- The Street Sheet
- Posts
- 👂 The AI Stock You Haven’t Heard Of
👂 The AI Stock You Haven’t Heard Of
Plus, European regulators are at it again
Pencils down, it’s time for lunch. Here’s what you missed this morning:
🟩 | Market Snapshot: The Dow jumped over 500 points as investors continue to rotate out of tech stocks and into the broader market.
🛍️ | In focus: Retail sales data came in better than expected in June. While retail sales were flat, economists expected a 0.3% decline in spending. Many believe this data strengthens the case for a soft landing.
🔎 | Noteworthy: European regulators are at it again… Microsoft hired AI startup Inflection’s co-founder Mustafa Suleyman, and Britain’s Competition and Markets Authority isn’t happy about it. The agency is investigating the latest hire to decide whether it constitutes a merger that undermines competition under UK rules.
👂| The Midday Trade: The AI Stock You Haven’t Heard Of. Scroll down for more.
Plus, get the most out of your Amazon Prime membership with today’s partner.
TOGETHER WITH BRAD’S DEALS
Maximize the value of your Amazon Prime membership by uncovering 10 lesser-known benefits that can transform your shopping, streaming, and saving experience.
STREET STATS
MORNING MOVERS
MS: Morgan Stanley’s stock rose after beating Q2 profit expectations, but its wealth management revenue growth slowed to 2% (Reuters)
BAC: Shares of Bank of America surged after reporting Q2 revenue and profit that topped expectations and a coming rebound in net interest income (CNBC)
SHOP: Shopify’s stock popped following a BofA upgrade from Neutral to Buy, claiming the company has returned to balanced growth and margin (IBD)
MTCH: Tinder’s parent company, Match, saw its stock surge on news that activist investor Starboard Value has a 6.5% stake in the company (WSJ)
UNH: Health insurance giant UnitedHealth saw its stock rise after posting better-than-expected earnings, which eased cyberattack concerns (Barron’s)
TOP CALLS
AGNC: JP Morgan Maintains Overweight on AGNC Investment, Raises Price Target to $10 (Trade It)
Carvana: Evercore ISI Group Maintains In-Line on Carvana, Raises Price Target to $140 (Trade It)
Lamar Advertising: TD Cowen Initiates Coverage On Lamar Advertising with Buy Rating, Announces Price Target of $135 (Trade It)
Reddit: JMP Securities Maintains Market Outperform on Reddit, Raises Price Target to $84 (Trade It)
Boston Scientific: TD Cowen Maintains Buy on Boston Scientific, Raises Price Target to $86 (Trade It)
BlackRock: Argus Research Maintains Buy on BlackRock, Raises Price Target to $910 (Trade It)
THE MIDDAY TRADE
Benefitting From the AI Goldrush
According to Jefferies, Insyde Software (6231.TWO), a small-name Taiwanese AI stock, could be in for a big boost. The bank thinks it has the opportunity to significantly benefit from rising demand for AI-enabled PCs and servers.
Jefferies has called the stock a “Firmware Leader and Yet-to-be Discovered AI Play” and given it a buy rating with a 42% upside.
Massive Stock Gains
The stock is up over 100% YTD and 1,500% over the past 5 years, yet has remained largely unknown. It currently owns around 50% market share in the personal computer firmware space.
It owes a lot of its success to its strategic partnerships with companies such as Nvidia (NVDA), Arm (ARM), Qualcomm (QCOM) and Intel (INTC). According to analyst Matt Ma, AI excitement could lead to 20% compounded annual sales growth until 2030.
Compounding Growth
Jefferies is predicting that the PC space Insyde operates in could grow at a 14% compound annual rate between 2023 and 2030. Its analysts are bullish on its royalty-based business model, which has allowed it to maintain gross margins of over 70% over the past decade, while consistently improving net margins.
For investors interested in under-the-radar AI plays, Insyde might be worth a look.
TOGETHER WITH BRAD’S DEALS
Maximize the value of your Amazon Prime membership by uncovering 10 lesser-known benefits that can transform your shopping, streaming, and saving experience.
SURVEY THE STREET
The latest data on the Chinese economy are bad news for the CCP. China’s economy grew 0.7% in the second quarter, well below the expectations of most economists. Its first-quarter growth estimate for the year was also revised down from 6.6% to 6.1%.
This comes amid a suite of tariffs issued against the nation’s industries, weak consumer spending, and a housing slump that could lead to an asset bubble burst.
China’s leaders are now meeting for the “third plenum,” hoping to find a way forward and put the nation’s economy back on track.
Will Chinese leaders find solutions to the nation's economic issues, or is the nation headed for a downturn? |
Plus, Yesterday’s Poll + Results:
🟩🟩🟩🟩🟩🟩 Yes ✅
🟨🟨⬜️⬜️⬜️⬜️ No ❌
What did you think of today's edition? |
Reply