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💎 Finding Value Outside of Nvidia

💎 Finding Value Outside of Nvidia

Plus, Meta has another EU headache

July 01, 2024

Pencils down, it’s time for lunch. Here’s what you missed this morning:

🟨 | Market Snapshot: The three major indexes hovered near flat, struggling to maintain momentum into the year's second half.
✈️ | In focus: Boeing announced that it has agreed to buy back Spirit AeroSystems, the manufacturer that produces components for its commercial planes, for $4.7 billion in stock. Boeing hopes this move will reduce its airplane malfunction issues.
👨‍⚖️ | Noteworthy: The European Commission found Meta in violation of the bloc’s Digital Markets Act for the company’s “pay or consent” model that it uses for Facebook and Instagram.
💎 | The Midday Trade: Finding Value Outside of Nvidia. Scroll down for more.

Plus, here are 10 Amazon Prime benefits you need to be using.

TOGETHER WITH BRADSDEALS

10 Amazon Prime Benefits You Need To Be Using

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STREET STATS

Credit: Statista

MORNING MOVERS

BlackRock, Chewy, & Birkenstock

CSSE: Redbox kiosk owner Chicken Soup for the Soul Entertainment filed for bankruptcy and saw its shares plummet (CNN)

BLK: BlackRock’s stock slipped after announcing plans to acquire UK data group Preqin in a $3.2 billion deal (Reuters)

CCL: Carnival, along with other cruise lines, saw its stocks fall as Hurricane Beryl made landfall in the southeastern Caribbean region (CNBC)

CHWY: Shares of pet product retailer Chewy fell after meme-stock promoter Keith Gill revealed his $245 million stake in the company (YF)

BIRK: Shares of Birkenstock rose after UBS upgraded the stock to Buy from Neutral, increasing its price target from $52 to $85 (YF)

TOP CALLS

Snowflake: Goldman Sachs Maintains Buy on Snowflake, Maintains $220 Price Target, Adds to Conviction List (Trade It)

Novo Nordisk: Cantor Fitzgerald Reiterates Overweight on Novo Nordisk, Maintains $160 Price Target (Trade It)

Global E: Goldman Sachs Maintains Buy on Global E Online, Maintains $43 Price Target (Trade It)

AeroVironment: BTIG Maintains Buy on AeroVironment, Lowers Price Target to $245 (Trade It)

Ally Financial: Deutsche Bank Maintains Buy on Ally Financial, Lowers Price Target to $50 (Trade It)

Chord Energy: Citigroup Reinstates Buy on Chord Energy, Announces $195 Price Target (Trade It)

THE MIDDAY TRADE

Finding Value Outside of Nvidia

Nvidia Alternatives

David Katz of Matrix Asset Advisors isn’t denying that Nvidia is a great company, he just thinks its price does not have a lot more room to grow. He sees competition for the chipmaker ramping up over the next year or two and is betting that its price may be lower then than it is now.

According to Katz, there are smarter investments to be made right, and they come with lower risk.

Cisco

First on Katz’s list is the technology firm Cisco Systems (CSCO). The stock is down over 6% thanks largely to poor revenue, but its earnings have remained above expectations. He believes demand for its products will grow as internet usage rises thanks to AI development.

He also sees its $28 billion acquisition of Splunk as a tailwind for growth. The stock’s 12.5 P/E ratio, compared to its peer's 30 or 40 multiples, has it poised for a significant upside. Wall Street has given it an average price target of $53.51.

Starbucks

Starbucks (SBUX) made the list, as well. The stock currently trades at 22 times forward earnings, and Katz believes that is a low price for a solid company with an addicting product.

Sales and earnings have been slumping lately, something executives have chalked up to backlash for its stance on the conflict in Israel. Katz expects the coffee maker to replace its CEO in response.

Shares are down nearly 17% YTD and 21% over the past 12 months. Analysts have given it an average price target of $88.50. Nvidia has had an incredible run over the past two years, but Katz isn’t convinced it can continue. These stocks could help investors find value elsewhere.

TOGETHER WITH BRADSDEALS

10 Amazon Prime Benefits You Need To Be Using

SURVEY THE STREET

Last year, we saw sweeping tech layoffs, with over 260,000 employees laid off—a 59% increase from 2022.

This year, tech giants ranging from Tesla to Microsoft have conducted sizeable layoffs yet again, with 60,000 job cuts so far.

In a recent interview, Mark Zuckerberg pointed to overhiring that occurred during the pandemic to meet the skyrocketing demand for e-commerce and online services.

The real question is when these tech companies will finally stabilize.