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⭐ Amazon Is Looking Prime
Plus, some stock picks to diversify your portfolio
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Happy Sunday to everyone on The Street.
Eli Lilly’s stock faced some massive headwinds recently, tumbling over 10% this past week.
A lot of that has had to do with increased competition.
Pfizer announced positive results from early-stage trials of its once-daily weight loss pill, danuglipron. This could be an enticing alternative to consumers wary of the current injectable GLP-1 drugs from Eli Lilly and Novo Nordisk.
Not to be outdone, Swiss pharma giant Roche made headlines Wednesday after it, too, reported promising results for its weight loss pill, CT-996. The pill was shown to help patients lose an average of 7.3% of their weight after four weeks.
It wasn’t all bad news for Eli Lilly, though. Its stock saw a slight gain on Friday after announcing its weight loss drug tirzepatide received approval from Chinese regulators, opening up a massive market for the company.
However, now that the GLP-1 cat is out of the bag and every big pharma company is looking to dive into the weight loss industry, Eli Lilly’s dominance in this sector may waver.
Plus, today’s partner can show you a new options trading strategy to secure your retirement income.
ICYMI: Here’s what drove the markets last week and what to keep an eye out for in the coming week.
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Amazon Is Looking Prime
A Brief History
Amazon’s (AMZN) Prime Day flooded the internet this past week, with its stock at a record high and its market cap over $2 trillion. Things are looking good in Amazon's world right now with the company’s sales and bottom line steadily improving.
Amazon stock nearly reached the $2 trillion market cap milestone three years ago, but then the stock plummeted over the next 18 months following the news of a new CEO. Revenue slowed and the growth pains from a pandemic expansion cut into earnings. By the end of 2022, Amazon’s operating margin sat at just 1.8%.
Solid Margins
The Everything Store’s operating income has increased by triple-digit percentages in the past four quarters and is projected to reach $62 billion in 2024. If that happens, Amazon would have an annual operating margin of around 10%, a sizable improvement from the past several years. Wall Street is bullish on margins continuing to grow through 2027.
The company’s advertising and cloud business arms are also growing. Amazon Web Services is expected to grow its revenue by 18% in 2024, largely thanks to AI.
A Low Multiple
Amazon is currently trading at less than 40 times projected earnings, far below its 67 multiple when it first hit $1 trillion in market cap, according to FactSet. While the stock is still trading above many of its peers, it has closed the gap considerably.
Given the company’s current market cap, revenue improvements, and relatively cheap stock price, it could be a promising entry point for investors.
Are you bullish or bearish on Amazon (AMZN) over the next 12 months? |
Halftime Huddle
Diversification Is Key
Inflation appears to be cooling, and the Federal Reserve could finally be ready to cut rates. In response, UBS (UBS) came out with a list of 24 diversified stocks it thinks could have a successful second half of 2024.
As a caveat, the bank cautioned investors that there’s already much optimism priced into the market, so risk versus reward may be low. For that reason, the bank believes strategic allocation and diversification are key.
Dexcom
Headquartered in San Diego, medical device manufacturer Dexcom (DXCM) made the list. The company’s shares have dropped over 5% YTD, and UBS thinks this presents an attractive entry point for investors.
The bank has observed that Dexcom’s continuous glucose monitoring system has had low market penetration. As consumers adopt the product, UBS expects it to have a “long growth runway.”
Samsung
Another pick on the list is Samsung (005930). The company’s stock has risen around 9% this year. UBS says the South Korean company is a “5G smartphone leader” and expects increasing earnings in the next several quarters. The bank thinks this growth will come from strengthened memory chip prices and shipments.
The company recently launched Galaxy Ring, its new product to continuously monitor users’ vitals. UBS believes it could be a gateway to drive sales for the company's other products.
The Fed meets at the end of the month, and investors will watch how markets react to its commentary. UBS recommends diversifying in the meantime.
Which stock do you think will outperform over the rest of 2024? |
The AI Energy Problem
Increasing Emissions
As artificial intelligence commands an increasing percentage of the power supply, the tech sector is beginning to experience some challenges in its quest to become more green.
Google (GOOG) recently reported that its greenhouse gas emissions were up 13% in 2023 year-over-year. The company mainly attributed this to the jump in data center energy usage. Microsoft (MSFT) similarly reported that its indirect emissions were up 31% since 2020 and cited the same cause.
Lofty Goals
Google is attempting to reach net-zero emissions by 2030, and Microsoft aims to be net-negative by then as well. Both plan to do so through carbon-free energy grids and Microsoft hopes to also focus on carbon removal technology.
Neither company has altered its goals in response to the data center boom butting heads with their emissions objectives, but they both continue to develop their AI businesses.
In response, Morgan Stanley (MS) came up with a list of stocks it thinks could help the tech industry continue to construct data centers while avoiding fossil fuels.
To the Rescue
Some of the stocks highlighted were AES Corporation (AES), Bloom Energy (BE), and Legrand (LGRDY).
AES has a plethora of renewable energy products, while Bloom produces solid oxide fuel cells to make off-grid energy. Legrand is known for its renewable energy improvement projects that provide power and temperature solutions.
Each of these stocks has the potential to play a role in the synchronization of AI and green energy.
Do you think Google and Microsoft will hit their current carbon emissions goals? |
TOGETHER WITH THEOTRADE
Unlock $25K+ Annual Income with The Great American Income Project
Dear Reader,
Dividend income isn’t keeping pace with inflation… but a new options trading strategy is not only replacing traditional stock dividend income, it’s exceeding it, and with less risk.
Imagine a strategy you can use to increase your income $25K, $35K, $55K or more per year, well this is it!
It’s all part of The Great American Income Project that a former ThinkorSwim executive built for average ordinary Americans to grow their income to the level they need to support their lifestyle.
To your income goals,
Don Kaufman
Founder / TheoTrade
Which stock are you most bullish on?
🟩🟩🟩🟩🟩🟩 Uber (UBER)
🟨🟨⬜️⬜️⬜️⬜️ DoorDash (DASH)
🟨🟨⬜️⬜️⬜️⬜️ Just Eat Takeaway.com (TKWY-NL)
Which stock do you think will outperform over the next 12 months?
🟨🟨🟨🟨⬜️⬜️ TJX Companies (TJX)
🟨🟨🟨🟨⬜️⬜️ Stryker (SYK)
🟩🟩🟩🟩🟩🟩 Trade Desk (TTD)
Which stock do you think will outperform over the next 12 months?
🟨🟨🟨⬜️⬜️⬜️ Carnival (CCL)
🟨🟨⬜️⬜️⬜️⬜️ Block (SQ)
🟩🟩🟩🟩🟩🟩 Palantir (PLTR)
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