Happy Monday afternoon to everyone on The Street. 

• 🟩 | US stocks rose on Monday. Stocks rose as investors are looking ahead to Nvidia’s GTC AI conference and new monetary guidance from the Federal Reserve. The S&P 500 and the Nasdaq Composite saw 1% gains, and the Dow climbed 75 points.

• 📈 | One Notable Gainer: Shares of Alphabet shot up 4% following a report from Bloomberg that Apple was in talks with Google to include the company’s Gemini AI in iPhones.

• 📉 | One Notable Decliner: Redfin saw a 7% pullback, bringing the stock down 21% over the past five days. The selloff was triggered by the National Association of Realtors reaching a settlement with home sellers that could lower commissions for realtors.

• 💸 | Tomorrow's Trade: Will It Pay to Buy PayPal? Scroll down for more.

MARKET MOVERS

Tesla, Zillow, and Pepsi

TSLA (+6%) Tesla got a big boost after it announced a price increase for its Model Y in Europe and the US (Reuters)

NVDA (+1%) Nvidia shares climbed as investors view the company’s GTC Conference as a bellwether for AI (Barron’s)

Z (-1%) Zillow’s stock dropped less than 1% after its shares took a 16% dive on Friday due to the National Association of Realtors settlement (SA)

PEP (+4%) Pepsi’s stock rose after a Morgan Stanley analyst upgraded shares of the beverage maker, stating, “We would be aggressive buyers…” (Barron’s)

APPL (+1%) Shares of Apple rose as investors believe a potential deal with Alphabet AI could benefit both companies (CNBC)

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OVERHEARD ON THE STREET

Bloomberg: Markets are showing the characteristics of a bubble, given the surge by the technology sector’s Magnificent Seven stocks and the all-time highs in cryptocurrencies.

FT: Another characteristic of a bubble? More companies have defaulted on their debt in 2024 than in any start to the year since the global financial crisis.

Axios: Egg prices are soaring again, increasing 8.4% in February from January. This comes ahead of Easter, the second hottest demand period for eggs.

Reuters: Some major brokerages expect the Fed to lower interest rates in June, months later than what markets had predicted earlier this year.

MW: More borrowers are tapping into their home equity for cash since the Fed jacked up interest rates two years ago.

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TOMORROW’S TRADE IDEA, TODAY

Will It Pay to Buy PayPal?

Falling From Grace

For a while, it seemed like PayPal (PYPL) had a monopoly within the online payments arena. 

But companies like Apple (AAPL) and Google (GOOG) came out with competing services, and online shopping has slowed since its height during the pandemic. 

PayPal shares have dropped 80% since peaking in 2021. The company is currently trading like a bank, not the fintech beast it once was.

New Leadership

PayPal has responded by bringing in a new CEO, Alex Chriss. 

On January 25th, Chriss pinpointed increasing ease of use, improving profits on white-label offerings, and innovation within PayPal’s core products as targeted areas of improvement. However, with no major metrics to share, PayPal stock fell 3.7% that day. 

JPMorgan analyst Tien-Tsin Huang noted that PayPal’s innovation of its Fastlane service could greatly increase its transaction completion rate.

Buying for Value

It’s no longer the growth company it once was, but analysts believe PayPal stock has value potential. Now, according to analysts, the stock is trading cheap at 12.1 times 12-month forward earnings predictions. 

Monness Crespi Hardt analyst Gus Galá gave it a price target of $80, which would represent an almost 28% increase from Friday’s open.

PayPal has a lot to prove these days, and it will have a chance to wow investors at its next earnings report, most likely in May. If it can beat expectations, investors might finally be rewarded for keeping the faith.

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ON OUR RADAR

Newsweek: Elon Musk has suggested the possibility of producing a commercially available flying car as the next generation of Tesla vehicles.

Axios: In 2023, Americans lost roughly $1.3 billion to scammers pretending to be from the government or tech support.

CNBC: Trump’s lawyers say the former president cannot secure a $454 million appeal bond in the New York fraud case.

NYP: Drivers of cars manufactured by GM, Honda, and Ford say their insurance went up after their driving behavior data was sent to issuers without their knowledge.

Bloomberg: The British pound is beating 92% of the world's currencies this year, a sign the nation’s economy is holding up better than expected

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