to be considerable optimism baked into current market valuations. As we approach the critical July 9th deadline for trade negotiations, investor sentiment reflects expectations of progress on key trade deals—particularly between the U.S. and China. While these deals are unlikely to roll back tariffs to pre-Trump-era levels (when average tariffs were around 2–4%), a consensus around a universal baseline of ~10% seems increasingly acceptable to market participants. This anticipation of a 'better-than-expected' outcome, though not quite the ideal scenario, is fuelling confidence. Importantly, the framework agreement—mistakenly described as a deal by the Trump administration—regarding rare earths and technology transfer between the U.S. and China provided the necessary catalyst to push equities to new heights. Meanwhile, the temporary breakdown in negotiations between the U.S. and Canada added a layer of complexity, particularly around digital services taxation. However, this appears to have been more of a negotiation tactic than a fundamental breakdown. The Trump administration's strategy of 'flipping the table' seems to have been employed to extract concessions, a method that has so far yielded positive market responses. Bullish Signals Across U.S. Indices: Technical indicators further support the bullish narrative. The S&P 500 broke through to a new all-time high last week, accompanied by a strong bullish signal on the RSI. This movement was largely triggered by easing geopolitical tensions, even before the ceasefire announcement by Trump on Tuesday. Despite minor pullbacks midweek, the general uptrend remained strong. US 500 daily chart Past performance is not a reliable indicator of future results. The Nasdaq has followed suit, reflecting broad-based strength in U.S. equities. Positive trade headlines continue to act as catalysts, pushing markets higher in the absence of any major negative surprises. In contrast to the U.S., European equities have struggled to regain their bullish footing. Indices such as the DAX 40, STOXX 600, and FTSE 100 have shown muted reactions, failing to match the momentum seen stateside. This disparity may stem from lingering concerns over trade negotiations between the U.S. and the European Union. President Trump's comments over the weekend reiterated the EU's difficulty as a negotiating partner. Although a breakdown in talks is not expected, there remains a real risk. As with other negotiations, Trump may employ pressure tactics to gain leverage, creating short-term uncertainty in European markets. Fragile Peace in the Middle East: While markets have largely moved past immediate concerns related to Middle East tensions, the situation remains fragile. Any escalation could act as a negative catalyst, though current sentiment suggests that investors are more focused on the opportunities from trade resolution. Meanwhile, another encouraging development came from the Federal Reserve's latest stress test results. Data released on Friday showed that all 22 U.S. banks passed the test, indicating they would remain resilient in the event of a 2025 recession. This strengthens investor confidence and adds another layer of support to the equity rally. Week Ahead: In summary, the path of least resistance for equities appears to remain to the upside. The combination of easing trade tensions, resilient economic data, and strong technical momentum supports continued bullishness. As always, risks remain—particularly around unresolved trade negotiations—but the market's current positioning suggests optimism is prevailing. Markets are likely to focus on the release of the US jobs data on Thursday (a day early given the 4th of July holiday on Friday). So far, the US economy has shown resilience, limiting the Fed's ability to cut rates, but the latest readings have shown softening inflationary pressures and job creation, allowing markets to continue to price in two rate cuts for the remainder of the year. The data this week is unlikely to skew this belief, likely reinforcing the appetite in US equities.
Yahoo
26-06-2025
- Business
- Yahoo
Warner Bros. Discovery, Inc. (WBD) Is Worth More Than It's Selling For, Says Jim Cramer
Warner Bros. Discovery, Inc. (NASDAQ:WBD) is one of the . Warner Bros. Discovery, Inc. (NASDAQ:WBD) is one of the largest media companies in the world. Its shares have lost 1.3% year-to-date as they are yet to recover from a massive 27% drop in April after the Liberation Day tariffs. Warner Bros. Discovery, Inc. (NASDAQ:WBD)'s stock fell after the tariffs because investors were worried about the firm's movies being subject to retaliatory actions from foreign nations. However, since the post-Liberation Day drop, Warner Bros. Discovery, Inc. (NASDAQ:WBD)'s shares have gained 36.8%. In his previous comments about the firm, Cramer praised the firm's CEO David Zaslav, and wondered whether inflation in streaming prices could force viewers to turn back to traditional media. Here are his recent thoughts about Warner Bros. Discovery, Inc. (NASDAQ:WBD): 'They have a deal with Disney. Look I happen to think the company's worth more than it's selling for because I love the studio. Studio business is a great business. A movie theater auditorium filled with an audience enjoying a blockbuster film. In his previous comments, Cramer discussed Warner Bros. Discovery, Inc. (NASDAQ:WBD)'s financial position: 'Here's my feeling, all right, David Zaslav runs Warner Brothers Discovery. He's done the first thing absolutely right. He has made that balance sheet to be palatable. Now he just has to break out of the hell that is Linear and be thinking about all the new exciting things that could be done. I want you to stay long on those couple hundred. I would even be tempted, dare I say…. I would actually buy the stock. That's right. I would buy Warner Brothers Discovery. I'm willing to stick my head out and see what happens.' While we acknowledge the potential of WBD as an investment, 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 extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. 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
Business Insider
26-06-2025
- Business
- Business Insider
‘Don't Be a Fool,' Says Top Investor About Nvidia Stock
Nvidia (NASDAQ:NVDA) holds a stunning advantage in the AI race, riding its world-beating GPU chips to unbelievable heights. The company controls some 90% of the lucrative data center market, and its newest Blackwell chips are selling like hotcakes. Confident Investing Starts Here: 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 For such a large company, its revenues are still growing strong – 69% last quarter – and despite a one-time $4.5 billion hit due to China restrictions, margins were still above 60%. That resilience has helped turn the tide. While trade tensions and fears of slowing capex spending among the hyperscalers placed some pressure on the company's share price earlier this year, those concerns now appear to be fading fast. NVDA stock is up over 60% since its post-Liberation Day dip in early April – and just today, it notched a new all-time high. Even so, Nvidia isn't out of the woods. Its dominance has made it a target, and rivals are scrambling to catch up. Whether through competing GPUs or emerging photonic and analog in-memory solutions, challengers are actively trying to erode Nvidia's edge. The question looming over the stock is this: Could these alternatives finally knock the giant off its perch? Not likely, says top investor James Foord, who is among the top 2% of TipRanks' stock pros. He believes that Nvidia has a 'secret weapon' up its sleeve – one that will help the company maintain its lead in the AI hardware race for years to come. 'Nvidia Corporation's dominance stems from its integrated AI stack and robust software ecosystem, not just its GPUs,' reminds Foord. In particular, the company's decision to open its CUDA software and NVLink Fusion interconnect to third parties – including Qualcomm and Marvell – could be transformative. This strategic shift, according to Foord, enables Nvidia to become the backbone of the broader AI ecosystem, embedding itself deeply across multiple platforms. The investor likens this to Microsoft's playbook with Windows. Just as becoming the default operating system cemented Microsoft's place atop the computing world, Nvidia could be positioning itself as the de facto OS for AI. 'Creating the dominant OS for computers secured revenues for the company for decades to come, even without the need to succeed in the hardware market,' adds Foord. While the investor concedes that Nvidia's hardware edge may be narrowing, he argues, 'it would be even more foolish not to acknowledge Nvidia still has a stronghold on the market.' As the hardware race heats up, Foord thinks investors might be missing what could be the real prize: AI software. That's where he sees the next big wave of growth and profit – and why he remains firmly bullish on NVDA stock, giving it a Strong Buy rating. (To watch Foord's track record, click here) That's the overall spirit on Wall Street as well. With 35 Buy, 4 Hold, and 1 Sell ratings, NVDA has a Strong Buy consensus rating. Its 12-month average price target of $175.28 has an upside of ~14%. (See NVDA stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
