U.S. stocks that took a beating last year are surging in the early weeks of 2023, leading markets higher. Some investors believe that trend is unlikely to last.
Not only is Amazon's (NASDAQ: AMZN) e-commerce business slowing, but it still hasn't figured out how to do physical retail yet. The online retailer announced it was shutting down a number of its Amazon Fresh grocery stores, along with some of its Amazon Go locations that feature
Many investors kept their powder dry throughout much of 2022. You can't blame anyone for building up their cash stockpiles amid significant market volatility. However, at least some of that cash could be coming off the sidelines now, with the stock market trending in a positive d
If you're looking for stocks that can make dramatic moves to the upside in a year or less, Wall Street analysts have some suggestions for you. Right now, projected price targets for these three growth stocks are well above the prices they've been trading at recently.
After a tough 2022, the market offered us a glimmer of hope recently. The three major indexes rallied in the first month of the year. And that's got all of us ready to welcome the next bull market. Are we being too optimistic? I don't think so. Here's why.
E-commerce specialist Amazon (NASDAQ: AMZN) has arguably been one of the best investments on Wall Street over the past two decades. Having crushed the market over this period, the tech giant boasts a monster market cap of $1.05 trillion, making it one of the few elite companies t
Facebook parent Meta Platforms Inc has delayed finalizing the budgets of multiple teams as it prepares a fresh round of job cuts, the Financial Times reported on Saturday.
Amazon (NASDAQ: AMZN) continues to experience pressure in its operations, and that was borne out again in another mixed earnings report that demonstrated slow growth and falling operating income. Amazon stock fell after the report, but it's up 19% so far in 2023. How can investor
Dividend stocks have historically outperformed broad market indexes like the Dow Jones Industrial Average. Meanwhile, the best returns tend to come from stocks that consistently increase their dividends.
It has been quite the start to the year for the Nasdaq 100, as it is up 14%. That run-up might scare some investors away from the index, but they should look deeper than the headline numbers.It can be useful to see how much room the highest-weighted companies in the index have to
Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) are the second-, third-, and fourth-largest companies on the U.S. markets today. These tech giants have their niches, but they all compete in one massive industry: cloud computing.Each co
Amazon (NASDAQ: AMZN) has been one of the best stocks over the past decade, turning every $10,000 invested into nearly $80,000. And before the stock's decline in 2022, that investment was worth nearly $150,000.So what happened? Well, investors got worried about Amazon's over-expa
I used to know some guys who met before the beginning of each college football season. They would predict how their respective teams' seasons would likely go.
Lots of investors can boast of a great year, and there are some who have done well in consecutive years. But if you look at long-term track records, you'll be hard-pressed to find anyone who has outperformed Warren Buffett.
U.S. stocks that took a beating last year are surging in the early weeks of 2023, leading markets higher. Some investors believe that trend is unlikely to last.
The metaverse may feel far off, but investors may want to pay close attention to what some of the world's leading technology companies are doing in this space. That's because the metaverse will be worth an estimated $679 billion by 2030.
Understandably, investors would be more confident in Amazon's (NASDAQ: AMZN) stock if Jeff Bezos was back at the helm. The company faces difficult challenges the founder may be better equipped to resolve.
On November 30, 2022, ChatGPT took the world by storm.
Built by San Francisco-based OpenAI, a
Microsoft (
NASDAQ:MSFT
)-backed startup, ChatGPT has attracted Internet users looking for straight answers to their questions -- rather than a series of suggested links. It's delighted students, too, who've used the new AI chatbot to turn a one-line prompt into an original 2,500-word term paper. And… it's lit a fire under Microsoft rival
Alphabet (
NASDAQ:GOOG
), which is now under pressure to come up with an alternative product or risk becoming irrelevant.
On Wednesday, Google announced version 1.0 of its response, a chatbot of its own named "Bard." The initial demo didn't go well, however, with Bard responding to an inquiry by (wrongly) asserting that the James Webb Space Telescope was the first telescope to photograph a planet outside of our solar system (In fact, a Chilean telescope was first).
Oops.
More than just an embarrassment, that mistake seems to have sparked a selloff in Alphabet stock, as investors absorbed the implication that Alphabet -- believed to be a leader in AI -- is subject to the same limitations that others have pointed out in ChatGPT.
Can Alphabet recover from its fumble, though? This is the question that Goldman Sachs analyst Eric Sheridan tackled in a wide-ranging note covering Alphabet's various artificial intelligence and machine learning initiatives.
The "AI arms race," argues Sheridan, will be "the dominant investing theme" among tech stocks for at least the next few months as Microsoft and Alphabet -- and
Amazon (
NASDAQ:AMZN
),
Meta (
NASDAQ:FB
),
Apple (
NASDAQ:AAPL
),
Baidu (
NASDAQ:BIDU
), and
Alibaba (
NYSE:BABA
), too -- all vie for supremacy in this space, and throw "tens of billions of dollars" into the effort to build increasingly better AI mousetraps. Which company will emerge victorious -- Sheridan doesn't even try to guess, admitting it's simply too "difficult to forecast." But one thing the analyst does think certain:
Whoever wins, and regardless of whether the winner is single, or whether multiple platforms end up with a piece of the AI market, the cost of this effort will take a toll on Alphabet in the short term.
Proceeding from an estimate that Alphabet has already spent anywhere from $27 billion to $137 billion on AI research to date, and guessing at what it might have to spend to keep up with the AI arms race in future years, Sheridan warns that investors can expect Alphabet's gross profit margin to shrink by somewhere between 60 basis points and 230 basis points over the next couple years.
True, Alphabet regularly rakes in gross profit margins of 55% and up today, so even a full two percentage-point decline will hardly kill the business. But it might hurt. Additionally, there's the risk to market share -- and the revenues those gross margins are applied to. As Microsoft has observed, it's currently really a runner-up in internet search, so all Microsoft really has to do with its Bing-ChatGPT partnership is add a few customers and steal a few points of market share from Google -- and it will come out of this a winner.
As the dominant player in search and search advertising, however, Alphabet must run simply to stay in place. This makes AI less of an opportunity for Alphabet, and more of a costly necessity. For this reason, it's curious that after outlining all the risks,
Overall, however, Sheridan comes to the conclusion that Alphabet stock is a "buy" and worth 31% more than it costs today -- $124.60 a share. (See Sheridan's track record,
click here)
Alphabet is that rare beast - a stock with plenty of coverage where everyone is in agreement. It has garnered 32 analyst reviews over the past 3 months – all Buys – naturally making the consensus view here a Strong Buy. The average target currently stands at $129.34, implying the shares will deliver returns of ~37% over the one-year timeframe. (See
GOOGL stock forecast
)
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Disclaimer
: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.